RNS Number:6654A
Croma Group PLC
31 March 2006
31 MARCH 2006
CROMA GROUP PLC
("Croma" or "the Group")
INTERIM RESULTS
FOR THE SIX MONTHS TO 31 DECEMBER 2005
The Board of Croma, the specialists in the design, development and production of
overt and covert surveillance, security and defence related products, announces
financial results for the six months to 31 December 2005.
CORPORATE HIGHLIGHTS
*Croma Vigilant Limited and Croma Photobase Limited established through
successful acquisitions;
*Croma Vigilant Limited already secures in excess of #1m of additional
business on an annualised basis;
*Sebastian Morley assumes role as Group Managing Director;
*Shareholder base expanded through existing and new Institutional
Holdings;
*First wireless 'RVS' CCTV system sold to a Council based in the South of
England; and
*Operational benefits already stemming from recent relocation of Croma
Defence Systems Limited.
Commenting on today's announcement, John French, Executive Chairman of Croma,
said: "The period gone has encompassed two successful acquisitions, one Board
appointment, the securing of #1m plus ongoing business and the sale of the
Group's first wireless Remote Video System CCTV.
"The ongoing policy of the Group will be to continue to accelerate the growth of
the current business and to seek compatible acquisitions to enable it to further
consolidate its position in the sector."
Enquiries:
Croma Group plc
John French, Executive Chairman Mobile: 07836 722 482
Sebastian Morley, Group Managing Director
Bishopsgate Communications Ltd. Tel: 020 7430 1600
Dominic Barretto Mobile: 07930 450 156
Scott Robertson
CHAIRMAN'S STATEMENT
I am pleased to report on another highly active period for your Group, which has
seen two successful acquisitions, one Board appointment, the securing of #1
million plus ongoing business and the sale of the Group's first wireless Remote
Video System CCTV.
Please find below the financial results of the Group for the six months to 31
December 2005.
Financials
Turnover for the six month period was #908,649 compared with #993,594 for the
same period last year. The loss before taxation is #298,306 compared with
#396,351 for the same period to December 2004, a reduction of 25%.
Strong operational progress
The Group has continued to restructure and reorganise its trading activities.
Following the 2004 acquisitions of R&D Design Services Limited, and the brand
and products of Shawley, Shawley now operates as 'Croma Shawley', a division of
Croma Defence Systems Limited and shares in the benefits of a single location
for both the CCTV and surveillance equipment divisions near Newport, South
Wales. As indicated in my previous statement, the operating base of Croma
Defence Systems Limited in Hereford was relocated during this period of time.
This will bring a number of operating benefits going forward during the course
of the second half of the year with the Group having disposed of the surplus
premises at the time of the relocation.
Croma Shawley has been actively engaged during this period in developing and
enhancing both its existing products and new products having overcome some
initial development issues at the prototype stage. The production and
introduction to the market of the resultant product, the King integrated pan &
tilt CCTV unit is now taking place.
The Company has sold their first wireless RVS (Remote Video System) CCTV system
to a Council based in the South of England who is moving from a conventional
system to a wireless system in order to reduce running costs and give greater
flexibility. This sale gives Croma Shawley a valuable reference site from which
they can demonstrate the system to other Councils and start the move to more
cost effective surveillance systems.
Croma Shawley exports approximately 35% of sales with a substantial order
recently being secured from Dubai. It is anticipated that the fulfilment of this
order will lead to further substantial enquiries from this territory.
R&D Design continues with a strong order book going forward, and has been
successful in establishing itself as a supplier of equipment to leading defence
contractors and manufacturers in addition to its traditional market of selling
direct to end users. R&D equipment is now in use with fixed wing, helicopter and
a range of surface vessel applications for both civil, government agency and
military use.
Two successful acquisitions
During this period of time the Group has been actively seeking to broaden its
product and customer base to achieve the objective of establishing its ongoing
position as an integrated supplier of surveillance, security and defence related
products and services. The efforts to seek such opportunities during the first
half of the year enabled us complete two acquisitions during the early part of
the second half of our financial year.
The Group completed the acquisition of Photobase Limited, to trade as Croma
Photobase Limited, a UK based business which designs, installs, services and
maintains biometric identification and access-control solutions to meet the
physical security needs for a wide range of locations, budgets, security
policies and organisation types.
