of 9

INTERIM RESULTS ANNOUNCEMENT

0 views9 pages

Download

All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
3 September PETARDS GROUP PLC INTERIM RESULTS ANNOUNCEMENT Petards Group plc ('Petards'), the AIM quoted developer of advanced security and surveillance systems, reports its interim results for the six
3 September PETARDS GROUP PLC INTERIM RESULTS ANNOUNCEMENT Petards Group plc ('Petards'), the AIM quoted developer of advanced security and surveillance systems, reports its interim results for the six months to. Key points: Operational o Order book remains in excess of 20 million giving strong position for the second half and future s. Approximately one third of order book is scheduled for delivery in the second half of Orders secured in first half of included; Over 1.5 million for Petards eyetrain CCTV systems from Siemens for new super high-speed trains it is building for the Turkish State Railway. This was the first order placed under a framework agreement signed with Siemens in June for the supply of Petards train related products and services. Over 4.5 million for modification programme relating to countermeasures equipment for the MOD. Financial o Results for the six months to Revenues up 101% to 7.2 million (: 3.6 million) Gross margin 27% (: 40%), a reflection of higher defence equipment supplies EBITDA 441,000 profit (: 158,000 loss before exceptionals) Operating profit 346,000 (: 299,000 loss) Profit after tax 273,000 (: 338,000 loss) o Finance Cash inflow from operating activities 181,000 (: 1,029,000 outflow) Cash at 1.5 million (31 Dec : 1.4 million) and no bank debt Basic EPS of 0.79p per share (: 3.11p loss per share) Diluted EPS of 0.62p per share (: 3.11p loss per share) Commenting on the current outlook, Raschid Abdullah, Chairman, said: The second half of has started well and the Group continues to trade profitably. The Group s overall order book is in excess of 20 million of which over one third is expected to be delivered before the end of the current. There continue to be opportunities for development and growth in all of our current product areas and we expect customers to be placing orders on a number of projects in the coming months which we believe we are well placed to secure. The Board is confident about the Group s prospects for the second half and beyond as whilst there is still work to be done this in closing out new business, the present order book already provides a strong base going forward into Contacts: Petards Group plc Raschid Abdullah, Chairman Mb: Andy Wonnacott, Finance Director Tel: WH Ireland Limited, Nomad and Joint Broker Mike Coe, Ed Allsopp Tel: Hybridan LLP, Joint Broker Claire Louise Noyce Tel: Chairman s Statement Corporate Overview I am pleased to report that having entered the with a strong order book the Group has produced a much improved trading performance in the six months. Revenues totalled 7.2 million and the pre-tax profit was 273,000. In addition the Group has secured a number of significant contracts within both the rail and defence industries and has a strong order book. The financing transactions completed in the latter part of coupled with positive cash flows on the larger projects currently flowing through the business have put the Company in a much stronger position with no bank debt and cash balances of 1.5 million as at. Operating Review The Group continued to make progress on a number of fronts with the award of some key projects during the period. Petards strategic position within the new train build market was strengthened with a five framework agreement being entered into with Siemens rail vehicle business to supply Petards train related products and services. The first order under that agreement was placed to supply Petards eyetrain on-board digital CCTV systems for the new super high-speed Velaro type trains that Siemens are building for the Turkish State Railway. The project is currently worth in excess of 1.5 million and has the potential to increase in size over time providing that Siemens is successful in winning additional train orders from the Turkish State Railway which has announced plans to procure up to a further 90 high speed trains. The UK rail market offers a number of near term order opportunities for Petards eyetrain systems for fitment onto new build trains for rolling stock for which orders have been placed on train builders already and for rolling stock for which orders are expected to be placed soon. Also as previously anticipated, enquiry levels for retrofit applications are increasing as a result of the letting of new franchises to UK train operators. The contract awarded at the end of June, worth over 4.5 million, by the Ministry of Defence ( MOD ) to modify