Annual Report 2022 Summary
Applying advanced technology to protect and secure
Chairman’s statement
Performance in line with revised expectations, robust cash, and a record closing order book with strong cover for the coming financial year.
Highlights presentation video
Financial highlights FY 2021/22
Adjusted operating profit (£m)
Order intake (£m)
Net funds / (debt) (£m)
Total revenue (£m)
Operational highlights FY 2021/22
- MASS, MCL and SEA all posted increases in profit
- Strong first full year contribution from ELAC Sonar, ahead of expectations
- Disappointing performance from Chess. As expected, weaker performance at EID
- Strong order intake of £186.4m (2021: £180.3m)
- Record closing order book of £291.0m (2021: £242.4m) underpinning 78% of expected revenue for 2022/23, a record high
- Adjusted operating profit of £15.5m (2021: £18.6m) on revenue of £137.8m (2021: £143.3m)
- Dividend increased by 10%
- Net funds higher than expected at £11.0m (2021:£2.5m)
Measuring our progress
Indicates the changes in total Group revenue compared with prior years.
Why is it important?
Revenue growth gives a quantified indication of the rate at which the Group’s business activity is expanding over time.
Results
(4)%
Comment on results
Excluding the impact of a full year contribution from ELAC, the underlying Group revenue of £126.5m was 12% lower than in 2021, mainly due to decreases at EID and Chess, partly offset by increases at MCL and SEA.
Change in Group operating profit before exceptional items, amortisation of other intangible assets, research and developmentexpenditure credits and non-trading exchange differences, including marking forward exchange contracts to market.
Why is it important?
The adjusted operating profit trend provides an indication of whether additional revenue is being gained without profit margins being compromised and whether any acquisitions are value enhancing.
Results
(17)%
Comment on results
Excluding the impact of the full year contribution from ELAC, the underlying Group adjusted operating profit of £13.8m was 26% lower than the 2021 equivalent figure with falls at Chess and EID the main contributors.
Orders for the next financial year expected to be delivered as revenue, presented as a percentage of consensus market revenue forecasts for the year.
Why is it important?
Order book visibility, based on expected revenue during the year to come, provides a measure of confidence in the likelihood of achievement of future forecasts.
Results
78%
Comment on results
This is higher than the last three years and has further increased to 90% in mid-July 2022.
Annual change in earnings per share, before exceptional items, amortisation of other intangible assets and non-trading exchange differences including marking forward exchange contracts to market, all net of tax.
Why is it important?
Change in adjusted earnings per share is an absolute measure of the Board’s management of the Group’s return to shareholders (net of tax and interest).
Results
(8%)
Comment on results
The 8% decrease compares to a 17% decrease in the adjusted operating profit with the difference being mostly driven by a fall in earnings from our part owned subsidiaries (Chess and EID). These downsides were partly offset by a full year contribution from ELAC and improved performances at MCL, MASS and SEA.
Net cash generated from operations (net of interest and net capital expenditure) before tax as compared to the profit before tax and interest, excluding amortisation of other intangible assets over a rolling four-year period.
Why is it important?
Operating cash conversion measures the ability of the Group to convert profit into cash.
Results
87%
Comment on results
The stronger conversion in the last year reflects good cash performance at SEA, EID and ELAC. Our expectation is that the conversion rate should decrease in 2022/23 due to the favourable timing seen in 2021/22 partly unwinding, the conversion rate in 2021/22 alone being 116%. We do expect an improved cash performance at Chess in 2022/23.
Total sales to markets outside the UK and Portugal.
Why is it important?
International markets are important to the organic growth of the business and reduce our dependence on domestic markets.
Results
£48.8m
Comment on results
The decrease in 2022 export revenue is driven by lower export sales at EID and Chess, partly offset by a full year contribution from ELAC and higher export sales at SEA. This represents 35% of the Group’s revenue compared with 42% in 2020/21.
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Annual report 2022
August 2022
