Half Yearly Report

Belgravium Technologies plc

Interim Results for the six months ended 30 June 2013

The Board of Belgravium Technologies plc ((AIM:BVM) 'Belgravium' or 'the Group'), suppliers of mobile data computing solutions and managed services to a variety of industrial sectors, is pleased to announce interim results for the six months ended 30 June 2013.

Key Financials:

30 June 2013 30 June 2012

· Turnover £4,082,000 £4,320,000

· Adjusted profit before tax* £142,000 £151,000

· Adjusted earnings per share* 0.14p 0.13p

· Cash & cash equivalents £239,000 £1,620,000

* Calculated before exceptional items

Commenting on the interim results, John Kembery, Chairman of Belgravium, said:

"Although order intake was slow at the start of the year, the second quarter picked up, enabling the Belgravium Group to finish the half year with profits in line with the equivalent period last year. We also successfully completed a promising acquisition which we expect to bring significant benefits in the years to come."

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Information on Belgravium Technologies plc can be seen at: www.belgravium-technologies.com

CHAIRMAN'S INTERIM STATEMENT 2013

Although order intake was slow at the start of the year, the second quarter picked up, enabling the Belgravium Group to finish the half year with profits in line with the equivalent period last year. We also successfully completed a promising acquisition which we expect to bring significant benefits in the years to come.

Results

Group sales amounted to £4,082,000 compared to £4,320,000 in the first half of 2012. This shortfall is explained by an export sale in which the hardware was supplied directly rather than being part of the main contract. Adjusted profit, before exceptional costs, associated with some restructuring and the acquisition, was £142,000 compared to £151,000 in the prior year. There was no tax charge due to research and development tax credits which meant that earnings per ordinary share, before exceptional items, were 0.14p per share compared to 0.13p per share in 2012.

The Market

The Belgravium Group designs, installs and maintains data capture systems for a variety of industries. In recent years we have expanded our product range in order to supply complete solutions and in a time when capital restraint has prevailed this has proved beneficial to the Group. In many instances we have been able to supply additional functionality to new and existing customers' solutions. Belgravium was once a hardware supplier but that is now only part of the solution. Our scope of supply now includes elements such as; in house packaged software, annually licenced, vehicle telematics and tracking services. We also offer fully managed support services tailored to customer demands and the ability to maintain and support customers' outsourced software, where source code is under their ownership. Our position in the market of mobile retail sales into the airline arena continues to be strong and, as with the logistics market, adding functionality to the offering has proved beneficial. This year we secured an order which includes our recently developed back office logistics system interfacing between the mobile EPOS terminals on the plane and the customers ERP system, again offering a complete solution.

Adapting in this way means we need a wide range of skills and products. When we do not have our own products to satisfy the market need we have strong working relationships with those who have. The first half of 2013 has shown significant progress in this redefinition of Belgravium's role from hardware manufacturer to supply and management of integrated systems, vitally important to the long term health of the Group.

Operational Review

Entering 2013 we reduced costs to improve profitability but only where this did not impinge on the central strategy of seeking to expand sales through supplying complete solutions. This strategy also requires a different sales approach.. 

In a changing market we have achieved some real success. For example, in Quarter 2, 2013, we secured a contract with Peters Foods to supply their van-based retail software system across their entire fleet. This comprised in-vehicle mobile computers, as well as additional hardware and software. An agreement is also in place to provide a fully managed support service for both hardware and software.

We were also successful in regaining an old customer of ours, Jetstar which is based in Australia. Jetstar went live with our mobile retail system for all domestic and international flights during the second quarter of 2013. This included the supply of software for an operation utilising 240 chip and pin approved mobile devices. It is especially pleasing when a customer returns to our fold and is a testament to our commitment to offer a quality system with excellent support.

In addition to up-grading existing systems, the first half of 2013 has seen us secure 19 new clients. We are particularly encouraged by gains made in the Transport and Logistics market place through a new vehicle telematics and tracking product set. This initiative started in late 2012 and is producing encouraging results.

The reshaping of Belgravium into a solution provider over the last couple of years has required extra work and commitment from our highly skilled workforce. Small changes in customer needs often require as much work as the big ones and it is this willingness to go the extra mile that has built our quality reputation and will help ensure the success of our approach to the current market.

Balance Sheet

Cash and cash equivalents at the end of June 2013 stood at £239,000 compared to £1,614,000 at the end of 2012. This does not, however, mean a reversal of the previous strong cash generation. There were cash needs in 2013 which did not exist in 2012, financing an acquisition for example. The biggest change has arisen from the fact that Quarter 2 was much stronger in sales terms than Quarter 1 and therefore receivables have increased significantly. At the end of June 2012 receivables had increased by nearly £2,000,000 to £3,612,000. These debts will be collected in Quarter 3 and the Group's cash position is already strengthening.

Dividend

A dividend was paid during this period and based upon the 2012 results. The Board is committed to this policy and it is expected a year end dividend will be proposed for 2013.

Acquisition

To fully restore Belgravium's profitability to previous levels, turnover needs to grow faster than is probable by organic means alone. Following the strengthening of our cash position we have actively been seeking an acquisition that complements the existing product portfolio and allows growth in new market verticals. On 31 May 2013 we completed such an acquisition by purchasing all of the issued share capital in Feedback Data plc, (FDP) for £243,000, and they required a loan from Belgravium at completion to pay off inter-company loans of £368,000 and provide working capital. Goodwill of £371,000 arose on the acquisition.

With a broad range of data capture products and services FDP provides solutions to a network of long standing customers across two key areas:

Time and attendance - a range of industrial grade data capture terminals and mobile devices that gather data about the actions and movements of personnel within an operation, to enable core systems to control payroll and billing, whilst providing feedback on organisationaleffectiveness.

Access control - a range of hardware and software products that intelligently control actions of people and resources through an organisation. Machine to machine (M2M) device management - a cloud based software device that monitors, tracks and manages large fleets of remote and networked data capture devices from high grade industrial devices to standard issue smart phones which connect directly to the operation's core IT system.

There is overlap between with existing technologies between FDP and the group and we have already jointly developed an IP65 rated outdoor Time and Attendance Terminal, the TS2020R.

We are confident that FDP will make a valuable improvement in the Group turnover and following some additional costs in 2013, we expect improved profitability from 2014 onwards.

Outlook

We do not expect the financial restraint which has characterised our market for some time to change significantly, and as a result, we have reshaped the Group to provide and manage a broad range of products and services. After a slow start to 2013, we are pleased that the measures undertaken to improve profitablity have been effective and that the commercial strategies are working. We will continue to seek to grow both organically and by acquisition.

We are confident that recent progress will be maintained and expect a better performance in the the second half of the year.

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