countermeasures equipment fitted to many of its aircraft will contribute to revenues in and the two following s. This programme will replace obsolete components within ALE-47 Threat Adaptive Countermeasure Dispensing System (TACDS) Programmers which form part of the integrated Defensive Aids Suite installed on a variety of aircraft. We are hopeful that some other smaller countermeasures projects will be approved in the second half of the. Petards has been the long standing operator of an MOD enabling contract to supply it with private mobile radio equipment, ancillaries and engineering services and the Group s expertise in this field was recognised when it was awarded the 7 million Secure Management Radio Equipment ( SMRE ) project in. We were therefore extremely pleased to have learned yesterday that Petards has been awarded, subject to contract, the new enabling contract that commences later this month. Revenues from this new two contract are estimated to be similar to those under the previous contract which were in excess of 0.5 million per annum and the MOD have the option to extend the contract by up to a further two s. Trading in our Emergency Services products remained similar to that for the equivalent period in and continues to make a small but positive contribution to the Group s profitability. Consideration is presently being given to how the Group s business in this area could be enhanced through product development. Our Fit 4 Growth programme is on-going and is now focused on the continuous improvement and development of our businesses. To support this programme and our current business levels of activity, additional resources have been recruited but operating costs will continue to be closely monitored to ensure they remain in step with both revenues and margins. Overview of the Results Group revenues for the six months of 7.2 million were double the 3.6 million achieved in the equivalent period last and were almost 15% higher than the total revenues for the prior (: 6.3 million). Equipment deliveries for the SMRE project accounted for a substantial proportion of this growth, although revenues from both equipment and one-off engineering services provided to Bombardier, Siemens and Hyundai Rotem were also notable contributors. 2 In line with our expectations, gross margins were down to 27% (June : 40%). While margins on our different product lines were generally maintained, the main cause of the reduction in the margin percentage was the mix of business compared with that of. In particular, the SMRE project had a significant effect due to its high material cost content as did some of the one-off rail engineering services which were competitively priced in order to gain market position for potential future equipment orders from those customers. Administrative expenses totalled 1.6 million (June : 1.7 million) and after net financial expenses of 73,000 (June : 39,000) and no tax charge, the Group recorded a profit after tax of 273,000 (June : 338,000 loss). Despite working capital increasing in the six months by approximately 0.2 million due to higher revenues, net cash inflow from operating activities was 0.2 million which compared favourably with a net cash outflow of 1.0 million in the same period last. Cash balances at were 1.5 million and were similar to those at ( 1.4 million). Board changes I am pleased to announce that Paul Negus was appointed as a director of the Company on 3 September. Paul has responsibility for business development for the Group s rail products and brings considerable commercial experience having spent eight s as Managing Director of PIPS Technology Limited, a developer of automatic number plate recognition and CCTV systems first under private ownership and latterly under the ownership of Federal Signal Inc. During the implementation of the Fit 4 Growth programme, Osman Abdullah assumed an interim role chairing the board of the Company s main operating subsidiary, Petards Joyce-Loebl. In recognition that this role is likely to continue for the foreseeable future the Board considers that the nature of his contribution will be as an executive director of the Company. Outlook The second half of has started well and the Group continues to trade profitably. The Board anticipates securing some additional business during the latter part of this that is expected to make a contribution to revenues during the second half. The Group s overall order book is in excess of 20 million of which over one third is expected to be delivered before the end of the current. There continue to be opportunities for development and growth in all of our current product areas and we expect customers to be placing orders on a number of projects in the coming months