26th Mar 2008 12:30
TG21 Plc26 March 2008 26 March 2007 TG21 plc ("TG21", "the company" or "the group") Preliminary results for the year ended 31 December 2007 TG21 today announces its preliminary results for the year ended 31 December2007. Over the last few years the company has moved successfully to repositionitself from being a distributor of in-car entertainment and security systems tobecome a vehicle installation service provider with its 75% subsidiary, 21stCentury, supplying public transport CCTV and other monitoring systems. Financial Highlights • Operating profit from continuing operations up 75% to £1.4m (2006: £0.8m) • Profit after tax from continuing operations up 100% to £1.0m (2006: £0.5m) • Earnings per share for continuing operations up 88% to 1.05p (2006: 0.56p) • Turnover for public transport monitoring division up 85% to £5m (2006: £2.7m) Operational Highlights • Successful disposal of two of the group's mature distribution divisions • 100% increase in sales volumes for public transport CCTV systems • Business now focused on core public transport CCTV and monitoring systems and vehicle installation • Trials of 21st Century's EcoManager and passenger counting system nearing completion Commenting on the results, Peter Ward, Chairman of TG21, said: "2007 has been a transformational year for the company and we are now wellplaced to take advantage of markets with high growth potential. The group hascontinued to reduce net debt with the disposal of our legacy divisions, allowingus to leverage core strengths in vehicle monitoring systems. We are excitedabout new product developments such as EcoManager, aimed at reducing fuel costs,where our initial field trails have been very encouraging." A copy of this preliminary results announcement is available on the company'swebsite: www.tg21plc.com For Further Information: TG21 plc Wilson Jennings, Finance Director 020 8710 4000 Hogarth PartnershipLimited Barnaby Fry 020 7357 9477 Sarah Richardson Daniel Stewart & Co plc(Nomad) Graham Webster 020 7776 6550 Notes to editors Launched in 1993, the company began as Toad plc and was focused on thedistribution of in-car entertainment systems and vehicle security products.Under the stewardship of Chairman Peter Ward, former Chairman and CEO of RollsRoyce Motors and Cunard Line, who joined the board at the end of 2001, TG21'sstrategy has been to reposition itself away from its legacy businesses intomarkets with better growth potential while leveraging its core strengths -nationwide field force of vehicle electrical engineers, call centre anddistribution facilities. In line with this strategy, in 2005 the company took a controlling stake in 21stCentury Crime Prevention Services Ltd ("21st Century"), the preferred supplierof on-board CCTV systems for Arriva UK Bus. 21st Century has pioneered the useof WiFi with on board CCTV systems and was the first company to successfullylaunch automatic video downloads and a bus CCTV monitoring system (HeartbeatTM).In addition to Arriva UK Bus, clients of 21st Century include ArrivaScandinavia, Go-Ahead Group, Metroline, Kinch Bus and ACIS. In 2006 the companybolstered this division, with a strategic investment in another bus CCTVbusiness, Cyberlyne Communications Limited ("CCL"). This investment was made byway of a loan of £430,000 to CCL and in parallel with this loan agreement CCLhas granted an option to TG21 to acquire the whole of its share capital. In 2007 the company completed a number of installations for a pilot black-boxbased motor insurance scheme with two major insurance companies. The company wasawarded these opportunities on the back of the long and valued relationshipswhich it has developed in this market through its insurance replacementservices. Headquartered in Mitcham, the group also has an office in Blackburn and employsaround 170 staff. TG21 plc Chairman's statement Trading Results I am pleased to report that the group results for the year are ahead of marketexpectations and our borrowings have been reduced significantly. Towards the end of the year the company took a significant step to repositionitself away from its legacy distribution businesses. On 30 October 2007 we soldSextons, our in-car entertainment distribution business and on 14 December 2007we sold our Sigma and Toad security businesses along with ITI, our interfacelead distribution business. The total proceeds from these sales was £2.2m incash of which £1.5m was received prior to the year end. This, combined with cashgenerated from operations, has reduced net debt from £3.3m at the start of theyear to just £0.6m at the year end. These disposals will allow us to focus onour core higher growth market sectors - public transport on-board monitoringsystems and vehicle installation services. Financial Review Our consolidated income statement for the year and the 2006 comparatives showsales from continuing operations only. The overall net result from the soldbusinesses (the "discontinued operations") is disclosed separately. The