Final Results

RED24 PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2011

red24 plc ("red 24" or the "Group") is pleased to announce its results for the year ended 31 March 2011.

Highlights

·; Revenue increased by 22% to £5,263,007 (2010: £4,287,744)

·; Profit Before Tax up 18% to £741,946 (2010: £628,294)

·; Basic EPS of 1.51p (2010: 1.43p)

·; Dividend payment increased by 60% to 0.24p per share (2010: 0.15p) paid in January

·; Net cash increased to £1,196,150 (2010: £937,885)

·; Two main distribution deals on three year contracts

·; New contract wins to provide additional special risk services, including a major international insurer starting May 2011

Simon Richards, Chairman, commented:

"This has been an excellent year for the Group and one that saw us build on the sound platform created in the previous year. 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 60% as part of our commitment to a progressive dividend strategy.

"Our two key distribution deals with TravelGuard and HSBC are on three year contracts providing a strong platform from which to grow the business. Our response to changes in the demand for additional special risk services has been well received and we have won a significant market share in this area. With this substantial progress in our business we continue to view the future with confidence."

Enquiries:

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present our annual report for the year ended 31 March 2011.

Financial Overview

The business continues to make excellent progress. Revenue has increased by 22% to £5,263,007 from £4,287,744 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 £741,946 is an increase of 18% on the previous year's £628,294, itself an increase of almost 17% on the year before.

This improvement has also been reflected in both the balance sheet and in cash returns to shareholders. The net assets per share have increased by 50% to 4p from 2.65p and available cash has increased by 23% We were pleased to announce a 60% increase in the dividend paid to shareholders in January this year. The increase to 0.24p per share from 0.15p, is covered by earnings and the Board remain committed to a progressive dividend policy.

The Board are delighted with this organic growth and aim to sustain it. More importantly, the improved financial strength of the group gives the Board the flexibility to expand either by acquiring complementary businesses or by taking on staff with the requisite skills to expand our range of services. To this end the Board have redesignated its business segments as "security assistance" and "other assistance". This reflects the Board's long standing view that we do not wish to enter low margin sectors of the security industry but wish to remain in sectors where we can add value and also to expand our expertise to other industries where the business model developed in the security industry can be profitably pursued. This change has made very little difference to the year just gone, but is expected to assist growth in the coming years. The Board are particularly hopeful of opportunities in the fields of environmental consulting and food safety.

In achieving organic growth the Board aim to sustain margins, but the results for the year have been adversely affected by exchange rate movements and gross profit margins are some 2% lower than last year. Almost all our revenue is in US dollars or sterling whereas 47% of our costs are incurred in rand which has appreciated against both of our revenue generating currencies despite a significantly higher rate of inflation. The decline of the dollar against sterling has also impacted the results as much of our dollar revenue is fixed and so worth less in sterling terms. These are complex factors and whilst the Board continues to believe that it is neither practical nor desirable to hedge these risks fully, we do work to minimise the adverse impact.

Security assistance

red24 is the brand name for our global security service, which 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 red24 business segment have grown by some 22% and segment profit has increased by 9%. The majority of this growth has come from the increase in business with special risk insurance providers. We announced last year that we had won contracts with three leading US underwriters. These took effect from the beginning of the calendar year 2010, so last year enjoyed only one quarter of revenue from these sources whilst the current year had a full years income. Since then we have succeeded in adding other UK and US underwriters in these fields and have built up a solid reputation in these areas. Further I am pleased to announce a new contract with a major international insurer that started on 1 May 2011 and which will benefit the new financial year.

Last year some 10% of the increase in revenue resulted from an increase in response work for those clients who do not buy the product on an inclusive basis. These revenues are clearly unpredictable and arise where there is a security crisis or a natural disaster that affects members, but interestingly the current year generated a very similar level of work, largely arising from the events associated with the "Arab Spring". We do not budget for these revenues but the world remains an unpredictable place and we envisage that we will continue to get response work of this type.

Other assistance

To date our other assistance work has been provided by The Arc Training International Academy for Security Management which 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 in conjunction with local training partners.

During 2011 we have launched Green 24 Ltd. This company has developed a website that provides objective advice on environmental issues that are relevant both to individuals and to corporate clients. The site was launched in mid-January and has been positively received. Users of the web based information can ask for bespoke advice from our experts and can engage them for consulting work. We envisage that the service will assist corporate clients, who are looking to find cost effective solutions to their corporate social responsibility concerns and who will utilise the service both to address specific corporate concerns as well as to provide suitable information to their end consumers.

The passing of the Food Modernisation Act in the United States has introduced significant legislative requirements across the food industry. This has produced an increase in demand for our services in this area and we have recently appointed Eric Smith as Head of Food Safety. Eric has over 30 years of experience, working for the World Health Organisation, Wellcome Trust, the International Meat Trade Association and for the Hong Kong Urban Services Department in their Food and Environmental Hygiene Department. He has carried out research in meat and food safety while being a senior lecturer at University of Salford.  We have already increased our team of food specialists in the United States and are developing a website that will support the food and insurance industries as well as providing food safety and hygiene training courses.

The decision to develop the green24 and food safety business has been based on a growing demand for these services and the Board felt it appropriate to exploit these opportunities. We have been able to utilise our existing expertise and facilities in the development of these services making research and development extremely cost effective. The Board intends to continue to pursue a policy of providing assistance services in specialist areas and to high value customers.

Revenues in this segment grew by almost 19%, which came entirely from the training business. The costs of bringing on a new business stream held back the overall profitability of the segment, but future periods should benefit.

Outlook

We have worked hard to establish a reputation for high quality work for well established clients 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 our customers.

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

Staff

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

9 June 2011 

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2011

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2011

CONSOLIDATED BALANCE SHEET

As at 31 March 2011

CASH FLOW STATEMENTS

For the year ended 31 March 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31March 2011

1. 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.

3. Notes to the cash flow statement

(a) Cash generated from operating activities

(b) Analysis of changes in net cash (group)

Included in other movements on cash and cash equivalents is a foreign exchange movement of £1,389 (2010: £68,345).

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

4. The report and accounts for the year ended 31 March 2011 will be sent to shareholders by the week commencing 20June 2011 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 2011 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 9 June 2011.

The statutory accounts for the year ended 31 March 2010 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.