Return to profits for home safety products firm
Coventry home safety products supplier, Sprue Aegis has seen a dramatic turnaround in its fortunes with a return to half year profitability for the first six months of 2017.
The company, which supplies smoke alarms and other products, has reported adjusted operating profit of £1.5m (H1 2016: operating loss of £0.9m). This was achieved through a significant improvement in gross margin and a net reduction in overheads, delivered against a backdrop of flat sales. However, revenue was fl;at at £26m (H1 2016: £25.9m).
It said it had seen good progress in Europe, Middle East and Africa (EMEA), which helped to offset the lower year on year sales in the UK post the implementation of the private landlord legislation which had boosted sales in 2016.
The profit generated in the firm’s core markets has enabled the board to declare a maintained interim dividend of 2.5p per share, underpinning its confidence in the business and its prospects. Basic EPS in the six months ended June 30, 2017 was 2.8p per share (H1 2016: loss of 1.3p).
It added that despite the significant increase in debtors at period-end compared to the position at June 30 last year, together with the ongoing cash cost of servicing the product warranty, the firm’s balance sheet remained strong with £10m in cash at June 30, 2017 (June 30, 2016: £14.7m) and no debt.
All this is a far cry from the events of April 2016 when the company’s shares went into meltdown following a profit warning due to warranty issues with its devices.
In outlook, it said it expected the second half to see a stronger UK sales bias, with full year results expected to be in line with market expectations.
Graham Whitworth, executive chairman, said: “I am pleased to report the strong progress made in the first half, highlighted by our return to profitability. We are fast transforming into a lean, technology driven safety products business in the high growth potential connected home safety products market.”
