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Trading statements

Acal underlying earnings ahead of forecasts

15 April 2016 07:31

Acal expects underlying earnings for the year ended 31 March to be slightly ahead of its forecasts.

The group says trading since its last update on 12 February has been better than it expected.

Group sales for the year increased by 6% and by 14% at constant exchange rates. The Design & Manufacturing division, which accounted for 48% of Group revenue and more than three quarters of Group profit contribution for the year, saw sales grow by 3% on a like-for-like basis and by 50% CER due to recent acquisitions. As expected, overall sales in the Custom Distribution division were down, some 7% CER, as a result of strong prior year comparators arising from the previously reported three large non-repeating orders last year and the discontinuation of the final non-specialist supplier.

Trading in the UK has improved following the operational changes made during the year. Adjusting for these, ongoing sales3 in the division grew by 3% year-on-year. Sales beyond Europe and cross-selling activities both continue to develop positively. 17% of Group sales were beyond Europe, compared with 12% last year, and there was a near doubling of the sales of Design & Manufacturing products sold through the Custom Distribution division, to around GBP2.8m. Gross margins continue to be strong and ahead of last year, demonstrating the value of our differentiated offering. New business generation was strong in the second half of the year with a number of new large customer contracts being won. These are expected to generate revenue towards the end of this new financial year and into subsequent years, driving the Group's organic growth rates in line with our expectations. The three acquisitions made in the year to the end of March - Flux in November, Contour in January and Plitron in February - are all performing well and as expected.

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