TIDMBVM
RNS Number : 1239C
Belgravium Technologies PLC
02 March 2011
Belgravium Technologies Plc
(BVM:AIM)
Belgravium Technologies plc
Preliminary results for the year ended 31 December 2010
The Board of Belgravium Technologies plc ('Belgravium' or 'the
Group'), designers and suppliers of mobile data capture systems, is
pleased to announce preliminary results for the twelve months ended
31 December 2010.
Highlights:
-- Profit before tax increased by 7% to GBP432,000 (2009:
GBP405,000)
-- Substantial reduction in net debt from GBP1,424,000 to
GBP264,000
-- Earnings per share reduced to 0.38p (2009: 0.43p) due to tax
credit position in 2009
-- Group finished year in strong position to take advantage of
steadily improving conditions
Commenting on the year end results, John Kembery, Chairman of
Belgravium, said:
"I am pleased to report another year of increased profit before
tax at Belgravium as well as a substantial reduction in our net
debt position. We enter the new year with a better order book than
for the past three years having made real progress against our key
strategic objectives. There is undoubtedly increased financial
confidence amongst our customers and the need for our products has
been accentuated by three years of restraint in capital
expenditure".
For further information please contact:
Belgravium Technologies Plc John Kembery: 07770 731021
KPMG Corporate Finance - Nominated Christian Mayo: 0113 231 3000
Adviser
WH Ireland Jessica Metcalf (Corporate Broking):
0113 3946623
KPMG Corporate Finance, a division of KPMG LLP which is
authorised and regulated by the Financial Services Authority for
investment business activities, is acting for the Company as
nominated adviser in relation to the matters set out in this
announcement and is not acting for any other person in relation to
these matters. KPMG Corporate Finance will not be responsible to
anyone other than Company for providing the protections afforded to
its clients or for providing advice in relation to the contents of
this announcement
CHAIRMAN'S STATEMENT 2010
Results
Despite difficult market conditions throughout most of 2010, I
am pleased to report that Belgravium remained cash generative and
improved its profitability before taxation. The Group finished the
year in a strong position to take advantage of steadily improving
conditions.
With a marginal fall in revenues from GBP8,286,000 in 2009 to
GBP8,200,000 in 2010, the Group made a pre-tax profit of GBP432,000
in the twelve months ended 31 December 2010, an improvement of 7%
on the GBP405,000 achieved in the previous year. Sales were
stronger in the final quarter and whilst this seasonality is quite
normal, increased activity levels have continued into 2011, giving
rise to prospects of a year of further improvement.
In 2009 we benefited from a tax credit of GBP32,000 but in 2010
have suffered a tax charge of GBP50,000. So despite the improved
profit before tax, basic earnings per ordinary share reduced from
0.43p per share in 2009 to 0.38p per share in 2010.
Cash flow continued to be positive. Between 31 December 2009 and
31 December 2010, the Group reduced net debt by GBP1,160,000
including continued repayment of the term loan.
The Market
The Group manufactures and installs complete systems
incorporating both hardware and software for real-time data capture
in the logistics, petrochemical and mobile retailing markets. We
seldom have to convince operating management of the improved
efficiency and cost benefits of such systems but financial
constraints have led to a marked reluctance to commit to capital
projects. This has caused frustrating delays and
re-appraisals and Belgravium's increasing international business
has shown little difference between home and overseas markets. Over
the past few years we have developed a five point strategy for
dealing with such an unresponsive market and on every count we have
achieved real progress in 2010.
The Strategy
1. Persistent and determined sales force.
The only secure route to improve Belgravium's profitability is
to increase revenues and in such a hesitant market this needs sheer
dogged persistence. For example, an existing customer operating in
France had an excellent but aging system, which could not be
supported after 2010, but this still led to protracted and time
consuming negotiations with a wide range of issues raised, and
eventually resolved. The new contract, worth
EUR4 million, will be concluded in 2012, and is the result of
tenacious and determined efforts by the whole team.
