Stadium Group plc’s (LON:SDM) interims revealed some of the benefits of making the transition to higher-margin, design-led electronics.
However its progress was hampered by an already-flagged decline in the wireless business and the loss of a major customer.
Resilient, then, is probably the best way to describe results. The gross margin grew by 2.5% to 24.1% year-on-year, while pre-tax profits were up 14.3% to £1.6mln on flat revenues of £24.3mln.
The order book, a good proxy for the underlying health of the business, grew by 22.5% to £30.7mln, while investors will be rewarded with a 0.5p hike to the dividend, which comes in at 0.95p.
Continued transition
The split of the business reflects the moves to reposition Stadium with higher-margin technology products accounting for 57% of revenues. Here the company is working in the fast-growing machine-to-machine sector.
Chairman Nick Brayshaw said: "The half-year results show continued progress in transitioning Stadium into a design-led technology solutions business capable of supporting our customers across the globe from our network of regional design centres and manufacturing centres of excellence.
“We continue to believe that by developing a more robust and customer-focused operating model, we will support further profitable growth across the group going forward.
“Given the visibility and rate of growth in our forward order book, we remain confident we will return to our higher growth trajectory next year and beyond."
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Stadium in detail
The group has a long history as a components maker, dating back to 1911 when it pioneered injection moulding. It floated on AIM in 1996 and has since built itself an impressive repertoire of industry-specific businesses.
Stadium has four arms: Power, wireless, electronics assembly, and human machine interface (HMI).
- Power specialises in custom and standard power products to serve security, medical, industrial and specialist lighting markets.
- Wireless is a relatively new addition, providing machine-to-machine wireless connectivity technology, used in things like home security, fleet tracking and wearable tech.
- HMI arm provides user interfaces, such as keypads and controllers, for machinery.
- Electronic assembly manufactures electronic devices and components.