29th Nov 2006 07:01
Asfare Group plc29 November 2006 Press Release 29 November 2006 Asfare Group plc ("Asfare" or "the Company") Interim Results for the six months ended 30 September 2006 Asfare Group plc, a leading supplier of products and services for the EmergencyServices and Homeland Security markets, today announces its Interim Results forthe six months ended 30 September 2006. Highlights:• Turnover doubled to £3,580,000 (2005: £1,698,000)• Profit before interest £388,000 (2005: £66,000 loss)• Profit after tax £228,000 (2005: £98,000 loss)• Adjusted Earnings Per Share 6.6p (2005: -0.6p loss per share)• Successful acquisition and integration of the Collins Youldon business• Secured a £1.1 million order for the London Fire Brigade• Proceeds of £1.3 million from the sale of the Todd property in Chelmsford• Interim dividend of 1.0 pence per share Commenting on the interim results for the six months to 30 September 2006, TimWightman, Chairman said: "In the first six months of this financial year theCompany has made significant steps to grow both organically and throughacquisition. The acquisition of Collins Youldon increases the range of qualityproducts we supply our key markets. The strength of the order book, and thecontinuing improvement in the Company's markets, give the Directors confidencein the prospects for the second half of the year." For further information, please contact: Enquiries: Asfare Group plc Tony O'Neill, Chief Executive www.asfare.com Tim O'Connor, Finance Director Tel: +44 (0) 2380 861 966 Seymour Pierce Mark Percy Tel: +44 (0) 20 7107 8000 Media enquiries: Abchurch Communications Charlie Jack Tel: +44 (0) 20 7398 7700 [email protected] - Ends - Chairman's Interim Statement The Company reported turnover of £3,580,000 for the six months ended 30September 2006, which was over 100% higher than the previous year (£1,698,000).This was driven by a buoyant fire equipment market and the acquisitions of ToddResearch and Collins Youldon. Gross margins remained strong at 54%. Afteraccounting for the profit on the sale of the Todd Research building, profitbefore tax, interest and goodwill amortisation was £487,000, up from £8,000 inthe previous year. Profit after taxation was £228,000 compared to a loss of£98,000 in the six months ended 30 September 2005. In June Asfare acquired the business and assets of Collins Youldon Limited andEwart F Youldon Limited ("Collins Youldon"). The total cost of the acquisitionwas £941,000 which was financed through bank debt of £700,000 and cash reserves.These results include three months contribution from Collins Youldon. In September Asfare sold the Todd Research premises in Chelmsford for£1,300,000. The sale realised a net profit of £209,000, with £850,000 of theproceeds being used to repay bank debt. After fulfilling the working capital requirements associated with theacquisition of Collins Youldon, cash outflow from operating activities was£167,000 during the period (2005: inflow £89,000), the overall cash balance fellby £420,000 to £81,000. Net debt rose in the period from £1,329,000 to£1,369,000 and the gearing remained at 33%. The Board has decided to pay an interim dividend of 1.0 pence per share. The Market The Asfare Group is split into two divisions; the Fire, Search & RescueDivision, made up of AS Fire and Collins Youldon and the Detection andProtection Division, made up of Todd Research. Fire, Search & Rescue Asfare consolidated its strong position in the UK fire equipment market throughthe acquisition of the Collins Youldon business in June 2006 and theannouncement of two large contract wins for its subsidiary AS Fire and Rescue. Collins Youldon adds hose reels and cable drums to the existing AS-Fire range ofladders, beam gantries, roller shutter products and ancillary fire brigadeequipment. Furthermore, Collins Youldon broadens the Company's geographicalsales, as 40% of its revenue is in Europe and it also serves the oil tankerindustry. The contract wins include a 5 year maintenance contract for ladders and a £1.1morder for supplying equipment to the new fleet of London Fire Brigadeappliances. The majority of the equipment order is expected to be delivered inthe second half of the current financial year. Detection & Protection The Todd Research business which sells X-ray equipment for scanning postage andbaggage, continues to progress with the launch of a series of new products thatincludes a value for money range designed for smaller businesses. The level ofopportunity with high profile blue chip companies remains strong and themanagement believes Todd Research is well positioned to take advantage of this. The sale of the Chelmsford property occupied by Todd Research was agreedsimultaneously with a leaseback arrangement for part of the building. The spacerequirements and cost base for the business have been reduced through theoutsourcing of the manufacturing of the production of the metal cabinets. Strategy and Acquisitions With the Homeland Security and emergency services continuing to