Turbotec Products Plc (TRBO.L), the designer and manufacturer of high performance, high quality heat exchangers and flexible connector products, which was admitted to AIM in May 2006, announces its Final Results for the year ended 31 March 2007.
HIGHLIGHTS
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Turnover increased by 25% to $23.53m (2006: $18.75m) |
|
Operating profit up by 16.5% to $1.974m (2006: $1.694m) |
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Profit before tax up 20.7% to $1.878m (2006: $1.556m) |
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Total dividend 5.8 cents (2006: Nil) |
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Expanded customer base in targeted markets |
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Operational efficiencies achieved through continued implementation of lean manufacturing |
Commenting on the Final Results, Sunil Raina, Managing Director of Turbotec Products, said:
”I am pleased with the performance of the Company in its maiden year in the AIM market. I remain optimistic about the future given Turbotec’s expanding product offerings in an era of ever increasing fossil fuel process and the uncertainty of energy supply.”
- Ends -
Enquiries:
Enquiries:
Media enquiries:
Copies of this announcement are available for collection from Dawnay, Day Corporate Finance Limited's offices at 17 Grosvenor Gardens, London, SW1W 0BD and electronic copies can be obtained from the Company's website www.turbotecproducts.com
CHAIRMAN’S STATEMENT
I am pleased to report that good progress has been made in meeting our strategic objectives, increasing our product range and improving our manufacturing facilities, which will support our continued growth and profitability.
Results and Earnings
Turnover for the year ended 31 March 2007 increased by 25% to $23.5m from $18.75m in the previous year, and whilst this was partly assisted by increases in raw material prices, we have successfully managed to pass these on through increased selling prices, and still report a real sales volume growth of 11% for the year. We produced an operating profit for the financial year of $1.97m representing an increase of 16.5% over the previous year.
In May 2006, at the time of the AIM placing, the Company stated that for the 2007 financial year, and in the absence of unforeseen circumstances, it intended to recommend a final dividend at the time of announcing the preliminary results for the 2007 financial year ending 31 March 2007. Accordingly The Company is recommending a final dividend of 5.8 cents per ordinary share (approximately 2.9p per share) making a total dividend for the year of 5.8 cents. This is ahead of the dividend payment referred to at the IPO and we anticipate paying an interim and a final dividend going forward.
We continue to expand our utilisation of existing manufacturing facilities by active and continuous pursuit of lean manufacturing improvements. Looking to the future, we will at some stage need to take on additional facilities to meet our increasingly geographically spread customer base; which will at the same time also offer many opportunities for cost savings in our operations. The recent volatility in raw material prices led to a thorough and beneficial review of our pricing policies.
Dividend Timetable
The dividend will be paid to qualifying shareholders on 24 August 2007. Shareholders recorded on Turbotec’s share register at the close of business on 27 July 2007 will be eligible to receive the dividend. Consequently, Turbotec’s ex-dividend date is 25 July 2007.
Administration Fee
As disclosed in our admission document, Turbotec made payments during the year to Thermodynetics (the Company’s majority shareholder), in anticipation of administrative services. In accordance with the Relationship Agreement these amounts are now recoverable. This has a positive impact on our reported earnings and allows your Board to present shareholders with a clearer picture of the underlying performance of the Company.
People
We continue to search for good people to augment our existing strong team, which we are continually training and developing for our future growth. The business expansion has placed demands on employees at all levels and the Board would like to thank all employees for their dedication and support during the year.
Business Summary
Turbotec’s enhanced surface tubing provides higher energy efficiencies for applications in the biomedical, aerospace, automotive, boiler, marine, ice machine, swimming pool and spa, food and beverage and residential/commercial heating and cooling industries. These tubing products support a wide array of component and heat transfer needs, including surface-enhanced tubing, single and double wall co-axial condenser and evaporator coils and heat recovery systems.
Outlook
The much-publicised current depression in the U.S. housing market has thus far had no negative impact on our business, with our order pipeline remaining healthy within our existing customer base, and our steady expansion in new sector customers. With the ever-increasing energy prices affecting running costs, and the growing awareness on global warming issues, our products are well placed to exploit opportunities.
We have an evolving strategy that is simple and sound, a strong value proposition in our product range, facilities that we will expand to cope with our increased geographical sales coverage, and therefore the Board views the future prospects with optimism.
