RNS Number:4449S
Belgravium Technologies PLC
07 March 2007
07 March 2007
Belgravium Technologies Plc
(BVM:AIM)
Preliminary Results for the
Year Ended 31 December 2006
The Board of Belgravium Technologies plc ("Belgravium" or "the Group"),
designers and manufacturers of real-time data capture systems, is pleased to
announce the Preliminary Results for the year ended 31 December 2006.
FINANCIAL HIGHLIGHTS
* Turnover up 101% #10,922,000 (2005: #5,430,000)
* Pre tax profits* up 88% #1,844,000 (2005: #982,000)
* Increased final dividend 0.36p (2005: 0.32p)
* Earnings per Ordinary share* up 31% 1.27p (2005: 0.97p)
*(before amortisation of goodwill)
OPERATIONAL HIGHLIGHTS
* Appointment of Chris Phillips to the Group Board
* Successful integration of acquired businesses, Touchstar Ltd and Novo IVC
Ltd
* Opportunities for cross-selling across the enlarged group exploited
* Sharing of technical expertise and resources across divisions
* Further blue-chip and international contracts
Commenting today, Executive Chairman John Kembery said:
"The Group completed 2006 with greatly improved results and has been
strengthened in all operations. Acquisitions have widened the Group's offering
and we now have the technical capability to design both hardware and software
for many more uses than we had before.
The Group is now better prepared for the continual task of developing and
improving products for changing market needs. We are confident that the progress
made in 2006 will continue into 2007 and that the Group is in a strong position
to seize opportunities for further growth."
For further information please contact:
Buchanan Communications ltd Kelly-Ann Knight/Eric Burns
020 7466 5000
Belgravium Technologies plc John Kembery
Mob: 07770 731021
www.belgraviuminvestorrelations.com
CHAIRMAN'S STATEMENT
1. Introduction
Belgravium Technologies plc ("the Group") acquired Touchstar Limited
("Touchstar") in October 2005 and Novo IVC Limited ("Novo IVC") in January 2006.
During the year a good deal of management time was spent in assimilating these
companies into the Group and gaining the optimum benefit from the acquisitions.
This has been a big success and the Group completed 2006 with greatly improved
results and has been strengthened in all operations.
2. Results
Group sales in 2006 totalled #10,922,000, a 101% increase on the prior period
(2005: #5,430,000). Profit before tax and amortisation of goodwill increased by
88% to #1,844,000 (2005: #982,000). Earnings per ordinary share, before
amortisation, were up 31% at 1.27p per share compared to 0.97p per share in
2005.
Much of the sales growth came from Touchstar and with the acquisition of Novo
IVC contributing as expected.
3. Balance Sheet
Cash at the year end was less than historic levels at #171,000 (2005:
#1,799,000) due to the net payment of #1,202,000 in corporation tax and net
expenditure of #1,056,000 on the acquisition of Novo IVC (including costs)
during the year. Repayment of the term loan commenced in October but forward
projections show that the Group has more than sufficient cash for its planned
activities.
4. Dividend
Following the good results and improved outlook, the Board is pleased to
recommend an increased final dividend of 0.36p per ordinary share (2005: 0.32p).
This will be paid on 7 June, subject to approval at the AGM, to shareholders
on the register at 11 May 2007.
5. The Enlarged Group
Most of what we found in Touchstar, once handover was complete, was as had been
anticipated by due diligence. However, a slow period in the first quarter, at
both Belgravium and Touchstar, exposed a longer term shortage of order
prospects. The Group's sales force was immediately enlarged and strengthened,
followed by an extensive campaign aimed at developing the sales pipeline and
building upon the Touchstar brand.
As expected, opportunities for cross-selling with Belgravium have arisen and
been exploited. Gradually new sales opportunities have begun to emerge in both
Touchstar's traditional markets and in other sectors. The close working
relationship with Novo IVC has proved crucial in this process and by the year
end, long term sales prospects are much improved.
Sales strategy and organisation have also been changed in Belgravium Ltd. With
effect from 1 January 2007 Novo IVC has become a sales division of Touchstar,
using Touchstar hardware with its own specialised software. This will provide
greater focus on central markets and avoid administrative duplication. During
the course of the year Novo IVC accounting functions were merged with Touchstar
and the two units now run smoothly as a unified operation.
