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LPA Group PLC  -  LPA   

Half-year Report

Released 07:00 26-Jun-2017

RNS Number : 0668J
LPA Group PLC
26 June 2017
 

LPA GROUP PLC

 

Half-Yearly Report for the six months to 31 March 2017

 

LPA Group PLC ("LPA" or "the Group"), the LED lighting and electro-mechanical system manufacturer and distributor, announces a strong performance for the six months to 31 March 2017.

 

KEY POINTS

 

·      Revenue increased 3.1% to £10.81m (2016: £10.48m)

·      Operating profit before exceptional items £772,000 (2016: £782,000)

·      Net exceptional gain £226,000 (2016: £14,000)

·      Profit before tax increased to £976,000 (2016: £782,000)

·      Diluted earnings per share substantially increased to 6.81p (2016: 5.34p)

·      Interim dividend increased 5.0% to 1.05p (2016: 1.00p)

·      Order entry increased 7.7% to £14.85m (2016: £13.78m)

·      Order book stands at £22m (2016: £22m)

·      Lighting operation successfully relocated in the period

 

Michael Rusch, Chairman, comments:

 

"In my comments at the Annual General Meeting, I reported that the Group had established itself on a new trading level and that this was being sustained with excellent levels of orders and sales. I am delighted to report that this remains the case.

 

"Our new manufacturing facilities give us the capacity and improved productivity to continue to grow and prosper. 

 

"Our current order book underpins expected progress in the remainder of this financial year and in the medium term.

 

"As a measure of our continued confidence, the interim dividend has been increased by 5.0% to 1.05p."

 

26 June 2017

 

 

ENQUIRIES:

 

LPA Group plc 

Peter Pollock, Chief Executive                                          Tel: 07881 626123 or 01799 512844

Steve Brett, Finance Director                                           Tel: 07881 626127 or 01799 512860

 

Cairn Financial (Nominated Adviser)                           Tel: 020 7213 0880

James Caithie / Tony Rawlinson

 

WH Ireland (Broker)                                                      Tel: 0113 394 6600

Tim Feather / Ed Allsopp

 

Instinctif Partners (PR Adviser)                                   Tel: 020 7457 2020

Mark Garraway / Helen Tarbet    

 

 

CHAIRMAN'S STATEMENT

 

In my comments to the Annual General Meeting on 14 March 2017, I reported that the Group had established itself on a new trading level and that this was being sustained with excellent levels of orders and sales. I am delighted to report that this remains the case.

 

Order entry increased 7.7% to a new record of £14.85m (2016: £13.78m) and sales increased 3.1% to £10.81m, also a record (2016: £10.48m). Despite the previously reported lower margin due to a change of product mix (higher proportion of project work, reduced aerospace & defence activity), operating profit before exceptional items exceeded our internal forecasts at £772,000 (2016: £782,000). The period includes a net exceptional gain of £226,000 comprising a property disposal gain on the sale of our former lighting factory in Yorkshire of £341,000 (2016: £14,000) less £115,000 of relocation and other nonrecurring costs. Profit before tax amounted to £976,000 (2016: £782,000) and diluted earnings per share were 6.81p (2016: 5.34p).

 

Electro-mechanical, and, in particular, Transport+, performed well during the period.  Lighting suffered the failure of a large oil and gas customer and relocated its factory during the first half, but still performed well. Engineered component distribution faced reduced demand from the aerospace and defence sector and some delayed projects in the rail sector, but delivered a satisfactory result.

 

The order book at the end of the period was unchanged at £22m (2016: £22m). There are a number of project orders in the pipe-line for which we have been selected but which remain un-entered because we have not yet received confirmed delivery schedules: these amount to approximately £4.6m (2016: £4.4m). Interest in our LED lighting, ethernet backbone, USB outlet charging technology and Transport+ remains strong: our efforts in export markets will continue.

 

With the relocation of our lighting activity in March, the Group has completed the reorganisation of its two manufacturing operations (that for electro-mechanical was completed in 2015). Substantial investments in new buildings and plant have been made, in large part funded from the sale of former properties, which provide the Group with expanded capacity, improved productivity and excellent facilities for the future.

 

The loss of a working majority for the Government, coupled with the Brexit negotiations may prolong a period of uncertainty. However we trust that the Government will continue with its investment in the rail sector and that the Group will continue to enjoy success in exports to Europe, the Middle East and Asia.

 

Following the significant investment in facilities and a working capital build to fund growth over the year, gearing amounted to 31.6% as compared to 29.2% at the start of the financial year. Cash flow is expected to be increasingly positive through the second half and beyond.

 

We are continuing to follow a progressive dividend policy: the interim dividend will be increased by 5.0% to 1.05p (2016: 1.00p) which will be paid on 22 September 2017 to those shareholders registered at the close of business on 1 September 2017.