Sales to the UK logistics market have been noticeably quiet.
Here, service personnel have received additional sales-oriented
product training and we are starting to see a small but significant
flow of orders being generated by those people. We have
successfully entered the specialised market of RF Tagging,
labelling and line marking, which not only generates revenue but
also opens opportunities for other sales.
In Belgravium everyone is a salesman; no more so than at Novo
IVC where persistent hard work has eventually gained orders in the
long-suffering airline retailing market. In December we won major
contracts with both Thomas Cook and Monarch and there are several
more significant orders pending.
2. Making sure that all products fit the customer's needs.
With a much greater general understanding of IT, customers now
expect more flexibility and functionality in a system. Where
practically and economically possible our policy is to make sure
they receive it and that the resulting product is completely fit
for purpose.
In 2009 we introduced a major new product, the "Boston" handheld
terminal. Since then we have decided to improve and develop this
and other products to better satisfy the customer's changing needs.
End-user consultation sessions are now an established part of
research and development project management. We go to considerable
lengths to identify technology trends and keep ahead of
requirements.
3. Supply the complete solution with increasing elements of
repeat revenue.
Historically, Belgravium has been thought of as a hardware
supplier but increasingly the contracts we gain tend to centre
around software and the other elements of a complete system.
Licences, upgrades and maintenance are all essential in a system
and all differentiate the overall product and provide repeat
revenues. In addition the Group has been successful in offering web
hosted services attracting healthy and recurring revenues. In
particular, we have has added vehicle tracking and telematics
capability to our core fuel distribution system. The company also
seeks to gain repeat revenue from GPRS data contracts and software
licencing. We have successfully added accredited "chip and pin",
Wi-Fi on-board and GPRS data transfer technology to our portfolio
providing wider recurring revenue, as well as being able to offer
"virtual" on- board products to the airline passenger such as
tickets to theme parks and other major city attractions.
4. Controlling costs and managing cash.
The Group is tightly run and in an effort to improve earnings,
we have continued to take costs out of the business. The fact that
profits for 2010 were higher than 2009 on a slightly reduced
turnover is largely due to a fall in administrative costs and
demonstrates the success of our cost cutting programme. We will
continue with this policy and as confidence in our market
increases, we will recruit relevant skilled personnel where
needed.
5. Where we do not have the expertise in a sector, seek a
strategic relationship with a partner who does.
Perhaps the best example of this policy is with "chip and pin"
technology which has long been perceived as essential by the
airlines. The hardware for such uses is relatively straight-forward
but specific expertise and authorisation is needed when dealing
with Banks and financial authorities. We wanted to retain our lead
in this market and therefore developed a "preferred supplier"
relationship with Ingenico, Europe's leading "chip and pin"
provider. This relationship was vital in our gaining the Thomas
Cook and Monarch contracts.
Another example of strategic partnership is with Accutest (part
of the Trimble Group), a UK organisation, specialising in engine
management monitoring. By taking their system hardware, we have
integrated individual driver performance reports into our live web
hosted tracking system.
Balance Sheet
In times of financial restraint cash management is critical and
Belgravium has also sought to improve its independence by repaying
the term loan. At the end of 2009, net debt stood at GBP1,424,000
but strong cash generation has meant that Belgravium had a net debt
position of GBP264,000 at the year end.
It is the Board's strategy to continue to repay the term loan as
quickly as possible. In addition, it is likely that our working
capital requirement will increase in the near term in order to
finance the expected growth in sales. The Board, therefore, does
not recommend a dividend for 2010, although it is our intention to
restore dividend payments as soon as possible.
Employees
Cost controls and the policy of widening sales activity has
meant that many employees have had to learn new skills and work
more flexibly. This combined with the frustration of a very
hesitant market has not made for an easy working environment.
Overall the response has been tremendous and I am confident that
the team is in great shape to meet the challenges of 2011.