Tom Nairn
Chairman
26 June 2007
FINANCIAL STATEMENTS
TURBOTEC PRODUCTS PLC
CONSOLIDATED INCOME STATEMENT
For the YEAR ended 31 MARCH 2007
|
2007 |
2006 |
|
$’000 |
$’000 |
|
|
|
Revenue |
23,530 |
18,750 |
Cost of sales |
(18,193) |
(13,932) |
Gross profit |
5,337 |
4,818 |
|
|
|
Distribution costs |
(836) |
(751) |
Administrative expenses |
(2,527) |
(2,373)
|
Operating profit |
1,974 |
1,694 |
|
|
|
Finance costs |
(96) |
(138) |
|
|
|
Profit before tax |
1,878 |
1,556 |
|
|
|
Income tax expense |
(564) |
(530) |
|
|
|
Profit for the year |
1,314 |
1,026 |
|
|
|
Earnings per share – basic |
$ 0.10 |
$ 0.10 |
Earnings per share – diluted |
$ 0.10 |
$ 0.10 |
|
|
|
The profit for the year is all attributable to the equity holders of the parent company.
The accompanying notes are an integral part of these consolidated financial statements.
TURBOTEC PRODUCTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the YEAR ended 31 MARCH 2007
|
Share capital |
Share Premium |
Retained earnings |
Merger Reserve |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
|
|
|
|
|
|
Balance at 31 March 2005
|
178 |
- |
2,791 |
(168) |
2,801 |
Profit and total recognised income and expenses for the period |
- |
- |
|
|
1,026 |
Dividends paid |
- |
- |
(852) |
- |
(852) |
|
|
|
|
|
|
Balance at 31 March 2006 |
178 |
|
2,965 |
(168) |
2,975 |
|
|
|
|
|
|
Profit and total recognised income and expenses for the period |
- |
- |
1,314 |
- |
1,314 |
|
|
|
|
- |
|
Share capital issued |
50 |
4,333 |
- |
- |
4,383 |
Share issue costs |
- |
(892) |
- |
- |
(892) |
Dividends paid |
- |
- |
(98) |
- |
(98) |
Share based payment expense
|
- |
- |
1 |
- |
1 |
Balance at 31 March 2007 |
228 |
3,441 |
4,182 |
(168) |
7,683 |
The accompanying notes are an integral part of these consolidated financial statements.
TURBOTEC PRODUCTS PLC
CONSOLIDATED BALANCE SHEET AT 31 MARCH 2007
|
2007 |
2006 |
|
$’000 |
$’000 |
Assets |
|
|
Non-current assets: |
|
|
Property, plant and equipment |
4,175 |
3,656 |
Intangible assets |
411 |
240 |
|
4,586 |
3,896 |
Current Assets:
Inventories
Trade and other receivables
Cash and cash equivalents |
3,416
3,359
45 |
3,002
2,112
- |
|
6,820 |
5,114 |
Current Liabilities
Current portion of long-term borrowings
Bank overdraft
Trade and other payables
Current tax liabilities
|
108
-
2,315
481
|
286
2,610
2,303
- |
|
2,904 |
5,199 |
Net current assets/(liabilities) |
3,916 |
(85) |
Non-current liabilities |
|
|
Long-term borrowings
Deferred tax |
224
595 |
291
545 |
|
819 |
836 |
|
|
|
Net assets |
7,683 |
2,975 |
|
|
|
|
|
|
Shareholders’ equity: |
|
|
Share capital |
228 |
178 |
Share premium account |
3,441 |
- |
Merger reserve |
(168) |
(168) |
Retained earnings |
4,182 |
2,965 |
|
|
|
Total equity |
7,683 |
2,975 |
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
TURBOTEC PRODUCTS PLC
CONSOLIDATED Statements of Cash Flows
for the YEAR ENDED 31 MARCH 2007
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2007
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2006
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($000's) |
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($000's) |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Cash generated from operations |
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Taxes paid |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Development costs paid |
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Payments for property, plant and equipment |
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Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from bank borrowings |
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Proceeds from stock placing |
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Share issue costs |
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Principal payments on long term debt |
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Principal payments on capital lease obligations |
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Dividends paid to equity shareholder |
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Net cash used in financing activities |
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NET CHANGE IN CASH AND CASH EQUIVALENTS |
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CASH AND CASH EQUIVALENTS, beginning of period |
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CASH AND CASH EQUIVALENTS, end of period |
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The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The financial information set out above does not constitute the company’s statutory accounts for the years ended 31 March 2007 or 2006. Dormant company statutory accounts for 2006 have been delivered to the Registrar of Companies. The statutory accounts for 2007 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.
