We are pleased to announce another strong set of annual results that reinforces our transformation to a leading design-led technology company.
2015 was another year of significant progress, during which Stadium continued to deliver on our strategic objective to transition from an electronic manufacturing services company to a high growth technology-led business, specialising in wireless solutions and power supplies.
The successful execution of this strategy can be seen in the increased contribution of our higher value and higher margin Technology Products division, which is made up of wireless solutions, power supplies and human machine interface (HMI) sales. This division now accounts for just over half of total revenues, compared to our financial year ended December 2013 when Technology Products accounted for 21% of total sales with electronic manufacturing services contributing 79%.
The successful growth of Stadium’s Technology Products division both organically and by acquisition has contributed to the overall performance of the Company with the improved sales mix significantly enhancing operating profit margins and normalised profit before tax. Stadium is now well placed for future growth, operating in the high growth markets of wireless solutions and power supplies.
Total revenues for the full year increased by 29% to £53.9m driven by significant growth in our Technology Products division. Other financial headlines include increased normalised operating profit margin of 8.5% and normalised profit before tax (after adjusting for non-recurring costs, amortisation of acquired intangibles and interest charged on the fair value of deferred consideration) increased to £4.0m, up 48.2% on 2014. Statutory earnings per share are 4.2p, with a final dividend proposed of 1.8p per share (2014:1.4p) and total dividends up 28.6% to 2.7p per share (2014:2.1p).
Throughout the year Stadium made a number of key investments to drive and support growth across our Technology Products division and to ensure that our manufacturing capabilities remained world-class.
We established three new regional design centres (one in China and two in the UK) and relocated our operations in South China to upgrade and enhance our manufacturing capability. Both of these strategic initiatives support the high level of growth forecasted for our Technology Products division.
In August last year Stadium completed the acquisition of Stontronics Ltd, a UK based manufacturer and distributor of power supply units, transformers and adaptors, for a maximum consideration of £6.5m. The integration of Stontronics into the Group is proceeding ahead of plans and has already generated a number of value enhancing opportunities with suppliers and customers.
The biggest contributor to the overall growth performance of Technology Products was Stadium’s Wireless business which has quickly become a cornerstone of the Group’s technology offering. The wireless market is an exciting growth space for Stadium with market intelligence suggesting strong growth in the foreseeable future.
“Berg Insight estimates that the global number of cellular M2M subscribers increased by 23 percent during 2015 to reach 265.2 million at the end of the year – corresponding to around 3 percent of all mobile subscribers. Until 2020, the number of cellular M2M subscribers is forecasted to grow at a compound annual growth rate (CAGR) of 22.9 percent to reach 744.2 million at the end of the period. During the same period, cellular M2M network revenues are forecasted to grow at a CAGR of 23.3 percent from € 8.0 billion in 2015 to approximately € 22.8 billion in 2020.” The Global M2M / IoT Communications Market – 2015 Report Berg Insight.
Charlie Peppiatt, Chief Executive Officer, Stadium Group, comments: “We continue to make positive progress as we accelerate the deployment of our strategy as a design-led technologies business and we enter 2016 stronger and better positioned for growth with our upgraded technology offering in wireless solutions, power supplies and HMI.
Our focus for the year is to continue to grow our business organically by leveraging the offering we have from our complementary electronic technologies, engineering expertise, global manufacturing footprint and skilled people. Furthermore, we will also actively identify further acquisitions that fit our strategy and further strengthen our value-add offering to our customers.
We are encouraged by the strong order book and pipeline of opportunities across the Company and early indications that the strong performance we demonstrated in 2015 will continue into 2016.”
Copies of the audited financial statements will be sent to all shareholders shortly and are available at www.stadiuminvestors.com.
Image shows Charlie Peppiatt, CEO of Stadium Group