Elektron Technology PLC – Preliminary Results

Elektron Technology PLC – Preliminary Results

Elektron Technology plc announces its unaudited preliminary results for the year ended 31 January 2019.

GROUP HIGHLIGHTS

  • Group revenues from continuing operations of £33.7m (2018: £29.8m), an increase of 13.1%, with growth in all three businesses
  • Operating profit from continuing operations of £4.6m, up 77% (2018: £2.6m).
  • EBITDA(Earnings before interest, taxation, depreciation and amortisation) on continuing operations  of £6.8m, up 33% (2018: £5.1m)
  • Queensgate Nano was disposed of during the year for £1.4m. The consideration was split between an initial £0.8m for the trade and assets and a further £0.6m generated from earn out payments, of which £0.4m was received before the year end and £0.2m shortly after the year end.
  • Net cash at year end of £10.1m (2018: £5.2m).
  • The Group continued with its strategy of investing a substantial proportion of Bulgin operating cash flow into Checkit in view of the outstanding opportunities which the Board believed that the business offers.
  • Acquisition post year end of Next Control Systems for a net consideration of £8.8m, satisfied wholly in cash, which provides an opportunity to accelerate the scaling of Checkit.

INDIVIDUAL BUSINESS HIGHLIGHTS

Bulgin

  • Sales of £30.1m, up 10.3%, with operating profits of £9.0m, up 25% (2018: £27.3m and £7.2m respectively).
  • Focus on continuing sales growth whilst maintaining class-leading margins. This has resulted in a sales increase of c.10% and net operating margins increasing to 30% with over 300% ROCE (Return on capital employed).
  • Bulgin has made a strong start to the new financial year with sales in the first quarter nearly 20% ahead of the same period last year. Whilst growth rates are expected to moderate towards market growth rates during the second quarter Bulgin sales are expected to be well ahead at the half year.  Bulgin visibility now extends to around 12 weeks and whilst management are cautious of macro-economic conditions, it is expected that Bulgin will continue to trade ahead of previous expectations.

Checkit

  • Sales of £1.0m, a 100% increase over the previous year with operating loss of £4.5m which is within budget (2018: £0.5m and £4.4m loss respectively).
  • There is a strong pipeline  of opportunities and management is focused on converting these into revenues Greater emphasis is being placed on developing non-food markets and building the US infrastructure to drive adoption.
  • Integration of Next Control Systems is a key priority, with initial focus on leveraging the cross selling opportunities the acquisition presents.

Elektron Eye Technology

  • Sales of £2.6m, up 30% and return to profitability with operating profit of £0.1m (2018: £2.0m and loss of £0.2m respectively).
  • Management focus is on increasing distribution sales, with emphasis on USA and Europe.
  • Considered non-core to the longer term Group strategy, the business is currently being marketed for sale.

John Wilson, Chief Executive Officer of Elektron, said: 

“The Group’s trading performance in FY19 was exceptional and we have made strong operational and financial progress during the year. Bulgin delivered record profitability, Checkit sales accelerated to plan and EET returned to profitability. We have worked hard to establish the foundation for continued growth in current and future years and hence look to the future with optimism.” 

Keith Daley, Executive Chair of Elektron Technology said:

“The recent acquisition of Next Control Systems significantly enhances the market opportunity for Checkit. Next Control Systems adds new capabilities and services and brings immediate scale to the business. We look forward to realising the many opportunities offered by the combination of Checkit and Next Control Systems.” 

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