PreliminaryResults2003 010410073333

The Roxboro Group PLC
Preliminary Results
2003
15th March 2004
preliminary results
2003
the roxboro group plc
2003 - the opening challenge
y Economic climate continued to be difficult in key
markets
y Telecoms market remained soft
y Process segment remained flat
y Oil and Gas segment was mixed
y Aerospace was beginning to improve
y Very few bright spots
y Market capitalisation £82million
preliminary results
2003
the roxboro group plc
2003 - our response
y Disposal of aerospace sensors business for £55.7million
y Returned £42.6million to shareholders
y Relocated Dialight production from USA to Mexico
y Drove hard on RoBuST programmes
y Kept costs tight
y Redirected selling effort
y Maintained R&D spend
preliminary results
2003
the roxboro group plc
the result
y Sale proceeds 61% of market cap. at the time of the deal
y Generated shareholder value
y Created more focus in Group
y Reduced operating and central costs
y Positioned Group for new growth
preliminary results
2003
Financial Review
2003
preliminary results
2003
the roxboro group plc
group profit and loss account
2003
£m
y Turnover
136.8
Continuing Operations
Discontinued operations
2002
156.0
122.2
14.6
124.6
31.4
8.2
8.6
5.4
2.8
5.2
3.4
y Interest
(0.3)
(0.9)
y Profit before goodwill & exceptionals
– Goodwill
– Profit on disposal of Weston
y Profit before tax
7.9
(1.2)
15.6
22.3
7.7
(1.1)
6.6
y Operating Profit
Continuing operations
Discontinued operations
preliminary results
2003
the roxboro group plc
group profit and loss account-continued
£m
2003
y Profit before taxation
Tax
Dividends
y Retained Profit
2002
22.3
6.6
(2.6)
(2.5)
19.7
4.1
(3.0)
(5.7)
16.7
(1.6)
y Operating Margin*
6.0%
5.5%
y Trading Margin **
5.8%
4.9%
*
before profit on disposal,
goodwill, amortisation and interest
** before profit on disposal,
goodwill amortisation and after interest
preliminary results
2003
the roxboro group plc
continuing operations
first and second half comparison
£m
First Half
Second Half
% Movement
Sales
Profit
Sales
Profit
Sales
Profit
Dialight
27.6
0.3
30.3
0.7
10%
133%
Solartron
31.1
2.8
33.2
3.8
7%
36%
58.7
3.1
63.5
4.5
8%
45%
Central
Interest
(1.1)
(1.1)
-
2.0
3.4
70%
(0.3)
-
1.7
3.4
100%
preliminary results
2003
the roxboro group plc
profit on disposal of Weston
£m
Initial Sales Proceeds
Cash adjustment net of assumed tax
Expenses
55.0
0.7
55.7
(2.4)
53.3
Less cost of investment
– net assets
(16.0)
– goodwill previously written off
(21.7)
(37.7)
Profit on disposal
15.6
Tax due on disposal
(0.2)
Exit P/E (2002 actuals)
Exit EBITDA (2002 actuals)
25x
11x
preliminary results
2003
the roxboro group plc
dividends and earnings per share
2003
y Dividends per share
2002
10.0p
10.0p
45.4p
12.6p
7.2p
9.1p
6.5x
1.4x
0.7x
0.7x
y Continuing Operations
0.8x
-
y Cash Cover - continuing operations
1.6x
-
y EPS
Basic
Adjusted
y Dividend Cover
Basic
Adjusted for profit on disposal
preliminary results
2003
the roxboro group plc
movement in net debt
£m
Free Cash Flow
y
y
y
y
y
y
Disposals
Issue of ordinary shares
Redemption of B shares
Share issue expenses
Dividends
Acquisitions
2003
2002
6.8
8.0
52.7
0.1
(40.1)(0.5)(4.9)(5.7)
(4.8)
Net Cash Inflow/(Outflow)
14.1
(2.5)
y Opening Net Debt
(11.7)(8.6)
y Translation
(0.4)(0.6)
Closing Net Cash/(Debt)
2.0
(11.7)
preliminary results
2003
Operational Review
2003
preliminary results
2003
Operational Review
SOLARTRON
preliminary results
2003
the roxboro group plc
Solartron business by market sector
19%
14%
12%
Level & Flow Measurement in Process Sector
55%
Flow Metering in Oil and Gas
Gauging Products in Metrology Sector
Laboratory Instruments for Materials Analysis
preliminary results
2003
the roxboro group plc
Solartron overview
y Good tight performance in slack markets
