TIDMCOE
RNS Number : 1545C
Coe Group PLC
09 November 2009
COE Group plc
("COE", the "Company" or the "Group")
Announcement of preliminary unaudited results for the twelve months ended 30
June 2009
COE, the AIM-quoted developer and supplier of advanced video surveillance
systems, announces preliminary unaudited results for the 12 months ended 30 June
2009.
Financial Highlights
* Order book increased by 35%.
* Revenue down 9% to GBP3,828k (2008: GBP4,185k) due to timing of orders. Order
book increase expected to flow through to revenue during the second half of
FY10.
* Gross margins up to 58% (2008: 54%).
* Operating expenses reduced by 38% to GBP2,138k (2008: GBP3,436k) following the
successful restructuring of the Company cost base.
* Operating profit, before exceptional items, of GBP71k compared to a loss of
GBP1,195k for the prior year.
* Profit after taxation of GBP13k compared to a loss of GBP1,053k for the prior
year.
* Funds of GBP1,290k raised in November 2008 via an equity share issue to
strengthen the balance sheet and provide working capital to take on the larger
contracts for which the Company is now competing.
Operational Highlights
* Significant contract wins include:
* Seoul Metro, a CCTV system with a capacity of over 8000 cameras transmitted over
a network utilising our Course Wave Division Multiplexing (CWDM) technologies.
* Upgrade of transmission equipment on east/west and north/south rail lines for
Singapore MRT to add around 4,000 cameras to the existing network.
* Gunsan Port, our second major port win in Asia following our success at the Port
of Singapore ("PSA"), based on our IP digital video technology.
* Product launches:
* Ethernet data and video transmission product for hybrid video/IP network
solutions.
* H.264 video codec for real time digital video transmission and storage over IP
networks.
* CCTV control keyboard for IP networks that allows video system control over
digital networks.
* I-Vue Cameras, a range of IP/Analogue cameras providing a choice of compression
options, high performance quality and built in motion detection.
* I-Command Lite, a management and control interface for small to medium size
networks.
Ian Jefferson, Chief Executive, commented:
"There are two key achievements which stand out for me this year. The first one
is the Group turnaround. Achieving a profit in a very difficult economic climate
is a tremendous result and a testament to the talented group of people we have
at COE. The second is the Seoul Metro contract win. This contract, which is
worth in excess of GBP1m, was through a new partner in a new territory and
demonstrates the competitiveness of our solution and the quality of partners we
are attracting. In the current year we will be stepping up our business
development activity as we look to replicate this success around the world".
About COE:
COE Ltd develops and supplies integrated analogue and IP video surveillance
(CCTV) systems for some of the most complex high profile sites worldwide. COE
products and systems allow users to achieve faultless and cost-effective video
surveillance in safety critical operations and rugged environments year after
year, by delivering very high quality video, high reliability and extensive
third party integration. COE provides both IP and hybrid IP/analogue solutions
so that customers have the option of leveraging existing installations.
The Company has over 10,000 installations worldwide across three main sectors -
traffic & transport, heavy industrial and urban surveillance. References include
the London Congestion Charge network, underground and high-speed rail systems
worldwide, including the UK, Singapore, France, Spain, Germany, Hong Kong and
Delhi; airports across Germany, Hong Kong and SE Asia, and road systems
worldwide. City-centre systems include over 35 UK towns and cities, while
industrial complexes include the South Parrs gas field in the Middle East.
COE works closely with selected systems integrators, helping them to deliver the
most competitive overall solutions for end-users. The Company provides support
through the entire lifecycle including design, supply, on-site testing,
commissioning and long-term support.
Please visit www.coe.co.uk
CHAIRMAN'S STATEMENT
Operational report
I am pleased to report that the Company delivered a profit for the year and is
successfully executing its strategy for turnaround and growth. The order book
increased by 35% over the prior year and this increase is expected to flow
through to revenue during the second half of FY10. The order book increase was
bolstered by a contract win for Seoul Metro worth in excess of GBP1m. This
contract was through a new partner in a new region and demonstrates the
potential of our partner expansion programme. Business development activity to
find more new partners in other new territories is progressing well as we seek
to replicate this early success.
The security market is undergoing a shift in technology from analogue to
digital. COE is uniquely positioned to take advantage of this change being able
to provide analogue, digital and hybrid solutions. This enables the Company to
be truly agnostic when advising customers of the most appropriate technology and
provides customers with the ability to transition from analogue to digital over
time and in a more cost effective manner than replacing the entire system in one
go. For green field sites our ability to provide tailored IP solutions is also
proving to be effective against our competitors.