overallnet loss from the discontinued operations for the year was £0.4m compared to anet loss of £0.1m in the prior year. Operating profit from continuing operationsincreased by 75% on last year at £1.4m (2006: £0.8m) and profit after tax of£1.0m from continuing operations was double that achieved in 2006 (£0.5m). Group - continuing operations 2007 2006 £m £m Turnover 15.5 15.2Gross profit 8.4 8.5Gross profit percentage 55% 56% Net operating expenses (7.0) (7.7)Total operating profit from continuing operations 1.4 0.8Finance costs (0.3) (0.3)Profit before tax from continuing operations 1.1 0.5Taxation (0.1) -Loss for the period from discontinued operations (0.4) (0.1)Profit from continuing and discontinued operations 0.6 0.4Minority interest (0.1) -Net profit attributable to members of the parent company 0.5 0.4 ========= =========------------------------------------- --------- ---------Earnings per share Pence Pence- Continuing operations 1.05p 0.56p- Continuing and discontinued operations 0.62p 0.49p------------------------------------- --------- --------- £m £mNet debt 0.6 3.3 ========= ========= Analysis of turnover from continuing operations 2007 2006 £m £m Public transport monitoring systems 5.0 2.7Vehicle installation services 8.6 10.1Distribution 1.9 2.4 --------- ---------Total 15.5 15.2 --------- --------- Operational Review Public transport on board monitoring systems Principal activities in this division are the supply of CCTV, black box andother monitoring systems for use on public transport vehicles. During the year our 75% subsidiary, 21st Century CPS Limited ("21st Century")supplied over 1,000 on bus CCTV systems, double the number of systems suppliedin 2006. While Arriva UK Bus remains the principal customer, the group also won repeatbusiness from Go-Ahead and Arriva in Europe. In the current year we already havevisibility on orders for in excess of 1,000 systems. Cumulative on bus CCTVsystems supplied by 21st Century are now 5,500 units representing less than 10%of the total UK market. In addition, 21st Century is close to completing trials of its EcoManager andpassenger counting systems aimed at reducing fuel costs and enhancing revenuesfor bus operators and we are confident that we will win orders in the currentyear for these new products. To strengthen our presence in the bus CCTV market we acquired an option topurchase Cyberlyne Communications Limited ("CCL") in July 2006. For the year to31 December 2006 CCL made a loss of £0.8m after hindsight adjustments. Since ourinvolvement, CCL has reorganised its business to reduce overheads and for 2007the company has achieved breakeven after hindsight adjustments and we believethat CCL is now well placed to make a positive contribution in the current year. Vehicle installation services The principal activities within this division are: (i) the supply and installation of replacements for stolen in-car entertainment and navigation systems for insurance company customers; (ii) the supply and installation of mobile 'phone hands-free kits for corporate fleets; (iii) the installation of public transport monitoring systems for 21st Century. The division now also provides installation services for the embryonic black-boxmotor insurance schemes operated by several insurance companies. The reduced turnover in this division is attributable to the maturing audioinsurance replacement business and, as flagged in my interim statement, at theyear end we exited from our mobile 'phone hands-free installation contract withUnipart. We anticipate that in the medium to longer term this division could benefitsignificantly from growth in the black-box motor insurance market and we areencouraged that so far in the current year we have undertaken over 1,000black-box installations on behalf of insurers. Distribution Up until the disposal of the majority of this division, the principal activitieswithin Distribution consisted of the distribution of in-car entertainmentsystems, satnav/communications equipment, speed camera alerts, audio leads andown brand automotive and motorcycle alarms to the retail trade. The only continuing business in this division is the distribution of motorcyclealarms and accessories through our Datatool business. Datatool continues to makea positive contribution to our results. Outlook Thanks to the invaluable contribution of management and staff, we havesuccessfully repositioned the group away from the mature legacy businesses toallow us to focus on areas with higher growth potential. At the same time wehave generated cash to reduce our net debt position significantly. We have anumber of exciting new initiatives in growth markets and we are well placed tobuild sustainable returns in the coming years. Peter WardChairman26 March 2008 Consolidated income statement for the year ended 31 December 2007 Notes 2007 2006 £'000 £'000 Continuing operationsRevenue 2 15,455 15,246 Cost of sales (7,020) (6,735) -------- -------- Gross profit 8,435 8,511Other operating income 108 104Administrative