RNS Number:8210V
Belgravium Technologies PLC
26 February 2004
EMBARGOED UNTIL 26 FEBRUARY 2004
BELGRAVIUM TECHNOLOGIES PLC
(AIM)
PRELIMINARYRESULTS FOR THE
YEAR ENDED TO DECEMBER 31 2003
The Board of Belgravium Technologies plc ("Belgravium" or "the Company"),
designers and manufacturers of real-time data capture systems, are pleased to
announce the Preliminary Results for the year ended 31 December 2003.
HIGHLIGHTS
* Cash in bank up 52% #2,043,000 (2002: #1,342,000)
* Final dividend 0.30p (2002: 0.24p)
* Total dividends for year 0.42p (2002: 0.36p)
* Pre tax profits #795,000 (2002: #1,405,000)
* Sales of #3,895,000 (2002: #4,188,000)
* Earnings per Share 0.85p (2002: 1.54p)
Commenting today, Chief Executive John Kembery said:
"During 2003, a restraint on capital spend, combined with a general loss of
confidence in the logistics industry meant that every contract was hard won for
Belgravium and its competitors.
Having weathered a cautious market, the Group balance sheet shows a very strong
position and the Company continues to operate profitably. We have not held back
on investment and have continued to spend on product and technical development,
which should leave us well placed when optimism returns.
We are still committed to developing our position in Europe, where our products
have won general approval. We have also continued with a full programme of
technical and product development and are currently looking to expand our key
personnel.
As we enter 2004 there are significantly more contracts in negotiation than a
year ago. There is still strong competition on price and the logistics industry
is far from returning to its earlier assurance. However, there are now
increasingly more new business opportunities and the Company's messages of
quality and reliability do have a bearing on negotiations.
We shall continue to build on the company's strengths, confident that only minor
improvements in our market could have a major impact on performance."
For further information please contact:
Buchanan Communications Ltd Kelly-Ann French
Mob: 07958 972164
Belgravium Technologies plc John Kembery
Mob: 07770 731021
www.belgraviuminvestorrelations.com
FULL STATEMENT ATTACHED
Belgravium Technologies plc
Preliminary announcement for the year ended 31 December 2003
Chairman's statement
Introduction
Belgravium Technologies designs and manufactures real time electronic data
capture systems, which are largely applied to the logistics and the supply chain
sectors in the UK and Europe.
Results
2003 was a tough year for Belgravium and its competitors. In the first quarter
the market was slow and although this improved as the year progressed, turnover
for the year was 7.0% down on 2002 at #3,895,000 (2002: #4,188,000). On this
lower turnover, profit before tax was also reduced, at #795,000 compared to
#1,405,000 in 2002, a decrease of 43%. Basic earnings per share fell from 1.54p
per share in 2002 to 0.85p per share in 2003. Despite the difficult market, we
have not held back on investment and have continued to spend on product and
technical development, which should leave us well placed when optimism returns.
Balance Sheet
The Group has continued to accumulate cash. At the end of 2003 cash in hand and
in the Bank totalled #2,043,000, an increase of 52% on the previous year-end
(2002: #1,342,000).
During the year Belgravium sold a property held for resale. This disposal added
#56,000 profit on disposal to the P & L account for the year and added #281,000
cash to the balance sheet.
Having weathered a cautious market and a difficult year, the Group balance sheet
shows a very strong position for a small company and a good basis for future
growth.
Dividend
The Board is committed to a policy of improving dividends whenever conditions
allow. Due to the strong cash position and our overall confidence in the
Company, we are pleased to recommend a final dividend of 0.30p (2002: 0.24p) per
ordinary share to be paid on 27 May, subject to approval at the AGM for
shareholders on the register on 30 April 2004. This will provide total
dividends paid and proposed in the year of 0.42p per ordinary share compared to
0.36p per share in 2002.
Operations
A slowdown in corporate expenditure meant that every contract was hard won and,
as it is so often the case in such conditions, we saw competitors engage in
price reductions. Belgravium's sales policy has always been to trade on the
quality of its goods and services, believing that in a technology based
business, strong margins are necessary to generate funds for technical and
market development. Whilst we did not change this policy, the Company was not
immune from price competition and this is reflected in the overall margins.
Administrative costs were also higher since, as stated in our strategy a year
ago, we increased marketing activity to establish the Company in Europe. We
have also continued with a full programme of technical and product development.
As we commented in the Interim Statement, it is a major company strength that it
can continue to invest in this way at a time of significant restraint in IT
expenditure.
The Market
In the second half of 2002 there developed a reluctance in our customers to
commit to projects, even with proven benefits and returns. During the first
quarter of 2003 this restraint on capital spend, combined with a general loss of
confidence in the logistics industry, slowed the market to a standstill. There
was a gradual improvement in the subsequent quarters but confidence has still
not returned to investment and margins remain depressed. In order to expand
sales, we have set up a network of distributors in Europe, and have found
conditions similar. As we enter 2004 there are significantly more contracts in
negotiation than a year ago. There is still strong competition on price and the
logistics industry is far from returning to its earlier assurance. However
there is now business to go for and the messages of quality and reliability do
have a bearing on negotiations. We are still committed to developing our
position in Europe, where our products have won general approval but our overall
recognition is still too low. We shall apply marketing spend to making
Belgravium a recognised European supplier.
Product Development
The developing needs of the market have lead us to widen and extend the
functions of our hardware range. The work of developing products of increasing
sophistication and capability continues and is essential for the long-term
development of the company. We are currently adding to the establishment of our
technical department and would expect to go on investing wisely to increase the
technical capability of our products.