COE has a reputation for providing highly scalable dual redundant systems
providing unparalleled levels of reliability in extreme environments with no
single point of failure. Our products have proved to be particularly suited to
harsh environments such as railways and ports and have secured us contract wins
with PSA, the largest port in the world and Seoul Metro, the world's third
busiest metro system.
We fully expect to build on these wins as we extend our reach around the world
and, as the shift from analogue to digital is estimated to be only 10% complete,
the market opportunities are significant.
Financial report
Revenue of GBP3,828k was down 9% (2008: GBP4,185k) due simply to the longer
delivery schedules of larger contracts which consequently resulted in an
increase in the order book of 35%. The increase in the order book is expected
to flow through to revenue in the second half of FY10.
Gross margins increased from 54% to 58%. This continued growth in the gross
margin percentage is attributed to better material sourcing and the value that
customers place on our unique tailored solutions.
Overheads, excluding exceptional costs, decreased significantly during the year
to GBP2,138k (2008: GBP3,436k) due to the successful restructuring of the
Company cost base, resulting in a pre-exceptional operating profit of GBP71k
(2008: loss of GBP1,195k).
Exceptional costs of GBP206k (2008: GBPnil) were incurred in the year relating
to the re-organisation of the Group.
Tax income of GBP170k (2008: GBP62k) was recorded in the year as a result of a
research and development tax credit of GBP100k (2008: GBP62k) and recognition of
a deferred tax asset of GBP70k (2008: GBPnil).
A profit after tax of GBP13k was recorded for the year compared to a loss of
GBP1,053k in the prior year.
Balance sheet and financing
In July 2008 IPG Plc ("IPG") provided a GBP350k loan to the Group in order to
enable it to implement its restructuring plans.
In November 2008 the Group announced that it had raised approximately GBP940k by
way of a share issue. These funds were to provide the working capital headroom
required by the Group as it continued to implement its growth plans. The Group
also took the opportunity during the share issue to convert the GBP350k loan
from IPG to ordinary shares to further improve the financial position.
Board and staff changes
In July 2008 the Board announced a restructuring plan designed to deliver growth
more efficiently. As a result of the restructuring Andrew Wallace left the
business. Ian Jefferson, formerly Finance Director took over as CEO.
Conclusion and outlook
Despite very difficult market conditions the Company successfully delivered a
profitable result for the year and its business development strategy achieved
early success with a contract win, worth over GBP1m, from a new partner in a new
territory. Our focus in the current year is to accelerate the partner
recruitment process.
The security market is moving from analogue to digital. COE is uniquely placed
to capitalise on this move as its product range enables it to cost effectively
transition customers from one technology to the other. This therefore provides
good, medium to long term, opportunities for the Company.
However, the ongoing economic downturn continues to affect short term business
performance. In the UK and Europe, in particular, we have seen a significant
slow down in demand. To date this slowdown has been offset by new business wins,
primarily in Asia, and whilst the results for FY10 will be heavily weighted
towards the second half, the board remains confident that the overall result for
the current year will show a continued improvement over FY09.
