Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2018.

Overview

·    Group revenue of £10.6m (H1 2017: £11.3m)

·    Gaming revenues increased by 17%, offset by a decline in Financial revenues of 29%

·    Profit before tax of £2.2m (H1 2017: £2.5m)

·    Interim dividend increased by 100% to 7.60p per share (H1 2017: 3.80p)

·    Basic earnings per share (“EPS”) of 11.7p (H1 2017: 13.8p)

·    Net cash of £13.7m (30 September 2017: £14.1m) following an increase to dividend payments

Commenting on the results, Chairman, Tudor Davies said:

“The second half of the year has started with some improvement in demand from the ATM market and an increased number of projects in the growing Gaming sector. This is consistent with the improvement in trading normally experienced in the second half, and whilst growth may be suppressed compared with recent years, we expect to make good progress in developing our unique, award-winning products, particularly in the USA and Asia.” 

Chairman's statement

Introduction

The Board is pleased to report a doubling of the interim dividend to 7.6p (H1 2017: 3.8p) in line with our progressive dividend policy, and the continued development of our business into new markets, which in the first half has counteracted some deferral in business from the Financial sector.

Results

Revenues for the first half to 31 March 2018 were £10.6m (H1 2017: £11.3m), with profit before taxation of £2.2m (H1 2017: £2.5m).

There has been a considerable variation in demand across the various sectors, resulting in a reduction in revenues. The most positive has been Gaming which has increased by 17%, whereas in the Financial sector, where we supply product for ATM manufacture, demand has been unpredictable with projects being deferred and sales lower than at this time last year. However, in recent weeks we have seen some improvement in demand from the ATM market, and the good progress in Gaming is continuing with an increasing number of projects in the pipeline, and we expect further opportunities to result from the change to direct sales representation in USA and Asia.   

Cash generation

Cash generation from operating activities improved to £2.4m (H1 2017: £2.1m), of which £0.3m was invested into capital expenditure, and with the 2017 final dividend payment of £2.4m, some £0.7m higher than the 2016 final dividend payment, resulted in cash balances of £13.7m (30 September 2017: £14.1m).

Dividend

The Directors have declared a 100% increase to the interim dividend to 7.60p per share (H1 2017: 3.80p) payable on 20 July 2018 to shareholders on the Register on 6 July 2018, to facilitate a move towards an improved balance between the interim and final dividends for a fiscal year, whilst maintaining the Company's progressive dividend policy.

Outlook

The second half of the year has started with some improvement in demand from the ATM market and an increased number of projects in the growing Gaming sector. This is consistent with the improvement in trading normally experienced in the second half, and whilst growth may be suppressed compared with recent years, we expect to make good progress in developing our unique, award-winning products, particularly in the USA and Asia. 

Tudor Davies

Chairman