Employees
It has been a frustrating year with frequent changes of priority and,
particularly in the sales and technical areas, demands which put considerable
pressure on our people. As always the staff have responded to these challenges
with skill and good humour. That the Company is in such a strong position
financially is due, in no small part, to their hard work and in the coming year,
we shall confidently expand our activities in the technical and marketing
departments.
Strategy
Belgravium has a deserved reputation for quality and service in the supply of
real time data capture systems in the logistics industry. This market is
becoming both more competitive and sophisticated. We shall continue to develop
and refine our products to supply these needs and be able to sell on quality.
At the same time we shall increase our efforts to grow in Europe, where there is
a very large potential and significant penetration by UK logistic companies.
We also believe that the IT revolution will produce real time data capture
opportunities in other markets, where our capabilities will be appropriate. We
are still examining a variety of applications and it is in this sort of area
that an acquisition might provide growth. We are determined not to do anything,
which does not increase shareholder value. The search continues.
Outlook
2003 was difficult but in such a thin market the Company did well to make
reasonable profitsand generate cash. This is certainly a process, which can
continue in 2004, and as the year begins there is more optimism based upon a
stronger market than a year ago. It is too early to say whether this recovery
will be sustained but we shall continue to build on the company's strengths,
confident that only minor improvements in our market could have a major impact
on performance.
Audited group profit and loss account for the year ended 31 December 2003
2003 2002
#'000 #'000
Turnover 3,895 4,188
Cost of sales 1,367 1,212
Gross profit 2,528 2,976
Distribution costs 34 21
Administrative expenses 1,812 1,602
1,846 1,623
Operating profit 682 1,353
Profit on sale of property held for resale 56 -
Profit on ordinary activities before interest and taxation 738 1,353
Interest receivable 57 52
Profit on ordinary activities before taxation 795 1,405
Tax charge on profit on ordinary activities (218) (342)
Profit on ordinary activities after taxation 577 1,063
Ordinary dividend (283) (248)
Profit retained for the year 294 815
Basic earnings per ordinary share 0.85p 1.54p
Diluted earnings per ordinary share 0.84p 1.53p
All activities in the years above relate to continuing operations.
There are no recognised gains or losses other than the profit for the year.
There is no difference between the profit on ordinary activitiesbefore taxation
and the retained profit for the year as stated above, and their historical cost
equivalents.
Audited group balance sheet as at 31 December 2003
2003 2002
#'000 #'000
Fixed assets
Tangible assets 294 325
Current assets
Stocks 443 490
Debtors 1,232 1,060
Property held for resale - 225
Cash at bank and in hand 2,043 1,342
3,718 3,117
Creditors: amounts falling due within one year (1,691) (1,282)
Net current assets 2,027 1,835
Total assets less current liabilities 2,321 2,160
Provisions for liabilities and charges (70) (87)
Net assets 2,251 2,073
Capital and reserves
Called up share capital 3,391 3,441
Share premium account 120 120
Capital redemption reserve 2,050 2,000
Revaluation reserve - 25
Profit and loss account (3,310) (3,513)
Total equity shareholders' funds 2,251 2,073
Audited group cash flow statement for the year ended 31 December 2003
2003 2002
#'000 #'000
Net cash inflow from operating activities 1,033 909
Returns on investment and servicing of finance
Interest received 57 52
57 52
Taxation - corporation tax paid (260) (538)
Capital expenditure and financial investment
Purchase of tangible fixed assets (50) (145)
Proceeds from disposal of property held for resale 281 -
231 (145)
Acquisitions and disposals
Receipt of deferred consideration from sale of subsidiary - 80
companies
- 80
Equity dividends paid to shareholders (244) (186)
Net cash inflow before financing 817 172
Financing
Purchase of own ordinary share capital (116) -
Lease and hire purchase obligations repaid - (1)
(116) (1)
Increase in cash in the year 701 171
Audited reconciliation of net cash flow to movement in net funds
2003 2002
#'000 #'000
Increase in cash 701 171
Lease and hire purchase obligations repaid - 1
Movement in net funds during year 701 172
Net funds at 1 January 1,342 1,170
Net funds at 31 December 2,043 1,342
Audited reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
#'000 #'000
Operating profit 682 1,353
Depreciation 81 62
Movement in provisions (17) (21)
Funds generated by operations 746 1,394
Decrease/(increase) in stocks 47 (175)
Increase in debtors (186) (132)
Increase/(decrease) in creditors 426 (178)
Decrease/(increase) in working capital 287 (485)
Net cash inflow from operating activities 1,033 909
Audited reconciliation of movements in group equity shareholders' funds
2003 2002
#'000 #'000
Profit on ordinary activities after taxation 577 1,063
Dividends (283) (248)
294 815
Purchaseof own ordinary share capital (116) -
Net change in equity shareholders' funds 178 815
Opening equity shareholders' funds 2,073 1,258
Closing equity shareholders' funds 2,251 2,073
Basis of reporting
This preliminary announcement, which has been prepared on a basis consistent
with theprevious year, does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. This announcement has been
agreed with the company's auditors for release.
This preliminary announcement contains information extracted from the audited
financial statements of the group for the year ended 31 December 2003. The
statutory accounts for the year ended 31 December 2003 will be sent to the
shareholders shortly.
The information for the year ended 31 December 2002 is an extract from the
statutory accounts to that date which have been delivered to the Registrar of
Companies. These accounts included an audited report which was unqualified and
which did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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