Laird PLC (LON:LRD) Final results

Laird PLC

Final results for the year ended 31 December 2017 & Recommended Cash Acquisition

Much improved results lay strong foundations for future

*2016 restated for the bonus element of the 2017 rights issue

 

Recommended Cash Acquisition

·     The Board is pleased to announce that it has reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Laird, to be effected by means of a scheme of arrangement under Part 26 of the Companies Act

·     Under the terms of the acquisition, shareholders will be entitled to receive 200p in cash for each Laird share held, representing a premium of approximately 72.6 per cent to the closing price of Laird shares of 115.9p on 28 February 2018

·     The bidder is a wholly-owned indirect subsidiary of funds managed by Advent International Corporation

·     See 2.7 notice for further information

 

Financial Summary

·     Much improved Group financial performance, with continued progress across all three divisions

·     Group revenue up 17% on a reported basis and up 10% on an organic constant currency basis

·     Underlying profit before tax improved by 32% to £67.3m driven by revenue growth and operating margin improvement

·     Profit before tax was £57.0m, improved from a loss of £(122.3)m in 2016

·     Operating cash flow increased 84% to £51.8m due to improved profitability and tight control of capital expenditure

·     Net debt to Underlying EBITDA was 1.4x compared to 3.2x at last year-end following successful completion of £185m rights issue in April and improved cash generation

·     As a result of today’s announcement on the recommended cash acquisition, no final dividend is currently proposed

 

Operational Highlights

·     New divisional structure has brought efficiencies and enabled a greater focus on complementary markets and technologies

·     Significantly strengthened the Executive Committee and Divisional leadership teams

·     Ongoing investment in engineering capability and new products to support future revenue and earnings growth

·     The Group continues to deliver the planned cost savings identified as part of our operating model re-design with over $15m of benefits seen in 2017 and a further $5m of benefits expected in 2018

 

Short-Term Outlook

·     The Group has started the year with good underlying trading momentum across the majority of the business with new business wins and new product launches expected to support future growth

·     During 2018, on an organic constant currency basis, this growth is expected to more than offset possible challenges in the premium smartphone market

·     Recent volatility in foreign exchange rates (particularly the strengthening of Sterling against the US Dollar and the strengthening of Renminbi against the US Dollar) currently presents a significant headwind in 2018, given our reporting currency is Sterling

 

 

Tony Quinlan, Chief Executive, commented:

“Laird has made significant progress and delivered a much improved performance in 2017. In my first year as CEO, we’ve simplified structures, enhanced the quality of the leadership and focussed on improving the efficiency and profitability of all Laird’s operations. These actions have delivered much improved results, and have built strong foundations for the future.”

 

“We expect to demonstrate continued progress in underlying financial performance in 2018, despite currency headwinds given our reporting currency is Sterling.”

 

“Laird is a high quality business, as our 2017 results demonstrate. This quality has been recognised by Advent International and their cash offer for the Group represents good value and certainty for shareholders. Laird’s history goes back almost 200 years and the business has evolved over that time into the global engineering company of today. I believe for its next chapter, Laird will benefit from private ownership as it further strengthens its business model and looks to the future.”

 

Divisional Highlights

Performance Materials (PM)

·     Good revenue growth of 8% on an organic constant currency basis and 14% on a reported basis, albeit against a weak comparative in the prior year

·     Revenue growth in all parts of the Division, but particularly Precision Metals and Thermal Materials

·     The focus on increasing productivity, improving our internal processes and correcting our commercial inefficiencies has started to deliver better results

 

Connected Vehicle Solutions (CVS)

·     Strong revenue growth of 18% on an organic constant currency basis and 26% on a reported basis

·     Operating margin continues to be impacted by investments to drive long term growth

·     New business wins in the year have lifetime revenues of around $750m, with revenues expected from 2019 to 2025. We continue to benefit from the very strong customer relationships we have in both the US and Europe

·     Established a new R&D centre in Grand Blanc, Michigan, in the heart of the US automotive industry

 

Wireless and Thermal Systems (WTS)

·     Revenue growth of 4% on an organic constant currency basis, improving from flat in the first half, and 10% growth on a reported basis

·     Benefits from operating model redesign have contributed to strong operating margin improvement

·     Synergies from establishing and optimising the new divisional structure are being delivered

 



 

Full RNS Update HERE 

About Laird

Laird is a global technology company providing systems, components and solutions that protect electronics from electromagnetic interference and heat, and that enable connectivity in mission critical wireless applications and antennae systems.  We are a global leader in the field of innovative radio frequency (“RF”) engineering.

laird-plc.com

 

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