E2V.L Regulatory News (E2V)

12 Nov 2007 07:00

e2v technologies PLC12 November 2007 12 November 2007 e2v technologies plc Interim results for six months to 30 September 2007 e2v technologies plc, a leading developer and manufacturer of high-technologyelectronic components and sub-systems to the medical & science, aerospace &defence, and commercial & industrial sectors, announces its interim results forthe six months ended 30 September 2007. 6 months ended 6 months ended % change 30 September 2007 30 September 2006 £ million £ millionRevenue 95.9 67.8 +41%Adjusted* profit before tax 8.3 6.2 +34%Profit before tax 3.6 3.7 -2%Earnings per share - basic 4.40p 4.60p -4%Adjusted* earnings per share - basic 9.60p 7.67p +25%Interim dividend 2.45p 2.2p +11% *Before amortisation of acquired intangibles, business improvement programmecosts, share-based payment charges, integration costs, non-recurring costsassociated with acquisitions, exceptional interest charges and their tax impactwhere applicable. Highlights • Group sales up 41% - Continuing strong performance from Electronic Tubes - Sensors and Semiconductors growth due to Grenoble acquisition • Adjusted* profit before tax up 34%, gross margin up 4.3% • Significant progress on UK business improvement programme • Dividend increased by 11% to 2.45p • Strengthened order book since 30 September 2007, increases confidence in full year outcome Commenting on the results, Keith Attwood, Chief Executive said: "The solid first half performance reflects the strength of e2v's position as amajor global provider of specialised electronic components and subsystems.Since the period end, the group's order book has strengthened significantly,which provides increased confidence in the full year outcome." Further enquiries: e2v technologies plcKeith Attwood, Chief Executive Today: 020 7269 7291 Mike Hannant, Group Finance Director Thereafter: 01245 493 493Website: www.e2v.com Financial DynamicsJon Simmons / Susanne Yule Tel: 020 7269 7291 Review of the half year RESULTS OVERVIEW Overall the group delivered a first half performance in line with managementexpectations and these results include a full six months trading of the Grenobleoperation, acquired in July 2006. Sales increased by 41% to £95.9m and adjusted* profit before tax by 34% to£8.3m. These solid results have been achieved despite the adverse impact of theUS dollar to sterling exchange rate weakening by 9%. Sales and adjusted* profitbefore tax would have been £2.8m and £1.9m higher respectively at constantexchange rates. After adjusting for acquisitions and using constant exchangerates, the group delivered 5% growth in sales and 12% increase in adjusted*profits before tax and net finance costs. Profit before taxation amounted to£3.6m (2006: £3.7m). Gross margins increased to 35.9% (2006: 31.6%) with margins in both the sensorsand semiconductors and electronic tubes product groups improving. Theimprovements in sensors and semiconductors arose from improved productivitytogether with lower warranty costs. The improvement in electronic tubes was dueto a greater proportion of higher margin electronic subsystems and a lower levelof cost overruns on contracts than in the previous year. Research and development costs of £7.7m represented 8% of sales (2006: £3.8m/5.6%). The increases arise mainly from the growth of the sensors andsemiconductor product group which not only incurs higher levels of research anddevelopment spend than electronic tubes but there has also been a lower level ofcustomer funding. The amount of expenditure available for capitalisation underIFRS has also reduced. Overall the engineering resource is at similar levels tolast year. Selling and distribution costs at £6.2m amounted to 6.5% of sales, the samelevel as in the year to 31 March 2007. Other administrative costs of £9.7mrepresented 10.1% of sales (2006: 7.8%). The increases reflect a re-allocationfrom selling and distribution costs together with strengthening the managementteam to manage the enlarged business following the Grenoble acquisition. Thefirst half also incurred certain one-off items including the majority ofpersonnel related costs, such as training, and further IT projects to manage thesales networks. Interest charges increased to £2.6m (2006: £1.2m, excluding the abnormal writeoff of debt issue costs) as the Grenoble acquisition was primarily financed byadditional