RNS Number:2066P
Stadium Group PLC
01 September 2003
Stadium Group plc
Interim Results for the six months ended 30 June 2003
Stadium Group plc, the AIM listed provider of Electronic Manufacturing Services,
announces its interim results for the six months ended 30 June 2003 ahead of
market expectations and an encouraging outlook for the second half.
Financial Highlights
* Turnover up 1% to #17.5m (2002: 17.3m).
* Operating profit up 33% to #736,000 (2002: #554,000).
* Pre-tax profits (after goodwill amortisation) of #712,000 (2002: #917,000
loss).
* Asia sales up 28%, profits up threefold.
* Basic EPS of 2p (2002: Loss per share 1.8p).
* Bank borrowings reduced by #1m to #3.5m; gearing reduced from 36% to 27%.
* Dividend maintained at 0.95p.
Operational Highlights
* Positive new business pipeline.
* Confident future trading outlook.
* China domestic sales channel open in H2.
Commenting on the results, Nigel Rogers, Chief Executive, said:
"We are very pleased with the growth achieved by Stadium Asia and we will begin
to transact domestic sales in China in the second half. With the further
development of our capabilities in Asia, including technical, design and
development resources, we are well placed to maintain this current growth
strategy. Sales and orders in the second half to date, and the new business
pipeline indicate a positive outlook."
For further information please contact:
Stadium Group plc
Nigel Rogers, Chief Executive Tel: 01429 852520
Mob: 07767 603362
Binns & Co PR Ltd Tel: 020 7786 9600
Paul McManus Mob: 07980 541 893
Copies of the interim financial statements will be sent to all shareholders
shortly
Stadium Group Plc
Chairman's statement
For the six months ended 30 June 2003
Results and overview
The Group made pre-tax profits (after goodwill amortisation) of #712,000 for the
six months to 30 June 2003, compared with an overall loss of #917,000 in the
prior year. Operating profits from continuing activities of #736,000 improved
by 33% over the corresponding amount last year, (#554,000), and there were no
exceptional costs, discontinued activities, or exceptional losses (2002:
#1,278,000).
Earnings of 2.0 pence per share compared with 1.5 pence (before exceptional
items) in the same period last year, or an overall loss per share last year of
1.8 pence. Strong operational cashflow and the receipt of deferred
consideration enabled further reduction in bank borrowings by #1.0 million to
#3.5 million, and gearing reduced from 36% to 27%.
An unchanged interim dividend of 0.95 pence per ordinary share will be paid on
21 October 2003 to shareholders on the register on 19 September 2003.
We have continued to invest in developing the capabilities of Stadium Asia, and
are confident of future prospects.
Electronics
2003 2002
Turnover Operating Turnover Operating
profit profit
Continuing businesses 12,217 628 12,266 288
Discontinued businesses - - 1,263 (84)
12,217 628 13,529 204
Turnover at Stadium Asia grew by 28% to #6.9m, mainly due to realising the full
benefits of major automotive and telecommunications contracts won in the early
part of last year. Significant new business that commenced in the period under
review provides the momentum for further growth in the second half.
UK sourced turnover fell in line with expectations, with the reduction largely
attributable to the relocation of consumer products manufacture by one major
customer to Eastern Europe. Actions taken in 2002 on our UK cost base ensured
that the profit impact was minimal. Our UK activities also continued to make a
valuable contribution as an interface with key customers of Stadium Asia.
Overall operating profits more than doubled to #628,000, at an operating margin
of 5.1% (2002 continuing businesses: 2.3%).
Chairman's statement (continued)
Business development
Continued investment in skills, facilities and design and development resources
in Asia are leading to new business gains. The first half of the year saw the
start of contracts for the production of appliance controls and domestic
ventilation products for key customers, and development projects for audio
accessories, automotive and consumer goods.
During the second half of the year, we will begin to transact domestic sales in
the People's Republic of China. In August 2003 we invested approximately
#160,000, which will cover the fitting out of a new manufacturing facility
measuring 35,000 square feet near the main plant at Dongguan. This facility will
be operational in September 2003, and there is encouraging interest from local
customers including a major OEM user of charger/adaptors.
