TIDMPEG
RNS Number : 4614H
Petards Group PLC
16 March 2015
16 March 2015
PETARDS GROUP PLC
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
Petards Group plc ('Petards'), the AIM quoted developer of
advanced security and surveillance systems, reports its audited
results for the year ended 31 December 2014.
Key points:
-- Operational
o Order book maintained to close at GBP20 million (2013: GBP20
million)
o Secured five year framework agreement with Siemens Mobility
Division for the supply of Petards train related products and
services under which over GBP3 million of orders received to
date
o Other significant orders secured during the year included:
-- Over GBP5.5 million for electronic countermeasure related
projects from the MOD
-- Re-awarded framework contract by MOD to supply to it private
mobile radio equipment, ancillaries and engineering support
-- Further orders from other leading global train builders
including Bombardier Transportation and Hitachi Europe
-- Financial
o Petards returns to profitability
o Results for 2014
-- Revenues more than doubled to GBP13.5 million (2013: GBP6.3
million)
-- Gross margin 30% (2013: 40%) reflecting higher
defence-related equipment revenues
-- EBITDA GBP1.0 million profit (2013: GBP0.7 million loss)
-- Operating profit GBP0.8 million (2013: GBP1.3 million
loss)
-- Profit after tax GBP0.6 million (2013: GBP2.3 million
loss)
o Finance
-- Generated GBP0.8 million of operating cash inflows
-- Cash at 31 December 2014 GBP1.4 million (31 Dec 2013: GBP1.4
million) and no bank debt
-- Convertible loan notes of GBP1.5 million maturing in
September 2018 providing long term finance (31 Dec 2013: GBP1.5
million)
-- Basic EPS of 1.8p earnings per share (2013: 15.9p loss per
share)
-- Diluted EPS of 1.4p earnings per share (2013: 15.9p loss per
share)
-- Outlook
o Over 50% of opening order book scheduled for delivery in
2015
o Performance in 2015 to date in line with management's
expectations
Raschid Abdullah, Chairman of Petards, commented:
"I am pleased to say for the year to date the Group has traded
in line with expectations and that it remains well placed to add to
the achievements of 2014. The visibility provided by the Group's
current forward order book and its pipeline of order prospects
provides the Board with confidence that further progress will be
made in 2015."
Contacts
Petards Group plc www.petards.com
Raschid Abdullah, Chairman Mb: 07768 905004
Andy Wonnacott, Finance Tel: 0191 420 3000
Director
WH Ireland Limited, Nomad www.wh-ireland.co.uk
and Joint Broker
Mike Coe, Ed Allsopp Tel: 0117 945 3470
Hybridan LLP, Joint Broker www.hybridan.com
Claire Louise Noyce Tel: 020 3713 4581
claire.noyce@hybridan.com
Chairman's statement
Corporate Overview
I am pleased to report that for the year to 31 December 2014
Petards Group plc ("Petards" or "the Group" or "the Company")
recorded pre-tax profits of GBP620,000 building on the return to
pre-tax profitability of GBP273,000 announced at the interim
stage.
This has been achieved with no diminution of order book which
stood at GBP20 million at the start of 2015 of which over 50% is
scheduled to be delivered in the current year.
The Group's strengthened financial position has also enabled
investment to be made in both our people and products, which the
Board have continued into 2015.
Operating Review
The Group serves three sectors, those of:
-- Transport (Rail - software driven video systems mounted
in-train and externally and automatic passenger counting
systems)
-- Defence (Electronic defensive countermeasures and mobile
radio systems predominantly to the UK Ministry of Defence
("MOD"))
-- Emergency Services (Mobile speed enforcement and ANPR systems
predominantly to the Law Enforcement Agencies sold under the
Provida brand).
Having built a solid foundation for the future based on a strong
order book and appropriate financing in the latter part of 2013,
the challenges faced by the Group in 2014 were to continue to
develop the Group's potential while profitably delivering on the
order book and at the same time maintaining its level. I am pleased
to say that these challenges were met successfully.
The Board's strategy to develop the Group's presence in the new
train build market continues to bear fruit. At the half year stage
I reported on the five year framework agreement that the Group had
entered into with Siemens' rail business. To date, under the
framework agreement two significant orders have been obtained.