 

We expect good progress in orders and sales through the remainder of this year and the current order book underpins the situation for the medium term. The future looks encouraging.

 

 

 

MICHAEL RUSCH

Chairman

26 June 2017

 

 

 

 

 

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2017

 

CONSOLIDATED INCOME STATEMENT

 

 

6 months to

31 March 2017

Unaudited

£000's

Period to

1 April 2016

Unaudited

£000's

Year to

30 Sept 2016

Audited

£000's

 

 

 

 

Revenue

10,807

10,483

21,422

 

 

 

 

Operating profit before exceptional items

772

782

1,533

 

 

 

 

Gain on sale of property

341

14

14

Relocation and other nonrecurring costs

(115)

-

-

 

 

 

 

Operating profit

998

796

1,547

 

 

 

 

Finance costs

(32)

(40)

(85)

Finance income

10

26

54

 

 

 

 

Profit before tax

976

782

1,516

 

 

 

 

Taxation

(78)

(100)

(54)

 

 

 

 

Profit for the period

898

682

1,462

 

 

 

 

Attributable to:

 

 

 

 - Equity holders of the parent

898

682

1,462

 

 

 

 

Earnings per share (see note 2)

 

 

 

 - Basic

7.37p

5.75p

12.30p

 - Diluted

6.81p

5.34p

11.35p

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

6 months to

31 March 2017

Unaudited

£000's

Period to

1 April 2016

Unaudited

£000's

Year to

30 Sept 2016

Audited

£000's

 

 

 

 

Profit for the period

898

682

1,462

 

 

 

 

Other comprehensive income / (expense)

 

 

 

 

 

 

 

Items that will not be reclassified to profit or loss

 

 

 

Actuarial gain / (loss) on pension scheme

294

64

(692)

Tax on actuarial gain / (loss)

(57)

(23)

119

 

 

 

 

Other comprehensive income / (expense) net of tax

237

41

(573)

 

 

 

 

 

 

 

 

Total comprehensive income for the period

1,135

723

889

 

 

 

 

Attributable to:

 

 

 

 - Equity holders of the parent

1,135

723

889

 

 

 

 

 

 

 

 

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2017

 

CONSOLIDATED BALANCE SHEET

 

 

As at

31 March 2017

Unaudited

£000's

As at

1 April 2016

Unaudited

£000's

As at

30 Sept 2016

Audited

£000's

Non-current assets

 

 

 

Intangible assets

1,190

1,204

1,194

Property, plant and equipment

6,686

4,722

5,624

Retirement benefits

1,195

1,519

841

 

9,071

7,445

7,659

 

 

 

 

Current assets

 

 

 

Inventories

3,593

2,866

3,030

Trade and other receivables

4,721

4,502

4,678

Cash and cash equivalents

138

4

149

 

8,452

7,372

7,857

 

 

 

 

Total assets

17,523

14,817

15,516

 

 

 

 

Current liabilities

 

 

 

Bank overdraft

(640)

(384)

(138)

Bank loans and other borrowings

(265)

(246)

(247)

Current tax payable

(199)

(134)

(122)

Trade and other payables

(4,061)

(3,582)

(3,803)

 

(5,165)

(4,346)

(4,310)

 

 

 

 

Non-current liabilities

 

 

 

Bank loans and other borrowings

(2,327)

(1,471)

(2,305)

Deferred tax liabilities

(251)

(369)

(193)

Other payables

-

(20)

(19)

 

(2,578)

(1,860)

(2,517)

 

 

 

 

Total liabilities

(7,743)

(6,206)

(6,827)

 

 

 

 

 

 

 

 

Net assets

9,780

8,611

8,689

 

 

 

 

 

 

 

 

Equity

 

 

 

Share capital

1,231

1,189

1,196

Share premium account

610

480

504

Un-issued shares reserve

183

191

183

Merger reserve

230

230

230

Retained earnings

7,526

6,521

6,576

 

 

 

 

Equity attributable to shareholders of the parent

9,780

8,611

8,689

 

 

 

 

 

 

 

 

 

 

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2017

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

6 months to

31 March 2017

Unaudited

£000's

Period to

1 April 2016

Unaudited

£000's

Year to

30 Sept 2016

Audited

£000's

 

 

 

 

Opening equity

8,689

7,987

7,987

 

 

 

 

Total comprehensive income

1,135

723

889

 

 

 

 

Transactions with owners:

 

 

 

Dividends

(185)

(119)

(238)

Proceeds from issue of shares

141

20

51

 

 

 

 

Closing equity

9,780

8,611

8,689

 

 

 

 

 

 

 

 

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2017

 

CONSOLIDATED CASH FLOW STATEMENT

 

 

6 months to

31 March 2017

Unaudited

£000's

Period to

1 April 2016

Unaudited

£000's

Year to

30 Sept 2016

Audited

£000's

 

 

 

 

Profit before tax

976

782

1,516

Finance costs

32

40

85

Finance income

(10)