bank borrowings. The resultant adjusted* profit before tax amountsto £8.3m (2006: £6.2m). Amortisation of acquired intangibles, share basedpayment charges and costs incurred to date on the business improvement programmeamount to £4.7m and result in a profit before tax of £3.6m (2006: £3.7m). During the first half the group submitted further claims to the UK HMRC foradditional R&D tax credits and this is the principal reason the underlying taxrate has reduced to 26% resulting in profit after tax of £2.7m (2006: £2.6m). Adjusted* earnings per share of 9.6p (2006: 7.67p) increased by 25% and earningsper share amounted to 4.40p (2006: 4.6p). The board has declared an interim dividend of 2.45p (2006: 2.2p) an increase ofover 11%. The dividend will be paid on 20 December 2007 to shareholders on theregister at 23 November 2007. Net debt increased to £92.3m (2006: £77.8m) due to the acquisition of the MiCSbusiness in May 2007 for £5.0m in cash and increases in working capital of £8.9mas a result of phasing issues with creditors and a high level of debtors at 30September 2007 following a particularly strong sales month. EBITDA of £16.0m(2006: £12.4m) increased by 29%. BUSINESS OVERVIEW Sales increased by 41% to £95.9m and (after excluding the impact of acquisitionsand using constant currencies but including growth of prior year acquisitions)overall organic growth was 5%. The organic growth for the electronic tubesproduct group amounted to 16% whilst sensors and semiconductors business wasflat. The order book at 30 September 2007 was £113m (2006: £141m). The principalreasons for the lower order book were the timing of contract awards and theweakening of the US$. Since the half year, the group has received orders inexcess of £32m and the current order book levels for delivery within the currentfinancial year are comparable with previous years, at constant exchange rates. Sensors and Semiconductors Sales for the sensors and semiconductors product group increased by 67% to£61.3m (2006: £36.8m). £26.6m of the growth was as a result of acquisitions,the impact of currency reducing sales by £1.7m or 2.7%. Sector adjusted* profitwas up 35% to £5.4m (2006: £4.0m) due to the impact of the Grenoble acquisition.Adjusted* profit margins fell from 10.8% to 8.8% as a result of the sector beingallocated the majority of the increase in administrative overheads. Sales growth, by sector, was: £m 2007 2006 % changeMedical and Science 16.5 11.9 +39%Aerospace and Defence 26.0 14.7 +77%Commercial and Industrial 18.8 10.2 +84% 61.3 36.8 +67% The underlying demand within the medical and science sector for the group'sproducts remains positive, though industry consolidation in the market served bye2v digital dental x-ray sensors resulted in sales levels falling in the firsthalf. The Danaher Corporation has acquired a number of the group's customersand another customer gained access to an in-house source of sensors via anacquisition. In addition e2v contributed to the consolidation by acquiring oneof its major competitors in the sector. Since the half year a significantnumber of the group's customers have placed orders in excess of £13.7m and themarket appears to be stabilising. In aerospace and defence, the group continues to be one of the world's leadingsuppliers of CCD imaging technology into the space and astronomy markets, andfollowing 50% organic growth in this area last year, has achieved sales atsimilar levels. Current projects include the European Space Agency star mappingprogramme, GAIA. Whilst funding, particularly in the USA, for major spaceprogrammes has been restricted in the last year there remain a number ofprogrammes that are being supported. Organic sales growth has been deliveredfrom broadband data converters and microprocessors as well as high reliabilityassembly test services provided by the Grenoble facility. Contract wins in thedefence sector also increased sales of microwave and microelectronic componentsdesigned and manufactured in our Lincoln facility. The group is also a supplierof a range of components into the Typhoon platform and bidding is in progressfor tranche 3 and export opportunities (worth c£16m). In addition the group'smicroprocessors are designed-in on a number of commercial aircraft platforms(e.g. Airbus A320/A380). The commercial and industrial markets remain relatively flat for the group'srange of products but sales into the