Dr Alison Fielding
Chairman
9 November 2009
COE Group Plc
Ian Jefferson, Chief Executive Officer 0113 230 8800
Zeus Capital Ltd
Nick Cowles 0161 831 1512
Consolidated income statement (unaudited)
For the year ended 30 June 2009
+-----------------------------------------+------+------------+------------+
| | | Year ended | Year ended |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+-----------------------------------------+------+------------+------------+
| Revenue | | 3,828 | 4,185 |
+-----------------------------------------+------+------------+------------+
| Cost of sales | | (1,619) | (1,944) |
+-----------------------------------------+------+------------+------------+
| Gross profit | | 2,209 | 2,241 |
+-----------------------------------------+------+------------+------------+
| Total net operating expenses | | (2,344) | (3,436) |
+-----------------------------------------+------+------------+------------+
| Profit/(loss) from operations: | | | |
+-----------------------------------------+------+------------+------------+
| Operating profit/(loss) excluding | | 71 | (1,195) |
| exceptional costs | | | |
+-----------------------------------------+------+------------+------------+
| Exceptional re-organisational costs | | (206) | - |
+-----------------------------------------+------+------------+------------+
| Operating loss | | (135) | (1,195) |
+-----------------------------------------+------+------------+------------+
| Financial income | | 7 | 558 |
+-----------------------------------------+------+------------+------------+
| Financial expense | | (29) | (478) |
+-----------------------------------------+------+------------+------------+
| Loss before tax | | (157) | (1,115) |
+-----------------------------------------+------+------------+------------+
| Income tax credit | | 170 | 62 |
+-----------------------------------------+------+------------+------------+
| Profit/(loss) for the period | | 13 | (1,053) |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Basic loss per share | | 0.0p | (4.7)p |
+-----------------------------------------+------+------------+------------+
| Diluted loss per share | | 0.0p | (4.7)p |
+-----------------------------------------+------+------------+------------+
Consolidated statement of changes in equity (unaudited)
For the year ended 30 June 2009
+-----------------------------------------+------+------------+------------+
| | | Year ended | Year |
| | | 30 June | ended |
| | | 2009 | 30 June |
| | | GBP'000 | 2008 |
| | | | GBP'000 |
+-----------------------------------------+------+------------+------------+
| Profit/(loss) for period | | 13 | (1,053) |
+-----------------------------------------+------+------------+------------+
| Total recognised income and expense | | 13 | (1,053) |
+-----------------------------------------+------+------------+------------+
| Shares issued | | 1,167 | - |
+-----------------------------------------+------+------------+------------+
| Share based payments | | (18) | 64 |
+-----------------------------------------+------+------------+------------+
| Net increase/(decrease) in total equity | | 1,162 | (989) |
+-----------------------------------------+------+------------+------------+
| Total equity at start of period | | - | 989 |
+-----------------------------------------+------+------------+------------+
| Total equity at end of period | | 1,162 | - |
+-----------------------------------------+------+------------+------------+
Consolidated balance sheet (unaudited)
As at 30 June 2009
+-----------------------------------------+------+------------+------------+
| | | Year ended | Year |
| | | 30 June | ended |
| | | 2009 | 30 June |
| | | GBP'000 | 2008 |
| | | | GBP'000 |
+-----------------------------------------+------+------------+------------+
| Non-current assets | | | |
+-----------------------------------------+------+------------+------------+
| Property, plant and equipment | | 41 | 72 |
+-----------------------------------------+------+------------+------------+
| Intangible assets | | 416 | 340 |
+-----------------------------------------+------+------------+------------+
| | | 457 | 412 |
+-----------------------------------------+------+------------+------------+
| Current assets | | | |
+-----------------------------------------+------+------------+------------+
| Inventories | | 225 | 236 |
+-----------------------------------------+------+------------+------------+
| Trade and other receivables | | 1,547 | 1,104 |
+-----------------------------------------+------+------------+------------+
| Cash and cash equivalents | | 358 | 384 |
+-----------------------------------------+------+------------+------------+
| | | 2,130 | 1,724 |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Total assets | | 2,587 | 2,136 |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Current liabilities | | | |
+-----------------------------------------+------+------------+------------+
| Trade and other payables | | (1,398) | (2,020) |
+-----------------------------------------+------+------------+------------+
| | | (1,398) | (2,020) |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Non Current Liabilities | | | |
+-----------------------------------------+------+------------+------------+
| Provisions for liabilities and charges | | (27) | (116) |
+-----------------------------------------+------+------------+------------+
| | | (27) | (116) |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Total liabilities | | (1,425) | (2,136) |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Net assets | | 1,162 | - |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Shareholders' equity | | | |
+-----------------------------------------+------+------------+------------+
| Called-up share capital | | 1,455 | 1,312 |
+-----------------------------------------+------+------------+------------+
| Share premium account | | 4,653 | 3,629 |
+-----------------------------------------+------+------------+------------+
| Retained earnings | | (4,946) | (4,941) |
+-----------------------------------------+------+------------+------------+
| Total shareholders' equity | | 1,162 | - |
+-----------------------------------------+------+------------+------------+