The second acquisition was that of Vigilant Security (Scotland) Limited
("Vigilant"), to trade going forward as Croma Vigilant Limited. Vigilant
provides a range of services related to asset protection, operating and selling
aggressively on the ex-military brief. Clients are primarily from the
International and UK business community together with local authorities seeking
premium services and high standards in areas of security. Within the last two
weeks, Croma Vigilant has secured in excess of #1m of additional business on an
annualised basis.
Board re-organised
Following the acquisition of Vigilant, the Board announced in February the
appointment of Sebastian Morley to the Board as an Executive Director.
With the satisfactory completion of the two recent acquisitions, and ambitious
plans for the future development of the Group as a whole, I believe the time is
right for me to share some of the day-to-day Executive responsibilities of the
running of the Group. Having discussed the matter with my colleagues the
decision has been made to create the position of Group Managing Director, a role
which will be taken up by Sebastian Morley, currently a Main Board Director.
The intention is for me to concentrate on the corporate and business development
of the Group in terms of our expansion plans and future growth, with Sebastian
assisting in the day-to-day operational matters of the Group's subsidiaries.
This is an important step in creating a strong team for future development and
operational effectiveness.
Mr Morley established Vigilant in 2001 and has been instrumental in the
development of that company. Prior to this, he worked with organisations related
to the surveillance and security sector, and from 1994 held the position of
Operations Director at Profile Security Services.
Mr Morley was educated at Eton and attended the Royal Military Academy at
Sandhurst. He was subsequently commissioned in The Black Watch with the rank of
Captain and undertook a period with the United Kingdom Special Forces where he
held the rank of Major. This hands-on experience gives him a unique insight into
the sector.
Expansion of shareholder base
As a result of the acquisitions, the Board has been able to expand and
strengthen the Group's shareholder base, with support from existing and new
institutional investors.
In February, the Group was advised that Framlington and Noble Fund Managers
increased their holdings to 11,956,522 ordinary shares, representing 10.30% of
the issued share capital, and 10,478,261 ordinary shares representing 7.40% of
the issued share capital, respectively.
The Company also announced that two new institutional investors took part at the
time of the Placing; Artemis Investment Management Limited holding a notifiable
interest of 5,000,000 shares, representing 3.73% of the issued share capital of
the Company, and Calculus Capital and the Neptune-Calculus Income and Growth
VCT.
This support is encouraging as it will doubtless provide a strong base for the
further development of the Group in terms of consolidating the sector. With the
impact from the acquisitions and the introduction of new products from Croma
Shawley, I would expect to see a more stable trading pattern during the next
full financial year.
Opportunities to benefit from cross referrals amongst the consolidated customer
and product base are considerable and represent a significant opportunity to
further the Group's intention to consolidate its position in the sector. The
acquisitions, together with the improving performance of the Group overall, as
the result of the changes introduced during the second half of last year, and
the early part of the current year, will reflect in an improving position for
the period to June 2006 and going forward in successive years. The broader
products and structure of the Group as now expressed provides a much improved
platform for growth in all areas.
Outlook
The ongoing policy of the Group will be to continue to accelerate the growth of
the current business and to seek compatible acquisitions to enable it to further
consolidate its position in the sector. A number of such opportunities have been
identified and tentative discussions are expected to take place in the near
future.