automotive sector are growing as a resultof the MiCS acquisition which secured a further contract win and is now arecognised supplier into 12 platforms. Electronic Tubes Sales for the electronic tubes product group increased by 12% to £34.6m (2006:£31.0m) and the impact of currency reduced sales by £1.1m or 3.7%. Adjusted*profit was up 85% at £6.2m (2006: £3.3m). The increase in operating margin from10.8% to 17.9% was primarily due to the increased level of electronic subsystemsales and a lower level of cost overruns on contracts than in 2006. Sales growth, by sector, was: £m 2007 2006 % changeMedical and Science 10.4 11.4 -9%Aerospace and Defence 14.0 7.6 +84%Commercial and Industrial 10.2 12.0 -15% 34.6 31.0 +12% In the medical and science sector, there continues to be general growth indemand from the group's radiotherapy customers (who in some cases also supplythe x-ray sources for cargo screening) but after sales growth of 32% lastfinancial year there has been a period of destocking by a major customer in thefirst half and sales have fallen back. The group remains the dominant supplierto the radiotherapy market for low to medium power RF sources for both newequipment and the after sales market. New equipment demand continues to growand, due to the extended life of radiotherapy systems (typically up to 20years), so does the installed base. In aerospace and defence the electronic subsystems, introduced in 2005/06 tomeet a UK MoD requirement, continue to deliver strong growth from the UK MoD andothers. New products and new platforms are being introduced and demand isexpected to continue. The remainder of defence sales are primarily forcounter-measure radar systems. In commercial and industrial there has been a very low level of new transmitterbuild associated with the US terrestrial broadcast sector, for which the group'selectronic tubes are a key component, though spares demand continues. This hasadversely affected sales in H1, though demand is expected to increase in H2.Elsewhere demand in this sector has been robust. Managing Acquisitions The group's acquisition strategy is to acquire complementary businesses andtechnologies to accelerate growth. Since flotation in July 2004 the group hasacquired three businesses; the Grenoble facility as well as the smalleracquisitions of a scientific instruments business and, in the current financialyear, MiCS, an automotive sensor business in Switzerland. With the acquisition of Grenoble, e2v is now firmly established as a leadingprofessional imaging company targeting 'high end' applications including notonly defence, aerospace and scientific sectors but also industrial and processcontrol sectors. Whilst the sales infrastructure to support the expandedbusiness has not developed as quickly as we might have hoped, key appointmentsare now in place and progress will accelerate. Grenoble added complementarytechnologies, in the form of specialist semi-conductors, to the e2v range andthis in turn has identified further opportunities to grow the business byacquisition. Overall the acquisition has been significantly earnings enhancingand management expect organic growth to be in line with e2v's establishedorganic growth profile. The scientific instruments business is on track to achieve £4.5m of sales in thecurrent financial year compared with £3.2m in 2006/07 and the MiCS business isdelivering in line with expectations. Business Improvement Programmes Business Improvement Programme - 'Fit for the Future' As previously indicated, the group has been undertaking a major review of UKoperations in order to improve customer service by simplifying product lines andprocesses. £0.5m of consultancy costs have been incurred up to 30 September andthe full costs of the programme in the year to 31 March 2008 are estimated to be£2.6m. Benefits, over and above those arising from improved customer service, areexpected to be £1.8m per annum in terms of salary savings with £0.2m beingrealised in the current financial year. The programme currently has tenindividual project workstreams which continue to focus on delivering enhancedcustomer service and, as the programme name identifies, ensuring the UKactivities are fit for the future. Low cost sourcing The group has opened purchasing offices in Taiwan and San Diego to accessfurther the purchasing opportunities offered by Asia Pacific and the Americas. Our strategy includes