Quadrant Group Plc - Interim Results
04 February 1999 - 10:36PM
UK Regulatory
RNS No 1474m
QUADRANT GROUP PLC
4th February 1999
Quadrant Group plc
Interim Report
FOR THE HALF YEAR TO 30 NOVEMBER 1998
Chairman's Statement
In this, my first statement to you, I want to reassure you that your
company is run by talented and intelligent people. They are
committed to rebuilding shareholder value from the remaining four
businesses. I am convinced that each of those businesses is
fundamentally sound and capable of producing attractive returns on
capital employed.
I know what I want to be able to report to you within the next 18
months and your Board has a strategy in place which I am determined
will deliver the results you require.
Quadrant Group produced a profit before tax for the half year of
#21,000 (1997/8: loss before tax #323,000). The operating result
from continuing operations recovered from a loss of #252,000 in the
first half of last year to a profit of #191,000.
Quadrant Video Systems more than doubled its operating profit
compared with the corresponding period last year, benefiting
particularly from strong profit growth in Closed Circuit Television
security systems. The market for such systems in both town centre
and commercial applications remains buoyant. Average margins
improved significantly with an increasing proportion of business
coming from service and maintenance contracts. In professional
video, the focus was increased on higher margin systems and
presentation services activities, but competition for profitable
business is intense.
Synectics' range of CCTV control products achieved continued external
sales growth of well over 50% and made a positive contribution. The
future of this business continues to look exciting.
Quadrant Systems' results improved significantly compared to the
first half of last year. Training loads remained good on the
existing two flight simulators and much effort was directed to the
extensive update of the Airbus A300B4 simulator purchased late last
financial year. This simulator is expected to receive shortly its
Certification from the UK Civil Aviation Authority under complex new
European regulations, and should enter revenue service in the next
few weeks. Projected demand for pilot training on this aircraft type
remains strong. Sales under simulator equipment services contracts
were below expectations in the first half, but the pipeline of bids
maturing over the next 3-6 months has grown substantially.
Quick Imaging Centre, although small, made a solid contribution in
the half year. Turnover grew 15% and costs were tightly controlled.
As a result, operating margins increased from 3% to 9%, well ahead of
budget.
Net borrowings at 30 November 1998 were #3.5 million, including #0.6
million of long term convertible debt.
The second half is seasonally weaker for the Group as a whole, but
will gain in part from the new flight simulator coming on line.
Overall, Quadrant Group is starting to benefit from the major
reorganisation of the past two years and we are confident that our
chosen areas of activity within the electronics systems sector are
capable of achieving good margins and growth.
PM Rae
Chairman
4 February 1999
For further information
contact:
David Coghlan (Chief Executive) 01527 850080
Nigel Poultney (Finance Director) 01527 850080
Consolidated Profit and Loss Account
For the half year to 30 November 1998
Unaudited Unaudited Audited
Half Half year Year
year to to to
30 30 31
November November May
1998 1997 1998
Notes #'000 #'000 #'000
Turnover
Continuing operations 1 8,988 10,035 18,431
Discontinued operations 1 - 5,192 8,591
8,988 15,227 27,022
Operating profit/(loss)
Continuing operations 191 (252) (382)
Discontinued operations - 207 288
191 (45) (94)
Exceptional items - discontinued 2 - - (37)
operations
Profit/(loss) before interest 191 (45) (131)
Net interest payable (170) (278) (517)
Profit/(loss) before taxation 21 (323) (648)
Tax charge on ordinary 3 - (47) (20)
activities
Profit/(loss) on ordinary 21 (370) (668)
activities after taxation
Minority interests - (15) (21)
Profit/(loss) attributable to 21 (385) (689)
shareholders
Dividends - - -
Retained profit/(loss) for the
period - transferred to reserves 21 (385) (689)
Profit/(loss) per ordinary share 4 0.3p (6.2)p (11.1)p
Consolidated Balance Sheet
30 November 1998
Restated Restated
Unaudited Unaudited Audit
30 30 31
November November May
1998 1997 1998
Notes #'000 #'000 #'000
Fixed assets
Intangible assets 5 49 - -
Tangible assets 4,820 6,520 4,465
4,869 6,520 4,465
Current assets
Stocks 1,077 1,818 995
Debtors 3,859 5,007 4,133
Cash at bank and in hand 5 83 308
4,941 6,908 5,436
Creditors: amounts falling due
within one year (including 5,508 8,229 5,519
convertible debt)
Net current liabilities (567) (1,321) (83)
Total assets less current 4,302 5,199 4,382
liabilities
Creditors: amounts falling due 1,314 1,695 1,260
after more than one year
(including convertible debt)
Provisions for liabilities and 251 597 424
charges
Net assets 2,737 2,907 2,698
Capital and reserves
Called-up share capital 1,254 4,613 1,243
Share premium account 6,798 6,789 6,791
Other reserves 4,387 1,005 4,387
Profit and loss account 5 (9,702) (9,607) (9,723)
Equity shareholders' funds 2,737 2,800 2,698
Equity minority interests - 107 -
2,737 2,907 2,698
Consolidated Cash Flow Statement
For the half year to 30 November 1998
Unaudited Unaudited Audited
Half Half year Year
year to to to
30 30 31
November November May
1998 1997 1998
Notes #'000 #'000 #'000
Net cash inflow/(outflow) from
operating activities (136) (94) 1,049
Returns on investments and (157) (297) (538)
servicing of finance
Taxation - tax received 3 - 38 18
Net capital expenditure and (781) 526 (670)
financial investment
Acquisitions and disposals 6 601 203 1,575
Cash inflow/(outflow) before (473) 376 1,434
financing
Financing (86) (711) (131)
Increase/(decrease) in cash (559) (335) 1,303
Notes
1. Continuing operations comprise the businesses of Quadrant
Systems, Quadrant Video Systems, Synectic Systems and Quick Imaging
Centre. Discontinued operations comprise Yewlands Engineering Co.
which was sold on 6 August 1997 and Quadrant Precision Manufacturing
which was sold on 29 May 1998.
2. Exceptional items in the year ended 31 May 1998 arose in respect
of losses on disposal of subsidiaries (including related goodwill)
less provisions utilised.
3. Tax charges and receipts arose in respect of United States'
subsidiaries only.
4. The calculation of earnings per share is based on profits of
#21,000 (half year to November 1997: losses of #385,000; year to May
1998: losses of #689,000) and on 6,269,956 shares (half year to
November 1997: 6,202,455; year to May 1998: 6,202,558), being the
average weighted number of shares in issue during the period.
5. In accordance with FRS10 goodwill arising on consolidation in
the half year to 30 November 1998 has been capitalised and amortised
over its useful economic life. All goodwill previously charged to the
Goodwill write-off account has now been eliminated against profit and
loss reserves. The comparative figures for profit and loss reserves
at 31 May 1998 and 30 November 1997 have been restated accordingly.
6. Cash inflows from acquisitions and disposals in the half year
ended 30 November 1998 arise from the receipt of deferred
consideration for Quadrant Precision Manufacturing, Inc. in September
1998.
7. The half year figures have not been audited nor reviewed by the
Group's auditors and do not constitute statutory accounts.
8. The comparative figures for 31 May 1998 have been abridged from
the statutory accounts for the year ended 31 May 1998. The Auditor's
opinion on these accounts was unqualified and the statutory accounts
have been filed with the Registrar of Companies.
9. Copies of this Interim Report will be distributed to all
shareholders and will also be available to members of the public at
the Company's Registered Office, North Court House, Morton Bagot,
Studley, Warwickshire B80 7EL.
END
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