Branded Plastics
2003 2002
Turnover Operating Turnover Operating
profit profit
Continuing businesses 5,256 400 5,056 430
The business continued to perform well, showing a 4% improvement in turnover,
and an annualised return on net assets of over 20%.
We have increased investment in new products covering both the babycare and
building products markets, and early indications suggest that this should enable
the business to maintain momentum despite the increasingly competitive
environment.
Balance sheet and cash flow
Bank borrowings reduced from #4.5m to #3.5m during the first half, with exit
gearing of 27%. After allowing for deferred consideration receivable of #1.8m,
net borrowings and gearing stood at #1.7m and 13% respectively, compared with
#2.2m and 18% at 1 January 2003.
Current trading and prospects
Our UK businesses have entered a period of relative stability after much radical
change, and continue to perform to expectations.
Further development of capabilities at Stadium Asia, including technical, design
and development resources, provide opportunities to maintain the current growth
strategy. Sales and orders in the second half to date, and the new business
pipeline indicate a positive outlook.
Struan Wiley
Chairman
1 September 2003
STADIUM GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2003
Six months Six months Year ended
30 June 30 June 31 December
2003 2002 2002
Notes #'000 #'000 #'000
Turnover
Continuing operations 17,473 17,322 35,375
Discontinued operations - 8,208 8,482
1 17,473 25,530 43,857
Cost of sales (13,370) (21,034) (36,066)
Gross profit 4,103 4,496 7,791
Net operating expenses (3,301) (4,128) (6,669)
Exceptional items 2 - (425) (1,341)
Goodwill amortisation (66) (66) (132)
Total net operating expenses (3,367) (4,619) (8,142)
Continuing operations 736 554 1,356
Discontinued operations - (677) (1,707)
Operating profit/(loss) 1 736 (123) (351)
Exceptional losses 3 - (601) (772)
Net interest payable (24) (193) (267)
Profit/(loss) on ordinary activities before tax 712 (917) (1,390)
Taxation (158) 405 551
Profit/(loss) for the period 554 (512) (839)
Dividends 4 (268) (268) (790)
Retained profit/(loss) for the period 286 (780) (1,629)
Earnings per share
Basic 2.0p (1.8)p (3.0)p
Diluted 1.9p (1.8)p (3.0)p
The financial information in this Interim Report is unaudited and does not
constitute Financial statements. It has been prepared using accounting policies
consistent with those applied in the Audited Financial Statements for the
financial year ended 31 December 2002. The report of the auditors on those
Financial Statements was unqualified. Copies can be obtained from the Company's
registered office at Stephen House, Brenda Road, Hartlepool., TS25 2BQ.
STADIUM GROUP PLC
CONSOLIDATED BALANCE SHEET
At 30 June 2003
30 June 2003 30 June 31 December
2002 2002
#'000 #'000 #'000
Fixed assets
Intangible assets 867 1,001 933
Tangible assets 10,668 11,849 11,194
11,535 12,850 12,127
Current assets
Stocks 4,101 5,392 4,128
Debtors due after one year 729 1,851 1,278
Debtors due within one year 8,014 7,584 7,755
Cash 347 756 590
13,191 15,583 13,751
Creditors: amounts falling due within one year
Bank overdrafts (212) (1,323) (1,035)
Creditors (8,560) (8,736) (8,606)
(8,772) (10,059) (9,641)
Net current assets 4,419 5,524 4,110
Total assets less current liabilities 15,954 18,374 16,237
Creditors: amounts falling due after more than one year (2,880) (4,854) (3,459)
Provisions for liabilities and charges (150) (729) (150)
12,924 12,791 12,628
Capital and reserves
Called up equity share capital 1,411 1,411 1,411
Share premium account 4,032 4,032 4,032
Capital redemption reserve 88 88 88
Merger reserve 2,751 2,751 2,751
Profit and loss account 4,642 4,509 4,346
Equity shareholders' funds 12,924 12,791 12,628
STADIUM GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2003
