Stadium Group plc, the AIM listed provider of electronic manufacturing services (EMS), announces interim results for the six months ended 30 June 2010.  Revenues increased by more than one third compared with the same period last year, operating margin improved, and profit before taxation more than doubled to £1.45m.

The principal activity of Stadium Group plc is the design and manufacture of electronic and power supply products for original equipment manufacturers from its manufacturing facilities in the UK and China. Stadium Group delivers high quality solutions to a diverse range of customers worldwide, primarily operating in the industrial, transport infrastructure, security, consumer, medical and personal care, automotive and green technology sectors.

Financial Highlights

• Revenues (continuing operations) up 37% to £23.13m (2009 H1: £16.83m)
• Profit before tax (continuing operations) up 120% to  £1.45m (2009 H1: £0.66m)
• Strong net cash flow from operations at £1.68m (2009 H1: £1.45m)
• Earnings per share 3.9 pence (2009 H1: 2.4 pence)
• Interim dividend 0.95 pence per share (2009 H1: 0.80 pence per share)

Nick Brayshaw OBE, Chairman of Stadium Group plc, said, “The Group benefited from broad recovery in customer demand across most industrial and geographical segments, and increased market share through further new business wins in key target markets. 

The strength and speed of recovery since early 2009 demonstrates that Stadium continues to be a robust and reliable business partner.  The positive outlook for revenues from the core business in the second half is expected to continue, such that even without the contribution of Branded Plastics for the remainder of the year, we are confident of achieving market expectations for the full year ending 31 December 2010.

The divestment of the non-core branded plastics business enables the business to focus entirely on growth in the core areas of EMS and Power, and releases financial and management resources to seek new opportunities to leverage these areas of core capability. We anticipate further exciting opportunities for the future, both organically and through targeted acquisitions.

The board’s satisfaction with the strong performance of the business and positive outlook was sadly put into perspective by the tragic death of Ken Leung on 23 August 2010.”

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Ken has been with Stadium since March 2000 and joined the board of Stadium Group plc in December 2002.

Chief Executive, Nigel Rogers pays tribute to Ken, a respected colleague and friend:

“On behalf of Stadium employees in the UK, Hong Kong and China we offer our thoughts and deepest sympathy to Ken’s wife and son at this difficult time.

“The overwhelming reaction from our business partners and the wider network is a true mark of the affection and respect people felt for Ken. Thank you to everybody for your kindness.

“The sense of personal loss and injustice is profound for all of us, and even more so for his family.

The resilience of our strong team in Asia empowers the business to come to terms with this tragic event, building on the values which Ken considered to be so important, and which customers clearly value so highly.”

Chief Executive message to customers of Stadium Asia> read more

The standard has been in place at the Stadium wholly owned facility in Dongguan China since 2008.

Tony Inskip, Commercial Director, said: “The medical sector is a high growth area for the electronics industry worldwide, not only in medical devices but within a wider spectrum of products in the healthcare and wellbeing markets including consumer marketed products with electronic content.

Driven by the increasing average age of the population, technology innovations and a predicted growth of medical and healthcare-related products, this proves this a very attractive area for EMS providers with the right offering.

New business success achieved in the second half has led to significant out-performance relative to expectations established earlier in the year, and this has continued into 2010. The group had net cash of £0.4m at the year end, and facility headroom exceeding £5m to finance further expansion.

Far East outsourcing remains a compelling strategy for a wide range of companies, and continues to offer a significantly lower cost base. Meanwhile, the proposition for UK manufacturing is improving as customers seek to shorten new product introduction timescales, reduce production lead times and minimise working capital investment. By combining our facilities, we provide our customers with cost effective design and manufacturing solutions which meet international standards of product quality, customer service and intellectual property protection regardless of location.

Current trading is substantially ahead of the same period last year, and the level of enquiries from both existing and target customers is encouraging. Looking further ahead, we are optimistic that new products emanating from emerging market sectors, including green technology, will offer significant potential for organic growth, and lead to further investment and acquisition activity when suitable opportunities arise.”

Financial highlights

• • Revenues of £46.58m (2008: £47.61m)
• • Profit before taxation and severance costs* of £2.50m (2008: £2.78m)
• • Underlying earnings per share* of 6.8p (2008: 7.6p)
• • H2 PBT* up 40% to £1.46m (2009 H1: £1.04m)
• • H2 earnings per share* up 43% to 4.0p (2009 H1: 2.8p)
• • Net cash flow from trading activities of £4.83m (2008: £4.21m)
• • Balance sheet net cash of £0.40m (2008: £2.05m net borrowings)
• • Proposed final dividend up 11.5% to 1.45 pence per share, total 2.25 pence (2008: 1.30p, 2.55p)

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The contract, which has an annual value of £2.3m, will see over 30,000 water meters built and shipped to major Utilities in Africa and Brazil.

Headquartered in Hartlepool and with further manufacturing locations in Rugby and China, Stadium Electronics is part of AIM-listed Stadium Group plc and employees over 1000 people worldwide.

The innovative SmartMeter Prepayment System™ utilises a fully electronic, non-moving parts water meter ensuring accuracy, performance and reliability – the first prepayment system to prevent false billing for air, therefore ensuring total meter accuracy and accurate billing.

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To view/download the full document, please click here.

Highlights

• • Revenues at £22.34m (2008: £23.06m)
• • Profit before tax £0.88m after reorganisation costs of £0.16m (2008: £1.40m)
• • Strong operating cash flow of £1.45m (2008: 1.39m)
• • Net bank borrowings reduced to £0.69m (31 December 2008: £2.09m)
• • Significant new business wins in pipeline

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