While under the framework agreement there can be no guarantee that
future business will be obtained, it has provided Petards with the
opportunity to develop its strategic relationship with Siemens, a
leader in the global rail market.
In addition, during the year significant orders as well as day
to day transactional business was obtained from other leading
global new train builders including Bombardier Transportation and
Hitachi Rail Europe.
While every new train builder has its own preferred way of
operating with its suppliers, wherever possible it remains
management's objective to seek to work closer with its customers in
the areas of product development and service within an established
framework.
Defence products continue to form an important part of the
Group's revenues and profitability with several significant
contracts being secured during the year, in particular a GBP4.5
million order from the MOD in June to modify electronic
countermeasures equipment fitted to many of its aircraft was
followed in December by an order from MOD for in excess of GBP1
million for electronic countermeasures equipment for helicopters in
the Royal Navy's Merlin fleet.
In addition, the Board and management were pleased to be awarded
by the MOD in open tender an 'enabling contract' to supply it with
private mobile radio equipment, ancillaries and engineering
support. The contract, which has historically produced annual
revenues of circa GBP500,000, is for two years with the MOD having
the option to extend for a further two years and replaces the
previous contract the Company had held for a number of years.
While Emergency Services forms the smallest of the three areas
in which Petards operates it is a useful contributor of revenue
working from a small operational cost base and provides a useful
contribution when measured on returns on capital employed and Group
resources utilised. Its Provida 4000 in-car video evidence and
speed enforcement system remains one of only two such systems that
currently have UK Home Office Type Approval. During the year it
received a steady flow of orders from UK Law Enforcement Agencies
with trading in the second half year being broadly similar to that
experienced in the first half. As well as the home market,
Emergency Services products also have the potential for sales to
overseas markets, an area of marketing activity management intends
to selectively pursue in 2015.
Revenues for eyeTrain products were higher in the second half of
the year with deliveries on projects for Bombardier, Hyundai Rotem
and Siemens being the main contributors. The MOD's Secure
Management Radio Equipment ("SMRE") project won in 2013 formed a
significant proportion of Defence revenues in the first half year.
However, as the majority of the related equipment had been
delivered by June, deliveries in the second half were much less
significant and by the year end almost 95% of the equipment had
been delivered. The SMRE contract includes GBP1.7 million for the
support of that equipment for 10 years, revenues for which will be
recognised over the period that the support is provided.
As I reported in September, our 'Fit 4 Growth' is now focussed
on the continuous improvement and development of the Group.
Since the beginning of the second half of 2014, additional
resources have been recruited to support both increased levels of
activity and to enhance the Group's business and product
development service offering to its customers. The Board recognises
the importance of such costs remaining in step with revenues and
profitability and as such they will continue to be closely
monitored.
Overview of the Results
The results for 2014 benefitted significantly from a strong
opening order book with revenues more than doubled to GBP13.5
million (2013: GBP6.3 million) on which the Group made an operating
profit of GBP0.8 million (2013: GBP1.3 million loss). While
revenues for Provida remained flat, those for eyeTrain and Defence
products both saw increases well in excess of 100% over the
previous year resulting from significant orders received from the
MOD, Siemens, Bombardier and Hyundai Rotem.
Gross margin for the second half year was higher than that
achieved in the first half year at 33.8% (H1 2014: 27.4%) and
totalled 30.4% for the year (2013: 40.4%). The differing product
mix was the principal reason for this improvement as the first half
year, in line with management's forecasts, included the supply of a
significant volume of lower margin third party equipment on the
SMRE project whereas the second half revenues included a much
greater proportion of Petards own eyeTrain related products and
services.
Administrative expenses of GBP3.3 million for the year remained
tightly controlled and were GBP0.5 million lower than the prior
year when they totalled GBP3.8 million including GBP0.3 million of
restructuring costs.
Net financial expenses were GBP0.1 million almost all of which
related to cash and amortised interest on the 7% convertible loan
notes issued in September 2013. The prior year net expense of
GBP1.1 million included exceptional finance costs of GBP1.0 million
relating to the debt for equity swap undertaken with Water Hall
Group in 2013.
Petards (LSE:PEG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Petards (LSE:PEG)
Historical Stock Chart
From Jul 2023 to Jul 2024