Six months Six months Year ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Net cash inflow from operating activities 926 928 815
Net cash outflow from servicing of finance (24) (193) (267)
Tax received/(paid) 105 (1) 285
Purchase of tangible fixed assets (228) (382) (732)
Sale of tangible fixed assets 189 1,105 1,936
Net cash (outflow)/inflow from capital expenditure (39) 723 1,204
Disposals 549 4,998 5,268
Equity dividends paid (522) (522) (790)
Net cash inflow before financing 995 5,933 6,515
Financing
Loans repaid (400) (6,120) (6,555)
Net cash outflow from financing (400) (6,120) (6,555)
Increase/(decrease) in cash 595 (187) (40)
STADIUM GROUP PLC
NOTES:
1. Segmental analysis
Other 2003 Other 2002
Electronics Plastics and group Total Electronics Plastics and group Total
#000's #000's #000's #000's #000's #000's #000's #000's
Turnover
Continuing 12,217 5,256 - 17,473 12,266 5,056 - 17,322
Discontinued - - - - 1,263 5,560 1,385 8,208
Total 12,217 5,256 - 17,473 13,529 10,616 1,385 25,530
Operating
profit
Continuing 628 400 (226) 802 288 430 (98) 620
Discontinued - - - - (84) (26) (142) (252)
Exceptional & - - (66) (66) - - (491) (491)
goodwill
Total 628 400 (292) 736 204 404 (731) (123)
Net assets 6,868 3,961 2,095 12,924 7,675 3,874 1,242 12,791
2. Exceptional items in operating profit
Six months Six months Year ended
30 June 30 June 31 December 2002
2003 2002
#'000 #'000 #'000
Reorganisation and redundancy costs - (297) (565)
Asset impairments - - (518)
Other closure costs - (128) (258)
- (425) (1,341)
3. Exceptional losses
Six months Six months Year ended
30 June 30 June 31 December 2002
2003 2002
#'000 #'000 #'000
Loss on sale of subsidiaries - (554) (601)
SSAP 24 prepayment on disposal - (310) (70)
Goodwill previously written off to reserves - (444) (1,183)
Profit on sale of properties - 707 1,082
- (601) (772)
4. Dividends
Six months Six months Year ended
30 June 30 June 31 December 2002
2003 2002
#'000 #'000 #'000
Ordinary dividends:
Interim dividend at 0.95p per share (2002: 0.95p) 268 268 268
Final dividend not yet declared (2002: 1.85p) - - 522
268 268 790
The interim dividend will be paid on 21 October 2003, to shareholders on the
register on 19 September 2003.
5. Earnings per share
2003 2003 2002 2002
Earnings EPS Earnings EPS
#'000 Pence #'000 Pence
Continuing profit before exceptionals 620 2.2 427 1.5
Discontinued - - (48) (0.2)
Exceptional items - - (381) (1.4)
Goodwill (66) (0.2) (510) (1.7)
Earnings per share 554 2.0 (512) (1.8)
The calculation of basic earnings per share is based on the profit for the
financial period and the weighted average number of ordinary shares in issue
(June 2003 : 28,212,198 shares, June 2002 : 28,212,198 shares, December 2002:
28,212,198 shares).
6. Net cash inflow from operating activities
Six months Six months Year ended
30 June 30 June 31 December 2002
2003 2002
#'000 #'000 #'000
Operating profit/(loss) 736 (123) (351)
Release of grants received (33) (34) (67)
Goodwill amortisation 66 66 132
Depreciation 540 832 1,379
(Profit)/loss on sale of tangible fixed assets (25) (179) 25
Decrease/(increase) in stocks 27 (5) 1,269
Increase in debtors (259) (440) (425)
(Decrease)/increase in creditors (126) 811 (1,147)
Net cash inflow from operating activities 926 928 815
7. Analysis of changes in net debt
31 Dec Cashflow Exchange 30 June 2003
2002
#'000 #'000 #''000 #'000
Cash and overdrafts (445) 595 (15) 135
Loans due within one year (800) - - (800)
Loans due after one year (3,280) 400 78 (2,802)
Net debt (4,525) 995 63 (3,467)
8. Statement of group total recognised gains and losses
Six months Six months Year ended
30 June 30 June 31 December 2002
2003 2002
#'000 #'000 #'000
Profit/(loss) for the period 286 (780) (839)
Exchange adjustments offset in reserves 10 (169) (222)
Goodwill written back to balance sheet on disposal - 444 1,183
296 (505) 122
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