6. Product Development
One of the big advantages of the acquisition of Touchstar for the Group was the
integration of the product development plans of Belgravium and Touchstar. This
has been put in place with a sharing of technical expertise and resources
against a single development plan and with clear targets. New products have
been introduced to the market and bought-in goods and services reduced. The
Group is now better prepared for the continual task of developing and improving
products for changing market needs. Newly introduced products have been well
received by customers.
7. Employees
We expected to find some very capable and motivated people in both Touchstar and
Novo IVC and were not disappointed. Staff in these companies have fully
embraced the changes and worked well with the ever resilient Belgravium
employees. We have an extremely competent team in place, in all our operations.
Chris Phillips has done an excellent job in managing Touchstar through this
integration process and we are delighted that he has accepted the Directors'
invitation to join the Board with effect from 6 March 2007.
8. Future Strategy
There is plenty of growth potential within the real time data capture markets
and few companies who can match the Group's combined expertise in the
instillation of fully working systems in critical applications. Acquisitions
have widened the Group's offering and we now have the technical capability for
the design of both hardware and software for many more uses than we had before.
We shall go on seeking organic growth with wider geographic coverage and in
new applications.
We also continue to seek further acquisitions but have been disappointed by the
quality of those companies we looked at in 2006. We will remain committed to
seeking targets which demonstrate the kind of real synergy that we have found in
Touchstar and Novo IVC. The Board is aware that this may take some time.
9. Outlook
There was an upturn in orders in the last quarter of 2006, some of which have
carried over into 2007. The first quarter is more buoyant than in previous years
and, based upon our improved products and good customer service, there are
encouraging contracts in the pipeline. We are confident that the progress made
in 2006 will continue into 2007 and that the Group is in a strong position to
seize opportunities for further growth.
FULL RESULTS BELOW
Audited Group profit and loss account for the year ended 31 December 2006
2006 2005
Continuing Acquisitions Total
operations Total
#'000 #'000 #'000 #'000
Turnover 8,328 2,594 10,922 5,430
Cost of sales 2,881 1,671 4,552 2,280
Gross profit 5,447 923 6,370 3,150
Distribution costs 112 - 112 44
Administrative expenses 3,595 670 4,265 2,200
3,707 670 4,377 2,244
Operating profit before goodwill amortisation 1,740 253 1,993 906
Goodwill amortisation (411) (53) (464) (80)
Operating profit 1,329 200 1,529 826
Net interest (payable)/ receivable (149) 76
Profit on ordinary activities before taxation 1,380 902
Tax charge on profit on ordinary activities (569) (273)
Profit for the financial year 811 629
Basic earnings per ordinary share 0.81p 0.86p
Diluted earnings per ordinary share 0.80p 0.85p
There are no recognised gains or losses other than the profit for the year and
therefore no separate statement of total recognised gains and losses has been
presented.
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year as stated above, and their historical cost
equivalents.
Audited Group balance sheet as at 31 December 2006
2006 2005
#'000
#'000
Fixed assets
Intangible assets 8,861 8,232
Tangible assets 361 325
9,222 8,557
Current assets
Stocks 1,157 1,103
Debtors 3,325 2,479
Cash at bank and in hand 171 1,799
4,653 5,381
Creditors: amounts falling due within one year (4,304) (6,189)
Net current assets/(liabilities) 349 (808)
Total assets less current liabilities 9,571 7,749
Creditors: amounts falling due after more than one year (1,755) (170)
Provisions for liabilities and charges (51) (173)
Net assets 7,765 7,406
Capital and reserves
Called up share capital 5,021 5,021
Share premium account 2,915 2,915
Capital redemption reserve 2,100 2,100
Profit and loss account (2,271) (2,630)
Total equity shareholders' funds 7,765 7,406
Audited Group cash flow statement for the year ended 31 December 2006
2006 2005
#'000 #'000
Net cash inflow from operating activities 1,759 870
Returns on investment and servicing of finance
Interest received 37 96
Interest paid (183) (20)
(146) 76
Taxation
Corporation tax paid (1,382) (396)
