16th Nov 2005 07:00
ARC RISK MANAGEMENT GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2005 ARC Risk Management Group plc ("ARC" or the "Group"), is a provider of securityrisk management services, offering preventative and reactive advice to helpindividuals avoid and manage personal risks to themselves and their families.The products are distributed through leading international financial servicecompanies.Highlights * Loss before tax reduced to ‚£392k, compared with ‚£560k in the first half of 2004. * Loss before tax down to ‚£98k in second quarter * Turnover up 68% to ‚£893k, compared with ‚£532k in the first half of 2004. * New distribution agreements with HSBC and AIG. * Red 24 sales are more than five times that of the corresponding period last year and now comprise over 50% of Group revenues. * Investment in product development will result in further new product launches in the second half of the year. Simon Richards, Chairman, commented:"ARC is strongly positioned as a leading provider of security risk managementservices, which are meeting the growing requirement for greater protection,particularly for those travelling whether on business or for pleasure, marketswhich, at present, remain largely untapped.We continue to grow our relationships with existing and new partners in thefinancial services and insurance industries and envisage increasing growth inthe adoption worldwide of red24". 16 November 2005Enquiries:ARC Risk Management Group plc Tel: 0208 080 0218 Simon Richards, Chairman Simon Wakeling, Director Hansard Communications Tel: 020 7245 1100 Nicholas Nelson CHAIRMAN'S STATEMENTIntroductionI am pleased to report that the strong customer growth, to which I referred inthe share placing announcement on 3 June, has been maintained and is beingtranslated into an improved financial performance. The benefits of the newstructure where each division has become a separate subsidiary with its ownmanaging director are also apparent.Financial OverviewTurnover demonstrated a healthy 68% period on period growth to ‚£893,000, whilethe loss before tax of ‚£392,000 for the half year compares favourably with theloss of ‚£560,000 incurred in the same period last year. It is worth noting that‚£294,000 of this loss was incurred in the first three months and only ‚£98,000was lost in the second three months.Immediately after the publication of the results for the year to 31 March 2005,we successfully raised ‚£320,000. However, the growth in turnover inevitablyrequires additional working capital, and this, coupled with extra funding forour marketing activities, means that it is likely, depending on marketconditions, that the Board may still decide to raise additional capital beforethe financial year end.Red24TMRed24 is a global security service providing preventative and reactive adviceto help individuals avoid and manage personal risks to themselves and theirfamilies. Last June we entered into an agreement with HSBC Bank plc toincorporate red24's personal security service as part of HSBC's Premier bankingoffering and ID imposter into their HSBC Plus banking offering. These are twosignificant contracts, which have taken the total number of customers of red24to well over 500,000. Each month several thousand new customers are added andthe English language service of red 24 now has sufficient mass to cover itscosts on a monthly basis.Red24's Japanese service has taken longer to develop but is now being sold inJapan through AIG's network of agents. At present the product is offered as adiscretionary sale and take up is not as high as we had hoped. This is,however, consistent with our early experience in the UK and critical mass isunlikely to be achieved until red24 is incorporated in a major financialproduct offering on a mandatory basis. This is expected to occur in the not toodistant future.Significant investment in product development continues to be made and in thenext half year we expect to launch two new offerings - a corporate care productand a gap year product. Essentially we have developed a modular approach to themanagement of security risk advice which enables us to tailor the core red24product to meet the needs of particular markets quite readily. The modularapproach then gives an opportunity to our distributors to purchase productupgrades appropriate to their client needs and budgets.It is pleasing to note that as contracts come up for renewal, our distributorsare tending to take the opportunity to upgrade the product they are taking andthat feedback from their clients when using the red 24 service has beenpositive.In the half year under review red24 sales were more than five times that of thecorresponding period last year and now comprise over 50% of group revenues.ConsultancyThe Consultancy business has achieved a greater income, from a smaller costbase, than in 2004 when much of the division's time was taken up developing andtesting the response procedures for red24.TrainingThe Training business has not enjoyed the same buoyant start to the year as itdid in 2004 and revenues in the first half were down some 20% period on period.Nonetheless there is a busy autumn programme with additional courses on offerand over the year as a whole this revenue shortfall should be made up.OutlookARC Risk Management is strongly positioned as a leading provider of securityrisk management services which are meeting the growing requirement for greaterprotection for those travelling, whether on business or for pleasure, marketswhich, at present, remain largely untapped.We continue to grow our relationships with existing and new partners in thefinancial service and insurance industries and envisage increasing growth inthe adoption worldwide of red24.Simon RichardsChairman16 November 2005CONSOLIDATED PROFIT & LOSS ACCOUNT 6 months ended 6 months ended 12 months ended 30 September 30 September 31 March 2005 2005 2004 ‚£'000 ‚£'000 ‚£'000 (audited) (unaudited) (unaudited) Turnover Continuing 893 532 1,021operations Operating (loss) Continuing (393) (562) (1,124)operations Net interest 1 2 2receivable Loss on ordinary (392) (560) (1,122) activities before taxation Taxation on loss on 0 0 0 ordinary activities Loss for the period (392) (560) (1,122) Dividends 0 0 0 Retained loss for (392) (560) (1,122)the period Loss per share (0.14p) (0.25p) (0.46p) CONSOLIDATED BALANCE SHEET 30 September 30 September 31 March 2005 2005 2004 ‚£'000 ‚£'000 ‚£'000 (audited) (unaudited) (unaudited) Fixed Assets Intangible assets 292 365 329 Tangible assets 54 66 55 346 431 384 Current Assets Debtors 644 263 260 Cash at bank and in hand 140 422 154 784 685 414 Creditors: Amounts 859 428 443 falling due within one year Net Current Assets/ (75) 257 (29)(Liabilities) Total Assets less 271 688 355 Current Liabilities Creditors: Amounts 55 64 61 falling due after more than one year 216 624 294 Capital and Reserves Called up share capital 3,032 3,848 2,712 Share premium account 558 571 564 Profit and loss account (3,374) (3,795) (2,982) Shareholders' Funds - 216 624 294Equity CONSOLIDATED CASH FLOW 6 months ended 6 months ended 12 months ended 30 September 30 September 31 March 2005 2005 2004 ‚£'000 ‚£'000 ‚£'000 (audited) (unaudited) (unaudited) Operating loss (393) (562) (1,124) Depreciation charges 10 10 21 Amortisation charges 37 36 73 Loss on disposal of tangible - - 1fixed assets Increase in debtors (384) (23) (18) Increase in creditors 416 37 51 Net cash outflow from (314) (502) (996)operating activities Returns on investments and servicing of finance Interest received 2 4 10 Interest paid (1) (2) (8) 1 2 2 Capital expenditure Purchase of tangible fixed (9) (20) (22) assets (9) (20) (22) Net cash outflow before (322) (520) (1,016)financing Financing Repayment of hire purchase 0 0 (2) loans Issue of ordinary share 320 420 660 capital Expenses of issue of ordinary (6) (15) (22) shares Repayment of bank loans (6) (6) (10) Other loans 0 (1) 0 Net cash inflow from 308 398 626financing Decrease in cash (14) (122) (390) Notes: 1. The interim financial statements for the six months ended 30 September 2005 have been prepared using accounting policies consistent with those set out in the annual report and accounts of ARC Risk Management Group plc for the year ended 31 March 2005 and which will be applied for the year ending 31 March 2006. The interim financial information for the six months ended 30 September 2005 is unaudited and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. 2. The figures for the year ended 31 March 2005 are extracted from the Company's statutory accounts for that year, which have been filed with the Registrar of Companies and contain a report from the auditors that is unqualified save as to matters of emphasis. Copies of the statutory accounts may be obtained from the Company or Seymour Pierce. 3. The loss per share for the six months ended 30 September 2005 has been calculated based on the loss on ordinary activities after taxation divided by the weighted average number of shares in issue during the period. 4. Copies of this interim financial statement will be available for at least one month from Seymour Pierce Limited, Bucklersbury House, London EC4N 8EL. ENDARC RISK MANAGEMENT GROUP PLCRelated Shares:
REDT.L