Sign up
Tech Capital
Why invest in SDM?

Technology switch drove 2016 growth for Stadium Group, with 2017 expected to see more acceleration

Stadium said sales for its Technology Products were up 18.1% to £31.9mln in 2016, representing 60.1% of group sales, while Electronic Assemblies sales fell 21.1% to £21.2mln
In a trading update mid-January, Stadium revealed that its technology operation accounted for 57% of sales, so growth in this division has continued

A boost from its Technology Products business drove growth for electronics firm Stadium Group plc (LON:SDM) in 2016, and 2017 is expected to see more acceleration.

The AIM-listed firm - a leading supplier of wireless solutions, power supplies, interface displays and electronic assemblies – saw its full-year pretax profits jump by 29% to £2.2mln for the year ended December 31, up from £1.7mln in 2015.

Stadium said sales for its Technology Products were up 18.1% to £31.9mln, representing 60.1% of group sales, although Electronic Assemblies sales fell 21.1% to £21.2mln leading to a slip in overall revenues.

READ: Stadium’s 2016 results …

WATCH: Stadium eyes accelerated growth ...

The firm saw its year-end order book increase by 36% to £25.8mln, up from £19.0mln a year earlier, bolstered by the Technology Products division growth.

In the results statement, Stadium’s chairman, Nick Brayshaw said: “We are very excited about the prospects for the Group and believe that our operating model focused around strategically located regional design centres, manufacturing centres of excellence and regional fulfilment centres will allow us to deliver accelerated growth in 2017.”

He added: “Our offering of complementary electronic technologies and design-focused engineering expertise is proving very attractive to current, previous and new customers, and this growing demand gives us confidence in the outlook for 2017, which has started positively."

The group saw its net debt improve to £3.3mln at the year-end, down from £4.7mln in 2015, with cash in the bank of £4.6mln.

Stadium also hiked its final dividend to 1.95p per share, up from 1.8p a year earlier, giving total 2016 dividends of 2.9p per share, up 7.4% on 2015’s 2.7p.

Switch split …

The switch in the split of the business reflects Stadium’s moves to reposition itself towards higher-margin technology products, where the group is working in the fast-growing machine-to-machine sector.

In a trading update mid-January, Stadium revealed that its technology operation accounted for 57% of sales, so growth in this division has continued.

Broker N+1 Singer said Stadium said after January’s trading update that it thinks Stadium has a "bright future" as it makes the transition to becoming a technology-led business.

At the same time in January, Stadium also unveiled a modest bolt-on acquisition, paying £750,000 for Cable Power, a specialist supplier of cable and power products to computer companies.

WATCH: Stadium boss pleased with “strong 2016” ...

The firm’s chief executive, Charlie Peppiatt said then that: “There is a great deal of synergy between the product ranges of our power division, Stadium Stontronics, and Cable Power, and we already work closely with many of the same customers.

"Bringing together the expertise of Cable Power and Stontronics places Stadium in a unique position to offer a highly compelling exclusively approved 'one-stop-shop' solution for the single board computer sector.”

Long history ….

Stadium 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.

The shares have shown a good recovery in the year to date, up over 20% following a dip over the previous year, with Stadium pushing above the 100p level after today’s full-year results, up 4.5p to 104.5p.

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.

The HMI arm provides user interfaces, such as keypads and controllers, for machinery.

And Electronic Assembly manufactures electronic devices and components.

Register here to be notified of future SDM Company articles
View full SDM profile View Profile
View All

Related Articles

Hydrogen refuelling
As the move towards alternative fuels for vehicles gathers pace, news last month of the opening of the first 'under the canopy' hydrogen refuelling station at Beaconsfield Services on the M40 deserved a bit of a fanfare

© tech Capital 2018

Tech Capital, a subsidiary of Proactive Investors, acts as the vanguard for listed tech companies to interact with institutional and highly capitalised investors.
Headquartered in London, Tech Capital is led by a team of Europe's leading analysts and journalists, publishing daily content, covering all key movements in the Technology market.