TIDMPEG
RNS Number : 3261Y
Petards Group PLC
08 September 2015
8 September 2015
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 30 June 2015.
Key points:
-- Operational
o June order book remained strong at GBP19 million providing
good revenue cover for the second half of 2015 and beyond
-- Circa 40% of order book currently scheduled for delivery in
the second half of 2015
-- H1 2015 highlights included:
-- Over GBP2.5 million of orders for Petards' eyeTrain CCTV
systems under the framework agreements held with Siemens and
Hitachi, and a new project from Bombardier
-- Strong recurring revenue streams for eyeTrain spares and support
-- Financial
o Strong results for the six months to 30 June 2015
-- Higher margin revenues than 2014 totaled GBP6.1 million
(2014: GBP7.2 million)
-- Gross margins of 36.4% (2014: 27.4%)
-- 39% increase in EBITDA to GBP609,000 (2014: GBP441,000)
-- Operating profit increased to GBP436,000 (2014:
GBP346,000)
-- 30% increase in profit after tax to GBP356,000 (2014:
GBP273,000)
o Finance
-- Cash inflow from operating activities GBP558,000 (2014:
GBP181,000)
-- Cash at 30 June 2015 GBP2.0 million (31 Dec 2014: GBP1.4
million) with no bank debt
-- Basic EPS up 30% to 1.03p per share (2014: 0.79p per
share)
-- Diluted EPS up 23% to 0.76p per share (2014: 0.62p per
share)
Commenting on the current outlook, Raschid Abdullah, Chairman,
said:
"The continued strength of the order book at 30 June provides
good support for revenues for the second half of 2015, with around
40% currently scheduled for delivery before the year end, giving
the Board confidence for a satisfactory outcome for the year."
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 3764 2341
claire.noyce@hybridan.com
St Brides Partners Limited, www.stbridespartners.co.uk
Financial PR
Elisabeth Cowell, Charlotte Tel: 020 7236 1177
Heap
Chairman's Statement
I am pleased to report that the results for the Group for the
six months ended 30 June 2015 show continued improvement in the
Company's trading performance. This reflects significant increases
in margins, profitability and cash flows over the comparable period
in 2014 resulting in greater Balance Sheet strength.
The Group serves three sectors, those of:
-- Transport (Rail - software driven video systems mounted
in-train and externally and automatic passenger counting (APC)
systems sold under eyeTrain brand)
-- Emergency Services (Mobile speed enforcement and ANPR systems
predominantly to Law Enforcement Agencies sold under the ProVida
brand)
-- Defence (Electronic defensive countermeasures and mobile
radio systems predominantly to the UK Ministry of Defence
("MOD"))
The overall order book at the end of June was just under GBP19
million with the level of the Group's eyeTrain products order book
maintained following a number of repeat orders from train
builders.
Operating review
During the period the Group secured a number of new orders for
its eyeTrain systems. In addition to the previously announced order
worth in excess of GBP1.5 million secured in March 2015 from
Siemens Mobility Germany for Driver Only Operation (DOO) systems
and saloon CCTV, the Group was also awarded further orders
totalling GBP1 million by Bombardier Transportation and Hitachi.
The Bombardier order is for further sets of equipment for fitment
to Electrostar trains for delivery in 2016 and a second order by
Hitachi under the framework agreement awarded in August 2013 for
the supply of APC systems for its Class 800 trains for the
Intercity Express Programme. These APC systems will be fitted to
trains to be built at Hitachi's recently opened rail vehicle
manufacturing facility in Newton Aycliffe for use on the East Coast
Main Line with delivery scheduled for 2017/18.
The growing installed base of eyeTrain is leading to an increase
in the levels of recurring revenues from spares and support as wear
and tear take their effect on earlier installations, with revenues
for the first half of 2015 exceeding expectations. It is
anticipated that this trend will continue and increasingly become a
significant contributor to the Group's revenues as the existing
installed base becomes older, the current order book is delivered
and as warranties progressively expire. To support this growth some
additional investment in both personnel and systems was made during
the period.
The Board and management remain conscious that the success of
the business is dependent upon understanding and meeting its
customers' requirements without compromising quality, in particular
in the area of interfacing software. To this end, products continue
to be reviewed for improvement from a cost, functionality and
reliability perspective.
The largest contributor to defence revenues in the first half
year was the modification programme for countermeasures equipment
fitted to certain aircraft within the MOD's fleet. The GBP4.5
million project, which is now over 40% complete, is running to
schedule and in line with budget with completion scheduled for the
second half of 2016.