(26)

(54)

Operating profit

998

796

1,547

 

 

 

 

Adjustments for:

 

 

 

Depreciation

230

224

442

Amortisation of intangible assets

17

19

39

Gain on sale of property, plant and equipment

(341)

(14)

(14)

Loan arrangement fees

4

-

19

 

908

1,025

2,033

Movements in working capital:

 

 

 

Change in inventories

(563)

(208)

(372)

Change in trade and other receivables

(43)

(1,036)

(1,212)

Change in trade and other payables

259

617

873

Cash generated from operations

561

398

1,322

Retirement benefits

(50)

(50)

(100)

Net cash from operating activities

511

348

1,222

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

(1,354)

(174)

(1,294)

Proceeds from sale of property, plant and equipment

524

637

601

Capitalised development expenditure

(13)

(1)

(11)

Net cash (used in) / from investing activities

(843)

462

(704)

 

 

 

 

 

 

 

 

Drawdown of bank loans

500

-

2,475

Repayment of bank loans

(603)

(100)

(1,750)

Repayment of obligations under finance leases

(27)

(18)

(40)

Interest paid

(7)

(40)

(72)

Proceeds from issue of share capital

141

20

51

Dividends paid

(185)

(119)

(238)

Net cash (used in) / from financing activities

(181)

(257)

426

 

 

 

 

 

 

 

 

Net (decrease) / increase in cash and cash equivalents

(513)

553

944

Cash and cash equivalents at start of the period

11

(933)

(933)

Cash and cash equivalents at end of the period

(502)

(380)

11

 

 

 

 

Reconciliation of cash and cash equivalents

6 months to

31 March 2017

Unaudited

£000's

Period to

1 April 2016

Unaudited

£000's

Year to

30 Sept 2016

Audited

£000's

 

 

 

 

Cash and cash equivalents in current assets

138

4

149

Bank overdraft in current liabilities

(640)

(384)

(138)

Cash and cash equivalents at end of the period

(502)

(380)

11

 

 

 

 

 

 

NOTES

 

1 - BASIS OF PREPARATION

 

These interim consolidated financial statements are for the six months ended 31 March 2017. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2016.

 

They have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and applicable law (IFRS) and in accordance with the provisions of the Companies Act 2006 applicable to companies applying IFRS. These financial statements have been prepared under the historical cost convention with the exception of certain items which are measured at fair value.

 

These consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 September 2016. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements and are expected to be followed throughout the year ended 30 September 2017.

 

2 - EARNINGS PER SHARE

 

The calculations of earnings per share are based upon the profit after tax attributable to ordinary equity shareholders and the weighted average number of ordinary shares in issue during the period. Details are as follows:

 

 

Six months to

31 March 2017

Unaudited

Period to

1 April 2016

Unaudited

Year to

30 Sept 2016

Audited

 

 

 

 

Profit for the period - £000's

898

682

1,462

 

 

 

 

Weighted average number of ordinary shares in issue during the period

 

12.186m

 

11.856m

 

11.884m

Dilutive effect of share options

0.995m

0.924m

1.003m

Number of shares for diluted earnings per share

13.181m

12.780m

12.887m

 

 

 

 

Basic earnings per share

7.37p

5.75p

12.30p

Diluted earnings per share

6.81p

5.34p

11.35p

 

 

 

 

 

3 - ANALYSIS OF NET DEBT

 

 

 

Bank loans

£000's

Finance lease obligations

£000's

Cash and cash equivalents

£000's

 

Net debt

£000's

 

 

 

 

 

 

 

 

 

 

At 1 October 2016

2,457

95

(11)

2,541

New finance lease obligations

-

141

-

141

Draw down of bank loans

500

-

(500)

-

Interest and arrangement fees

29

-

-

29

Repayment of borrowings

(603)

(27)

630

-

Cash absorbed

-

-

383

383

At 31 March 2017

2,383

209

502

3,094

 

 

 

 

 

 

4 - INFORMATION

 

LPA Group plc is the Group's ultimate parent company.  It is incorporated in England and Wales and domiciled in Great Britain.  The address of LPA Group plc's registered office, which is also its principal place of business, is Light & Power House, Shire Hill, Saffron Walden, Essex, CB11 3AQ.  LPA Group plc's shares are quoted on the AIM market of the London Stock Exchange.

 

LPA Group plc's consolidated interim financial statements are presented in Pounds Sterling (£'000), which is also the functional currency of the parent company. These consolidated interim financial statements have been approved for issue by the Board of Directors on 26 June 2017. The financial information for the year ended 30 September 2016 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The Group's statutory financial statements for the year ended 30 September 2016 have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006.

 

Summarised copies of this Interim Report are being sent to shareholders. Copies are also available from the Company's registered office at the above address and will be made available on the Company's website (www.lpa-group.com).


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Half-year Report - RNS