Future prospects and events after the reporting period
Future prospects
Addtech operates on an international technology trading market where demand is largely influenced by macroeconomic factors. Group companies operate in different but carefully selected niches, resulting in a smoothing effect between sectors, geographical markets and customer segments. Our independent companies continually work to adapt to changes based on their market and the competitive situation.
Historically, Addtech's continuous pursuit of profit growth, profitability (P/WC) and development have provided good average value growth. Our cash flow and financial position form a stable foundation for continued long-term profitable growth based on the same mission.
Events after the reporting period
On 1 April 2016 Hans Andersén became the new head of the Energy business area and a member of Addtech’s Group management. He succeeds Åke Darfeldt, who is retiring after many years of valuable contributions. Hans Andersén joined the Group in 2006 as managing director of an acquired company, and since 2010 he has worked in the Energy business area as business unit manager of Energy Supply.
One of Addtech’s strategies to attain continued long-term profitable growth is to strengthen the Group’s positions in selected niches by acquiring companies. The acquisitions are recognised in the Group’s balance sheet among other things as intangible non-current assets and are distributed over goodwill and other intangible non-current assets. Goodwill is assessed annually for impairment, and other intangible non-current assets are amortised to profit over the estimated useful life. The amortisation of the intangible non-current assets does not affect cash flow and does not therefore affect the underlying ability to generate a profitable increase in operating profit. In light of this, and like several other acquisition-intensive companies, Addtech will also report operating profit for the Group and per business area before amortisation of intangible non-current assets, i.e. at EBITA level (Earnings Before Interest, Tax and Amortisation). This will take full effect as of the first quarter 2016/2017.
Four company acquisition took place after the end of the reporting period:
On 1 April, Addtech acquired Sammet Dampers Oy to become part of the Industrial Process business area. Sammet Dampers is a leading developer and supplier of industrial dampers in Northern Europe. The company has 12 employees and sales of around EUR 5 million.
On 5 April, Addtech acquired Poryan China Company Ltd to become part of the Power Solutions business area. Poryan China Company Ltd provide component solutions and subsystems in circuit protection primarily to the train and signaling market in China. The company has 22 employees and sales of around SEK 50 million.
On 5 April, Addtech acquired ETS Cable Components to become part of the Energy business area. ETS Cable Components supplies products, systems and services in the field of cable accessories for power cable installation, including cable cleats brackets, cable glands, cable lugs, flexible conduits, cable ties and cable tooling above all for the UK market. The company has 35 employees and sales of around GBP 8.5 million.
On 2 May, 100 percent of the shares in Elektro-Tukku Oy, Finland, were acquired to become part of the Components business area. Elektro-Tukku Oy sells measuring and control instruments to industry, OEMs and the public sector. The company has 3 employees and sales of around SEK 8 million. The operation will be part of an existing company.
The acquisition analyses are not yet complete and will be presented in the next interim report.
Proposed allocation of earnings
| The following amounts are available for distribution by the Annual General Meeting of Addtech AB: | |
|---|---|
| Retained earnings | 625 SEKm |
| Profit for the year | 142 SEKm |
| 767 SEKm | |
| The Board of Directors and the CEO propose that the funds available for distribution be allocated as follows: | |
| A dividend paid to shareholders of SEK 3.25 per share 1) | 218 SEKm |
| To be carried forward | 549 SEKm |
| 767 SEKm | |
| 1) Based on the number of shares outstanding at 31 May 2016. The total dividend payout may change if the number of treasury shares repurchased changes prior to the proposed dividend record date of 2 September 2016. | |
The Board of Directors deems the proposed dividend justifiable in the context of the demands on Group equity made by the Group's operations, size and risks, and in the context of the Group's need for a strong balance sheet, liquidity and overall financial position.
At the end of the reporting period, equity in the Parent Company included SEK -5 million (-3) resulting from financial assets and liabilities being measured at fair value in accordance with the Swedish Annual Accounts Act (Chapter 4, Section 14a).