the relocation of labour intensive manufactured productsto lower cost economies. Whilst the majority of products require extensivein-house processing there are a minority of products that will be considered fortransfer and an assembly facility based in Mexico is now operational with pilotproduction commencing in Q4. Lincoln site The group has obtained outline planning permission for a change of use of itsLincoln facilities for residential housing. Negotiations for the sale of theland to a developer are progressing well. The objective is to relocate theLincoln activities to a more modern and appropriately sized site in the Lincolnarea. Various options for relocation are under review. The sale of theexisting Lincoln site is expected to realise a substantial profit, though thecash flow will be reduced by the costs of establishing and relocating to the newfacility. Principal risks and uncertainties for the second half The principal risks to the business for H2 are that, despite a strengthenedorder book since 30 September, further orders are required for H2 delivery.Whilst the board have confidence these orders will be forthcoming there remainsa risk they could be delayed or deferred by customers. The board also recognisethe risk that undertaking a major business improvement programme has thepotential to disrupt business processes and performance during theimplementation phase. The currency exposure risk for H2 has largely been mitigated by an activehedging strategy. OutlookThe solid first half performance reflects the strength of e2v's position as a major global provider of specialised electronic components and subsystems. Since the period end, the group's order book has strengthened significantly,which provides increased confidence in the full year outcome. G Kennedy K AttwoodChairman Chief Executive Officer12 November 2997 12 November 2007 *Before amortisation of acquired intangibles, business improvement programmecosts, share-based payment charges, integration costs, non-recurring costsassociated with acquisitions, exceptional interest charges and their tax impactwhere applicable. Directors' Responsibilities We confirm that to the best of our knowledge: • The condensed set of financial statements has been prepared inaccordance with IAS 34; • The interim management report includes a fair review of theinformation required by DTR 4.2.7R of the 'Disclosure and Transparency Rules',being an indication of important events that have occurred during the first sixmonths of the financial year and their impact on the condensed set of financialstatements; and a description of the principal risks and uncertainties for theremaining six months of the year; and • The interim management report includes a fair review of theinformation required by DTR 4.2.8R of the 'Disclosure and Transparency Rules',being related party transactions that have taken place in the first six monthsof the current financial year and that have materially affected the financialposition or performance of the entity during the period; and any changes in therelated party transactions described in the last annual report that could do so. K Attwood M HannantChief Executive Officer Group Finance Director12 November 2997 12 November 2007 Independent review report to e2v technologies plc INTRODUCTION We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30September 2007 which comprises the Group income statement, Group statement ofrecognised income and expense, Group balance sheet, Group cash flow statementand the related notes 1 to 11. We have read the other information contained inthe half-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements. This report is made solely to the Company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performedby the Independent Auditor of the Entity" issued by the Auditing PracticesBoard. