Sprue Aegis plc Trading update (8912U)
January 24 2017 - 2:00AM
UK Regulatory
TIDMSPRP
RNS Number : 8912U
Sprue Aegis plc
24 January 2017
24 January 2017
Sprue Aegis plc
("Sprue" or the "Company" or the "Group")
Trading update
Sprue (AIM: SPRP), one of Europe's leading home safety products
suppliers, today announces a trading update ahead of the release of
its audited final results for the year ended 31 December 2016,
which are expected to be in line with market expectations. The
figures set out in this announcement are subject to audit.
Sales are expected to be approximately GBP57.1m (2015: GBP88.3m)
and the operating profit* (post a GBP0.2m restructuring charge) is
expected to be approximately GBP2.1m (2015: GBP12.8m). The Group
delivered an improved performance in the second half with an
estimated H2 2016 operating profit* of GBP3.0m (H1 2016: operating
loss of GBP0.9m before share based payments charge).
The reduction in sales was mainly driven by significantly lower
demand in France. However, sales into Germany recovered strongly in
2016, up 52% on 2015, primarily underpinned by the launch of new
FireAngel products in H2 2016. Due to the phased introduction of
smoke alarm regulation in further states in Germany and the timing
of the commencement of product replacement cycles, the Board
expects the German market will continue to provide significant
growth opportunities for the Group.
Since the EU referendum, the Group has seen significant product
cost inflation due to the weakness of Sterling against the US
Dollar, which was only partially offset by the strength of the Euro
against Sterling.
FireAngel product returns and FireAngel warranty costs in 2016
were in line with the Board's expectations. Sprue expensed a core
level of FireAngel warranty costs equivalent to approximately 1.0
per cent. of expected 2016 sales and released part of the FireAngel
warranty provision to offset warranty expense above that core
level.
In 2016, the Board increased the stock provision by GBP0.5m to
GBP0.7m (31 December 2015: GBP0.2m), primarily in relation to
French stock as previously announced. Net of provisions, stock at
31 December 2016 had reduced by 15 per cent. to approximately
GBP13.3m (2015: GBP15.6m).
The Company's balance sheet remains strong with GBP14.3m of cash
at the year end (2015: GBP22.4m) and no debt (2015: GBPnil).
The Company expects to announce its final results for the year
ended 31 December 2016 in late March 2017.
Graham Whitworth, Executive Chairman of Sprue, commented:
"We are pleased to report good progress across the Group. The
team worked effectively to address the key challenges which is
reflected in the stronger performance in H2 2016.
The functionality of home safety products continues to evolve
and our R&D team is working to ensure we maintain our "best in
class" reputation. We are well placed to capitalise on emerging
opportunities including sales of connected home products."
*Operating profit in 2016 of GBP2.1m is stated after a GBP0.2m
restructuring charge (2015: GBPnil) and before share based payments
charge of GBP0.6m (2015: operating profit of GBP12.8m is stated
before exceptional warranty charge of GBP5.5m and share based
payments charge of GBP0.5m)
For further information, please contact:
Sprue Aegis plc 02477 717700
Graham Whitworth, Executive
Chairman
Neil Smith, Group Chief Executive
John Gahan, Group Finance Director
Stockdale Securities 0207 601 6100
Tom Griffiths
Vigo Communications 020 7830 9700
Jeremy Garcia / Fiona Henson
/ Antonia Pollock
Notes to Editors
About Sprue Aegis plc
Sprue's mission is to protect, save and improve our customers'
lives by making innovative, leading edge technology simple and
accessible. Sprue is one of the market leaders in the European home
safety products market and is launched its own connected homes
product proposition at the end of 2016.
Sprue's principal products are smoke alarms, CO alarms and
accessories and the Group has an extensive portfolio of patented
intellectual property in Europe, the US and other selected
territories. Products are sold under the leading brands of
FireAngel, AngelEye, SONA, Pace Sensors, FireAngel Pro and Wi-Safe
Connect.
Sprue is also the exclusive European distributor for BRK Brands
Europe Limited, (a subsidiary of Newell Brands) selling BRK, Dicon
and First Alert branded home safety products.
For further product information, please visit:
www.sprue.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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