www.densitron.com 25 september 2002 displays and the electronics that drive them. page 1 densitron...
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25 September 2002 Displays and the electronics that drive them. Page 1
www.densitron.com
Densitron Technologies plc
2002 Half Year Presentation by...
Cliff Hardcastle, OBE - Chairman.
Rob Smith - Finance Director.
25 September 2002 Displays and the electronics that drive them. Page 2
www.densitron.com
Operational Highlights
• A tough economic climate– Difficult trading in first half.– Signs of recovery – strong order intake.– Gross Margins improved.– Continued strong performance by Vbest & Hitech.
• Actions taken– Acquisition of Ferrograph.– Restructuring of computer business.
25 September 2002 Displays and the electronics that drive them. Page 3
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Financial Highlights
£ Millions 6 Months to 30/6/2002
6 Months to 30/6/2001
Turnover 12.0 15.1
Operating (Loss) / profit (3.3) 0.7
(Loss) / Profit before taxation (3.5) 0.5
EPS pre exceptional items (4.66)p (0.11)p
EPS post exceptional items (13.2)p (0.11)p
Gearing 16% 1%
Order Book as at 30th June 15.5 14.9
25 September 2002 Displays and the electronics that drive them. Page 4
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Profit and Loss account comparative
£ Thousands 6 months to 30/6/2002
6 month to 30/6/2001
Turnover 12,026 15,068
Cost of Sales (7,010) (9,270)
Gross Profit 5,016 5,798
Operating Expenses (5,844) (5,303)
Exceptional Items (2,749) -
Group Operating (Loss) / Profit (3,577) 495
Group Operating (Loss) / Profit pre exceptional items
(828) 495
Share of Associates Operating Profit 324 225
Total Operating (Loss) / Profit (3,253) 720
Net Interest Payable (250) (195)
(Loss) / Profit before tax (3,503) 525
25 September 2002 Displays and the electronics that drive them. Page 5
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Exceptional Items
Asset Basis of Impairment £000s
Retail Cassius computer stock and development
Expected lower selling price for retail version.
1,075
Computer business restructuring
Redundancy and other termination costs
98
Internet businesses Revised asset value based on proposed sale of majority interest.
586
Densitron Software Ltd Discontinued 3rd party trading. 229
Rapidot Ltd Discontinued activity. 157
Densitron Australia pty Ltd Proposed reorganisation. 174
Post retirement benefits Recognition of benefits per FRS17
430
Total exceptional items 2,749
25 September 2002 Displays and the electronics that drive them. Page 6
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Sales and Orders - trend by quarter
0
2,000
4,000
6,000
8,000
10,000
Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02
Orders Sales
25 September 2002 Displays and the electronics that drive them. Page 7
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Sales - Geographic
Europe 44% (44%)
USA 26% (28%)
Asia 30% (28%)
25 September 2002 Displays and the electronics that drive them. Page 8
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Displays 58% (65%)
Computers 33% (27%)
E-M 9% (8%)
Sales – Class of business
25 September 2002 Displays and the electronics that drive them. Page 9
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Profit trend
-£1,000
£0
£1,000
£2,000
£3,000
£4,000
£5,000
£6,000
£7,000
H1 00 H2 00 H1 01 H2 01 H1 02
Th
ou
san
ds
36.0%
37.0%
38.0%
39.0%
40.0%
41.0%
42.0%
Gross Profit Operating Profit (excluding exceptionals) Gross Profit %
25 September 2002 Displays and the electronics that drive them. Page 10
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Balance Sheet
£ Thousands As at 30/6/2002
As at 30/6/2001
As at 31/12/2001
Fixed Assets 18,819 20,113 20,281
Current Assets 14,463 18,936 15,829
Creditors due < 1 year (12,129) (11,457) (10,423)
Net Current Assets 2,334 7,479 5,406
Assets less current liabilities 21,153 27,592 25,687
Creditors due > 1 year (949) (736) (598)
Net Assets 20,204 26,856 25,089
25 September 2002 Displays and the electronics that drive them. Page 11
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Cash Flow
£ Thousands 6 months 30/6/02
6 months 30/6/01
Year to 31/12/01
Operating Profit / (Loss) pre exceptional
(828) 495 380
Cash element of exceptional items (98) - -
Net Changes in Working Capital (907) (1,065) 1,162
Net non cash movements 620 742 1,152
Returns on investments (1,021) (374) (1,108)
Taxation Paid (88) (545) (1,035)
Capital expenditure (427) (750) (1,197)
Rights Issue - 19,011 18,831
Acquisitions & disposals (125) (12,238) (12,345)
Equity dividends paid (148) (305) (364)
Change in net debt (3,022) 4,563 5,056
25 September 2002 Displays and the electronics that drive them. Page 12
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Financial Outlook
• MARKET CONDITIONS REMAIN UNCERTAIN• BASIS FOR GROWTH
– Full year benefit of Ferrograph acquisition.– Large computer orders booked (Aruze) deliverable in
2003.– Series of good European display orders deliverable
in 2003.– Full year benefit of restructuring in computer
business.
