18th Apr 2005 07:00
Smart Approach Group PLC18 April 2005 Smart Approach Group plc (" Smart Approach" or "the Company") Trading Update and Resignation of Director Following a recent review of the opportunities for Smart Approach Group in theNorth American market the Board has decided to scale down significantly itsdirect activities in the USA based in Washington DC. As a part of the processGlenn Bartholomew the Group's Sales and Marketing Director who is based inWashington will be leaving the Board of Smart Approach Group Plc. The Directors continue to believe there are substantial and attractive salesprospects in North America. However most of these are with US Governmentdepartments where procurement cycles are very protracted. In the future it istherefore intended to address these opportunities through local partners anddistribution arrangements similar to those operated in other parts of the world.With regard to Smart Approach's other US interest in Smart Security Group LLC,discussions are ongoing about the future of this investment. As reported in the Company's interim results statement in December 2004, theconversion of sales prospects into firm orders has taken longer thananticipated. This has been especially marked in the case of the USA andconsequently sales arising from this territory for the financial year ended 31stMarch 2005 will be considerably lower than for the financial years ended 31stMarch 2003 and 2004. Outside the North American market, where the Company has been focussed onbuilding its distributor network, there is now a much improved prospect listpredominantly in the traditional aviation business. Non US revenues have shownsome good growth during the financial year ended 31st March 2005 and, with anumber of key accounts indicating their intention to roll-out the Company's webbased technology across multiple sites in the near future, the Board iscautiously optimistic about its sales prospects. On the financial side, much has been done during the past 12 months tostreamline the business. Whilst the Company will continue to bring new productideas to market, the heavy investment phase in its web based technology issubstantially complete. This , taken together with the cost savings (in excessof £0.5m) arising from the reorganisation of our US interests, will result inthe Company entering the new financial year with an annualised cash cost base ofapproximately £1.1m. By comparison , revenues for the year ended 31st March 2005are anticipated to total approximately £0.6m. Although the group trading lossfor the financial year ended 31st March 2005 will show some reduction over theprior year and will include reorganisation costs in respect of the US ofc.£0.1m, it is expected that this loss will be slightly greater than marketexpectations. In conclusion the Board believes Smart Approach continues to be the globalmarket leader in its specialised field. Its business is now efficientlyorganised to address the commercial opportunity that exists. The market has beenfrustratingly slow to emerge but aided by continued development of regulation inthe field of aviation security and a refreshed selling model the Board believesthat the Company will be successful. Enquiries:Mike OrmesherChief Executive OfficerTel: 01472-250300 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Science Group