2. TAXATION
Analysis of charge in period:
|
2007 |
2006 |
|
($000’s) |
($000’s) |
Current |
514 |
345 |
Deferred |
50 |
185 |
Taxation |
564 |
530 |
Tax reconciliation:
The tax for the period is different than the standard rate of corporate tax in the UK (30% for both 2007 and 2006). The differences are attributable to the following:
|
2007 |
2006 |
|
($000's) |
($000's) |
|
|
|
Profit Before Tax |
1,878 |
1,557 |
|
|
|
Profit before tax multiplied by rate of |
|
|
corporate tax in the UK of 30% (2006:30%) |
563 |
467 |
|
|
|
Effect of: |
|
|
Temporary differences between book and tax income |
(75) |
1 |
Higher rate of tax on overseas earnings |
75 |
62 |
Tax credits used to reduce taxes paid |
(166) |
- |
Dividend from overseas subsidiary taxed at higher |
|
|
UK tax rate |
167 |
- |
Total taxation |
564 |
530 |
|
|
|
3. BASIC EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE
The calculations of basic and diluted earnings per ordinary share are based on the profit for the financial year and the weighted average number of equity voting shares in issue and dilutive shares during the year.
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2007 |
|
2006 |
|
|
(Numerator) |
(Denominator) |
|
(Numerator) |
(Denominator) |
|
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($000's) |
Weighted |
|
($000's) |
Weighted |
|
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Average Shares |
|
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Average Shares |
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|
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Basic EPS |
|
|
|
|
|
|
|
|
|
|
|
|
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Profit for the year |
|
1,314 |
- |
|
1,027 |
- |
Weighted average shares |
|
- |
12,523,273 |
|
- |
10,009,590 |
|
|
|
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Effect of Dilutive Securities |
|
|
|
|
|
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Stock options |
|
- |
21,918 |
|
- |
- |
|
|
|
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|
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Diluted EPS |
|
|
|
|
|
|
|
|
1,314 |
12,545,191 |
|
1,027 |
10,009,590 |
|
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The comparative figures are pro-forma based on the number of shares that would have been in issue had the capital structure of the parent company always have been in place.
4. INTANGIBLE FIXED ASSETS
|
|
Capitalized |
|
|
|
Development |
|
|
Goodwill |
Costs |
Total |
|
($000's) |
($000's) |
($000's) |
2007 |
|
|
|
Cost and net book value |
|
|
|
Balance at 1 April, 2006 |
94 |
146 |
240 |
Additions |
- |
171 |
171 |
Balance at 31 March, 2007 |
94 |
317 |
411 |
|
|
|
|
|
|
|
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2006 |
|
|
|
Cost and net book value |
|
|
|
Balance at 1 April, 2005 |
94 |
- |
94 |
Additions |
- |
146 |
146 |
Balance at 31 March, 2006 |
94 |
146 |
240 |
Goodwill relates to the acquisition of a technology company acquired by the US parent company in 1985. The operations of that company were subsequently integrated into the company’s primary manufacturing facility. The technology acquired continues to be used by the Company as an integral part of the engineering and manufacturing of its current product line. As this asset is deemed to have an indefinite future benefit no amortization has been recognized in 2006 and 2007. The deferred development costs will be amortized over the expected lives of the related products once sales of these products commence on a commercial level.
5. FIXED ASSET INVESTMENTS
The following companies are subsidiary undertakings of the Company at 31 March, 2007 and have consolidated into the Company’s results:
|
Country of
Incorporation |
Principal Activity |
% Owned |
Turbotec Products, Inc |
United States |
Manufacture of Heat Transfer Products |
100 |
6. CALLED UP SHARE CAPITAL
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Authorized |
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2007 |
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2006 |
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Number of |
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Number of |
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|
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Shares |
$000's |
|
Shares |
$000's |
|
|
|
|
|
|
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Ordinary shares of 1p each |
|
20,000,000 |
356 |
|
20,000,000 |
356 |
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Issued and Fully Paid |
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Ordinary shares of 1p each |
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