Solid State Regulatory News (SOLI)

1 Jul 2005 07:00

Solid State Supplies PLC01 July 2005 1 July 2005 Solid State Supplies PLC Preliminary Announcement for the year ended 31 March 2005 CHAIRMAN'S STATEMENT Results The audited profit before tax of the Group was £315,000 (2004: £268,000) aftercharging amortisation of goodwill of £35,000 (2004: £35,000) on a turnover of£9,480,000 (2004: £8,638,000). The basic earnings per share amounted to 3.8p(2004: 3.2p). Trading Review Solid State Supplies As has been widely reported, the component distribution market in the UK remainsdifficult. Despite this, Solid State Supplies is benefiting from the Group'sBox Board Chip solutions strategy and has recorded a sequential improvement inboth sales and profits over this period. Steatite The results for the year were disappointing for Steatite as the UK manufacturingmarket continues to decline. Notwithstanding these demanding market conditions,we have been encouraged by the level of new business opportunities that havebeen generated in the form of new customers with our new own branded products.Our order book has remained strong, but broadly flat during this period, thelonger term element has risen, suggesting an upturn in the second half ofcalendar year 2005. Future Acquisitions In the report on the accounts for the year ended 31 March 2004, reference wasmade to a potential acquisition within the electronics industry. Thatacquisition could not proceed at that time, due to unresolved issues. Theseissues have now been resolved and I hope to be able to complete detailedcontract negotiations and make a formal announcement about this in the nearfuture. The acquisition will be treated as a Substantial Transaction for thepurposes of the AIM Rules of the London Stock Exchange. Summary We remain committed to developing our technology solutions approach with thefocus on the design led element of our business. This will improve our productbrand and gain higher margins. This approach also provides closer ties with ourcustomers by providing value added services in systems integration. In the lightof the softness of the market in the UK with substantial shifting of themanufacturing base offshore and the continued trend towards globalisation of theelectronics components distribution market, the Board is confident that itschange of focus in strategy will strengthen the Group's performance in themedium to longer term. Dividends The Directors are recommending a final dividend of 2p per share which, togetherwith the interim dividend, makes a total for the year of 3.5p per share. Thiscompares with a total of 3p per share last year. The final dividend will bepaid on 28 July 2005 to shareholders on the register at the close of business on15 July 2005. Renewal of authority to purchase the Company's shares Last year, resolutions were passed at the Annual General Meeting to give theCompany the authority to purchase its own Ordinary shares on the Stock Exchange.This authority would expire after a period of eighteen months from the passingof the resolution. In order to avoid this authority expiring during the nextyear and the need to call an extraordinary general meeting to renew theauthority, a resolution to renew the authority is set out in the notice of theAnnual General Meeting. Under the terms of the resolution to be proposed at the Annual General Meeting,the maximum number of shares which may be purchased in 923,476 sharesrepresenting 15% of the issued ordinary share capital of the Company. Theminimum price payable by the Company for its Ordinary shares will be 35p and themaximum price will be 150p. The authority will automatically expire after aperiod of eighteen months from the passing of the resolution unless renewed. It is not the Directors' current intention to exercise the power to purchase theCompany's Ordinary shares but they believe that under certain circumstances itwould be in the Company's best interests to do so. Your Directors consider that the resolution to be proposed at the meeting is inthe best interests of the Company and its shareholders. They unanimouslyrecommend that all Ordinary shareholders vote in favour of the resolution at theAnnual General Meeting as they intend to do in respect of their beneficialholdings amounting to 4,523,106 Ordinary shares, representing 73.47% of theCompany's issued Ordinary share capital. Conclusion I would like to thank my fellow Directors and the staff in general for theircontinued support. Peter HainingChairman1 July 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31 March 2005 2005 2004 £ £ Turnover 9,480,429 8,637,906Cost of sales (6,698,300) (5,826,847) ----------------- ----------------- GROSS PROFIT 2,782,129 2,811,059Selling expenses and distribution costs (1,181,137) (1,181,001)Administrative expenses (1,285,865) (1,296,491) ----------------- ----------------- OPERATING PROFIT 315,127 333,567Other interest receivable and similar income 1,943 831Interest payable (1,660) (66,243) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 