RNS Number:9746I
Isotron PLC
24 February 2005
DATE: Embargoed until 07:00am,
Thursday, 24 February 2005
CONTACT: John Barker, Chief Executive
Paul Wynne, Finance Director
Isotron plc
Tel: 020 7796 4133 (on 24 February)
Tel: 01793 567900 (thereafter)
Alistair Mackinnon-Musson
Philip Dennis
Hudson Sandler
Tel: 020 7796 4133
Email: isotron@hspr.co.uk
ISOTRON PLC
Interim Results
Isotron, whose principal business is contract sterilisation of medical products,
is pleased to announce its interim results for the half year ended 31 December
2004.
The Group operates in four main market sectors: Medical, Biological, Chemical
and Laboratory Services. Isotron is a multinational, market leading UK based
company with plants in the UK, Ireland, Holland, France, Germany, South Africa,
Malaysia and Thailand.
The key points are:
* Profit before tax and amortisation increased 21% to £5.2m
* Group turnover increased 10% to £19.6m
* Strong revenue growth from Medical, Chemical and Lab Services
* Benefit of significant one-off business in first half
* Strong cash flow contributed to reducing net debt
Commenting, John Barker, Chief Executive said:
'These results are significantly ahead of our expectations at the start of the
period. Chemical revenues were exceptionally strong and our underlying Medical
revenues were ahead of expectations. Additionally, we also benefited from
significant one-off sterilisation business in the first half.''The focus of the
business remains primarily on developing revenues from the
sterilisation of medical devices, and also expanding our Laboratory Services
business. The Board believes the Group is well placed to make good progress in
the second half year.'
Interim Statement
Group Results
Profit before tax and amortisation increased by 21% to £5.2m (2003: £4.3m) on
Group turnover that increased 10% to £19.6m (2003: £17.8m). At constant
exchange rates turnover grew by 12%. Operating profit before amortisation was
16% higher at £5.6m (2003: £4.8m).
These results are significantly ahead of our expectations at the start of the
period. Chemical revenues were exceptionally strong and our underlying Medical
revenues were ahead of expectations. Additionally, we also benefited from
significant one-off business in both the Medical and Laboratory Services markets
in the first half. Finally, exchange rates, while moving unfavourably against
last years comparative, were nevertheless better than expected.
Markets and Operations
Medical revenues, primarily the sterilisation of medical disposables, increased
by 10% to £12.1m (2003: £11.0m) and continue to represent the group's largest
revenue stream. Biological revenues, such as those from the treatment of food
packaging, were flat at £4.0m (2003: £4.0m). Chemical revenues, for example
from the cross linking of power cables, continued the acceleration seen in the
last financial year to move ahead by 32% to £1.4m (2003: £1.1m) in the first
half. Revenues from Laboratory Services, comprising contract microbiology and
pathology, advanced by 18% to £2.1m (2003: £1.7m).
Increasing revenues from the higher consumption of single use disposable medical
products is partly driven by demographics but also benefits from technological
advances and political drivers. The improvement in the group's Chemical revenues
comes mainly from increasing outputs of UK manufactured cable and tubing which
are treated by electron beam. Laboratory revenue increases come from the
testing for drugs of abuse together with microbiological testing for the growing
sterilisation customer base.
Reviewing the half-year by geographical coverage, we have made good progress in
all three regions, namely UK, Europe and Asia including South Africa. In
particular, a step up in production by key accounts in Thailand together with
new business there has increased that regions revenues by 17% (22% at constant
exchange rates).
In October 2004 we announced that capacity at our Tullamore plant in Ireland
would be expanded in response to the growing demand for our sterilisation
services. This represents further development of this site to include two more
ethylene oxide processing lines, which are planned to come on stream by the end
of calendar year 2005.
Cashflow
Strong operational cashflow of £9.0m in the first half (2003: £7.4m) contributed
to reducing net debt to £9.1m at end December 2004 from £11.9m at the end of
June 2004.
Dividend
The Board has declared an interim dividend of 3.91p per share, an increase of
10% on last year (3.55p). This will be paid on 22 April 2005 to shareholders on
the register at 18 March 2005.
Strategy and Outlook
We continue to seek ways to grow the business both organically and by
acquisition. The focus remains primarily on developing revenues from the
sterilisation of medical devices, and also expanding our Laboratory Services
business. The Board believes the Group is well placed to make good progress in
the second half year.