Outlook
Belgravium has entered the new year with a better order book
than for the past three years and has made real progress against
its key strategic objectives. There is undoubtedly increased
financial confidence amongst our customers and the need for our
products has been accentuated by three years of restraint in
capital expenditure. Provided these conditions are maintained, we
expect Belgravium to return to growth in 2011.
J P Kembery
Executive Chairman
1 March 2011
Audited consolidated income statement for the year ended 31
December 2010
2010 2009
GBP'000 GBP'000
--------------------------------------------------- -------- --------
Revenue 8,200 8,286
Cost of sales (4,183) (4,084)
--------------------------------------------------- -------- --------
Gross profit 4,017 4,202
Distribution costs (91) (94)
Administrative expenses (3,440) (3,623)
Operating profit 486 485
Finance income - 4
Finance expense (54) (84)
--------------------------------------------------- -------- --------
Profit before tax 432 405
Tax (charge)/credit (50) 32
--------------------------------------------------- -------- --------
Profit for the year attributable to the owners of
the parent 382 437
--------------------------------------------------- -------- --------
Earnings per ordinary share (pence) attributable to
equity holders of the parent during the year
Basic 0.38p 0.43p
--------------------------------------------------- -------- --------
Diluted 0.38p 0.43p
--------------------------------------------------- -------- --------
Audited consolidated statement of changes in equity for the year
ended 31 December 2010
Called up Capital Profit
share Share redemption and loss
capital premium reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ----------- ------------ ------------ ---------- --------
Balance at 1
January 2009 5,047 2,932 2,100 (878) 9,201
Comprehensive
income
Profit for the
year - - - 437 437
Balance at 31
December
2009 5,047 2,932 2,100 (441) 9,638
Comprehensive
income
Profit for the
year - - - 382 382
Balance at 31
December
2010 5,047 2,932 2,100 (59) 10,020
--------------- ----------- ------------ ------------ ---------- --------
Audited consolidated balance sheet as at 31 December 2010
2010 2009
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Non-current assets
Intangible assets
----------------------------------------------------- -------- --------
Goodwill 9,124 9,124
Development expenditure 278 298
----------------------------------------------------- -------- --------
9,402 9,422
Property, plant and equipment 257 316
----------------------------------------------------- -------- --------
9,659 9,738
----------------------------------------------------- -------- --------
Current assets
Inventories 1,152 1,223
Trade and other receivables 3,466 2,527
Current tax assets 12 50
Cash and cash equivalents 346 2
4,976 3,802
----------------------------------------------------- -------- --------
Total assets 14,635 13,540
----------------------------------------------------- -------- --------
Current liabilities
Trade and other payables 3,927 2,420
Deferred income tax liabilities 61 39
Financial liabilities: Borrowings 523 815
Short term provisions 17 17
4,528 3,291
----------------------------------------------------- -------- --------
Non-current liabilities
Financial liabilities: Borrowings 87 611
----------------------------------------------------- -------- --------
Total liabilities 4,615 3,902
----------------------------------------------------- -------- --------
Capital and reserves attributable to equity holders
of the Company
Ordinary shares 5,047 5,047
Share premium 2,932 2,932
Capital redemption reserve 2,100 2,100
Profit and loss account (59) (441)
Total equity 10,020 9,638
----------------------------------------------------- -------- --------
Total equity and liabilities 14,635 13,540
----------------------------------------------------- -------- --------
Audited consolidated cash flow statement for the year ended 31
December 2010
2010 2009
GBP'000 GBP'000
-------------------------------------------------------- --------- ---------
Cash flows from operating activities
Operating profit 486 485
Depreciation 140 177
Amortisation 142 139
Movement in:
Provisions - (9)
Inventories 71 135
Trade and other receivables (939) 120
Trade and other payables 1,507 (398)
-------------------------------------------------------- --------- ---------
Cash generated from operations 1,407 649
Interest received - 4
Interest paid (54) (84)
Corporation tax received 10 -
Corporation tax paid - (34)
Net cash generated from operating activities 1,363 535
-------------------------------------------------------- --------- ---------
Cash flows from investing activities
Capitalised development costs (122) (152)
Purchase of property, plant and equipment (81) (139)
-------------------------------------------------------- --------- ---------
Net cash used in investing activities (203) (291)
-------------------------------------------------------- --------- ---------
Cash flows from financing activities
Repayment of bank borrowings (457) (141)
Net cash used in financing activities (457) (141)
-------------------------------------------------------- --------- ---------
Net increase in cash, cash equivalents and bank
overdrafts 703 103
Cash, cash equivalents and bank overdrafts at start
of the year (357) (460)
-------------------------------------------------------- --------- ---------
Cash, cash equivalents and bank overdrafts at end
of the year 346 (357)
-------------------------------------------------------- --------- ---------
1. General Information
Belgravium Technologies plc is a public limited company
incorporated and domiciled in the UK and listed on the Alternative
Investment Market. Its registered office is 151 St. Vincent Street,
Glasgow, G2 5NJ.
