Stadium shares drop

Mar 5 2009 by Graeme King, The Journal

Revenues up 17% to £47.61m (2007: £40.76m)

Profit before taxation up 5% to £2.78m (2007: £2.66m before property disposal)

Earnings per share up 3% to 7.6p (2007: 7.4p before property disposal)

Net cash flow from trading activities £4.12m (2007: £4.85m)

Net bank borrowings £2.05m (2007: £0.50m) following £2.50m net consideration on acquisitions

Proposed dividend 1.3 pence per share, total 2.55 pence (2007: 2.55 pence, 3.75 pence)

CHAIRMAN’S STATEMENT

Introduction

I am pleased to report that the group has delivered excellent results for the year ended 31 December 2008 with
sales increased by 17%. Operating profits from Stadium Electronics and Stadium Power showed growth well in
excess of 25%, although this was offset by reduced returns from Branded Plastics. Profit before taxation and
property disposal rose by 5% to £2.78m (2007: £2.66m), and net cash flow from trading activities of £4.12m
represented 132% of operating profit (2007: £4.85m and 164% respectively).
The acquisition of Zirkon Limited on 31 October 2008 marked a significant event in the implementation of our
acquisition strategy, and the integration of its operations at Rugby into our Electronic Manufacturing Services
(“EMS”) business is progressing very well.
Group operations are in robust condition, and have the strength and resilience to take advantage of the
opportunities that are anticipated in a much more challenging trading environment in 2009.

Strategy
Stadium Electronics provides high quality, cost-effective EMS through a partnership approach with key customers.
We aim to deliver sustained growth through market development, technology investment and strategic acquisitions.
Our manufacturing operations in the UK offer flexible solutions for new product development and lower volume high
mix production, whilst our facility in Asia is able to deliver cost effective manufacturing services for customers with
higher volume requirements.
Stadium Power offers power supply solutions to original equipment manufacturers including custom and standard
switch mode power supplies, inverters, converters and battery chargers. The business is able to draw upon the
manufacturing capabilities of Stadium Electronics to offer flexibility and competitiveness. The business delivers
organic growth through the identification of new customers and product opportunities, and this is augmented by the
acquisition of other businesses offering complementary technology, skills, products and customers.
Branded Plastics comprises Stadium Building Products and Quest Consumer Products. Operating from a single
plastic injection moulding facility in North London, we design, produce, source, market and distribute products for
the building products and babycare market sectors in the UK and overseas.
Cash generated from Group operations is utilised to meet the funding requirements of the defined benefit pension
scheme, and to meet a progressive dividend policy with historic cover of approximately two times. Accordingly,
gearing has been maintained at relatively prudent levels in recent years, and investment activity (including
acquisitions) has been set against relatively short payback periods.

Prospects
Our customers are broadly distributed across many geographical markets and industry sectors and this provides
greater stability in a time of unprecedented uncertainty. Our people are dedicated to the provision of high quality
products and services, and we enjoy a favourable degree of customer loyalty.
The strength of our balance sheet, and the pre-emptive actions taken on operating costs, cash generation and
financial structure, will enable the Group to be well placed to take advantage opportunities going forward.