ANDOR TECHNOLOGY PLC
Andor Defies Global Downturn with Strong Interim Results
Interim Results for the Six Months ended 31 March 2009
Belfast, Tuesday 21 April 2009 - Andor Technology plc (AND.L), the
leading developer and manufacturer of high performance digital
cameras for academic, industrial and government applications
globally today announces interim results for the six months
ended 31 March 2009.
Financial Highlights
. Turnover up 40% to GBP16.1m (H1'08: GBP11.5m)
. EBITDA up 95% to GBP2.3m (H1'08: GBP1.2m)
. *Operating profit up 102% to GBP1.6m (H1'08: GBP0.8m)
. *PBT up 107% to GBP1.7m (H1'08: GBP0.8m)
. *EPS up 99% to 5.12 pence (H1'08: 2.57 pence)
. GBP2.5m cash generated in the six month period
* Pre exceptional items
Operational Highlights
. US sales up 60% driven by focus on OEM
. Systems division sales up 66% and first systems sales in China
. Successful mid-range product launches (iVac, Clara) with more to
follow
. New design contract win worth USD2.1m for delivery by 2010
. Record order book entering second half of financial year
. Well positioned to benefit from stimulus plans
Commenting on the results Conor Walsh, Chief Executive, said:"In December
2007 we said the new strategy for the business would
deliver from 2009 and onwards and to date that has been the case. We
are seeing the benefit of many of the strategic initiatives launched at
that time, but the better news is that there is more to come. Clearly
this has been an exceptional period and it is important we set
realistic and achievable expectations for the business going forward.
There will be bumps in the road, but the business is now on a sound
footing, delivering real profit and cash, with a clear strategy and
full product roadmap."
- ends -
For further information, please contact:
Andor Technology plc
Conor Walsh, Chief Executive Tel. +44 (0) 28 9023 7126
Singer Capital Markets
Jeff Keating, Joint Head Corporate Finance Tel. +44 (0) 20 3205 7500
Visit: www.andor.com
Notes to Editors:
Andor Technology plc (www.andor.com) is at the forefront of developing
and manufacturing instruments for the global scientific imaging and
spectroscopy markets. The company's range of CCD and intensified CCD
camera systems are used throughout the world for academic, industrial
and government research across a wide range of fields such as
biotechnology, physics and chemistry. Using Andor products these
customers can break new ground by performing experiments that
have previously been considered impossible. Independently conducted
customer research confirms that Andor's low-light solutions are
considered world beating.
Established in 1989, Andor's corporate headquarters are
in Belfast, Northern Ireland. Operating in a global market,
Andor's US headquarters opened in Connecticut in 1997. Andor has
regional sales offices in Europe, the US, Japan and China.
The company is quoted on the London Stock Exchange's AIM market and
commenced dealings in its Ordinary Shares in December 2004 (AND.L).
Financial Overview
This year we celebrate 20 years in business at Andor, so I am
especially pleased to report the Company delivered exceptional
financial performance for the first six months to 31 March 2009. The
results are even more remarkable given the economic backdrop that
exists now and during the period. Trading has been in excess of market
expectations, with every region and sector delivering significant
growth over the same period last year. The strategy outlined in
December 2007 is now delivering real profitability and, while
favourable currency movements are playing a part, the underlying
business is strong and the outlook for the remainder of the year is
good.
Sales have grown 40% to GBP16.1m (H1'08: GBP11.5m) and operating profit
pre exceptional has grown 102% to GBP1.6m (H1'08: GBP0.8m). This has
resulted in earnings per share increasing 99% to 5.12 pence (H1'08:
2.57 pence). Cash conversion from operating profit was 197% driven by
favourable working capital movements and net cash generated in the
period was GBP2.5m.
Sales grew across all geographic regions. In the US sales have grown
60% largely due to a shift in focus to OEM opportunities in 2008 and
the contract win that year against which we are now delivering. In Asia
Pacific sales continue to grow strongly, increasing 28% and sales
to Europe are up 38% on the same period last year.
More than 90% of our sales are outside of the UK and so the weakening
of Sterling against the major currencies in the period has had a
material impact on profitability. That said, we forward contract a
significant proportion of our currency exposure and so we have not yet
fully benefited from this movement. The volatility of exchange rate
movements and the current uncertain economic backdrop makes it
difficult to forecast future currency impacts, however we will continue
our forward contract strategy.
Research and development expenditure was 11.3% of sales (H1 2008:
11.2%). This amount includes impairment provisions on certain
intangibles which in the current period amounted to GBP0.4m (H1 2008:
nil).
Operating margins pre exceptional grew to 10.2% from 7.1% and EBITDA
margins increased to 14.5% from 10.4%. The tax charge for the period
of GBP287,000 equates to 18% of profit before tax. This tax rate
benefits from tax credits received against research and development
expenditure.
Cash from operating activities was GBP3m, an increase of 190% over the
same period last year. Capital expenditure was GBP0.3m, a reduction of
GBP0.5m and the net cash inflow after financing costs was GBP2.5m
(H1'08:GBP0.2m). At the balance sheet date the Company had cash of
GBP6.7m and net cash of GBP4.5m. Stock grew by GBP1.9m however a
significant proportion of this will be delivered to customers in Q3 of
our financial year.
Segment Review: Systems Division
Last year sales in this segment grew by 109% and we said in our annual
statement that 2009 would be a year of consolidation. I am delighted to
report that sales have grown a further 66% in the first six months of
this financial year, which is a remarkable performance following on
from the growth of last year. In the period we also sold our first
systems in China to the universities of Hefei and Wuhan. This is
central to further growth as China is an important developing market
for Andor. We continue to invest in the systems division and plan for a
major new product launch in the second half of calendar year 2009.
Segment Review: Scientific Research
Sales to our scientific research customers grew by 39% compared to the
same period last year, with particularly strong performance achieved
in Europe and Asia Pacific. Our strategy is to expand the product
portfolio and therefore significantly increase the addressable market.
During the period we launched two cameras, the iVac and the Clara, both
of which add to our mid-price point camera range. Scientific
research is a core market for Andor and we have invested heavily in
this area over the past two years and further product launches are
planned. In this segment, Andor is well positioned to benefit from the
announced stimulus plans both in the US and Japan.
Segment Review: OEM
Increasing OEM sales is a target growth area for Andor to better
balance our exposure to the scientific research market, and to provide
volume repeat business for our manufacturing facility. I am pleased to
report we have reversed the decline of 2008 and grown sales to OEM
customers by 23%. This is an especially strong performance given our
customers' product is typically a major capital investment for the end
user, something that is challenging in the current financial climate.
I am also pleased to report we have won a new design contract
worth USD2.1m for delivery by 2010. This project, for the development
of a new camera, has the potential to lead to significant sales of
product in subsequent years. Our security contract is now complete and
has been delivered to the customer's satisfaction. We have been
informed that the test phase has been extended by the end user and no
production units will be sold in 2009. This has no impact on our
projections as we were aware of this risk and had not forecast any
sales.
Outlook
In December 2007 we said the new strategy for the business
would deliver from 2009 and onwards and to date that has been the case.
We are seeing the benefit of many of the strategic initiatives launched
at that time, but the better news is that there is more to come.
Clearly this has been an exceptional period and it is important we set
realistic and achievable expectations for the business going forward.
There will be bumps in the road, but the business is now on a sound
footing, delivering real profit and cash, with a clear strategy and
full product roadmap. We believe the current markets offer
opportunities for consolidation and that is something we will be
turning our attention to over the coming year.
Conor Walsh
Chief Executive
21 April 2009
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