Final Results

RED24 PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2012

red24 plc ("red 24" or the "Group") is pleased to announce its results for the year ended 31 March 2012 and gives notice of its Annual General Meeting to be held at 11.00 a.m. on Wednesday 25 July 2012 at the offices of red24, The London Underwriting Centre, 3 Mincing Lane, London, EC3R 7DD.

Highlights

·; Revenue increased by 10.6% to £5,819,328 (2011: £5,263,007)

·; Profit Before Tax up 16% to £863,093 (2011: £741,946)

·; Net cash increased to £2,070,173 (2011: £1,196,150)

·; Dividend payment increased by 33% to 0.32p per share (2011: 0.24p) paid in January

·; Basic EPS of 1.53p (2011: 1.51p)

·; Successful launch of food and product safety assistance service

Simon Richards, Chairman, commented:

"This has been an excellent year for the Group and one that saw us build on the sound platform created over the last three years. The strength of our performance was across the board, with revenues, profits and cash generation all showing marked improvements on a strong prior year and providing us with the confidence to increase our dividend by 33% as part of our commitment to a progressive dividend strategy.

"Our special risk business for insurers has performed strongly and our growing reputation in this area has enabled us to develop additional services in the confidence that there is a ready market for them. Our focus on the quality of business has led to the growth in both the levels of business and in our financial performance and is reflected in the increasing strength of our balance sheet. We continue to view the future with confidence."

I am pleased to present our annual report for the year ended 31 March 2012.

Financial Overview

The business continues to make excellent progress. Revenue has increased by 10.6% to £5,819,328 from £5,263,007 achieved last year, which itself was a 29% increase on the year before. All of this growth has been achieved organically. Profit before tax of £863,093 is an increase of 16% on the previous year's £741,946 and the increases in profit before tax for the last three years has been 17%, 18% and 16%, a rate of growth, which we aim to sustain.

However, this sustained profitability has rapidly reduced the tax losses available for carry forward with the result that the tax charge has increased more rapidly than profits. This has had a consequent dampening effect on earnings per share, which is likely to continue for another year until we reach a "normal" tax charge. We are mindful that growth in earnings per share, which is a key factor in raising the share price and underpins the market valuation of the shares, has been limited; but shareholders will be pleased to note the improvement in both the balance sheet and in cash returns to shareholders. The net assets per share have increased by 25% to 5p from 4p and available cash has increased by 73%. The dividend paid to shareholders in January this year increased to 0.32p per share from 0.24p, which is more than four times covered by earnings. The Board remain committed to a progressive dividend policy. The Board are pleased to note that the average share price in the year was 11.47p compared to 8.76p in the previous year and just 5.66p in the year before that, and believe this is reflecting the Board's commitment to the sustainable long term growth of the business.

Business model

The red24 business model has been developed in the security industry to provide assistance to individuals and organisations in managing their security risks. Assistance is provided on an escalating basis as threats develop:

Advice ----------------->  Support ------------------> Response

The Board believes that this model enables the group to add value to clients enabling them to select the level of assistance they wish to embed in their own product and the level they wish to buy in on an ad hoc basis. Within the security industry this approach has enabled us to sustain margins as the business has expanded and has led to opportunities to utilise the model to provide other assistance services to clients, particularly in the field of product safety, especially to the food industry.

To date the group has been able to expand organically by recruiting appropriate specialists in the desired fields without the need for acquisitions. However the Board are mindful that acquisition remains an additional avenue to growth and, particularly in overseas markets, may be a more effective means of achieving growth.

Expansion in areas outside our reporting currency is affected by exchange rate movements. Almost half our revenue is now denominated in US dollars, even where our clients are the UK arm of US insurers, whereas 47% of our costs are incurred in rand. The Board are seeking to increase the proportion of costs that are incurred in US dollars and endeavouring to find sources of rand revenues. However exchange rate movements are influenced by many complex factors and the Board continues to believe that, although we do work to minimise the adverse impact, that it is neither practical nor desirable to hedge these risks fully.

Security assistance

Our global security service provides preventative and reactive advice to help individuals and businesses avoid and manage personal risks to themselves, their staff and their families.

Revenues for the security assistance business segment have grown by some 10% and segment profit has increased by 5%. The majority of this growth has come from the increase in business with special risk insurance providers, where we now offer our services to five leading underwriters. This may be approaching the practical limit because, as their business expands and claims occur, there will be growth in the level of responses.

