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News –
19 October 2006 |
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Amstrad Plc
Annual Report & Accounts 2005/2006 |
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Download the Full Annual Report & Accounts 2005/2006
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Chairman's Statement |
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Financial
Review
The Group reported a profit before tax of £20.2m (2005: £19.6m)
on sales of £91.7m (2005: £101.5m). The earnings per share
were 18.4p (2005: 17.2p).
The results published in this Announcement are the first full year
results to be prepared by the Group on the basis of International Financial
Reporting Standards, as opposed to UK Generally Accepted Accounting
Practice as has previously been the case. The main impact on the Group’s
accounts are the need to revalue (i.e. mark to market) foreign exchange
forward contracts and certain foreign currency denominated stock purchase
contracts, the capitalisation and subsequent amortisation of development
expenditure and the charging to the income statement of a fair value
in relation to share option grants. In these statements the comparative
figures for the year to 30 June 2005 have been restated accordingly
and the full impact of these changes to reporting under IFRS are outlined
in the notes to the financial statements.
As shareholders will be aware, the Group has been generating significant
levels of cash over the last few years. The cash is now at a level
where the Board feels it appropriate to recommend to shareholders the
return, by way of dividend, of £30m. It is proposed that the
return of cash is by way of a special dividend of 32p per ordinary
share and a normal final dividend of 4.5p (2005: 4.5p) per ordinary
share with both dividends to be paid on 8 December 2006 to shareholders
on the register on 6 October 2006. The Company paid an interim dividend
of 2.5p (2005: 2.0p) per ordinary share on 6 April 2006.
The Group’s net assets have increased to £56.3m (2005:
£46.0m). As at 30 June 2006 the Group had cash of £56.4m
(2005: £40.3m). Inventories of £6.1m (2005: £8.7m)
were lower than last year reflecting the successful sale of all of
the Group’s e-mailer stocks.
Review of Activities
Volumes of satellite set top boxes sold to the UK and Italian markets
were similar overall to a year ago. The reduction in sales value reflects
both the mix of product sales with a higher proportion of standard
set top box sales this year and the inevitable downward pressure on
selling prices of more mature products. However, our continuing focus
on cost reduction through re-engineering and component price and manufacturing
cost reductions has helped mitigate the impact of price pressure on
profits.
During the financial year we have been developing HDTV set top boxes
and in June 2006 we made our first deliveries of this product to the
Italian market.
The Hong Kong business, which designs, manufactures and sells audio
products to the US and European markets, has achieved a slightly lower
level of sales compared to last year, which was a good result in what
is a very competitive audio products market.
During the year the Amserve business sold all of its e-mailer stocks
to retailers with approximately 64,000 e-mailer units being bought
and registered by consumers bringing the total registered since the
initial launch of the product to 493,000 units.
The installed base of e-mailers continues to generate significant usage
revenue for the Group from e-mail, internet access, sms, downloading
of ringtones and advertising. In March 2006 the e-mail tariff was increased
and to date this tariff change does not appear to have had a significant
impact on the normal churn rate. Based on the figures for June 2006
usage revenue this equated to an annualised figure of £7.9m
Outlook
The broadcasting industry is increasingly moving towards high definition
television and we continue to work on developing HDTV set top boxes
and HDTV PVR boxes, with deliveries of HDTV boxes having already commenced
and deliveries of the HDTV PVR box scheduled for the second half of
the new financial year.
In September 2005 we announced that it had been agreed with BSkyB that
we would develop and supply a new PVR set top box. Development work
is ongoing on this product and we now expect first deliveries to be
in the second half of the current financial year rather than in the
first half as we originally envisaged. The development of this leading
edge product will leave us well placed for the future.
The current financial year will see a growing transition towards HDTV.
Our new models will start to ship in the current financial year but
the benefit of full scale production volumes will not be seen until
the following year and correspondingly we expect demand to decline
on the current models in the current year. As such shareholders should
not expect the same level of result as that which we have just reported.
We continue to invest in the development of the next generation of
smart phones for use on broadband lines and are in discussions with
telecom providers on the potential for these products.
Sir Alan
Sugar
Chairman
28 September 2006 |
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Amstrad plc
Register No. 955321
Brentwood House
169 Kings Road
Brentwood
Essex CM14 4EF
Press Enquiries:
Andrew Bloch/David Fraser– Frank PR
Tel: 0207 693 6999
e-mail: amstrad@frankpr.it |
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Download the Full Annual Report & Accounts 2005/2006
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