While performance from the defence business was satisfactory in
the first half of the year, order intake to date has been slower
than anticipated albeit there have been signs of improvement in
recent weeks. In July the MOD awarded the Group a GBP0.3 million
contract spread over three years for the provision of specialist
engineering support services at certain MOD bases in Europe.
Although the Group's activities within the context of the UK
defence sector are relatively small, management believes that with
so much unrest in various parts of the world, in particular in the
Middle East, demand for its defence related products and services,
while unpredictable as to timing, will continue at acceptable
levels.
The Emergency Services part of the Group's business, which has
traditionally been the smallest revenue producer, reflecting the
nature of its product range, has been a good contributor to the
Group's operating profit and remains so. Revenue for the first half
of the year was significantly ahead of the corresponding period
last year following the delivery of a long awaited, substantial
spares order from an overseas government.
While order intake to date for ProVida products has been slower
than anticipated, there exist a good number of active prospects for
the second half of 2015 into 2016. This represents a good area of
business for the Group with interest from the UK market showing
signs of improving and the potential to tackle export markets which
have lapsed over recent years.
As indicated at the time of the publication of the results for
2014, following the heavy investment in product development in that
year, in particular in the area of transport, investment will be
substantially lower in 2015. However, the Group continues to work
on developing and increasing the breadth and capability of its
product range as part of its programme of seeking constant
improvement.
Financial review
Revenues at GBP6.1 million for the six months ended 30 June 2015
were down on the corresponding period last year (2014: GBP7.2
million) as 2014 included GBP3 million of lower margin equipment
deliveries for the MOD's SMRE project whereas the six month period
to June 2015 benefitted from a larger proportion of higher margin
eyeTrain and ProVida products and services, both of which showed
growth over the corresponding period last year.
Revenues from eyeTrain products were ahead of expectations
principally due to much stronger recurring revenues for spares and
support which contributed to the achievement of higher margins.
Similarly the spares order worth in the region of GBP0.4 million
from an overseas government for their existing ProVida mobile ANPR
systems provided a boost to revenues and margins for Emergency
Services. The effect of the above was to substantially increase
gross margins for the Group to 36% (June 2014: 27%).
While administrative expenses rose to GBP1.8 million (June 2014:
GBP1.6 million) half of this increase was due to a higher charge
for amortisation arising from product development costs capitalised
in 2014. Earnings before interest, tax, depreciation and
amortisation (EBITDA) improved by 38% to GBP609,000 (June 2014:
GBP441,000) and operating profit by 26% to GBP436,000 (June 2014:
GBP346,000).
After net financial expenses of GBP80,000 (June 2014: GBP73,000)
and there being no tax charge, the Group recorded a profit after
tax of GBP356,000 (June 2014: GBP273,000), an improvement of 30% on
the corresponding period last year, resulting in a further
strengthening of the balance sheet.
The Group also recorded strong cash generation during the
period. Net cash inflow from operating activities was GBP558,000
(June 2014: GBP181,000) with working capital levels remaining
comparable to those at both June and December 2014. Cash balances
at 30 June 2015 increased to GBP2.0 million up from GBP1.4 million
at 31 December 2014 and after providing for outstanding long term
convertible loan notes that do not mature until 2018, free net cash
totalled GBP0.4 million (December 2014: GBP0.1 million net
debt).
The Board is conscious of the value of dividends to
shareholders. However, at this juncture, the lack of distributable
reserves prevents payments of dividends.
(MORE TO FOLLOW) Dow Jones Newswires
September 08, 2015 02:00 ET (06:00 GMT)
Shortly after the period end the Group increased its available
funding by entering into a GBP1.1 million overdraft and trade
finance facility with Santander UK plc. While it does not presently
envisage utilising the overdraft element of this facility, having
it provides the Board with added flexibility in the financing of
the Group.
Outlook
The objective of the Board remains that of building a
sustainable business built on solid foundations able to adapt to
technological changes and the constantly changing business and
operational environments while satisfying the requirements of its
customers.
Profitability, strong operational cash flow and the
strengthening of the Balance Sheet have enabled the Board to make
investment decisions in support of this objective.
The Board believes that the Company and its management are well
positioned to take on further challenges whether these are driven
by organic growth through product and market development,
acquisition of businesses and/or access to products which will
enhance the existing business model or broaden the corporate
identity of the Group; or a combination of all three.