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company, for our work, for this report,or for the conclusions we have formed. DIRECTORS' RESPONSIBILITIES The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of e2v technologies plcare prepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union. OUR RESPONSIBILITY Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. SCOPE OF REVIEW We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. CONCLUSION Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. Ernst & Young LLPCambridge12 November 2007 GROUP income statement For the six months ended 30 September 2007 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2007 2006 Note £000 £000 £000 Revenue 2 95,947 67,782 173,925Cost of sales (61,524) (46,338) (114,870)Gross profit 34,423 21,444 59,055Research and development costs (7,663) (3,772) (10,919)Selling and distribution costs (6,202) (4,994) (11,334) Amortisation of intangible assets arising on acquisitions (3,782) (1,601) (6,047)Cost associated with acquisition - (289) (300)Integration costs - (50) (755)Business improvement program (478) - -Share based payment charges (410) (290) (654)Other administrative costs (9,653) (5,314) (11,495)Administrative expenses (14,323) (7,544) (19,251)Profit before tax and net finance costs 2 6,235 5,134 17,551Finance costs 8 (2,816) (1,619) (4,217)Finance revenue 193 155 382Profit before taxation 3,612 3,670 13,716Income tax expense 4 (944) (1,052) (4,048)Profit for the period from continuing operations 2,668 2,618 9,668 Earnings per share - basic 9 4.40p 4.60p 16.46pEarnings per share - diluted 9 4.34p 4.57p 16.21pAdjusted earnings per share - basic 9 9.60p 7.67p 25.82pAdjusted earnings per share - diluted 9 9.46p 7.62p 25.42p GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE For the six months ended 30 September 2007 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Gains / (losses) on cash flow hedges 489 (56) 349Exchange differences on retranslation of foreign operations (163) (129) (603)Actuarial gain on post employment employee benefits 205 - 353Tax on items taken directly to or transferred from equity (266) 152 867Net income / (expense) recognised directly in equity 265 (33) 966Profit for the period 2,668 2,618 9,668Total recognised income and expense for the year 2,933 2,585 10,634 GROUP balance sheetat 30 September 2007 30 September 30 September 31 March 2007 2006 2007 Note £000 £000 £000AssetsNon-current assetsProperty, plant and equipment 36,499 33,354 35,192Intangible assets 87,018 88,173 84,275Deferred income tax assets 4,146 3,332 3,964 127,663 124,859 123,431Current assetsInventories 40,280 38,561 40,384Trade and other receivables 47,094 32,477 45,344Other financial assets 759 510 267Income tax recoverable 2,503 - 1,705Cash 6,428 12,508 8,496 97,064 84,056 96,196Total assets 2 224,727 208,915 219,627 LiabilitiesCurrent liabilitiesTrade and other payables (40,224) (37,445) (46,620)Other financial liabilities (4,772) (563) (2,398)Income tax payable (2,257) (799) (1,231)Provisions (4,179) (4,894) (4,557) (51,432) (43,701) (54,806)Net current assets 45,632 40,355 41,390 Non-current liabilitiesOther financial liabilities (93,915) (90,301) (84,801)Provisions (539) (1,056) (766)Retirement benefit obligations (2,577) (2,890) (2,691)Deferred income tax liabilities (11,537) (13,825) (12,335) (108,568) (108,072) (100,593)Net assets 64,727 57,142 64,228 Shareholders' equityOrdinary share capital 3,074 3,073 3,073Share premium 39,935 39,896 39,902Capital redemption reserve 274 274 274Investment in own shares held by employee benefit (9) (9) (9)trustHedge reserve 466 (172) 111Foreign currency translation (80) 92 (50)Retained earnings 21,067 13,988 20,927Total shareholders' equity attributable to equityholders of parent company 64,727 57,142 64,228 GROUP Cash Flow statement For the six months ended 30 September 2007 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 Note £000 £000 £000Cash flows from operating activities Profit before tax and net finance costs 6,235 5,134 17,551Adjustments to reconcile to net cash inflows fromoperating activitiesDepreciation of property, plant and equipment 3,924 4,237 7,311Amortisation of intangible assets 5,379 2,764 8,724Share based payment charges 410 290 654Decrease / (Increase) in inventories 980 (2,848) (4,349)Increase in trade and other receivables (1,270) (5,243) (18,327)(Decrease) / increase in trade and other payables (7,710) (1,731) 7,941(Decrease)/increase in provisions (621) 659 34Cash generated from operations 7,327 3,262 19,539Income taxes paid (2,201) (2,870) (8,930)Net cash flows from operating activities 5,126 392 10,609Cash flows from investing activitiesProceeds from sale of property, plant and equipment 45 - 21Interest received 193 155 382Purchase of property, plant and equipment (4,637) (3,954) (9,169)Purchase of software (782) (528) (1,493)Expenditure on patents, trade marks and technology (132) - (24)Expenditure