which we believe we are well placed to secure. The Board is confident about the Group s prospects for the second half and beyond as whilst there is still work to be done this in closing out new business, the present order book already provides a strong base going forward into Raschid Abdullah 3 September 3 Condensed Consolidated Income Statement for the six months Note Revenue 7,163 3,572 6,259 Cost of sales (5,202) (2,147) (3,733) Gross profit 1,961 1,425 2,526 Administrative expenses (1,615) (1,724) (3,856) Operating profit/(loss) 346 (299) (1,330) Analysed as: Earnings before interest, tax, depreciation 441 (158) (716) and amortisation ( EBITDA ) Depreciation and amortisation (95) (69) (308) Share based payments Restructuring costs - (72) (306) 346 (299) (1,330) Financial income Financial expenses 2 (75) (54) (1,078) Profit/(loss) before tax 273 (338) (2,388) Income tax Profit/(loss) for the period attributable to equity shareholders of the company 273 (338) (2,293) Basic earnings per share (pence) (3.11) (15.87) Diluted earnings per share (pence) (3.11) (15.87) The above results are derived from continuing operations. 4 Condensed Consolidated Statement of Comprehensive Income for the six month period Profit/(loss) for period 273 (338) (2,293) Other comprehensive income Currency translation on foreign currency net investments - (13) (13) Total comprehensive income for the period 273 (351) (2,306) Condensed Consolidated Statement of Changes in Equity for the six month period Share capital Share premium Merger reserve Equity reserve Retained earnings Currency translation differences Total equity Balance at 1 January (audited) 6,412 24, (28,849) (198) 1,517 Loss for the period (338) - (338) Other comprehensive income (13) (13) Total comprehensive income for the period (338) (13) (351) Balance at (unaudited) 6,412 24, (29,187) (211) 1,166 Balance at 1 January (audited) 6,412 24, (28,849) (198) 1,517 Loss for the (2,293) - (2,293) Other comprehensive income (13) (13) Total comprehensive income for the (2,293) (13) (2,306) Purchase of own shares (592) (592) Sale of own shares Water Hall transaction (note 2) 110-1, ,435 Share issue: placing 115 1, ,150 Expenses of share issue - (87) (37) (124) Conversion of convertible loan notes (7) 7-61 Balance at (audited) 6,645 25,153 1, (31,132) (211) 1,736 Balance at 1 January (audited) 6,645 25,153 1, (31,132) (211) 1,736 Profit for the period Other comprehensive income Total comprehensive income for the period Conversion of convertible loan notes (1) 1-20 Balance at (unaudited) 6,648 25,170 1, (30,858) (211) 2,029 5 Condensed Consolidated Balance Sheet at ASSETS Non-current assets Property, plant and equipment Goodwill Development costs Deferred tax assets ,836 1,658 1,859 Current assets Inventories 1,900 1,924 1,779 Trade and other receivables 2,283 1, Cash and cash equivalents escrow deposits Cash and cash equivalents 1, ,440 5,726 3,491 4,202 Total assets 7,562 5,149 6,061 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 6,648 6,412 6,645 Share premium 25,170 24,152 25,153 Equity reserve Merger reserve 1,075-1,075 Currency translation reserve (211) (211) (211) Retained earnings deficit (30,858) (29,187) (31,132) Total equity 2,029 1,166 1,736 Non-current liabilities Interest-bearing loans and borrowings 1,515-1,518 Deferred tax liabilities , ,646 Current liabilities Interest-bearing loans and borrowings - 1,334 - Trade and other payables 3,894 2,527 2,679 3,894 3,861 2,679 Total liabilities 5,533 3,983 4,325 Total equity and liabilities 7,562 5,149 6,061 6 Condensed Consolidated Statement of Cash Flows for the six month period Cash flows from operating activities Profit/(loss) for the period 273 (338) (2,293) Adjustments for: Depreciation Amortisation of intangible assets Financial income (2) (15) (20) Financial expense ,078 Income tax charge - - (95) Exchange differences - (13) (13) Operating cash flows before movement in working capital 441 (243) (1,035) Change in trade and other receivables (1,336) Change in inventories (121) (713) (568) Change in trade and other payables 1,206 (251) (267) Cash generated from operations 190 (990) (1,223) Interest received 2-20 Interest paid (49) (39) (60) Income tax received Net cash from operating activities 181 (1,029) (1,263) Cash flows from investing activities Acquisition of property, plant and equipment (29) (34) (40) Capitalised development expenditure (49) (3) (371) Cash deposits held in escrow (35) Net cash (outflow)/inflow from investing activities (113) 40 (334) Cash flows from financing activities Proceeds from share issue - - 1,150 Expenses of share issue - - (87) Water Hall transaction (note 2) - - (83) Proceeds from sale of own shares New short term borrowings - 1,334 - Repayment of bank borrowings - (42) (42) Net cash inflow from financing activities - 1,292 1,533 Net increase/(decrease) in cash and cash equivalents (64) Water Hall transaction: Settlement of working capital facility (note 2) - - 1,551 Total movement in cash and cash equivalents in the period ,487 Cash and cash equivalents at start of period 1,440 (47) (47) Cash and cash equivalents at end of period 1, ,440 Cash and cash equivalents comprise: Cash and cash equivalents per balance sheet 1, ,440 7 Notes 1 Basis of preparation The interim financial information set out in this statement for the six months and the comparative figures for the six months are unaudited. This financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act The comparative figures for the financial are not the Company s statutory accounts for that financial. Those accounts have been reported on by the Company s auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act This interim statement, which is neither audited nor reviewed, has been prepared in accordance with the measurement and recognition criteria of Adopted IFRSs. It does not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the. It does not comply with IAS 34 Interim Financial Reporting as is permissible under the rules of the AIM Market ( AIM ). The accounting policies applied in preparing these interim financial statements are the same as those applied in the preparation of the annual financial statements for the, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January and were adopted by the Group. These have had no significant impact on the Group s profit for the period or equity. The Board approved these interim financial statements on 2 September. Copies of this interim statement will be available on the Company s website ( and from the Company s registered office at 390 Princesway, Team Valley, Gateshead, Tyne and Wear, NE11 0TU. 2 Financial expenses Interest expense on financial liabilities at amortised cost: - Convertible loan notes at 7% p.a. (cash) - Convertible loan notes amortisation (non-cash) - Bank finance (cash) - Other (cash) Net foreign exchange loss Water Hall transaction (see below) Financial expenses ,078 On 29 August the Group completed a debt for equity swap with Water Hall Group plc ( the Water Hall transaction ). Under the terms of the arrangement, the Group issued equity, share options, and convertible loan notes with a combined fair value of 2,975,000 to: (i) settle its working capital facility of 1,551,000 (ii) purchase its own shares to the value of 592,000 and (iii) acquire the remaining net assets of Water Hall Group plc which comprised cash of 72,000 and net liabilities of 68,000 relating to trade and other payables net of VAT receivables. The loss on this transaction of 860,000 was included in total exceptional finance costs for the of 978,000; the balance included transaction expenses of 118,000. The net cash effect of this transaction was an outflow of 83,000. In addition the Group s overdraft of 1,551,000 was 8 settled. The debt for equity swap resulted in the Group obtaining control of the Water Hall Group plc legal entity with the result that, from 29 August, Water Hall Group plc has been consolidated into the accounts. 3 Taxation No provision for taxation has been made in the Condensed Consolidated Income Statement for the six months to based on the estimated tax provision required for the ending. No provision was required in the six months to. 4 Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit for the period attributable to the shareholders by the weighted average number of shares in issue. The calculation of earnings per share is based on the profit for the period and on the weighted average number of ordinary shares outstanding in the period. Earnings Profit/(loss) for the period ( 000) 273 (338) (2,293) Number of shares Weighted average number of ordinary shares ( 000) 34,347 10,866 14,456 Diluted earnings per share Diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, which arise from both convertible loan notes and share options, and is calculated by dividing the adjusted profit for the period attributable to the shareholders by the assumed weighted average number of shares in issue. The adjusted profit for the period comprises the profit for the period attributable to the shareholders after adding back the interest on convertible loan notes for the period. Adjusted earnings Profit/(loss) for the period ( 000) 347 (338) (2,293) Number of shares Weighted average number of ordinary shares ( 000) 55,983 10,866 14,456 At and diluted earnings per share was identical to the basic earnings per share as the Group was loss making. 9
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks