28th Nov 2005 08:30
Asfare Group plc28 November 2005 Press Release 28 November 2005 Asfare Group plc ("Asfare" or "the Company") Interim Results for the six months ended 30 September 2005 Asfare, a specialist supplier of products and services for the EmergencyServices and Homeland Security markets, today announces its interim results forthe six months ended 30 September 2005. Highlights: - Turnover £1,698,000 (2004: £1,982,000)- Gross margins maintained at 55%- Loss After Tax £98,000 (2004: £114,000 profit)- Loss Per Share 2.3p (2004: EPS 2.7p)- Net cashflow from operating activities £89,000 (2004: £253,000)- Net borrowings reduced to £652,000 (2004: £693,000)- Entry into new markets following the acquisition of Todd Research Limited in the second half Commenting on the interim results for the six months to 30 September 2005, TonyO'Neill, Chief Executive, said: "As previously announced in September, theresults for the first half of the year were hindered by the continued review ofprocurement policy in the fire services market. Despite this, Asfare hasmaintained its gross margins and has continued to generate cash. The recentclarification of the fire industry's procurement policy coupled with theacquisition of Todd Research provides a strong platform for the business to moveforward." For further information, please contact: Enquiries: Asfare Group plcTony O'Neill, Chief ExecutiveTim O'Connor, Finance Director Tel: +44 (0) 2380 861 966 Seymour PierceMark Percy Tel: +44 (0) 20 7107 8000 Media enquiries: Abchurch CommunicationsAriane Comstive/Julian Bosdet Tel: +44 (0) 20 7398 [email protected] - Ends - Chairman's Interim Statement The Company reported turnover of £1,698,000 for the six months ended 30thSeptember 2005, which was 14% lower than the previous year (£1,982,000) as aresult of the Government moratorium on fire brigade expenditure. Gross marginswere nevertheless maintained at 55%. As a result of lower revenues combinedwith increased central costs, which were associated with the strengthening ofthe senior management team, operating profit before goodwill amortisation was£8,000; down from £226,000. The loss after taxation was £98,000 compared to aprofit of £114,000 achieved in the six months ending 30 September 2004. Asfare generated £89,000 of cash from operating activities during the periodunder review, (2004: £253,000), while the overall cash balance fell by £75,000to £100,000. Net debt fell marginally from £693,000 to £652,000 and as aresult, gearing fell from 23.4% to 22.7%. The Market Asfare maintained its strong position in the UK fire and escape ladder market,selling both directly to fire brigades as well as through a small number of keyOEMs. The Company continued to supply beam gantries, roller shutter productsand ancillary fire brigade related equipment into the search and rescue markets. The resolution of the Government's fire equipment procurement review has enabledthe brigades to recommence ordering new vehicles and as a consequence Asfare hasseen its order book strengthen. This was underpinned by an additional orderreceived in September worth £435,000 to supply Assetco, for the London fireservice, in excess of 200 ladders over the next 6 months. Overseas, the Company continued to develop its relationships in Australia andNew Zealand, securing new orders in both countries. Strategy and Acquisitions Asfare has recognised that its traditional market is changing, with theemergency services increasingly combining their resources in response to majorincidents. This combined response leads to significantly wider marketopportunities as knowledge and equipment are shared between all the emergencyservice providers. There is also an increased awareness of Homeland Securityissues and risk management within government offices, public buildings and majorcompanies. Consequently the Board is keen to offer a broader product range andis intent on making acquisitions to fulfil these market requirements. The acquisition of Todd Research Limited ("Todd Research") was completed inNovember of this year. Todd Research is a market leading supplier of x-rayscanning equipment used to identify weapons, explosives and powders in postageand baggage. The business has a track record over 50 years of supplyingequipment to the emergency services, government departments, embassies and majorcompanies. Todd Research was acquired for an initial consideration of £1,650,000, plus thecash balance in the business on completion of £261,790, with a further deferredconsideration of up to £2,080,000. To fund the initial consideration for ToddResearch the Company raised £694,000 through a placing of new shares, thebalance of the initial consideration was satisfied through new debt facilitieswith HSBC secured on Todd Research's freehold property. The Group is now being run as two divisions, enabling a focussed productdevelopment and selling approach. Todd Research will be the focus foraddressing the detection and protection sectors within the Homeland Securitymarket. The original business, AS-Fire, will focus on the fire, search andrescue markets. The Company will continue to seek new business opportunitiesto develop these two divisions further. Outlook The Board is optimistic about the outlook for the remainder of the year. Thecompany enjoys good operating leverage as a result of its strong margins, goodcash flow generation and a healthy balance sheet. The recent clarification ofthe fire industry's procurement policy coupled with the acquisition of ToddResearch provide a good platform for the business to move forward. Thedirectors believe that the strengthening