315,410 268,155Tax on profit on ordinary activities (79,573) (71,575) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 235,837 196,580Dividends - Equity (216,505) (186,750) ----------------- ----------------- RETAINED PROFIT FOR THE YEAR 19,332 9,830 ----------------- ----------------- EARNINGS PER SHAREBasic 3.8p 3.2pDiluted 3.8p 3.2p All amounts relate to continuing activities There were no recognised gains or losses other than the profit for the year asstated above. RECONCILIATION OF MOVEMENT IN GROUP SHAREHOLDERS' FUNDSFor the year ended 31 March 2005 Group Company 2005 2004 2005 2004 £ £ £ £ Profit for the year 235,837 196,580 305,934 153,190 Less: Dividends (216,505) (186,750) (216,505) (186,750) Purchase of own shares (33,811) - (33,811) - --------------- --------------- --------------- ---------------Net addition/(reduction) toshareholders' funds (14,479) 9,830 55,618 (33,560) Opening shareholders' funds 2,089,406 2,079,576 1,888,934 1,922,494 --------------- --------------- --------------- ---------------Closing shareholders' funds 2,074,927 2,089,406 1,944,552 1,888,934 --------------- --------------- --------------- --------------- CONSOLIDATED BALANCE SHEETat 31 March 2005 2005 2004 £ £ FIXED ASSETSIntangible assets 596,117 630,879Tangible assets 415,322 546,098Investments - 500 ----------------- ----------------- 1,011,439 1,177,477 CURRENT ASSETSStocks 1,091,215 1,256,979Debtors 1,941,024 2,026,621Cash at bank in hand 108,536 159,494 ----------------- ----------------- 3,140,775 3,443,094 CREDITORS: Amounts falling due within one year 1,723,038 2,059,134 ----------------- ----------------- NET CURRENT ASSETS 1,417,737 1,383,960 ----------------- ----------------- TOTAL ASSETS LESS CURRENT LIABILITIES 2,429,176 2,561,437 CREDITORS: Amounts falling due after more than one year 354,249 472,031 ----------------- ----------------- 2,074,927 2,089,406 ----------------- ----------------- CAPITAL AND RESERVESCalled up share capital 307,826 311,250Share premium account 756,980 756,980Capital redemption reserve 4,674 1,250Profit and loss account 1,005,447 1,019,926 ----------------- -----------------SHAREHOLDERS' FUNDS-EQUITY 2,074,927 2,089,406 ----------------- ----------------- The financial statements were approved by the Board on 1 July 2005 CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 March 2005 2005 2004 £ £ Net cash inflow from operating activities 673,859 676,648 Return on investments and servicing of finance:Interest received 1,943 831Hire purchase interest paid 29,522 (4,011)Other interest paid (31,182) (62,232) --------------- ---------------Net cash outflow from return on investments and servicing offinance 283 (65,412) TaxationCorporation tax paid (71,575) (4,856) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (80,616) (189,167)Receipts from sales of tangible fixed assets 25,934 19,137 --------------- ---------------Net cash outflow from capital expenditure and financialinvestment (54,682) (170,030) Acquisitions and disposalsReceipt from sale of joint venture 500 -Purchase of business operation - (2,625) --------------- ---------------Net cash inflow/(outflow) from acquisitions and disposals 500 (2,625) Equity dividends paid (217,875) (186,750) --------------- ---------------Net cash inflow/(outflow) before financing 330,510 246,975 FinancingRepayments of medium term loan: capital element (108,572) (128,909)Hire purchase finance repaid: capital element (32,318) (11,988)Invoice discounting finance (paid)/received (net movement) (122,675) 33,348Purchase of own shares (33,811) - --------------- ---------------Net cash (outflow)/inflow from financing (297,276) (107,549) --------------- ---------------Increase in cash 33,234 139,426 --------------- --------------- NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 March 2005 1. The attached preliminary announcement is prepared on the same basis as setout in the previous year's annual accounts and does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985; thestatutory accounts for the year ended 31 March 2005, upon which an unqualifiedaudit opinion has been given and which did not contain a statement under Section235, 237(2) or 237(3) of the Companies Act 1985, will be delivered to theRegistrar of Companies at a later date. A duly appointed and authorisedcommittee of the Board of Directors approved the preliminary announcement on 29June 2005. 