John Barker Jonathan Azis
Chief Executive Chairman
24 February 2005
Group Profit and Loss Account
Half year ended Half year ended Year ended
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
Notes £'000 £'000 £'000
Turnover 2 19,583 17,787 36,076
Operating costs (14,426) (13,425) (27,124)
Operating profit before amortisation 5,616 4,821 9,870
Amortisation of goodwill (459) (459) (918)
Operating profit from continuing operations 5,157 4,362 8,952
Profit on disposal of fixed assets - 48 33
Profit on ordinary activities before interest and tax 5,157 4,410 8,985
Net interest payable (430) (572) (1,058)
Other finance costs (11) (9) (29)
Profit on ordinary activities before taxation and
amortisation 5,175 4,288 8,816
Amortisation of goodwill (459) (459) (918)
Profit on ordinary activities before taxation 4,716 3,829 7,898
Taxation on profit on ordinary activities 3 (1,260) (1,074) (2,146)
Profit on ordinary activities after taxation 3,456 2,755 5,752
Minority interests - equity (22) (24) (75)
Profit for the period/year 3,434 2,731 5,677
Dividends paid and proposed (829) (749) (2,036)
Retained profit for the period/year 2,605 1,982 3,641
Earnings per ordinary share
- basic 4 16.2p 12.9p 26.9p
- diluted 4 16.1p 12.9p 26.7p
- before amortisation of goodwill 4 18.3p 15.1p 31.2p
Group Statement of Total Recognised Gains and Losses
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
£'000 £'000 £'000
Profit for the financial period/year 3,434 2,731 5,677
Exchange differences 605 (126) (1,190)
Actual return less expected return on pension scheme assets - - (203)
Experience gains and losses arising on the scheme liabilities - - 23
Changes in assumptions underlying the present value of the scheme
liabilities - - 60
Death in service benefits - - 190
Deferred tax on actuarial loss (38)
Actuarial gain on pension scheme - - 32
Total recognised gains and losses relating to the financial
period/year 4,039 2,605 4,519
Group Balance Sheet
As at As at As at
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
Note £'000 £'000 £'000
Fixed assets
Intangible assets 15,644 16,562 16,103
Tangible assets 57,760 57,914 56,448
73,404 74,476 72,551
Current assets
Stocks 752 675 675
Debtors 6,685 6,328 6,863
Cash at bank and in hand 4,173 3,331 2,711
11,610 10,334 10,249
Creditors: amounts falling due within one year (9,942) (10,506) (9,927)
Net current assets/(liabilities) 1,668 (172) 322
Total assets less current liabilities 75,072 74,304 72,873
Creditors: amounts falling due after one year (9,403) (12,670) (10,726)
Provisions for liabilities and charges (5,347) (5,140) (5,084)
Net assets before pension 60,322 56,494 57,063
Pension liability (249) (712) (161)
Minority interests - equity (226) (289) (265)
Net assets 59,847 55,493 56,637
Capital and reserves
Called up share capital 5,313 5,276 5,313
Share premium account 23,472 22,992 23,472
Profit and loss account 31,062 27,225 27,852
Equity shareholders' funds 5 59,847 55,493 56,637
Group Cash Flow Statement
Half year ended Half year ended Year ended
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
£'000 £'000 £'000
Net cash inflow from operating activities 9,045 7,436 14,759
Returns on investments and servicing of finance
Interest received 24 34 46
Interest paid (422) (559) (1,084)
Interest element of finance lease payments - (15) (16)
Dividends paid to minority interests (76) - (62)
Net cash outflow from returns on investments and
servicing of finance (474) (540) (1,116)
Taxation
UK corporation tax (448) (334) (806)
Overseas tax paid (814) (266) (1,321)
Return of overpayment 109 394 415
Tax paid (1,153) (206) (1,712)
Capital expenditure
Payments for fixed assets (2,972) (3,172) (6,777)
Proceeds from the sale of fixed assets 14 106 128
Net cash outflow for capital expenditure (2,958) (3,066) (6,649)
Equity dividends paid (1,286) (1,159) (1,909)
Net cash inflow before use of liquid resources and
financing 3,174 2,465 3,373
Management of liquid resources
(Increase)/decrease in short term deposits (387) 290 374
Financing
Issue of ordinary share capital - 102 619
Cash outflow from decrease in debts (1,750) (1,148) (2,954)
Repayment of obligations under finance leases (16) (469) (610)
Net cash outflow from financing (1,766) (1,515) (2,945)
Increase in cash in the period/year 1,021 1,240 802
Liquid resources are defined as deposits repayable within three months.