develop acoordinated purchasing approach, Asfare will look to leverage its strongposition in the fire, search and rescue market to meet the continued demand forequipment and services for international agencies, rescue services andend-users. Increasingly, customers are looking for value-added services, forexample, training and long-term maintenance contracts, in addition to theprovision of equipment. The Company will also continue to seek acquisitions thatcompliment its portfolio of products and services so as to take full advantageof this developing market. Outlook The Board is pleased with the performance in the first half of the year. Thestrength of the order book and the continuing improvement in the Company'smarkets give the Directors confidence in the prospects for the second half ofthe year. The Board believes the organisation has a sound platform to continueits growth in 2007. Tim WightmanChairman28 November 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000 Turnover 3,580 1,698 4,905Cost of sales (1,656) (766) (2,069) Gross profit 1,924 932 2,836 Administration and establishment expenses (1,745) (998) (2,380) Operating profit before goodwill amortisation & curtailment gain 278 8 574 Curtailment gain - - 141Goodwill amortisation (99) (74) (259) Operating profit / (loss) 179 (66) 456 Profit on disposal of fixed asset 209 - - Profit / (loss) on ordinary activities before interest 388 (66) 456 Interest receivable 3 3 8Interest payable (96) (35) (106) Profit / (loss) on ordinary activities before taxation 295 (98) 358 Tax on ordinary activities (67) - (45) Retained Profit / (loss) on ordinary activities after taxation 228 (98) 313 Basic earnings / (loss) per share 4.6p (2.3p) 7.0p Diluted earnings / (loss) per share 4.6p (2.3p) 7.0p CONSOLIDATED BALANCE SHEET (Unaudited) (Unaudited) (Audited) As at As at As at 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000FIXED ASSETSIntangible assets 3,704 2,689 3,510Tangible assets 328 120 1,280 4,032 2,809 4,790 CURRENT ASSETSStock and work in progress 1,384 500 697Debtors 2,031 776 1,269Cash at bank and in hand 81 100 501 3,496 1,376 2,467 CREDITORS: amounts falling due within one year (2,418) (801) (1,786) NET CURRENT ASSETS 1,078 575 681 TOTAL ASSETS LESS CURRENT LIABILITIES 5,110 3,384 5,471 CREDITORS:amounts falling due after more than one year (954) (520) (1,443)Pension Liability (62) - (62) NET ASSETS 4,094 2,864 3,966 CAPITAL AND RESERVESCalled up share capital 1,243 1,050 1,243Share premium account 2,346 1,872 2,346Retained Profit 278 40 40Profit and loss account 227 (98) 337 SHAREHOLDERS' FUNDS 4,094 2,864 3,966 CONSOLIDATED CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000 Net cash (outflow)/inflow from operating activities (167) 89 774 Returns on investment and servicing of financeInterest received 3 3 8Interest paid (77) (31) (92)New Loans issue costs (14) - (18) (88) (28) (102) TaxationCorporation tax paid - - (4) Capital expenditure and financial investmentPurchase of tangible fixed assets (40) (16) (73)Sale of tangible fixed assets 1,300 - - 1,260 (16) (73) Acquisitions and disposalsPurchase of subsidiary undertakings - - (2,168)Purchase of trade and assets (941) - -Net cash acquired with subsidiaries - - 262 (941) 0 (1,906) Equity dividends paid (99) - - Net cash (outflow)/inflow beforemanagement of liquid resources and financing (35) 45 (1,311) FinancingPlacing Costs - - (27)Share Issue - - 694New long term loan 700 - 1,250Long term loan repayments (1,085) (120) (280)Net cash (outflow) from financing (385) (120) 1,637 Increase / ( decrease ) in cash for the period (420) (75) 326 NET CASHFLOW FROM OPERATING ACTIVITIES (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000 Operating profit / (loss) 388 (66) 411Depreciation 60 25 72Goodwill amortisation 99 74 164Loan cost amortisation - 4 -Profit on sale of tangible fixed assets (209) - -Decrease / (increase) in stock (216) 6 86Decrease / (increase) in debtors (688) 138 (226)(Decrease) / increase in creditors 399 (92) 267Net cash inflow from operating activities (167) 89 774 RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000 Increase / ( decrease ) in cash in the period (420) (75) 326Cash inflow from increase in loans (700) - (1,250)Repayment of new long term loans 1,085 120 280Issue costs of long term loans 14 - 18Amortisation of new loans issue costs (19) (4) (10)Movement in net debt in the period (40) 41 (636)Net debt brought forward (1,329) (693) (693) Net debt carried forward (1,369) (652) (1,329) ANALYSIS OF CHANGES IN NET DEBT At Other AtConsolidated Cash flow 2006 01-Apr Non-Cash 30-Sep 2006 Cash Flow Movements 2006 £000 £000 £000 £000 Cash at bank and in hand 501 (420) - 81Bank OverdraftsCash 501 (420) - 81Loans (1,830) 385 (5) (1,450) (1,329) (35) (5) (1,369) NOTES TO THE UNAUDITED INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 1. BASIS OF PREPARATION OF INTERIM ACCOUNTS The accounts for the Group for the six months ended 30 September 2006, which areunaudited, have been prepared on the basis of