2. SEGMENTAL ANALYSIS The turnover and profit before taxation are attributable to the one principalactivity of the Group. All operations are located in the United Kingdom. Ananalysis of sales by destination is as follows: 2005 2004 £ £United Kingdom 8,987,478 8,095,799Europe 395,777 394,477United States of America 60,704 8,722Asia 25,189 109,080Africa 8,834 27,154Australasia 2,447 2,674 --------------- --------------- 9,480,429 8,637,906 --------------- --------------- 3. OPERATING PROFIT The operating profit is stated after charging/(crediting): 2005 2004 £ £ Depreciation 177,049 188,264Loss/(profit) on disposal of fixed assets 8,409 (4,866)Amortisation of goodwill 34,762 34,762Auditors' remuneration:Audit services 24,495 29,814Operating lease rentals:Plant and machinery 23,227 41,337Other 102,838 84,485Foreign exchange gains (100,837) (57,416)Employment termination costs 14,896 4,645Shares for All Employee Share Plan (940) 3,310Relocation expenses - 607 ----------------- ----------------- Included in audit fees is an amount of £12,495 (2004: £21,314) in respect of theCompany. Additional non-audit services regarding the purchase of SteatiteLimited were £nil (2004: £2,625) and have been added to the goodwill figure onconsolidation. 4. DIVIDENDS 2004 2003 £ £Interim dividend paid of 1.5p per share (2004: 1p) 93,375 62,250Final dividend proposed of 2p per share (2004: 2p) 123,130 124,500 ---------------- ---------------- 216,505 186,750 ---------------- ---------------- 5. EARNINGS PER SHARE 2005 2004 £ £The earnings per share is based on the following:Earnings 235,837 196,580 ------------------ ------------------Weighted average number of shares 6,207,342 6,225,000Diluted number of shares 6,207,342 6,225,000 Earnings per share 3.8p 3.2pDiluted earnings per share 3.8p 3.2p Earnings per ordinary share has been calculated using the weighted averagenumber of shares in issue during the year. The weighted average number of equityshares in issue was 6,207,342 (2004: 6,225,000). The Diluted earnings per share is based on 6,207,342 (2004: 6,225,000) ordinaryshares which allow for the exercise of all dilutive potential ordinary shares. 6. DEBTORS: Amounts receivable within one year Group Group Company Company 2005 2004 2004 £ £ £Trade debtors 1,850,444 1,912,491 955,109 1,066,729Amounts owed by Groupundertakings - - 1,121,828 1,166,072Other debtors 1,985 16,861 1,985 5,387Prepayments and accruedincome 88,595 97,269 58,538 47,321 ------------- ------------- ------------- ------------- 1,941,024 2,026,621 2,137,460 2,285,509 ------------- ------------- ------------- ------------- Group trade debtors include £436,248 (2004: £714,717) which are subject to aninvoice discounting agreement. Under this agreement, borrowing equal to 80% ofthe relevant book debts can be taken with interest charged at 1.5% over bankbase rate and an administration fee of 3% of the gross value of debts per month.At 31 March 2005, borrowing under the agreement of £314,711 (2004: £541,747) wasavailable of which £69,799 (2004: £192,474) was taken up leaving unusedborrowing facilities of £244,912 (2004: £349,273). Interest charges in the yearamounted to £5,720 (2004: £17,234) and administration fees to £9,466 (2004:£9,840). 7. CREDITORS: Amounts falling due within one year Group Group Company Company 2005 2004 2004 £ £ £Bank overdrafts (secured) 5,971 90,163 5,971 90,163Bank loan (secured) 98,596 108,800 98,596 98,148Trade creditors 1,049,345 1,116,482 380,057 605,568Amounts due to invoice discounters 69,799 192,474 - -Corporation tax 79,573 71,575 79,573 71,575Other taxes and social security costs 238,151 250,636 135,270 128,121Proposed dividend 123,130 124,500 123,130 124,500Obligations under hire purchasecontracts - 12,804 - -Other creditors 4,694 32,621 4,694 15,185Accruals and deferred income 53,779 59,079 25,082 31,144 ------------ ------------ ------------ ------------ 1,723,038 2,059,134 852,373 1,164,404 ------------ ------------ ------------ ------------ The bank loan and overdraft are secured by a fixed and floating charge over theassets of the Company and the Group. At the balance sheet date, the Group had anundrawn overdraft facility of £656,529 (2004: £572,337), which enablesflexibility in the management of liquidity. The Company has guaranteed bank borrowings of its subsidiary undertaking.Steatite Limited. At the year end the liabilities covered by this guaranteeamounts to £nil (2004: £nil). 8. CREDITORS: Amounts falling due after more than one year Group Group Company Company 2005 2004 2005 2004 £ £ £ £Bank loan (secured) 354,249 452,617 354,249 452,617 Obligations under hire purchase contracts - 19,414 - - ----------- ----------- ----------- ----------- 354,249 472,031 354,249 452,617 ----------- ----------- ----------- -----------Bank loan repayments are due:In more than one year but notmore than two years 98,596 98,148 98,596 98,148In more than two years but notmore than five years 255,653 354,469 255,653 354,469 ----------- ----------- ----------- ----------- 354,249 452,617 354,249 452,617 ----------- ----------- ----------- ----------- The bank loan was for £750,000 taken out in May 2002 and repayable byinstalments over seven years. The loan is secured by a fixed and floating chargeover the assets of the Company and the Group. 9. The Annual Report will be sent to shareholders on 4 July 2005 and madeavailable to the public at the registered office of the Company at Unit 2,Eastlands Lane, Paddock Wood, Kent, TN12 6BU This information is provided by RNS The company news service from the London Stock Exchange