Stadium ‘solid’
HARTLEPOOL-BASED Stadium Group announced a “solid” set of interim results this morning, despite “difficult” trading conditions.
In the six months to June 30, pre-tax profits at the electronics firm were up 12.9% to £1.4m - in line with annual forecasts of £2.8m this year.
Meanwhile, a 16% rise in revenues to £23.06m bettered the 4% increase (to £19.88m) in the same period last year.
Recent growth has been driven by a 20% rise in sales in its electronics and power supply business, although branded plastics revenues were down 5% to £5.69m due to soaring energy and raw material costs.
Nigel Rogers, Stadium’s chief executive, said the company was “well prepared” should the economic downturn filter through to the business.
He said: “These are a solid set of results in difficult economic conditions. Many of our clients are in the industrial sector, which is not biting in the same way as the retail sector.
“We are more protected than businesses that are exposed to house building.”
Mr Rogers said the company was looking to make strategic acquisitions if the right opportunity came along. The company’s power business has made two acquisitions within the past two years.
He said: “Both in power and electronic manufacturing services (EMS) we see consolidation opportunities for further acquisitions. There are a number of well-managed business in the UK, while there are opportunities for geographical expansion into Europe and the US.”
“We are talking to a number of businesses, but nothing is imminent.”
As well as seeking acquisitions, Stadium is protecting its balance sheet by adopting lean manufacturing techniques at its Hartlepool site to “increase the cash flow and competitiveness of the business.”
The company is looking to roll out lean programmes, which involve changing factory lay-out and working practices, in its operations in Asia. Bought in 2000, they comprise a design and commercial centre in Hong Kong and a production facility in Chang Ping City in Guangdong.
Stadium Electronics sources composite parts from its Chinese facility and supplies electronic manufacturing services to the consumer, industrial, medical and automotive markets. The electronics division employs 121 staff at the group’s headquarters in Hartlepool and a further 1,200 throughout sites in the UK and China.
The group remains optimistic about future performance and said despite anticipated tough trading conditions, analysts had not revised downwards their growth forecasts. It expects pre-tax profits to rise to £2.8m in 2008 and £2.9m the following year.
Nick Brayshaw, chairman of Stadium Group, said: “The business has stood up well to the commercial challenges presented by further significant increases in commodity and energy prices. Once again, excellent cash conversion has resulted in reduced borrowings and places the company in a strong position to take advantage of future opportunities.”
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