on product development (747) (1,023) (1,905)Acquisition of subsidiary, net of cash acquired 7 (5,037) (64,553) (64,553)Net cash flows used in investing activities (11,097) (69,903) (76,741)Cash flows from financing activitiesInterest paid (2,642) (1,236) (3,653)Proceeds from issue of shares, net of expenses 34 12,864 12,870Dividends paid to equity shareholders of the parent (2,878) (2,334) (3,667)Payment of finance lease liabilities (7) (15) (28)Proceeds from borrowings 9,500 92,595 92,595Transaction costs of new bank loans raised - (1,735) (1,735)Repayment of borrowings - (26,100) (29,709)Net cash flows generated from financing activities 4,007 74,039 66,673 Net (decrease) / increase in cash (1,964) 4,528 541Net foreign exchange difference (104) (107) (132)Cash at beginning of period 8,496 8,087 8,087Cash at end of period 11 6,428 12,508 8,496 Notes to the interim group financial statements 1. Basis of preparation and accounting policies Basis of preparation These interim financial statements have been prepared in accordance with theaccounting policies set out in the Company's 2007 Annual Report and wereapproved by the Board of Directors on 12 November 2007. The interim financialstatements for the six months ended 30 September 2007 have been prepared inaccordance with IAS 34 'Interim Financial Reporting'. The interim financialstatements do not include all the information and disclosures in the annualfinancial statements, and should be read in conjunction with the Group's annualfinancial statements as at 31 March 2007. The financial information in these interim financial statements does notconstitute statutory financial statements as defined in Section 240 of theCompanies Act 1985. The Group's 2007 Annual Report has been filed with theRegistrar of Companies and the auditor's report on those financial statementswas not qualified and did not contain statements under section 237(2) or (3) ofthe Companies Act 1985. The Interim Financial Statements are unaudited but have been formally reviewedby the auditors, Ernst & Young LLP, and their report to the Company is set outon page 6. Significant accounting policies The accounting policies adopted in the preparation of the interim condensedconsolidated financial statements are consistent with those followed in thepreparation of the Group's annual financial statements for the year ended 31March 2007, except for the adoption of new Standards and Interpretations, notedbelow. Adoption of these Standards and Interpretations did not have any effecton the financial position or performance of the Group. • IFRIC 9 'Reassessment of Embedded Derivatives' The Group adopted IFRIC Interpretation 9 as of 1 April 2007, which states thatthe date to assess the existence of an embedded derivative is the date that anentity first becomes party to the contract, with reassessment only if there is achange to the contract that significantly modifies the cash flows. • IFRIC 10 'Interim Financial Reporting and Impairment' The Group adopted IFRIC Interpretation 10 as of 1 April 2007, which requiresthat an entity must not reverse an impairment loss recognised in a previousinterim period in respect of goodwill or an investment in either an equityinstrument or a financial asset carried at cost. • IFRIC 11 and IFRS 2 'Group and Treasury Share Transactions' The Group has elected to adopt IFRIC Interpretation 11 as of 1 April 2007. Theinterpretation requires arrangements whereby an employee is granted rights to anentity's equity instruments to be accounted for as an equity-settled scheme,even if the entity buys the instruments from another party, or the shareholdersprovide the equity instruments needed. The adoption of this Interpretation didnot have any effect on the financial position or performance of the Group. 