expenses (7,183) (7,718)Share of results of associate - (60) -------- -------- Operating profit 2 1,360 837 Finance costs (271) (356) -------- -------- Profit before taxation 1,089 481Taxation (100) 1 -------- -------- Profit for the period from continuing operations 989 482 Discontinued operationsLoss for the period from discontinued operations 3 (353) (55) -------- -------- Profit for the period 636 427 ======== ======== Attributable to:Equity holders of the parent 503 400Minority interest 133 27 -------- -------- 636 427 ======== ======== Earnings per shareFrom continuing operationsBasic and diluted 1.05p 0.56p ======== ======== From continuing and discontinued operationsBasic and diluted 0.62p 0.49p ======== ======== Consolidated statement of total recognised income and expensefor the year ended 31 December 2007 2007 2006 £'000 £'000 Profit for the year and total recognised incomeand expense for the year 636 427Prior period adjustment - share based payment reserve - (150) --------- --------- 636 277 ========= ========= --- ---Group 503 250Minority interest 133 27 --------- --------- 636 277 ========= ========= Consolidated balance sheet as at 31 December 2007 Notes 2007 2006 £'000 £'000AssetsNon-current assetsGoodwill 4,850 4,850Other intangible assets 511 524Property, plant and equipment 3,837 4,076Deferred tax asset 226 256 --------- --------- 9,424 9,706 --------- --------- Current assetsInventories 1,291 3,114Trade and other receivables 4,566 4,562Cash and cash equivalents 2,965 745 --------- --------- 8,822 8,421 --------- --------- Total assets 18,246 18,127 LiabilitiesCurrent liabilitiesTrade and other payables (3,682) (4,302)Current tax liabilities (70) -Bank loans and overdrafts (2,444) (2,032)Provisions 4 (72) -Derivative financial instruments - (29) --------- --------- (6,268) (6,363) --------- --------- Net current assets 2,554 2,058 Non-current liabilitiesBank loans (1,150) (1,989)Provisions 4 (337) -Deferred tax liabilities (626) (626) --------- --------- (2,113) (2,615) --------- --------- Total liabilities (8,381) (8,978) --------- ---------Net assets 9,865 9,149 ========= ========= Shareholders' equityShare capital 8,169 8,169Share premium account 3,387 3,387Special reserve 1,206 1,206Other reserve 43 43Retained earnings (3,091) (3,700) --------- --------- Equity attributable to equity holders of the parent 9,714 9,105Minority interests 151 44 --------- --------- Total equity 9,865 9,149 ========= ========= Consolidated statement of cash flows for the year ended 31 December 2007 Notes 2007 2006 £'000 £'000 Net cash generated from operating activities 5 1,373 1,213 --------- ---------Cash flow from investing activities Disposal of discontinued operations 1,547 -Costs of acquisition of associate - (25)Purchases of property, plant and equipment (78) (256)Purchases of intangible fixed assets (158) (189) --------- ---------Net cash generated from/(used in) investing activities 1,311 (470) --------- ---------Cash flow from financing activitiesRepayment of borrowings (1,350) (1,500)Increase in bank overdrafts 912 182Dividend paid to minority interest (26) (205) --------- ---------Net cash used in financing activities (464) (1,523) --------- --------- Net increase/(decrease) in cash andcash equivalents 2,220 (780) --------- --------- Cash and cash equivalents at beginning of year 745 1,525 --------- ---------Cash and cash equivalents at end of year 2,965 745 ========= ========= Other than the disposal proceeds disclosed above there was no cash flow frominvesting activities relating to the discontinued operations. Cash flows fromoperating and financing activities attributable to the discontinued operationscannot be meaningfully distinguished from those relating to continuingoperations. Notes to the preliminary results announcement for the year ended 31 December2007 1. Basis of preparation As required by the AIM Rules for Companies and European Union Law, the companywas required to adopt International Financial Reporting Standards ("IFRS") witheffect from 1 January 2007 for its consolidated financial statements.Consequently, the group's first IFRS Report and Accounts are for the year ended31 December 2007. Previously the group reported using UK generally acceptedaccounting principles ("UK GAAP"). Detailed UK GAAP to IFRS reconciliations ofequity for the date of transition (1 January 2006) and 31 December 2006, andreconciliations of profit and recognised income and expense for the six monthsended 30 June 2006 and the year ended 31 December 2006 along with a commentaryand the group's accounting policies under IFRS were issued on 21 September 2007and are available on the group's website www.tg21plc.com. 2. Segmental reporting The analysis by business area is based upon the group's reporting structure. Public 2007 - Continuing operations transport Vehicle monitoring installation systems services Distribution Total £'000 £'000 £'000 £'000 Total revenue 4,961 11,409 1,873 18,243Inter-segmentsales (4) (2,784) - (2,788) ----------- --------- -------- ---------Externalrevenue 4,957 8,625 1,873 15,455 =========== ========= ======== ========= Operating profit before --- --- --- ---reorganisation and --- --- --- ---Redundancycosts 545 782 79 1,406 Reorganisation andredundancycosts - (46) - (46) ----------- --------- -------- ---------Operatingprofit 545 736 79 1,360 =========== ========= ======== ========= 2007 - Discontinued operations Distribution £'000 Revenue 11,096 ========== Operating loss before disposal costs and proceeds (364) ========== Reorganisation and redundancy costs (262) Write down of inventories following disposals of businesses (200) Onerous lease provision (409) ---------- Operating loss before proceeds from disposals of businesses (1,235)Profit on sale of business 957 ---------- Operating loss after proceeds from disposals of businesses (278) ========== 2006 - Continuing operations Public transport Vehicle monitoring installation systems services Distribution Total £'000 £'000 £'000 £'000 Total revenue 2,895 10,819 2,444 16,158Inter-segmentsales (212) (700) - (912) ---------- ---------- ---------- ----------Externalrevenue 2,683 10,119 2,444 15,246 ========== ========== ========== ========== Operating profit/(loss)before shareof associate 370 615 (88) 897 Share of resultof associate (60) - - (60) ---------- ---------- ---------- ----------Operatingprofit/(loss) 310 615 (88) 837 ========== ========== ========== ========== 2006 - Discontinued operations Distribution £'000 Revenue 15,727 ========= Operating profit 20 ========= 3. Discontinued operations On 30 October 2007, the group entered into a sale agreement to dispose of itsin-car entertainment distribution division ("Sextons") and on 14 December 2007,the group entered into a sale agreement to dispose of its vehicle securitydivision. The disposals were completed on these dates and from these dates thecontrol of these divisions passed to the acquirers. The results of the discontinued operations which have been included in theconsolidated income statement were as follows: 2007 2006 £'000 £'000 Revenue 11,096 15,727Expenses (12,406) (15,782) -------- -------- Loss before and after tax* (1,310) (55) Profit on disposal of discontinued operations 957 - -------- -------- Net loss attributable to discontinued operations (353) (55) ======== ========\* There was no tax payable on discontinued operations. Book value of net assets soldCurrent assets - inventories 1,250 -Non-current assets - property, plant and equipment 30 - -------- --------Net assets disposed of 1,280Gain on disposal 957 - -------- -------- 2,237 - ======== ======== Consideration paid in cash 1,547 -Deferred sales proceeds 690 - -------- -------- 2,237 - ======== ======== 4. Provisions 2007 £'000 Balance at 1 January -Provision made in the year 409 -------- Balance at 31 December 409 ======== Included in current liabilities 72Included in non-current liabilities 337 -------- 409 ======== The provision represents the management's best estimate of the group's liabilityunder onerous leases in respect of property that is no longer utilised followingthe disposal of its discontinued operations. 5. Reconciliation of operating profit to net cash inflow from operatingactivities 2007 2006 £'000 £'000 Profit for the year 636 427 Adjustments for:Share of result from associate - 60Finance costs 346 432Income tax expense 100 (1)Gain on disposal of discontinued operations (957) -Depreciation of property, plant and equipment 289 377Amortisation of intangible fixed assets 148 113Share based payment expense 106 165Increase in provisions 409 - -------- -------- Operating cash flows before movement in working capital 1,077 1,573 Decrease in inventories 573 685Decrease in receivables 686 2,142Decrease in payables (620) (2,589) -------- -------- Cash inflow from operations 1,716 1,811Income taxes paid - (192)Interest paid (343) (406) -------- -------- Net cash inflow from operating activities 1,373 1,213 ======== ======== 6. Publication of non-statutory accounts The preliminary results announcement for the year ended 31 December 2007 isunaudited. The financial information contained in this preliminary announcementdoes not constitute statutory accounts for the year ended 31 December 2007. Thefinancial information for the year ended 31 December 2006 is derived from thestatutory accounts for that period (after the restatement described at note 1above) which have been delivered to the Registrar and included an audit reportwhich was unqualified and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. The financial information forthe year ended 31 December 2007 is derived from the statutory accounts for theperiod which include an audit report which is unqualified and did not contain astatement under either Section 237(2) or Section 237(3) of the Companies Act1985 and will be delivered to the Registrar of Companies following the company'sAnnual General Meeting. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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