RNS Number:1485N
Croma Group PLC
04 December 2006
4 DECEMBER 2006
CROMA GROUP PLC
("Croma" or "the Group")
FINAL RESULTS
FOR THE YEAR TO 30 JUNE 2006
The Board of Croma, the AIM listed surveillance security and homeland defence
specialist, is pleased to announce its Final Results for the year to 30 June
2006, which reflect an increase in turnover and reports on multiple new
contracts won and repeat business.
KEY POINTS
*47.4% increase in turnover like for like;
*New acquisitions fully embedded and trading well;
*Rapid recovery from previously announced delays;
*Multiple new contracts secured, together with strong repeat business;
*Heightened awareness of surveillance and homeland security needs; and
*Turnover up 161% for the first four months of the current year.
John French, Executive Chairman of Croma, said: "The current year has started
well with turnover for the first four months up from #627,000 to #1,654,000, an
increase of 161 %. This increase is due to contributions from acquisitions which
are now fully integrated as well as new business from both new and existing
clients throughout the Group."
"The Board believes the progress to date will continue and be reflected in the
results going forward."
Enquiries:
Croma Group plc
John French, Chairman & Chief Executive Mobile: 07836 722 482
Bishopsgate Communications Ltd. Tel: 020 7562 3350
Dominic Barretto Mobile: 07930 450 156
Jenni Herbert
CHAIMAN'S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2006
I have pleasure in announcing the results for the Group for the year ended June
2006.
Financials
Turnover for the year was #2,817,875 compared with #1,911,425 for the
comparative period last year, an increase of 47.4%. Losses were #1,090,474
compared with #971,766 for the previous year after goodwill amortisation of
#333,164 compared with #202,665 in the previous year, an increase of 12.2%. The
operating loss, before amortisation of goodwill, increased by 7.4% on the
previous year. The performance was not as initially expected, due to delays in
the introduction of new products in one division and in the take up of the
delivery of orders from a major customer in another which adversely impacted
gross margins. In addition, the acquisition of Vigilant Security (Scotland)
Limited, a known lower margin business, has reduced the overall margins achieved
for the Group. I am pleased however to report that all these matters have now
been satisfactorily resolved, which is reflected in the improved performance at
the start of our current year, as highlighted below.
The Company has in issue an instrument creating #1,000,000 Convertible Loan
Notes of which #600,000 have been drawn down and has a #240,000 overdraft
facility with Barclays Bank plc.
The two acquisitions scheduled for February were completed satisfactorily and
made a valuable contribution to the last quarter to the year to June 2006. The
relocation of Croma Defence Systems to Risca, South Wales to share a site with
Croma Shawley, has proved to be beneficial in terms of reducing operating costs
and improving general communications. Furthermore, in January, the Group
completed the relocation of its Head Office function to a small unit in
Hereford, resulting in a number of operational benefits and cost savings which
have begun to have a beneficial effect.
The current year has started well with turnover for the first four months up
from #627,000 to #1,654,000, an increase of 164%. This increase is due to
contributions from the acquisitions which are now fully integrated, and new
business from new and existing clients throughout the Group.
Operational Progress
As mentioned, we satisfactorily completed two acquisitions during the third
quarter of our financial year. Vigilant Security (Scotland) Limited became a
wholly owned subsidiary and will from the New Year trade as Croma Vigilant
Limited, reflecting the development of the Croma brand. I am pleased to say the
company has seen an increase in excess of 22% in its turnover since joining the
Group and it continues to secure additional business from both existing and new
customers. This has been a highly beneficial acquisition, resulting in a
valuable contribution to the overall progress of the Group. In addition, the
acquisition is proving to be increasingly successful in its specific field of
operations, providing a range of security services in the area of asset
protection to the industrial, commercial and public utilities markets.
The second acquisition was that of Photobase Limited, which will trade as Croma
Biometrics Limited. As the name implies this company operates in the growing
market of biometric identification and access-control solutions, which the
company designs, installs, services and maintains. Recent new orders include an
installation for a leading Police Authority, a biometrics attendance record for
an international food manufacturer and a biometric visitor booking and ID system
at high security centres for a major bank.
With the significant changes to the sales and marketing operation for the year
going forward at Croma Shawley, our CCTV operation, the Board expects to see
developing sales. The division has recently completed a number of new product
developments which are being introduced to the market including the use of
wireless technology. The initial response to these products has already resulted
in orders from a major UK Police Force, an international installer and
distributor of CCTV.
R&D Design Systems Limited continues to enhance its relationship as an innovator
and manufacturer of surveillance monitors with major customers operating in the
defence sector including a significant rolling contract for a worldwide
manufacturer of helicopters and a number of projects for a major international
defence contractor. It has also recently received its first breakthrough into
the North American defence market for its products and systems.
In my ongoing role as Executive Chairman and Chief Executive, I have, for
sometime, been looking to strengthen the operational capacity of the Main Board.