2. Segmental analysis Revenue is attributable to two operating segments, being the supply of sensorand semiconductor components and subsystems, and the supply of electronic tubesand subsystems. The following tables present revenue, profit and asset information by operatingsegment - Sensors and Electronic Total semiconductors tubes operations £000 £000 £000Sales by segment 6 months ended 30 September 2007Medical and Science 16,484 10,389 26,873Aerospace and Defence 26,014 14,017 40,031Commercial and Industrial 18,841 10,202 29,043Total segment revenue 61,339 34,608 95,947 6 months ended 30 September 2006Medical and Science 11,910 11,388 23,298Aerospace and Defence 14,703 7,596 22,299Commercial and Industrial 10,174 12,011 22,185Total segment revenue 36,787 30,995 67,782 Year ended 31 March 2007Medical and Science 33,466 24,788 58,254Aerospace and Defence 41,309 22,235 63,544Commercial and Industrial 29,511 22,616 52,127Total segment revenue 104,286 69,639 173,925 6 months 6 months Year ended ended ended 30 September 2007 30 September 31 March 2007 2006 £000 £000 £000Sales by destinationUnited Kingdom 23,879 15,139 37,547North America 25,790 22,502 51,314Europe 37,227 23,103 66,871Asia Pacific 7,310 5,789 14,998Rest of world 1,741 1,249 3,195 95,947 67,782 173,925 2. Segmental analysis (continued) Sensors and Electronic Total semiconductors tubes operations Unallocated £000 £000 £000 £000Profit before tax and net finance costs by segment 6 months ended 30 September 2007Segment result 1,603 6,192 (1,560) 6,235Amortisation of intangible assets arising on 3,777 - 5 3,782acquisitionBusiness improvement program - - 478 478Share based payment charges - - 410 410Adjusted segment result 5,380 6,192 (667) 10,905 6 months ended 30 September 2006Segment result 2,052 3,349 (267) 5,134Amortisation of intangible assets arising on 1,596 - 5 1,601acquisitionCost associated with acquisition 289 - - 289Integration costs 50 - - 50Share based payment charges - - 290 290Adjusted segment result 3,987 3,349 28 7,364 Year ended 31 March 2007Segment result 6,671 12,214 (1,334) 17,551Amortisation of intangible assets arising on 6,037 - 10 6,047acquisitionCost associated with acquisition 300 - - 300Integration costs 755 - - 755Share based payment charges - - 654 654Adjusted segment result 13,763 12,214 (670) 25,307 The following table presents total assets by operating segment - 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2007 2006Total assetsSensors and semiconductors 119,761 120,277 117,947Electronic tubes 21,655 19,078 20,462Total segment assets 141,416 139,355 138,409 Goodwill 9,709 9,709 9,709Intangible assets 4,984 4,560 5,026Property, plant and equipment 7,552 6,176 6,694Deferred tax 4,146 3,332 3,964Current assets 56,920 45,783 55,825Total consolidated assets 224,727 208,915 219,627 3. Dividends 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Final dividend for 2007: 4.75p (2006: 4.25p) per share 2,878 2,340 2,340Interim dividend for 2007: 2.20p per share - - 1,333Adjustment for prior year dividend payments - - (6) 2,878 2,340 3,667 The number of shares owned by the employee benefit trust is 884,239 (884,239 at30 September 2006 and 31 March 2007). The employee benefit trust has waived itsright to receive dividends. It is anticipated that 258,000 of the shares ownedby the employee benefit trust at 30 September 2007 will be allotted underincentive schemes and become eligible for the forthcoming dividend. On 9November 2007 the Board declared an interim dividend of 2.45p per share (2006:2.20p). The interim ordinary dividend is to be paid on 20 December 2007 toshareholders on the register at close of business on 23 November 2007. 4. Income tax The tax charge for the period has been calculated on the basis of the Directors'best estimate of the underlying annual effective tax rate for the year of 26%(2006: 29%). The lower tax rate in the current year reflects increased claimlevels of R&D tax credits, together with a restatement of deferred tax balancesin respect of UK timing differences to 28%, the latter being reflected in fullin the first half of the year. 5. Property, plant and equipment 6 months ended 6 months Year ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Opening net book value 35,192 21,320 21,320Additions 4,369 3,954 9,437Acquisition of subsidiary (see note 7) 607 11,829 11,829Disposals (45) - (21)Depreciation (3,924) (4,237) (7,311)Exchange adjustment 300 488 (62)Closing net book value 36,499 33,354 35,192 6. Commitments Capital commitments At 30 September 2007, the Group had capital commitments of £2,373,000 (30September 2006: £2,834,000; 31 March 2007 £4,173,000) principally relating tothe acquisition of new plant and equipment. 