Notes to the Interim Financial Statements
Half year ended 31 December 2004 - unaudited
1. Basis of presentation of accounts
The Group profit and loss account and balance sheet for the half years ended 31
December 2004 and 31 December 2003 have been prepared on a basis consistent with
accounting policies disclosed in the Group's Annual Report and Accounts 2004.
The comparative figures for the financial year ended 30 June 2004 are extracted
from the Company's statutory accounts for that financial year. Those accounts
have been reported on by the Company's auditors and delivered to the Registrar
of Companies. The report of the auditors was unqualified and did not contain a
statement under Section 237(2) or (3) of the Companies Act 1985. Copies of the
Annual Report and Accounts 2004 are available from the Company's registered
office by applying to the Company Secretary, Isotron plc, Moray Road, Elgin
Industrial Estate, Swindon SN2 8XS. The Company is registered in England Number
1771333.
2. Turnover
Turnover represents amounts invoiced in respect of services provided during the
period excluding value added tax. All turnover arises from the Group's
principal activity.
Segmental information
Half year ended Half year ended Year ended
31 December 2004 31 December 2003 30 June 2004
unaudited unaudited audited
£'000 £'000 £'000
Turnover by location of customer
United Kingdom 8,606 7,842 15,885
Rest of Europe 8,384 7,657 15,767
Asia and South Africa 2,593 2,288 4,424
19,583 17,787 36,076
Turnover by origin
United Kingdom 8,595 7,825 15,868
Rest of Europe 8,371 7,717 15,787
Asia and South Africa 2,617 2,245 4,421
19,583 17,787 36,076
Turnover by market sector
Medical 12,145 11,012 22,546
Biological 3,970 3,966 7,807
Chemical 1,413 1,071 2,244
Laboratory Services 2,055 1,738 3,479
19,583 17,787 36,076
Profit on ordinary activities by origin
United Kingdom 1,890 1,823 3,570
Rest of Europe * 2,362 2,024 4,235
Asia and South Africa * 905 563 1,180
5,157 4,410 8,985
Net interest payable (including other
finance costs)
United Kingdom 180 235 436
Rest of Europe 160 195 397
Asia and South Africa 101 151 254
441 581 1,087
Net assets by origin
United Kingdom 15,045 13,201 14,093
Rest of Europe 30,644 28,943 28,651
Asia and South Africa 14,158 13,349 13,893
59,847 55,493 56,637
* After amortisation of goodwill
3. Tax charge
The tax charge in the period has been based on the estimated effective rate
applicable to each significant category of income for the full year.
4. Earnings per share
The calculation of earnings per share is based on earnings of £3.43 million
(2003: £2.73 million) and the weighted average share capital of 21.25 million
ordinary shares of 25 pence in issue (2003: 21.08 million). The calculation of
the diluted earnings per share is based on earnings of £3.43 million (2003:
£2.73 million) and 21.37 million ordinary shares (2003: 21.14 million).
Earnings per ordinary share before amortisation of goodwill has been based on
profit of £3.43 million (2003: £2.73 million) and amortisation of goodwill £0.46
million (2003: £0.46 million).
5. Reconciliation of movements in shareholders' funds
As at As at As at
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
£'000 £'000 £'000
Profit for the financial period/year 3,434 2,731 5,677
Dividends (829) (749) (2,036)
Retained profit for the financial period/year 2,605 1,982 3,641
Exchange differences 605 (126) (1,190)
New share capital - 102 619
Actuarial gains recognised in STRGL - - 32
Net addition to shareholders' funds 3,210 1,958 3,102
Opening shareholders' funds as previously reported 56,637 53,535 53,535
Closing shareholders' funds 59,847 55,493 56,637
6. Reconciliation of Net Cash Flow to Movement in Net Debt
Half year ended Half year ended Year ended
31 December 31 December 30 June
2004 2003 2004
unaudited unaudited audited
£'000 £'000 £'000
Increase in cash 1,021 1,240 802
Cash outflow/(inflow) from short term deposits 387 (290) (374)
Decrease in debt 1,826 1,861 3,828
Cash inflow from new loans (60) (244) (264)
Deferred charges of loan issue costs (18) (18) (36)
New finance leases - (37) (86)
Exchange difference (353) (9) 440
Movement in net debt in the period 2,803 2,503 4,310
Net debt at the beginning of the period (11,878) (16,188) (16,188)
Net debt at period end (9,075) (13,685) (11,878)
- Ends -
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