The consolidated financial statements were authorised for issue
in accordance with a resolution of the Directors on 1 March
2011.
2. Basis of preparation
The financial information set out in this document does not
constitute the Group's financial statements for the year ended 31
December 2010 or 31 December 2009. The annual report and financial
statements for the year ended 31 December 2010 were approved by the
Board of Directors on 1 March 2011 along with this preliminary
announcement, but have not yet been delivered to the Registrar of
Companies.
The auditors' report on the financial statements for the year
ended 31 December 2010 was unqualified and did not contain a
statement under section 498 of the Companies Act 2006. Financial
statements for the year ended 31 December 2009 have been delivered
to the Registrar of Companies. The auditors' report on the
financial statements for the year ended 31 December 2009 was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006.
The audited consolidated financial statements from which these
results are extracted have been prepared under the historical cost
convention and in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union, IFRIC
interpretations and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The accounting policies set out below represent an extract of
the policies set out in the consolidated financial statements.
There have been no changes in accounting policies in the year.
3. Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below.
(a) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any
impairment, in accordance with its accounting policy. The
recoverable amounts of cash-generating units have been determined
based on value-in-use calculations. These calculations require the
use of estimates, both in arriving at the expected future cash
flows and the application of a suitable discount rate in order to
calculate the present value of these flows.
(b) Development expenditure
The Group recognises costs incurred on development projects as
an intangible asset which satisfy the requirements of IAS 38. The
calculation of the costs incurred includes the percentage of time
spent by certain employees on the development project. The decision
whether to capitalise and how to determine the period of economic
benefit of a development project requires an assessment of the
commercial viability of the project and the prospect of selling the
project to new or existing customers.
4. Audited reconciliation of net financial liabilities
2010 2009
GBP'000 GBP'000
-------------------------------------------------------- --------- ---------
Reconciliation of net financial liabilities
Net increase in cash, cash equivalents and bank
overdrafts 703 103
Net change in bank loans and finance leases 457 141
Movement in net financial liabilities in the year 1,160 244
Net financial liabilities at beginning of year (1,424) (1,668)
Net financial liabilities at end of year (264) (1,424)
-------------------------------------------------------- --------- ---------
5. Audited earnings per ordinary share
2010 2009
------------------------------------- ------ ------
Basic earnings per ordinary share 0.38p 0.43p
Diluted earnings per ordinary share 0.38p 0.43p
------------------------------------- ------ ------
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue 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.
Reconciliations of the earnings and weighted average number of
shares used in the calculation are set out below:
2010 2009
Weighted average Weighted average
Earnings number of shares Earnings number of shares
GBP'000 (in thousands) GBP'000 (in thousands)
Basic EPS
Earnings
attributable to
ordinary
shareholders 382 100,937 437 100,937
Effect of
dilutive
securities
Options - - - -
------------------ --------- ----------------- --------- -----------------
Diluted EPS
Adjusted earnings 382 100,937 437 100,937
------------------ --------- ----------------- --------- -----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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