The continued strength of the order book at 30 June provides
good support for revenues for the second half of 2015, with around
40% currently scheduled for delivery before the year end, giving
the Board confidence for a satisfactory outcome for the year.
Raschid Abdullah
8 September 2015
Condensed Consolidated Income Statement
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
Note 2015 2014 2014
GBP000 GBP000 GBP000
Revenue 6,067 7,163 13,462
Cost of sales (3,860) (5,202) (9,370)
Gross profit 2,207 1,961 4,092
Administrative expenses (1,771) (1,615) (3,323)
Operating profit 436 346 769
----------------------------- ----- --------- --------- ------------------
Analysed as:
Earnings before interest,
tax, depreciation
and amortisation
('EBITDA') 609 441 1,015
Depreciation and
amortisation (172) (95) (246)
Share based payments (1) - -
436 346 769
Financial income 1 2 3
Financial expenses 2 (81) (75) (152)
Profit before tax 356 273 620
Income tax 3 - - -
Profit for the period
attributable to equity
shareholders of the
company 356 273 620
Basic earnings per
share (pence) 4 1.03 0.79 1.80
Diluted earnings
per share (pence) 4 0.76 0.62 1.37
The above results are derived from continuing operations.
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
Profit for period 356 273 620
Other comprehensive income
Currency translation - - -
on foreign currency net
investments
Total comprehensive income
for the period 356 273 620
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2015
Currency
Share Share Merger Equity Retained translation Total
capital premium reserve reserve earnings differences equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2014
(audited) 6,645 25,153 1,075 206 (31,132) (211) 1,736
Profit for the
period - - - - 273 - 273
Other comprehensive - - - - - - -
income
Total comprehensive
income for the
period - - - - 273 - 273
Conversion of
convertible loan
notes 3 17 - (1) 1 - 20
Balance at 30
June 2014 (unaudited) 6,648 25,170 1,075 205 (30,858) (211) 2,029
Balance at 1
January 2014
(audited) 6,645 25,153 1,075 206 (31,132) (211) 1,736
Profit for the
year - - - - 620 - 620
Other comprehensive - - - - - - -
income
Total comprehensive
income for the
year - - - - 620 - 620
Conversion of
convertible loan
notes 4 23 - (2) 2 - 27
Exercise of share
options 2 16 - - - - 18
Balance at 31
December 2014
(audited) 6,651 25,192 1,075 204 (30,510) (211) 2,401
Balance at 1
January 2015
(audited) 6,651 25,192 1,075 204 (30,510) (211) 2,401
Profit for the
period - - - - 356 - 356
Other comprehensive - - - - - - -
income
Total comprehensive
income for the
period - - - - 356 - 356
Equity-settled
share based payments - - - - 1 - 1
Conversion of
convertible loan
notes 1 11 - (1) 1 - 12
Balance at 30
June 2015 (unaudited) 6,652 25,203 1,075 203 (30,152) (211) 2,770
Condensed Consolidated Balance Sheet
at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
ASSETS GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 212 170 187
Goodwill 401 401 401
Development costs 983 618 1,103
Deferred tax assets 514 647 516
2,110 1,836 2,207
Current assets
Inventories 1,864 1,900 1,439
Trade and other receivables 2,382 2,283 2,982
Cash and cash equivalents
- escrow deposits - 35 54
Cash and cash equivalents 1,968 1,508 1,434
6,214 5,726 5,909
Total assets 8,324 7,562 8,116
EQUITY AND LIABILITIES
Equity attributable
to equity holders of
the parent
Share capital 6,652 6,648 6,651
Share premium 25,203 25,170 25,192
Equity reserve 203 205 204
Merger reserve 1,075 1,075 1,075
Currency translation
reserve (211) (211) (211)
Retained earnings deficit (30,152) (30,858) (30,510)
Total equity 2,770 2,029 2,401
Non-current liabilities
Interest-bearing loans
and borrowings 1,528 1,515 1,524
Deferred tax liabilities 100 124 100
1,628 1,639 1,624
Current liabilities
Trade and other payables 3,926 3,894 4,091
3,926 3,894 4,091
Total liabilities 5,554 5,533 5,715
Total equity and liabilities 8,324 7,562 8,116
Condensed Consolidated Statement of Cash Flows
(MORE TO FOLLOW) Dow Jones Newswires
September 08, 2015 02:00 ET (06:00 GMT)
Petards (LSE:PEG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Petards (LSE:PEG)
Historical Stock Chart
From Jul 2023 to Jul 2024