With the successful acquisition of Vigilant, I am pleased to say we were able to
benefit from additional input from Sebastian Morley, Managing Director of
Vigilant, who joined the Board of Croma Group plc in February 2006 and was
appointed Group Managing Director in May 2006. As such, Mr Morley has been able
to contribute to the day to day responsibilities in terms of managing the
operational subsidiaries, allowing me to concentrate even more on Group and
corporate issues, together with the short and medium term growth of the Group as
a whole.
Outlook
In its present form, with four clearly defined active operations, we have made
significant progress in our stated plan to build a solid base from which we can
drive the business forward in this rapidly expanding business sector. Croma is a
business of its time, addressing the highly topical issues of surveillance and
homeland security. Croma's products provide leading edge security solutions and
products to commercial organisations such as Government Agencies, Local
Authorities and Police Forces. As reported at the time of the Group's September
update, the current order book stands at circa #2.5 million - inclusive of #1
million worth of contracts secured in September - underpinning the fact that the
Group is making progress on new business.
As both governments and private bodies bear responsibility for the protection of
individuals and the community as a whole, safety and security is increasingly
becoming a high priority. Croma continues to provide innovative and quality
solutions to meet this escalating demand with their existing surveillance &
counter surveillance products, systems and services. The Group's current product
portfolio covers Biometrics, CCTV solutions, surveillance monitoring and asset
protection.
With the improvement in trading in the current year we are well placed to be
able to accelerate the growth not only of our core businesses, but continue to
seek compatible acquisitions and relationships within the marketplace.
I would like to take this opportunity to express my appreciation to all the
management, staff and shareholders for their support during the year.
John French
Executive Chairman
4 December 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2006
2006 2005
# # # #
Turnover
Continuing operations 1,599,032 1,911,425
Acquisitions 1,218,843 -
-------- --------
2,817,875 1,911,425
Cost of sales (1,567,741 (903,948)
(1,535,248
--------- ---------
Gross profit 1,250,134 1,007,477
Goodwill amortisation (333,164) (202,665)
Other operating (2,028,660) (1,732,288)
expenses
--------- ---------
Operating loss (1,111,690) (927,476)
Continuing operations (1,116,932) (927,476)
Acquisitions 5,242 -
-------- --------
Loss before interest (1,111,690) (927,476)
Interest receivable 920 1,329
Interest payable and
similar (25,016) (46,431)
charges
--------- ---------
Loss before taxation (1,135,786) (972,578)
Taxation 45,312 812
--------- ---------
Retained loss after (1,090,474) (971,766)
taxation
Loss per share (1.04) (0.98)p
CONSOLIDATED BALANCE SHEET
30 JUNE 2006
2006 2005
# # # #
Fixed assets
Intangible assets 4,949,606 2,129,106
Tangible assets 237,855 98,814
-------- ---------
5,187,461 2,227,920
Current assets
Stock 540,961 531,150
Debtors 1,306,835 706,846
Cash at bank 242,083 8,443
-------- --------
2,089,879 1,246,439
Creditors: Amounts falling
due
within one year (2,963,570) (1,173,133)
-------- --------
Net current (liabilities)/ (873,691) 73,306
assets -------- ---------
Total assets less net 4,313,770 2,301,226
current
(liabilities)/assets
Creditors: Amounts falling
due
after more than one year (303,844) -
Provision for liabilities (27,414) (1,373)
and
charges
-------- ---------
3,982,512 2,299,853
======== =========
Share capital and reserves
Called up share capital 7,703,591 5,073,591
Share premium account 1,272,554 1,129,421
Profit and loss account (4,993,633) (3,903,159)
-------- ---------
Shareholders' funds 3,982,512 2,299,853
======== =========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2006
2006 2005
# # # #
Net cash outflow from
operating activities (584,346) (867,894)
Return on investments and
servicing of financing
Interest paid (25,016) (7,005)
Interest received 920 1,329
--------- --------
(24,096) (5,676)
Taxation (paid)/received (128,084) 36,669
Capital expenditure and
financial investment
Purchase of intangible assets - -
Purchase of tangible assets (15,654) (20,882)
--------- --------
Receipts from sales of 4,875 -
tangible
assets
--------- --------
(10,779) (20,882)
Acquisitions and disposals
Purchase of subsidiary (2,096,000) -
undertakings
--------- --------
Net cash acquired with (151,844) -
subsidiaries
--------- --------
(2,247,844) -
----------- --------
Cash outflow before use of (2,995,149) (857,783)
liquid resources and
financing
Issue of equity share capital 2,815,133 210,400
Cost of issue of shares - (6,345)
Increase in other 231,203 -
loans
Capital element of finance (9,876) (3,260)
leases --------- --------
3,036,460 200,795
--------- ---------
Increase/(decrease) in cash 41,311 (656,988)
========= =========
Financial information
The financial information included in the above statement is an abridged version
of the Group's accounts for the period ended 30 June 2006, and does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985.
The financial statements have not yet been approved by the Board and the
Auditors' Report has yet to be signed. Therefore, these financial statements
have not yet been delivered to the Registrar of Companies.
---ends---
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