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Advanced Power Components
- BY: Andrew Hore |
- POSTED: 23/05/2008 |
- COMMENTS: Add yours
Advanced Power Components is negotiating a £1m acquisition.
The distributor of data input devices is expected to cost around £1m. There will be a £925,000 payment for fixed assets and goodwill with a further £75,000 dependent on performance over the three months after the acquisition is completed.
The acquisition fits in well with APC’s niche electronic component distribution business. Both companies have their components designed in to products. It gives APC greater exposure to the broadcast and medical sectors.
In the eight months to March 2008, the target company generated pre-tax profit of £154,000 on revenues of £1.25m.
Taking account of the recent acquisition of Novacom, APC’s net debt is probably around £1m at the moment. There are additional performance-related payments for Novacom but they will be paid out of cash flow. Chief executive Mark Robinson is confident that there are interested investors who would be will to buy shares to help finance deals.
Excluding this acquisition, APC is expected to make profits of between £675,000 and £725,000 in the year to August 2008, against £605,000 the previous year.
Interims for the six months to February 2008 showed a small rise in profit from £250,000 to £270,000 and a 10% increase in turnover to £4.7m. That masks a mixed month by month performance with December extremely poor and January and February much better. Since then more than £15,000 has been cut from the monthly cost base.
At 18.5p, APC is valued at £3.75m. That values the shares at around five times prospective 2007-08 earnings.
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