Embargoed: 0700hrs, 1 December 2004
Croma Group Plc
("Croma," the "Company" or the "Group")
Final Results for the Year Ended 30 June 2004
Highlights
* 489% increase in turnover in the period against corresponding period last
year
* 41% reduction in losses after tax for the period against corresponding
period last year
* Recently acquired companies, Shawley and R&D Design Services, fully
integrated within Croma and contributing to operating profit of the Group
* Group achieved profitability in final two months of period - positive
momentum has continued into current year
* AIM listing in December 2003 and secured support of leading institutional
investors, enabling the Company to fully repay debt and establish
aggressive sales and marketing platform
John French, Chairman, commented,
"This financial year has seen Croma rise from OFEX to AIM, gain the backing of
some leading institutions, repay its debts, acquire two profitable businesses
and achieve Group profitability in the final two months of the period. I am
delighted to note that this positive momentum has continued into the current
year. I look forward to continued improvement and further consolidation
opportunities in the coming months."
Chairman's Statement
I am pleased to report a significant improvement in trading for the year ended
30 June 2004. Turnover for the year increased by 489% to �695,320 compared with
a turnover of �142,092 for the corresponding period for the previous year. The
after tax loss for the year was reduced by 41% from �769,794 to �457,559. The
loss would have been further reduced, but for the delayed completion of an
order since invoiced during the first quarter of the current financial year and
the integration of the acquisition of R&D Design Services Limited ("R&D Design
Services") made in late April 2004 not being fully completed until the first
quarter of the new financial year.
In March 2004, the Group successfully completed the acquisition of Shawley
Products, a leading manufacturer of CCTV defence related systems in use with
Local Authorities and Government Agencies. This operation now trades as a
division of Croma Defence Systems Limited, and is based at Risca, South Wales.
The following month saw the acquisition of R&D Design Services. R&D Design
Services has been established for six years and is recognised as a leader in
its field, producing high technology products including the MIST system that
enables air and seaborne craft to see through sea mist, fog and other adverse
weather conditions. Its products are in use worldwide with major civil and
military authorities with applications ranging from Air Sea Rescue, Police,
Customs & Excise and other defence related activities.
The acquisition of Shawley Products and R&D Design Services had an immediate
impact on the turnover of the Group which, together with an improvement in the
performance of the foundation business Croma Defence Systems Limited, resulted
in the Group trading profitably for the last two months to the year ending 30
June 2004.
Croma Group's products are now being marketed and are in use throughout the
world. There are applications in a variety of security and defence
organisations. Our customer base includes Police, Military, Customs & Excise
and Government Agencies. In particular R&D Design Services has seen its
products in use by customers worldwide including the UK, Finland, Italy,
Australia and Scandinavia. In addition to the UK, Croma Defence has opened
markets for its products in territories including The Czech Republic, France,
Spain and Australia. Croma is extremely well placed to benefit from the
increasing focus on terrorism, illegal immigration, drugs and other related
issues as its products are developed specifically to assist in combating them.
In December 2003 the Company successfully moved to AIM from OFEX, raising
approximately �2 million before expenses, via a Placing and Offer for
Subscription. At that time we secured the support of a number of leading
institutional investors together with additional support from existing and
private investors.
As a result of the fundraising, we were able to repay debt and create a
financial and commercial platform which has allowed our operations to become
more aggressive from a sales and marketing stance, where previously the
emphasis had been on product and business development.
Outlook
I am pleased to report that the improvement in trading has resulted in a
positive start to the current year where turnover to date is already in the
region of the full year to June 2004. The acquisitions have settled into the
Group's operations. Benefits are beginning to show through the centralisation
of a number of administrative support systems and services. In trading terms,
all operations are looking at encouraging prospects for the full year, and I
hope to report continued progress at the time of the announcement of our
Interim results.
John French
Chairman
December 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2004
2004 2004 2003 2003
� � � �
Notes Unaudited Unaudited Audited Audited
Turnover
Continuing operations 156,259 142,092
Acquisitions 539,061 -
695,320 142,092
Cost of sales (338,270) (111,603)
Gross profit 357,050 30,489
Administrative expenses (855,974) (559,475)
Operating loss (498,924) (528,986)
Operating (loss)/profit
Continuing operations (657,844) (528,986)
Acquisitions 158,920 -
Loss before interest (498,924) (528,986)
Loss on disposal of - (222,791)
investments
Interest receivable 7,192 50
Interest payable and (5,917) (18,067)
similar charges
Loss before taxation (497,649) (769,794)
Taxation 40,090 -
Loss after taxation and (457,559) (769,794)
retained
Loss per share 3 (1.00p) (5.07p)
Fully diluted loss per 3 (1.00p) (5.07p)
share
The Group had no recognised gains and losses other than the loss for the year.