of the management team combined withthe extension of the acquisition strategy into the wider field of HomelandSecurity will result in both strong organic and acquisitive growth over the nextfew years for the Group. Tim Wightman Chairman 25 November 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2005 2004 2005 £000 £000 £000 Turnover 1,698 1,982 3,925Cost of sales (766) (893) (1,847) Gross profit 932 1,089 2,078 Administration and establishment expenses (998) (937) (1,888) Operating profit before goodwill amortisation included inadministration and establishment expenses 8 226 338Goodwill amortisation (74) (74) (148) Operating (loss) / profit (66) 152 190 Interest receivable 3 1 3Interest payable (35) (39) (84) (Loss) / profit on ordinary activities before taxation (98) 114 109 Tax on ordinary activities 0 0 10 (Loss) / profit on ordinary activities after taxation (98) 114 119 Dividends - (42) (42) Retained (loss) / profit for the financial period (98) 72 77 Basic (loss) / earnings per share (2.3p) 2.7p 2.8p *RestatedDiluted (loss) / earnings per share (2.3p) 2.7p 2.8p * Correction of an incorrect calculation CONSOLIDATED BALANCE SHEET (Unaudited) (Unaudited) (Audited) As at As at As at 30-Sep 30-Sep 31-Mar 2005 2004 2005 £000 £000 £000FIXED ASSETSIntangible assets 2,689 2,836 2,762Tangible assets 120 136 131 2,809 2,972 2,893 CURRENT ASSETSStock and work in progress 500 600 506Debtors 776 817 914Cash at bank and in hand 100 161 175 1,376 1,578 1,595 CREDITORS: amounts falling due within one year (801) (841) (889) NET CURRENT ASSETS 575 737 706 TOTAL ASSETS LESS CURRENT LIABILITIES 3,384 3,709 3,599 CREDITORS: amounts falling due after more thanone year (520) (752) (637) NET ASSETS 2,864 2,957 2,962 CAPITAL AND RESERVESCalled up share capital 1,050 1,050 1,050Share premium account 1,872 1,872 1,872Retained Profit 40 (37) (37)Profit and loss account (98) 72 77 SHAREHOLDERS' FUNDS 2,864 2,957 2,962 CONSOLIDATED CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2005 2004 2005 £000 £000 £000 Net cash inflow from operating activities 89 258 487 Returns on investment and servicing offinanceInterest received 3 1 3Interest paid (31) (39) (74) (28) (38) (71) TaxationCorporation tax paid 0 0 (2) Capital expenditure and financial investmentPurchase of tangible fixed assets (16) (12) (30)Sale of tangible fixed assets 7 7 (16) (5) (23) Acquisitions and disposalsPurchase of subsidiary undertakings 0 0 0 0 0 0 Equity dividends paid 0 0 (42) Net cash inflow beforemanagement of liquid resources and financing 45 215 349 FinancingLong term loan repayments (120) (120) (240) Net cash (outflow) from financing (120) (120) (240) Increase / ( decrease ) in cash for the (75) 95 109period NET CASHFLOW FROM OPERATING ACTIVITIES (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2005 2004 2005 £000 £000 £000 Operating profit / (loss) (66) 152 190Depreciation 25 26 49Goodwill amortisation 74 74 148Loan cost amortisation 4 4 0Profit on sale of tangible fixed assets 0 (1) (1)Decrease in stock 6 35 129Decrease / (increase) in debtors 138 13 (84)(Decrease) / increase in creditors (92) (45) 56Net cash inflow from operating activities 89 258 487 RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT £000 £000 £000 Increase / ( decrease ) in cash in the period (75) 95 109Repayment of new long term loan 120 120 240Amortisation of new loans issue costs (4) (4) (9)Movement in net debt in the period 41 211 340Net debt brought forward (693) (1,033) (1,033) Net debt carried forward (652) (822) (693) ANALYSIS OF CHANGES IN NET DEBT Consolidated Cash flow 2004 At 1 Other At 30 April Non-Cash September 2005 Cash Flow Movements 2005 £000 £000 £000 £000 Cash at bank and in hand 175 (75) 0 100Cash 175 (75) 0 100Loans (868) 120 (4) (752) (693) 45 (4) (652) NOTES TO THE UNAUDITED INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER2005 1. BASIS OF PREPARATION OF INTERIM ACCOUNTS The accounts for the Group for the six months ended 30 September 2005, which areunaudited, have been prepared on the basis of the accounting policies set out inthe 2005 Annual Report and Accounts and have taken into account any regulatorychanges expected to alter the 2006 Annual Report and Accounts. 2. EARNINGS PER SHARE (Unaudited) (Unaudited) (Audited) Six Months Six Months Year Ended Ended Ended 30-Sep 30-Sep 31-Mar 2005 2004 2005 £000 £000 £000 (Loss) / profit after taxation (98) 114 119Adjustments : Goodwill amortisation 74 74 148 Adjusted (loss) / profit (24) 188 267 Number Number Number Basic weighted average number of shares 4,200,000 4,200,000 4,200,000Dilutive potential ordinary shares:Share options 0 18,539 22,057Warrants 0 0 0 4,200,000 4,218,539 4,222,057 Basic (loss) / earnings per shareBased on (loss) / profit after taxation (2.3p) 2.7p 2.8pLoss per share on goodwill 1.8p 1.8p 3.5pAdjusted (loss) / earnings per share (0.6p) 4.5p 6.3p Diluted (loss) / earnings per share *RestatedDiluted basic (loss) /earnings per share (2.3p) 2.7p 2.8pDiluted loss per share on goodwill 1.8p 1.8p 3.5pDiluted adjusted (loss) /earnings per share (0.6p) 4.5p 6.3p * Correction of an incorrect calculation 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 2005. 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 2005 which comprises the balance sheet,profit and loss account, cash flow statement and the related notes 1 to 3. Wehave read the other information contained in the interim report which comprisesonly the 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 2005. GRANT THORNTON UK LLPCHARTERED ACCOUNTANTS Portsmouth25th November 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Assetco