Consolidated cash flow statement (unaudited)
For the year ended 30 June 2009
+-----------------------------------------+------+------------+------------+
| | | Year ended | Year |
| | | 30 June | ended |
| | | 2009 | 30 June |
| | | GBP'000 | 2008 |
| | | | GBP'000 |
+-----------------------------------------+------+------------+------------+
| Cash flow from operating activities | | | |
+-----------------------------------------+------+------------+------------+
| Operating loss | | (135) | (1,195) |
+-----------------------------------------+------+------------+------------+
| Depreciation | | 38 | 54 |
+-----------------------------------------+------+------------+------------+
| Amortisation of intangible assets | | 340 | 245 |
+-----------------------------------------+------+------------+------------+
| Capitalisation of research & | | (416) | (340) |
| development costs to intangible assets | | | |
+-----------------------------------------+------+------------+------------+
| Decrease/(increase) in inventories | | 11 | (69) |
+-----------------------------------------+------+------------+------------+
| Increase in trade and other receivables | | (335) | (2) |
+-----------------------------------------+------+------------+------------+
| (Decrease)/increase in trade and other | | (703) | 343 |
| payables | | | |
+-----------------------------------------+------+------------+------------+
| Decrease in provisions | | (89) | (6) |
+-----------------------------------------+------+------------+------------+
| Share based payment (income)/charge | | (18) | 64 |
+-----------------------------------------+------+------------+------------+
| Interest paid | | (29) | (478) |
+-----------------------------------------+------+------------+------------+
| Taxation received | | 62 | 42 |
+-----------------------------------------+------+------------+------------+
| Net cash outflow from operating | | (1,274) | (1,342) |
| activities | | | |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Cash flows from investing activities | | | |
+-----------------------------------------+------+------------+------------+
| Purchase of plant and equipment | | (7) | (49) |
+-----------------------------------------+------+------------+------------+
| Interest received | | 7 | 558 |
+-----------------------------------------+------+------------+------------+
| Net cash flow from investing activities | | - | 509 |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Cash flows from financing activities | | | |
+-----------------------------------------+------+------------+------------+
| Proceeds from the issue of ordinary | | 1,167 | - |
| shares | | | |
+-----------------------------------------+------+------------+------------+
| Repayment of loan notes | | - | 18,342 |
+-----------------------------------------+------+------------+------------+
| Decrease in money market investments | | - | (18,342) |
| and deposits | | | |
+-----------------------------------------+------+------------+------------+
| Net cash flows from financing | | 1,167 | - |
| activities | | | |
+-----------------------------------------+------+------------+------------+
| | | | |
+-----------------------------------------+------+------------+------------+
| Net decrease in cash and cash | | (107) | (833) |
| equivalents | | | |
+-----------------------------------------+------+------------+------------+
| Cash and cash equivalents at the | | 21 | 854 |
| beginning of the period | | | |
+-----------------------------------------+------+------------+------------+
| Cash and cash equivalent at the end of | | (86) | 21 |
| the period | | | |
+-----------------------------------------+------+------------+------------+
Notes to the preliminary results announcement for the year ended 30 June 2009
(unaudited)
1. Annual accounts
The financial information set out in this announcement, which is unaudited, does
not constitute the Group's Statutory Accounts for the year ended 30 June 2009 or
2008 but, in relation to 2008, is derived from those accounts. Statutory
Accounts for COE Group Plc for 2008 have been delivered to the Registrar of
Companies and those for 2009 will be delivered to the Registrar of Companies in
November 2009.
2. Basis of preparation
The preliminary financial information has been prepared on the historical cost
basis in accordance with International Financial Reporting Standards (IFRS). The
accounting policies used in preparing the preliminary financial information are
set out in the "Accounting Policies" section of the COE Group Plc annual
accounts 2009, which will be delivered to the Registrar of Companies in November
2009.
3. Earnings per share
Basic earnings per share is calculated as the profit/(loss) for the period
divided by the weighted average number of shares outstanding. For diluted
earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potentially dilutive ordinary shares. Under
IAS 33 'Earnings per share' any potentially dilutive ordinary shares are deemed
anti-dilutive in the event that a loss has been incurred. Consequently the basic
and adjusted loss per ordinary share for the 12-month period ended 30 June 2008
are unaffected by dilution.
+-----------------------------------------+------+------------+----------------+
| | | Year ended | Year |
| | | 30 June | ended |
| | | 2009 | 30 June |
| | | | 2008 |
+-----------------------------------------+------+------------+----------------+
| Profit/(loss) attributable to | | 13,000 | (GBP1,053,000) |
| shareholders | | | |
+-----------------------------------------+------+------------+----------------+
| Weighted average number of shares | | 30,626,805 | 22,394,397 |
+-----------------------------------------+------+------------+----------------+
| Basic/diluted profit/(loss) per share | | 0.0p | (4.7) |
+-----------------------------------------+------+------------+----------------+
4. Copies of Preliminary Results
Copies of these preliminary results announcement are available to view from the
Company's website
at www.coe.co.uk and the Annual Report and Accounts will be posted to
shareholders in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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