We continue to provide our advisory and support services on a volume mandatory basis to clients of HSBC and AIG, amongst others, and this has seen steady growth in use during the year. Response work also arises from this work but, unlike last year, there was no major "headline" incident such as the Arab Spring where we extracted over 400 people. However there were a good number of less visible incidents, such as the political unrest in Mali where we helped over 60 people.

The demands on management of this segment can be considerable, particularly when major incidents arise, and can be made more complex than necessary if our offerings to clients are overly varied, complex or inconsistent. The Board have reflected on this and refined the organisational structure accordingly in the expectation that service levels to clients can be sustained at appropriate margins. In particular the Board have created a new senior post in the London office to oversee this.

Other assistance

This segment comprises the Arc Training International Academy for Security Management, our environmental advisory service, green 24 and our product safety advisory service, red24 assist.

Arc Training is one of the UK's leading providers of security management training courses and one of the best-known international security management training companies in the world. The courses offer a range of qualifications and education for full-time security professionals and for managers for whom security is one of their key responsibilities. Each year a published programme of courses, open to all, is run in the UK and, increasingly overseas where they may be branded as Arc courses or be run in conjunction with local training partners. Revenues from this business exceeded £1m for the first time.

Our environmental service has had a disappointing first year and failed to produce stand alone revenues. However the web based advice has been well received and is becoming a desired part of our overall offering.

The passing of the Food Modernisation Act in the United States has introduced significant legislative requirements across the food industry in that country. This has produced an increase in demand for our services in this area and we have appointed Eric Smith as Head of Product Safety. He is supported by a team of food specialists in the United States and by our website. Eight US underwriters have now purchased the red24 assist product and many have shown interest in the food safety and hygiene training courses that we are developing. This business only started in October 2011 and will contribute significantly to our growth in the coming year.

Revenues in this segment grew by 38%, of which 25% came from the training business and 13% from the launch of red24 assist. The costs of bringing on a new business stream held back the overall profitability of the segment, but future periods should benefit from the investment.

We have worked hard to build up a reputation with well established clients for high quality work and we see future growth both from our existing services and also from the addition of other services that are likely to be of assistance to those clients.

The work of the past few years is now showing through in the group's financial performance and this is in turn being reflected more closely in the share price. Although there are risks to any business and these are considered in the Directors' Report, the Board feel encouraged by the progress of the last year and are confident of further progress to come.

Our staff are absolutely crucial to the quality of service provided and to creating an environment where we can attract good quality people who want to come to work for us. The Board are most grateful to all the staff for their hard work and are gratified that so many of them are choosing to build their careers with the group.

Simon Richards

Chairman

14 June 2012

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2012

The results above arose from continuing operations.

CONSOLIDATED STATEMENT OF coMPREHENSIVE INCOME

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2012

CONSOLIDATED BALANCE SHEET

As at 31 March 2012

CASH FLOW STATEMENTS

For the year ended 31 March 2012

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31March 2012

1. Accounting policies

Basis of preparation

From 1 April 2007, the group and company have adopted International Financial Reporting Standards ("IFRS") and the International Financial Report Interpretations Committee ("IFRIC") interpretations as adopted by the European Union ("EU") in the preparation of its financial statements and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost basis.

The accounts are prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the directors have taken into account relevant available information about the future including profit and cash forecasts for the next two financial years and the assumptions on which they are based. After reviewing this information, the directors consider that it is appropriate to prepare the financial statements on a going concern basis.

2. Earnings per share

3. Notes to the cash flow statement

(a) Cash generated from operating activities

(b) Analysis of changes in net cash

Included in other movements on cash and cash equivalents is a foreign exchange movement of £20,066 (2011: gain £1,389).

(c) Reconciliation of net cash flow movement to movement in net cash

4. The report and accounts for the year ended 31 March 2012 will be sent to shareholders on our around Friday 22 June 2012 and will be available on the Company's website www.red24plc.com.

5. Financial Information

The above financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The above figures for the year ended 31 March 2012 are an abridged version of the Company's accounts which will be reported on by the Company's auditors before dispatch to the shareholders and filing with the Registrar of Companies. The preliminary announcement was approved by the Board on 14 June 2012.

The statutory accounts for the year ended 31 March 2011 have been lodged with the Registrar of Companies. These accounts received an audit report which was unqualified and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying their report or a statement under section 237(2) or section 237(3) of the Companies Act 1985.