NOTE OF HISTORICAL COST PROFITS AND LOSSES
2004 2003
� �
Unaudited Audited
Loss for the financial period (457,559) (769,794)
Realisation of investment revaluation - (150,000)
losses of previous years
Historical cost loss before and after (457,559) (919,794)
taxation
CONSOLIDATED BALANCE SHEET
30 JUNE 2004
2004 2003
� � � �
Unaudited Unaudited Audited Audited
Fixed assets
Intangible assets 2,331,771 -
Tangible assets 106,632 53,816
Investments - -
2,438,403 53,816
Current assets
Stock 462,964 107,999
Debtors 403,081 115,661
Cash at bank 207,839 120
1,073,884 223,780
Creditors: Amounts
falling due
within one year (441,723) (471,851)
Net current assets/ 632,161 (248,071)
(liabilities)
Total assets less current 3,070,564 (194,255)
liabilities
Creditors: Amounts (815) -
falling due
after more tan one year
Provision for liabilities (2,185) -
and charges
3,067,564 (194,255)
Share capital and
reserves
Called up share capital 4,890,341 1,146,554
Share premium account 1,108,616 1,133,025
Revaluation reserve - -
Profit and loss account (2,931,393) (2,473,834)
Shareholders' funds 3,067,564 (194,255)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2004
Notes 2004 2003
� � � �
Unaudited Unaudited Audited Audited
Net cash outflow from
operating activities 4 (761,590) (425,749)
Return on investments
and
servicing of financing
Interest paid (5,917) (5,118)
Interest received 7,192 50
1,275 (5,068)
Taxation recovered 27,640 -
Capital expenditure and
financial
Investment
Purchase of intangible (1,000) -
fixed assets
Purchase of tangible (23,434) (6,375)
assets
Receipts from sales of 3,148
tangible assets
Sale of investments - 108,458
(21,286) 102,083
Acquisitions and
disposals
Purchase of subsidiary (2,500,100) -
undertakings
Net cash acquired with 21,529 -
subsidiaries
(2,478,571) -
Cash outflow before use
of liquid
resources and financing (3,232,532) (328,734)
Financing
Issue of equity share 4,221,467 190,975
capital
Cost of issue of shares (502,089) (33,000)
(Decrease)/increase in (209,358) 166,369
other loans
Capital element of (815) -
finance lease
Net cash inflow from 3,509,205 324,344
financing
Increase/(decrease) in 5 276,673 (4,390)
cash
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 JUNE 2004
1 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 2004, 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.
2 Taxation
There is no liability to taxation in the period due to losses incurred. The tax
credit represents research and development tax credits receivable.
3 Loss per share
The calculation of the loss per share is based on the loss for the year and on
the weighted average number of ordinary shares in issue and ranking for
dividend in the period.
2004 2003
Unaudited Audited
Ordinary
Loss for the year �(457,559) �(769,794)
Weighted average number of shares 45,323,440 15,188,248
Fully diluted
Loss for the year �(457,559) �(769,794)
Weighted average number of shares and 45,323,440 15,188,248
potential shares
The share options in issue are not considered dilutive.
4 Reconciliation of operating loss to net cash
outflow from operating activities
2004 2003
� �
Unaudited Audited
Operating loss (498,924) (528,986)
Depreciation of tangible fixed assets 23,201 20,217
Amortisation of intangible fixed assets 34,313 39,096
(Increase) in stock (63,819) (14,513)
(Increase)/decrease in debtors (226,751) 49,334
(Decrease)/increase in creditors (29,610) 9,103
Net cash outflow from operating activities (761,590) (425,749)
5 Reconciliation of net cashflow to movement
in net debt
2004 2003
� �
Unaudited Audited
Increase/(decrease) in cash 276,673 (4,390)
Cash outflow/inflow from increase in debt 210,173 (166,369)
Change in net funds resulting from cash 486,846 (170,759)
flows
Non cash movements (4,890) (42,989)
Opening net (debt) (278,192) (64,444)
Closing net funds/(debt) 203,764 (278,192)
Represented by: � �
Cash at bank 207,839 120
Bank overdraft - (68,954)
Other loans - (209,358)
Finance leases (4,075) -
203,764 (278,192)
For any further information please contact,
John French, Chairman and Chief Executive
Croma Group plc - 01432 373 030 / 07836 722 482
Ben Simons / Chris Roberts
Hansard Communications
020 7245 1100
END
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