Sales more than double at Sprue Aegis
COVENTRY-based home safety products supplier Sprue Aegis has reported a record trading period.
In an update to the London Stock Exchange, the firm said that for the six months ended June 30 it expects sales to be approximately £56.5m compared to £23.8m in H1 2014.
And it expects to reveal an operating profit (before a share-based payments charge) of approximately £9m, more than triple H1 2014’s £2.7m total).
But Sprue Aegis is suggesting its H1 2015 gross margin declined to around 29.0% (H1 2014: 37.4%) primarily due to the adverse impact of the strength of Sterling against the Euro with an average exchange rate in the period of 1.38 (H1 2014: 1.22).
This significantly reduced the Sterling value of gross profit and sales into Continental Europe.
Adversely, the weakness of Sterling against the US Dollar with an average exchange rate in the period of 1.53 (H1 2014: 1.67) increased the cost of US Dollar-sourced products (such as carbon monoxide detectors from Pace Technology and from DTL).
Net cash increased significantly during the period to £29m as at June 30 (H1 2014: £11.7m) helped in particular by the extension in credit terms in April 2015 from DTL, the group’s principal smoke detector supplier and £2.9m (excluding VAT) of cash received from a West Midlands Fire and Rescue Services’ tender.
Sprue remains debt free.
The firm said growth in revenue in H1 2015 was primarily attributable to trade and retail sales into France which were significantly ahead of both H1 2014 and management expectations.
The deadline for landlords in France to fit at least one working smoke alarm in each rented property was extended from 15 March 2015 to 31 December 2015 which continued to drive sales.
