The integration of BOAR into our Spanish business has established Chloride BOAR as a leading player in the Spanish market.
This expansion has continued, with the acquisition in October 1999 of Hytek Vital Energy (Hytek), based in Melbourne, Australia. Hytek provides a strong position in critical power protection services for the Australian telecommunications market. It was integrated with our existing business, making Chloride Hytek the market leader in Australia. In December 1999, we completed the acquisition of the power protection business of Dale Electric Power Systems (Dale) from TT Group PLC. Dale has been combined with Chloride Thailand to strengthen Chloride’s existing service operation in the Far East and create the largest power protection service organisation in Thailand.
At the end of the year, we announced the acquisition of Masterguard, the power protection business of Siemens AG. Masterguard is based in Erlangen, Germany, and has a sales and service operation in Istanbul, Turkey. The acquisition is expected to enhance earnings per share in the year to 31 March 2001.
During the year we invested a further gbp 3.3 million in new facilities in Bologna, Italy, for Chloride Silectron, which is our international centre of excellence for mid-range power protection and remote monitoring products.
PERFORMANCE
Turnover on continuing operations grew 24% to gbp149.6 million (1999: gbp120.5 million). Operating margin on core continuing operations rose to 10.1% (1999: 8.9%), with operating profit on core continuing operations before goodwill amortisation up 44% to gbp14.3 million (1999: gbp9.9 million). Profit before tax and exceptional items increased by 15% to gbp13.8 million (1999: £12.0 million). Adjusted EPS increased by 17% to 4.70p (1999: 4.01p).
FINANCIAL POSITION
Content from our partners
Operating cash flow continues to be strong at 97% of operating profit and we have committed facilities available for further investment opportunities.
DIVIDEND
The Board is pleased to recommend the payment of a final dividend of 0.72p per share (1999: 0.60p). Together with the interim dividend of 0.68p, this gives a full year dividend of 1.40p (1999: 1.20p), which is up 17% in line with earnings growth.
The final dividend will be paid on 28 July 2000 to shareholders on the register at 30 June 2000.
YEAR 2000 / E-BUSINESS
The systems implementations necessary to achieve millennium compliance were all completed successfully. These new systems will help us to improve our business processes and e-business capability.
Chloride achieved another year of strong performance with sales, operating profit and earnings per share well ahead of the previous year.
This performance was driven by the Power Protection Division, which achieved excellent results from good organic growth and the acquisitions made during 1999.
Results in the Safety Systems Division were flat, but included additional investment in sales and marketing and product development, the benefits of which are expected to come through in the coming year.
At the end of the year, we completed the divestment of the loss making magnetics division of our power conversion business.
STRATEGIC DEVELOPMENT
The key strategic objective during the year was to increase our focus on the higher-growth sectors within our markets. Considerable progress was made in achieving this, with good sales growth in telecoms, e-business and financial services. This success reflected the greater concentration of sales and marketing resources on these sectors, together with a number of important product and service innovations.
Chloride maintained its programme of significant investment throughout its businesses. The Company continues to increase its investment in product development, with highly focused teams devoted to both product and service innovation. Ongoing development programmes for people and information technology will ensure that Chloride has a strong foundation for growth.
A number of acquisitions were made to strengthen our product ranges and gain access to key markets. These businesses are delivering the anticipated benefits.
At the year-end we acquired Masterguard, the power protection division of Siemens AG, with its operations in Erlangen, Germany, and Istanbul, Turkey. The business provides complementary high-quality products and services, a strong research and development capability and leading positions in the important German and Turkish markets. The acquisition is a major step in our strategy to build further market leadership positions in power protection.
Chloride Power Protection achieved another year of strong performance. Turnover was increased by 39% to gbp107.7 million (1999: gbp77.7 million) with operating profit increased by 60% to gbp11.7 million (1999: gbp7.3 million). Operating margins were increased to 10.9%
(1999: 9.4%) through the combination of organic growth and the benefit of the acquisitions made in 1999.
The increased focus on the growth sectors within our markets began to pay off and our business with customers in telecoms, e-business and financial services accounted for 36% of divisional sales (1999: 30%). We also consolidated our positions internationally with solid growth in all markets. Service sales were increased in line with expectations. After-sales service is a vital aspect of our power protection solution offering.
