Laird PLC

Press Releases

AUDITED RESULTS FOR THE YEAR TO 31 DECEMBER 2009

10 Mar 2010

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Peter Hill, Chief Executive, said:

"Trading conditions proved to be very challenging in 2009 and against this background we took decisive actions to reduce costs and align our operations to the market environment. We also strengthened Laird's balance sheet in the light of the uncertain conditions and the limited visibility of customer demand.

By the end of 2009 we had seen some recovery in a number of our markets and this, together with the benefits of our cost reductions, led to a significant improvement in underlying profits and operating margin in the second half of 2009. Operating cash conversion was particularly strong in the year.

While the profile of an economic recovery remains uncertain, we have so far in 2010 seen a continuation of the trends experienced in the second half of 2009. We have a sound financial structure, and we retain leading positions in the majority of our markets. We believe that the fundamentals of our markets remain attractive, and that we are well placed to capitalise on opportunities as these markets return to growth."

Summary

• Results impacted by the global economic downturn and associated destocking in the global supply chain, but aggressive actions taken to reduce costs and reposition the business.
  
  
• Revenue for the year of £528.8 million, down 17% (down 30% in US Dollars).
  
  
• Sequential recovery in revenues in the second half of 2009, compared with the first half, in our Performance Materials and Wireless Systems divisions, although visibility of customer demand remained limited. Customer base being successfully expanded in the Handset Products division.
  
  
• Aggressive actions taken to reduce costs:
  
  
  • Direct labour costs reduced by 30%, in line with revenues.
    
    
  • Total overheads reduced by $72 million (£45.9 million) in the year compared with 2008.
    
    
• Underlying operating profit of £33.6 million, down 51%. Strong improvement in profit in the second half of 2009 (£22.2 million) compared with the first half (£11.4 million). Underlying operating profit margin 8.5% in the second half of 2009, compared with 4.3% in the first half.
  
  
• Underlying profit before tax for the year of £26.5 million (2008: £60.6 million).
  
  
• Continued investment in technology and Research & Development:
  
  
  • £42.8 million (2008: £39.0 million).
    
    
  • Research & Development as percentage of sales 8.1% (2008:  6.1%).
    
    
• Focus on cash generation: operating cash flow, after capital expenditure, for the year of £49.7 million (2008: £48.1 million). Operating cash conversion 148% (2008: 70%).
  
  
• Sound financial structure, benefitting from the Rights Issue proceeds and strong cash generation: net borrowings at year end £45.4 million (2008: £139.5 million).
  
  
• Full year dividend of 6.0 pence (2008: 10.31 pence*), a level which allows funding of growth opportunities while pursuing a progressive dividend policy.

Explanatory notes:

i) Laird uses underlying results as key performance indicators. Underlying profit before tax and underlying earnings per share are stated before exceptional items, the amortisation of acquired intangible assets, deferred tax on acquired intangible assets and goodwill, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments, and acquisition transaction costs. The narrative that follows is based on underlying operating profit, profit before tax and earnings per share, as the directors believe that these provide a more consistent measure of operating performance.

* The weighted average number of shares used to calculate earnings per share was 211.6 million in 2009 and 204.3 million in 2008, following the Rights Issue announced in October 2009. 2008 earnings and dividends per share have been restated for the effect of the Rights Issue.

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