Acal : Preliminary Results for the year ended 31 March 2016

01 Jun 2016

Underlying earnings per share up 23% CER
Further growth in operating margins

Acal plc (LSE: ACL, 'Acal' or 'the Group'), a leading international supplier of customised electronics to industry, today reports strong full year results for the year ended 31 March 2016.

Highlights

• Strong growth in profits and earnings per share
• • Sales up 14% CER(2) and gross profit up 18% CER
  • Ongoing sales(4) up 3%
  • Underlying profit before tax up 37% CER
  • Underlying earnings per share up 23% CER
• Excellent progress made towards our target key performance and strategic indicators
• • Underlying operating margin increased to 5.7% (2014/15: 4.9%)
  • Design & Manufacturing sales up to 51%(5) of Group sales (2014/15: 37%)
  • International sales(6) increased to 17% of Group sales (2014/15: 12%)
  • Cross-selling accounts for 5% of Group revenues
  • Operating cash flow(7) at 100% of underlying operating profit
• New customer contract wins support growth plans
• Acquisitions of Contour, Flux and Plitron further build capabilities and generate efficiencies
• Group well positioned for further growth
• • Highest ever order book at £85m
  • Developing acquisition opportunities
• Full year dividend up 6%

Nick Jefferies, Group Chief Executive, commented:
'This is a strong set of results with underlying operating profit increasing by 36% on sales growth of 14% at constant exchange rates. Underlying operating margins have almost doubled over the last two years. Over 50% of ongoing revenue is now from our higher margin Design & Manufacturing division, which is generating almost 80% of Group profits.

Whilst challenging trading conditions are likely to continue in the first half of the year, we expect an improvement in the second half in line with our expectations for the full year. We have £20m of funding available for acquisitions and will continue to take advantage of opportunities that will enhance growth and shareholder value.

We are building a highly differentiated, international electronics business, supplying essential technologies to growth markets, and are confident of making further progress in the year ahead.'

For further information please contact:

Acal plc
Nick Jefferies - Group Chief Executive
Simon Gibbins - Group Finance Director
01483 544 500

Instinctif Partners
Mark Garraway
Helen Tarbet
James Gray
020 7457 2020

Notes:

(1) 'Underlying Operating Profit', 'Underlying Operating Costs', 'Underlying Operating Margin', 'Underlying Profit before Tax' and 'Underlying EPS' are non-IFRS financial measures used by the Directors to assess the underlying performance of the Group. These measures exclude provision for earn-out payments (included in exceptional items) of £0.6m, other exceptional items of £1.2m, amortisation of acquired intangible assets of £2.8m and the IAS19 pension charge relating to a legacy defined benefit scheme of £0.5m; totalling £5.1m for FY 2015/16. Equivalent exclusions within the FY 2014/15 underlying results totalled £7.5m. For further information see note 5 of the attached summary financial statements.

(2) Growth rates at constant exchange rates ('CER'). Unless stated, growth rates refer to the comparable prior year period. The average Sterling rate of exchange strengthened 7% against the Euro for the year ended 31 March 2016 compared with the average rate for last year (rising from 1.275 to 1.367) and strengthened 9% against Nordic currencies on average, together negatively affecting Group reported sales for this period by 6% and underlying operating profit by 8%.

(3) Organic growth for the Group of -2% is calculated at CER including the pre-acquisition periods of the Noratel Group and the Foss Group which were acquired during the last financial year (on 17 July 2014 and 7 January 2015 respectively) and of the Flux Group, Contour, and Plitron which were acquired this financial year (on 5 November 2015, 7 January 2016 and 1 February 2016 respectively).

(4) Ongoing sales growth for the Group of 3% excludes large, non-repeating orders from last year within Custom Distribution and sales of its final major non-specialist, low margin supplier, which was discontinued last year.

(5) Design & Manufacturing sales, annualised for acquisitions, expressed as a percentage of Group sales.

(6) International sales are sales outside the UK and Western Europe.

(7) Operating cash flow is net cash generated from operations before financing, taxation and dividends, payment of acquisition related costs, exceptional items, earn-out payments and legacy pension costs.

Notes to Editors:

Acal is a leading international supplier of customised electronics to industry. It designs, manufactures and distributes customer-specific electronic products and solutions to 25,000 industrial manufacturers and is listed on the London Stock Exchange (LSE: ACL).

Acal has two divisions: Design & Manufacturing and Custom Distribution. The majority of its sales comes from products and solutions which are created specifically for a customer. Acal works across a range of technologies, namely Communications & Sensors, Power & Magnetics, Electromechanical & Shielding, Embedded Systems, and Photonics & Imaging.

Acal operates through the following wholly-owned businesses: Acal BFi, Contour, Flux, Foss, Hectronic, MTC, Myrra, Noratel, Plitron, RSG, Stortech and Vertec. It has operating companies and manufacturing facilities in a number of markets, including the UK, Germany, France, the Nordic region, Benelux, Italy, Poland, Slovakia and Spain, as well as in Asia (China, India, South Korea, Sri Lanka and Thailand), North America (the US and Canada), and South Africa.

01 Jun 2016 Preliminary Results for the year ended 31 March 2016 (644KB PDF)

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