Corporation tax received 180 -
(1,202) (396)
Capital expenditure and financial investment
Purchase of intangible fixed assets (108) (28)
Purchase of tangible fixed assets (169) (52)
(277) (80)
Acquisitions
Acquisition of subsidiary company (1,316) (8,170)
Acquisition expenses (356) (633)
Cash at bank and in hand acquired with subsidiary 616 3,362
(1,056) (5,441)
Equity dividends paid to shareholders (452) (344)
Net cash outflow before financing (1,374) (5,315)
Financing
Repayment of bank loan (250) -
Repayment of hire purchase contracts (4) -
Repayment of loan notes (2,580) -
Issue of ordinary share capital - 4,704
Expenses of share issue - (229)
New bank loans 2,580 420
(254) 4,895
Decrease in cash in the year (1,628) (420)
Audited reconciliation of net cash flow to movement in net debt
2006 2005
#'000 #'000
Decrease in cash in the year (1,628) (420)
Cash outflow/(inflow) from decrease/(increase) in debt and lease 254 (420)
financing
Non cash changes
New hire purchase contracts (14) -
Loan notes issued in connection with acquisition - (2,580)
Movement in net debt during year (1,388) (3,420)
Net (debt)/funds at 1 January (1,201) 2,219
Net (debt) at 31 December (2,589) (1,201)
Audited reconciliation of operating profit to net cash inflow from operating
activities
2006 2005
#'000 #'000
Operating profit 1,529 826
Depreciation 199 123
Amortisation 520 85
Movement in provisions (122) (16)
Funds generated by operations 2,126 1,018
Decrease/(increase) in stocks 91 (156)
Increase in debtors (576) (41)
Increase in creditors 118 49
Increase in working capital (367) (148)
Net cash inflow from operating activities 1,759 870
Audited reconciliation of movements in Group equity shareholders' funds
2006 2005
#'000 #'000
Profit for the year 811 629
Dividends (452) (344)
359 285
Issue of ordinary share capital - 4,704
Expenses of share issue - (229)
Net change in equity shareholders' funds 359 4,760
Opening equity shareholders' funds 7,406 2,646
Closing equity shareholders' funds 7,765 7,406
Audited earnings per ordinary share
2006 2005
Basic earnings per ordinary share 0.81p 0.86p
Diluted earnings per ordinary share 0.80p 0.85p
Basic earnings per ordinary share before goodwill amortisation 1.27p 0.97p
Diluted earnings per ordinary share before goodwill amortisation 1.26p 0.96p
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive ordinary shares. The
dilutive ordinary shares represent the share options and warrants granted to
employees where the exercise price is less than the average market price of the
Company's ordinary shares during the year.
Basic earnings per ordinary share before goodwill amortisation and diluted
earnings per ordinary share before goodwill amortisation is based on profit on
ordinary activities after taxation but before goodwill amortisation of
#464,000, being #1,275,000. (2005: profit on ordinary activities after taxation
but before goodwill amortisation of #80,000 being #709,000).
Reconciliations of the earnings and weighted average number of shares used in
the calculation are set out below:
2006 2005
Earnings Weighted average Earnings Weighted average
number of shares number of shares
#'000 (in thousands) #'000 (in thousands)
Basic EPS
Earnings attributable to ordinary 811 100,426 629 73,454
shareholders
Effect of dilutive securities
Options - 500 - 649
Diluted EPS
Adjusted earnings 811 100,926 629 74,103
Earnings per share before goodwill
amortisation
Basic EPS 811 100,426 629 73,454
Goodwill amortisation 464 - 80 -
Basic EPS before goodwill amortisation 1,275 100,426 709 73,454
Diluted EPS 811 100,926 629 74,103
Goodwill amortisation 464 - 80 -
Diluted EPS before goodwill amortisation 1,275 100,926 709 74,103
Basis of reporting
This preliminary announcement, which has been prepared on a basis consistent
with the previous year, does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. This announcement has been
agreed with the company's auditors for release.
This preliminary announcement contains information extracted from the audited
financial statements of the group for the year ended 31 December 2006. The
statutory accounts for the year ended 31 December 2006 will be sent to the
shareholders shortly.
The information for the year ended 31 December 2005 is an extract from the
statutory accounts to that date which have been delivered to the Registrar of
Companies. These accounts included an audited report which was unqualified and
which did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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