25 September 2002 Displays and the electronics that drive them. Page 13
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Vbest Update – New Factory
Suzhou
Guangzhou
Suzhou
Guangzhou
TAIPEISHANG HAISHANG HAISHANG HAISHANG HAI
DONG-GUAN
LCD Back End +LCM Assembly
Plant area : 20,000m2
Land Area : 30,000 m2
DONG-GUAN
LCD Back End +LCM Assembly
Plant area : 20,000m2
Land Area : 30,000 m2
HONG KONGHONG KONG
SHANGHAILand Area : 66,667M2
Building Area : 31,706M2
Plant Area : 12,000M2
Location
25 September 2002 Displays and the electronics that drive them. Page 14
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Vbest Update – Trading Performance
£ thousands 6 months to 30/6/2002 (unaudited)
6 months to 31/12/2001
(audited)
6 months to 30/6/2001(unaudited)
Sales 9,354 10,208 9,189
Margin 2,755 2,702 2,033
Margin % 29% 26% 22%
Pre tax Profit 1,438 1,453 1,042
25 September 2002 Displays and the electronics that drive them. Page 15
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Vbest Update – Flotation Road Map
• Intention to list on Taiwan Stock Exchange (TSE).• Mandatory 12 month “Counselling” period.
– Process started June 2002.• Listing criteria for TSE.
– Minimum 5 years incorporation.– Paid-in capital > NT$600 million for last 2 years.– Profitability various tests.– Registered shareholders > 1,000.– Two year restricted period for shareholders with >
10% - this limits the amount that Densitron can sell.• Current view is listing early 2004.
25 September 2002 Displays and the electronics that drive them. Page 16
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Ferrograph Acquisition
• Public Information Displays business.• Based in Newcastle.• Acquired April 2002.
– Asset acquisition from Receiver for £250k.• Orders received by 30th June 2002 - £1,169k.• Sales made by 30th June 2002 - £239k.• Continue to build up business.• Good synergistic fit to existing business.
– Selling and distribution integration underway.– Many supply side opportunities to be harvested.
25 September 2002 Displays and the electronics that drive them. Page 17
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Ferrograph - products
25 September 2002 Displays and the electronics that drive them. Page 18
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Summary
• Tough trading conditions - US and European markets very slow.
• Improved order intake.• Vbest on track.• Continued strong performance at Hitech.• Ferrograph added.• Balance sheet review and financial restructuring
completed.• Group positioned well to exploit economic recovery.
25 September 2002 Displays and the electronics that drive them. Page 19
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Contacts
Cliff Hardcastle
Chairman
Densitron Technologies plc
01959 542000
Rob Smith
Finance Director
Densitron Technologies plc
01959 542000
Takki Sulaiman
Hansard Communications
0207 735 9415