John French
Executive Chairman
31 March 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
Notes 6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
Turnover 908,649 993,594 1,911,425
Cost of Sales (361,979) (505,081) (903,948)
__________ __________ __________
Gross Profit 546,670 488,513 1,007,477
Administrative Expenses (830,636) (883,933) (1,934,953)
__________ __________ __________
Operating loss 3 (283,966) (395,420) (927,476)
Interest receivable 121 300 1,329
Interest payable (14,461) (1,231) (46,431)
__________ _________ _________
Loss on ordinary
activities before
taxation (298,306) (396,351) (972,578)
Taxation 2 - - 812
_________ _________ _________
Loss after taxation and
for period (298,306) (396,351) (971,766)
========== ========== ==========
Loss per share 4 (0.31)p (0.43)p (0.98)p
========== ========== ==========
Fully diluted loss per
share 4 (0.31)p (0.43)p (0.98)p
========== ========== ==========
CONSOLIDATED BALANCE SHEET
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
Fixed assets
Intangible assets 2,027,774 2,230,740 2,129,106
Tangible assets 95753 102,447 98,814
_________ __________ _________
2,123,527 2,333,187 2,227,920
_________ __________ _________
Current assets
Stock 572,283 556,473 531,150
Debtors 459,365 573,297 706,846
Cash - - 8,443
__________ _________ _________
1,031,648 1,129,770 1,246,439
Creditors: Amounts falling due
within one year (952,456) (789,559) (1,173,133)
________ _________ ________
Net current assets 79,192 340,211 73,306
________ _________ _________
Total assets less current
liabilities 2,202,719 2,673,398 2,301,226
Creditors: Amounts falling due
after one year - (2,185) (1,373)
________ ________ ________
2,202,719 2,671,213 2,299,853
========== ========== ==========
Share capital and reserve
Called up share capital 5,323,791 4,890,341 5,073,591
Share premium account 1,126,906 1,108,616 1,129,421
Profit and loss account (4,247,978) (3,327,744) (3,903,159)
________ ________ ________
Equity shareholders' funds 2,202,719 2,671,213 2,299,853
========== ========== ==========
This interim financial information was approved by the Board of Directors on 17
March 2006
DJ Bretel
Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
Notes 6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
Net cash outflow from 5 (212,933) (412,311) (867,894)
Operating activities
__________ __________ __________
Return on investments
And servicing of financing
Interest received 121 300 1,329
Interest paid (14,161) (1,231) (7,005)
__________ __________ __________
(14,040) (931) (5,676)
__________ __________ __________
Taxation recovered - - 36,669
Capital expenditure and
Financial investment
Purchase of intangible fixed - - -
assets
Purchase of tangible
fixed assets (9,950) (8,803) (20,882)
Proceeds from sale of - - -
tangible fixed assets
__________ __________ __________
(9,950) (8,803) (20,882)
Acquisitions and disposals __________ __________ __________
Purchase of subsidiary - - -
undertaking
Net cash acquired with - - -
subsidiary
__________ __________ __________
- - -
__________ __________ __________
Cash outflow before use (236,923) (422,045) (857,783)
of liquid resources and
financing
__________ __________ __________
Financing
Issue of equity share
capital - - 210,400
Costs of issue of
equity share capital - - (6,345)
Repayment of other loans - - -
Repayment of the
capital element of hire
purchase (1,630) (1,630) (3,260)
__________ __________ __________
(1,630) (1,630) 200,795
(Decrease)/increase in cash __________ __________ __________
(238,553) (423,675) (656,988)
========== ========== ==========
NOTES TO THE INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
1.Financial Information
The financial information above does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985.
The interim financial information has not been audited.
2.Taxation
No liability to taxation arises due to the loss incurred.
3.Operating loss
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
This is stated after charging:
Depreciation of tangible fixed
assets 13,011 12,988 28,700
Amortisation of intangible
fixed assets 101,031 101,031 202,665
========== ========== ==========
4.Loss per share
The loss per share is based on the loss for the period and the weighted average
number of ordinary shares in issue and ranking for dividend.
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
Loss for the period (298,306) (396,451) (971,766)
========== ========== ==========
Weighted average number of
shares 96,740,874 91,961,744 98,682,760
========== ========== ==========
Loss per share (0.31p) (0.43p) (0.98p)
========== ========== ==========
Fully diluted loss per share (0.31p) (0.43p) (0.98p)
========== ========== ==========
The directors do not consider the share options in issue to be dilutive.
5.Reconciliation of operating loss to net cash outflow from operating activities
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
# # #
Operating loss (312,646) (395,420) (927,476)
Depreciation of tangible fixed
assets 13,011 12,988 28,700
Amortisation of intangible
fixed assets 101,031 101,031 202,665
(Increase) in stock (41,133) (93,509) (68,186)
(Increase)/decrease in debtors 247,481 (170,216) (340,434)
Increase in creditors (220,677) 132,815 236,837
__________ __________ __________
Net cash outflow from operating
activities (212,933) (412,311) (867,894)
========== ========== ==========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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