“If it ain't broke, don't fix it” is synonymous with corporate life. However ‘laurel resting’ is not in Elektron’s lexicon, even after producing a 10-fold rise in the stock price over the past 5 years. No instead, the firm’s DNA is based on ‘continuous improvement’ and maximising shareholder returns, as characterised by this morning’s bumper results and encouraging outlook.
FY19 turnover jumped 13.1% to £33.7m (all organic vs £29.8m LY), whilst EBITDA and EBITA climbed 33% and 77% to £6.8m (£5.1m) and £4.6m (£2.6m) respectively – further bolstered by the devaluation of the Tunisian Dinar (+3.6% margin boost) and favourable operating leverage. Similarly, underlying EPS came in at 2.1p (+103%), with net cash closing Jan’19 at £10.1m, or 94% higher than 12 months’ earlier (£5.2m) - despite investing £2.8m in R&D (8.3% sales), of which £1.5m was capitalised (vs £1.8m amortisation), and incurring start-up costs related to Checkit’s US rollout on the West Coast.
Divisionally, Bulgin revenues rose +10% to £30.1m, Checkit doubled to £1.0m and EET leapt 30% to £2.6m, with regional standouts in the UK (£12.3m +15%), EMEA (£9.7m + 20%) and Americas (£9.4m +9%).
The top line increase was primarily thanks to robust demand at Bulgin for smart components (eg agriculture, automotive, energy, industrial and marine), broadening distribution (eg Arrow Electronics) and new product launches. Complemented too, by higher ARR at Checkit (£0.9m, annualised recurring revenues) as more clients adopted the technology, together with expanded European distribution for EET’s MPSII macular degeneration detector and greater orderflow for the Henson glaucoma screener.