11 Apr 2011 07:00
11 April 2011
e2v technologies plc
2011 Year end trading update and dividend declaration
e2v technologies plc, the specialist provider of technology solutions for high performance systems, is today providing a period end trading update for the financial year ended 31 March 2011.
Highlights
·; Full year trading performance expected to be ahead of management's previous expectations
·; Over 9% underlying turnover growth, 13% reported
·; Excellent progress in developing key new application areas
·; Net borrowings of c.£28m, lower than previous expectations
·; Intended full year dividend of 3.6 pence a share
Keith Attwood, Chief Executive Officer, said
"We are very pleased to have delivered such a strong trading performance in improving markets overall and believe the business is well positioned to deliver further growth. As a result, the Board has decided to restart the payment of dividends earlier than planned.
During the year we have made continued progress on implementing the growth strategy, previously announced last July. We intend to provide further guidance on the scale of the opportunities being generated when we announce our results on 6 June."
Group Performance and Strategy Summary
Group revenue for the financial year ended 31 March 2011 was around £229m, up by over 13% compared with last financial year. The Group's trading performance for the full year is anticipated to be ahead of management's previous expectations.
Underlying turnover growth for the Group's continuing products (see note 3) was over 9%.
Interest expense in the financial year ended 31 March 2011 is anticipated to be around £4.5m and our adjusted effective tax rate for the year is estimated to be c.31%.
The growth strategy we announced on 26 July 2010 set out our focus on:
·; Six existing application areas, which represented two thirds of our base business
·; Two new focus areas of semiconductor lifecycle management and bulk materials processing
·; Geographic expansion in the US and Asia.
The growth strategy also set out our financial targets:
·; 15% underlying operating profit margin before December 2012
·; 8% a year underlying revenue growth by July 2013.
We believe we are currently ahead of these financial targets, by approximately 12 and 18 months respectively.
Divisional performance in the financial year ended 31 March 2011
In RF Power Solutions, our radiotherapy sales grew strongly. Our engagement in electronic countermeasures in the US is building, with a further contract award received within an ongoing military fast jet programme as well as a new development contract for our ultrawide band travelling wave tube on an airborne upgrade programme. In Europe, we have experienced lower demand as anticipated within electronic countermeasures. The other product lines in the division grew overall, with strong revenue growth in industrial products offsetting modest decline elsewhere.
In bulk materials processing, we have secured orders in the year of c.£1m for development work with our customers in the mining and offshore oil drilling sectors. Equipment orders for full scale production trials are anticipated to be received in the coming quarter. We will be demonstrating our 'production-ready' machine for vermiculite processing to members of The Vermiculite Association in April. We are also seeking to accelerate the technology for this programme and so have submitted an application to the Regional Growth Fund.
In High Performance Imaging Solutions, demand for our industrial process control cameras continued to be very strong, due to demand from Asia, along with recovering demand in our scientific imaging products. Progress has continued on resolving technical issues within our space imaging activities, though certain programmes remain challenging. Other product lines, including dental products, benefited from last time buy activity and have shown underlying growth on the smaller continuing product portfolio.
In Hi-Rel Semiconductor Solutions, the contract to support semiconductor lifecycle management for the 68k series microprocessor for the Eurofighter Typhoon programme secured revenues estimated at £30m over the next 10 years, of which £16m has been delivered this year, resulting in strong revenue growth in the year. The European assembly and test services business grew, offsetting lower assembly activity in the US operations due primarily to lower European end user demand.
In the US, we have partnered with Raytheon Space and Airline Systems to provide semiconductor lifecycle management services to support the F15 radar system. This contract will be for the next 5 years with an initial estimated value of £3m. We are also developing a broad range of other programmes with Raytheon and other leading defence OEMs in the US. These have a potential contract value of c.£35m over a 5 year period.
With the situation in Japan, we have taken management action to seek to secure our supply chain including extending forward orders. We do not currently anticipate material supply chain disruption to our planned revenue in the financial year ending 31 March 2012.
Order Book
The Group's total order book is £167m (31 March 2010: £161m), whilst the order book for delivery over the coming 12 months is £137m (31 March 2010: £132m). The order book includes last time buy orders of £7.8m (31 March 2010: £12.5m).
Net Borrowings
Net borrowings at 31 March 2011 were approximately £28m, a reduction of £17m from net borrowings of £45m at 31 March 2010.
Restructuring Programme and Organisational Changes
The restructuring programme has continued to plan and is now complete in the UK. In France, the programme is largely complete, with the front end CCD fab on schedule to close in June.
Consistent with previous communications, we have also completed the review of the activities held in the corporate centre. As a result, we have transferred the hand held thermal imaging product line to our High Performance Imaging Solutions division. The remaining businesses, equating to 6% of turnover, are confirmed as non core activities.
Dividend
Following the announcement on 20 January 2011, the Board is today pleased to confirm its intention to return to a progressive dividend policy. For the financial year ended 31 March 2011, the Board intends to pay a dividend of 3.6 pence per share. Of this, 1.2 pence per share will be paid on 27 May 2011 to e2v shareholders on the register as at 3 May 2011 and, subject to e2v shareholder approval at the Group's forthcoming Annual General Meeting, 2.4 pence per share will be paid on 3 August 2011 to e2v shareholders on the register as at 8 July 2011. Barring exceptional circumstances, the Board intends to adopt a similar weighting between interim and final dividends in future financial years.
Further enquiries:
e2v technologies plc Tel: +44 (0)1245 493 493
Keith Attwood/Charles Hindson
www.e2v.com
Financial Dynamics Tel: +44 (0)20 7269 7291
Nick Hasell/Nina Delangle
Notes to editors
1. The full year results will be announced on Monday 6 June 2011.
2. Net borrowings exclude capitalised borrowing costs.
3. The continuing products exclude "one off" revenue in the year, arising mainly from last time buys on the Grenoble front end fab, and non core product areas to our strategy, mainly servicing the automotive sector.
4. All financial information included in this release is sourced from unaudited management accounts and excludes any exceptional items.
5. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.