the accounting policies set out inthe 2006 Annual Report and Accounts and have taken into account any regulatorychanges expected to alter the 2007 Annual Report and Accounts. The Group is required to adopt FRS 20, Share-based Payment for the year ended 31March 2007. Under the transitional provisions contained within the Standard,all share-based payment arrangements granted after 7 November 2002 that had notvested prior to 1 April 2006 are recognised in the financial statements. All goods and services received in exchange for the grant of any share-basedremuneration are measured at their fair values. Fair values of employeeservices are indirectly determined by reference to the fair value of the shareoptions awarded. Their value is appraised at the grant date and excludes theimpact of non-market vesting conditions (for example, profitability and salesgrowth targets). All share-based remuneration is ultimately recognised as an expense in theincome statement with a corresponding credit to "other reserve". If vesting periods or other non-market vesting conditions apply, the expense isallocated over the vesting period, based on the best available estimate of thenumber of share options expected to vest. Estimates are subsequently revisedif there is any indication that the number of share options expected to vestdiffers from previous estimates. Any cumulative adjustment prior to vesting isrecognised in the current period. No adjustment is made to any expenserecognised in prior periods if share options ultimately exercised are differentto that estimated on vesting. Upon exercise of share options the proceeds received net of attributabletransaction costs are credited to share capital. The Directors have evaluated the accounting entries required under FRS 20, andhave concluded that these are not material. No adjustment has therefore beenreflected in the interim accounts. 2. EARNINGS PER SHARE (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2006 2005 2006 £000 £000 £000 Profit / (loss) after taxation 228 (98) 313Adjustments : Goodwill amortisation 99 74 164 Adjusted profit / (loss) 327 (24) 477 Number Number Number Basic weighted average number of shares 4,971,112 4,200,000 4,496,582Dilutive potential ordinary shares:Share options - - -Warrants - - - 4,971,112 4,200,000 4,496,582 Basic earnings / (loss) per shareBased on profit / (loss) after taxation 4.6p (2.3p) 7.0pLoss per share on goodwill 2.0p 1.7p 3.6pAdjusted earnings / (loss) per share 6.6p (0.6p) 10.6p Diluted earnings / (loss) per shareDiluted basic earnings / (loss) per share 4.6p (2.3p) 7.0pDiluted loss per share on goodwill 2.0p 1.7p 3.6pDiluted adjusted earnings / (loss) per share 6.6p (0.6p) 10.6p 3. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information contained in this interim statement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The financial information for the full preceding year is based onstatutory accounts for the financial period ended 31 March 2006. Those accounts,upon which the auditors issued an unqualified opinion, have been delivered tothe Registrar of Companies. INDEPENDENT REVIEW report to ASFARE GROUP PLC INTRODUCTION We have been instructed by the company to review the financial information forthe six months ended 30 September 2006 which comprises the balance sheet, profitand loss account, cash flow statement and the related notes 1 to 3. We haveread the other information contained in the interim report which comprises onlythe Chairman's statement and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. Ourresponsibilities do not extend to any other information. This report is made solely to the company's members, as a body, in accordancewith guidance contained in APB Bulletin 1999/4 "Review of Interim FinancialInformation". Our review work has been undertaken so that we might state to thecompany's members those matters we are required to state to them in a reviewreport and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the company and thecompany's members as a body, for our review work, for this report, or for theconclusion we have formed. DIRECTORS' RESPONSIBILITIES The interim report including the financial information contained therein is theresponsibility of, and has been approved by, the directors. The Listing Rulesof the Financial Services Authority require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. REVIEW WORK PERFORMED We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of Interim Financial Information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and, based thereon, assessing whetherthe accounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with UnitedKingdom auditing standards and therefore provides a lower level of assurancethan an audit. Accordingly, we do not express an audit opinion on the financialinformation. REVIEW CONCLUSION On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2006. GRANT THORNTON UK LLPCHARTERED ACCOUNTANTS Portsmouth28th November 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Assetco