y Margins in double digits
y Strong H2 performance up 36% up on H1
y RoBuST initiatives making a difference
y Good growth in Service Business
y Brighter environment towards year end
preliminary results
2003
the roxboro group plc
Solartron highlights
y Dualstream II granted international recognition
y Sakhalin contract expanded and on schedule
y Won first Dualstream II contract in China
y Completed North Sea contract for Shell
y Acquired novel radar technology
y Ultrasonic product family launched
y Markets looking better than for past three years
preliminary results
2003
the roxboro group plc
Solartron -key drivers in 2004
y Overall expected market recovery
y New product introductions
y Geographic expansion
y Dualstream II Wet Gas Growth
y Far East appetite for laboratory instruments
y Increasing glass gauging
preliminary results
2003
Operational Review
DIALIGHT
preliminary results
2003
the roxboro group plc
Dialight - 2003 key points
y Significant operational issues related to supply chain
transfer to Mexico
y Gross Margin Increase 17% in $ and 2.3% in COS
y Inventory reduced 8%
y Sales up 7% despite fall in Traffic pricing
y Material and direct labour savings yet to be fully
realised
preliminary results
2003
the roxboro group plc
Dialight -Optoelectronics
y Distributor POS up strongly from Q4/02
y Expanded distribution channels - Future Electronics and Regional Industrial
y Continued strong position in Distribution and with proprietary products
y Fourth quarter - strongest bookings for 12 quarters
y Continuing price pressures at CEMs
y LED costs continue to reduce
y Electronics market growth expected to continue
y Expansion into new markets - Gaming, Industrial, and other non-telecom
preliminary results
2003
the roxboro group plc
DIalight - Signals - traffic
y
y
y
y
y
y
y
y
y
US Traffic sales up 7% in units but slightly down in turnover
Major cost reductions implemented giving improved margins
Strong dealer network protecting small/medium business
Major contracts bid selectively- wins at NC, CT, KY, Detroit,
Edmonton, Calgary
“IntelliLED™”, Expanded View and “Incandescent” Arrow
introduced
European Signals sales show double digit growth
New supply agreements signed with Peek and Siemens
Some price pressure coming to Europe
New low cost Traffic Signal to be introduced in March at
Intertraffic Show
preliminary results
2003
the roxboro group plc
Dialight - Signals
y Expect good growth
y Continued cost reductions
y FAA Obstruction Contract to ship in 2004
y Balance of NYCT Rail contract to ship with follow on
expected
y New products differentiation continues
preliminary results
2003
the roxboro group plc
Dialight - Lighting
y Luxeon Design Centre established
y Partnering with Lumileds and Future
y 2003 was a year of prospecting
y Strategy is similar to Opto - selling to OEMs
y Trial OEM Customers in Lifts / Street Sign / Marine / Vending /
Theatre / Swimming
y Secured substantial OEM Pool Light order
y Good revenues expected in 2004
preliminary results
2003
the roxboro group plc
Dialight - Prospects
y Continued electronics market recovery expected
y Dialight leveraged to recovery
y Further Signals cost reductions yet to show
y Shipment of new technology products to begin in 2004
y Improving Mexican improvements
y Anticipate a much improved overall performance
preliminary results
2003
the roxboro group plc
Summary
y Conditions more favourable than past 3 years
y Relocation project completed
y New product introductions
y Exciting prospects in Lighting
y Looking for better progress in 2004
y Group mission remains generation of shareholder value
preliminary results
2003
The Roxboro Group PLC
Preliminary Results
2003
15th March 2004
preliminary results
2003