7. Business combinations Acquisition of MiCS On 14 May 2007, e2v technologies plc acquired 100% of the voting shares of MiCSan unlisted company based in Switzerland specialising in the design andmanufacture of specialised electronic components and sub-systems. The fair value of the identifiable assets and liabilities of MiCS as at the dateof acquisition was: Provisional Fair value recognised on acquisition Book value £000 £000 Property, plant and equipment 607 607Intangible assets 2,073 453Deferred income tax asset 266 -Inventories 225 225Trade debtors 85 85Other debtors 166 166Cash and cash equivalents 103 103 3,525 1,639Trade payables (342) (342)Other creditors (603) (603)Financial liabilities (7) (7)Deferred income tax liability (345) - (1,297) (952)Fair value of net assets 2,228 687Goodwill arising on acquisition 2,912Total consideration 5,140Consideration: £000Cash paid 5,008Costs associated with the acquisition 132Total consideration 5,140The cash outflow on acquisition is as follows: £000Net cash acquired with the subsidiary 103Cash paid (5,140)Net cash outflow (5,037) Included in the £2.9m of goodwill recognised above are certain intangible assetsthat cannot be individually separated and reliably measured from the acquireedue to their nature. These items include the expected value of synergies and anassembled workforce. From the date of acquisition, MiCS has contributed £0.4m loss to the profitbefore tax and net finance costs of the Group. Had the acquisition occurred onthe first day of the year, MiCS would have contributed £0.7m loss to the profitbefore tax and net finance costs. 8. Finance costs 6 months ended 6 months Year ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Bank loan interest 2,643 1,279 3,741Finance charges payable under finance leases - - 3Amortisation of debt issue costs 173 64 197Abnormal write off of debt issue costs - 276 276 2,816 1,619 4,217 Included in finance costs for the six months to 30 September 2006 is thewrite-off of debt issue costs of £276,000 relating to the early repayment ofloans. 9. Earnings per share The calculated basic and diluted earnings per share is based on the following: 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Profit for the period 2,668 2,618 9,668 Adjusted earnings per share is arrived at using the following earnings and sharenumbers: 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Profit for the period 2,668 2,618 9,668 Amortisation of intangible assets arising on acquisitions 3,782 1,601 6,047Share based payment charges 410 290 654Business improvement program 478 - -Cost associated with acquisition - 289 300Integration costs - 50 755Abnormal write off of debt issue costs - 276 276Tax impact of the above (1,519) (761) (2,535) 5,819 4,363 15,165 Weighted average number of shares No. 000 No. 000 No. 000 For basic and adjusted earnings per share 60,590 56,891 58,730Effect of dilution:Options 943 362 918For diluted earnings per share 61,533 57,253 59,648 The adjusted earnings per share is considered to more appropriately reflect theunderlying performance of the business. This reflects that the costs highlightedabove are expected to be either non-recurring or not comparable between periods. 10. Consolidated statement of changes in shareholders' equity 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 Note £000 £000 £000 Opening equity 64,228 43,737 43,737Total recognised income for the period/year 2,933 2,585 10,634Dividends on equity shares (2,878) (2,340) (3,667) 3New share capital subscribed 34 13,284 13,284Costs on issue of shares - (414) (414)Share based payment charges 410 290 654Closing equity 64,727 57,142 64,228 11. Analysis of movements in net debt 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007 £000 £000 £000 Cash at beginning of period 8,496 8,087 8,087Loans at beginning of period (87,153) (25,841) (25,841)Net debt at beginning of period (78,657) (17,754) (17,754) (Decrease) / increase in cash (1,964) 4,528 541Loans advanced (9,500) (92,595) (92,595)Loans repaid - 26,100 29,709Finance leases arising on acquisition (7) - -Finance leases repaid 7 15 28Loan issue costs capitalised - 1,735 1,735Amortisation of capitalised loan issue costs (173) (368) (538)Exchange differences (1,965) 513 217Total movement in net debt (13,602) (60,072) (60,903) Cash at end of period 6,428 12,508 8,496Loans at end of period (98,687) (90,334) (87,153)Net debt at end of period (92,259) (77,826) (78,657) Cash and cash equivalents:Total cash at bank and in hand 6,428 12,508 8,496 Loans advanced during the half year to September 2007 were drawn from existingfacilities. This information is provided by RNS The company news service from the London Stock Exchange