Interim Results - Replacement
November 30 2007 - 11:44AM
UK Regulatory
RNS Number:9383I
Reflec PLC
30 November 2007
The following announcement replacec RNS No: 8395I, released today at 07.01
hours. The announcement should have included the Independent Review
Report by BDO Stoy Hayward LLP. In addition certain revisions to the
text have been made.
REFLEC PLC
("Reflec" or "the Group")
INTERIM RESULTS
FOR THE HALF YEAR PERIOD ENDED 31 AUGUST 2007
Reflec (AIM ticker: REF) is a specialist developer and manufacturer of
retro-reflective inks, fabrics, ancillary products and powder processing. The
Group moved into the security consultancy sector in 2006 with a majority stake
in Perseus Consulting.
Operational and Financial Review
At the time of the final results in August 2007 I noted that demand for the
powder and media products during the early months of this financial year had
been slow, which has impacted the results for the first half year. Group revenue
for the six months ended 31 August 2007 was 11% lower, at #2.25m (2006: #2.53m).
Profit before tax was #101,166 compared with a profit of #207,016 in the same
half year last year.
At Evolution turnover was 14% lower at #702,669 and profits reduced by 28% to
#200,974. Currently we see few signs of an upturn in this sector.
Within Media, turnover was 4% lower at #661,314, while profit fell 10% to
#163,829, compared to the previous half year. The principle factor moderating
the first half sales and profits for Media was the focus on two significant
product development projects aimed more at the consumer market where the Board
believes it will see significant growth potential. Costs associated with the
development of these two products, which amounted to #73,802 in the period, have
been capitalised and sales are expected to commence during 2008.
I am pleased to report that our recently acquired security business, Perseus,
achieved profitability of #12,050 on sales of #226,438. Our relationship with
Serco plc and development of the risk analysis systems is making good progress
and we expect Perseus to expand further during next year.
Paul Holdcroft is appointed Group Managing Director with effect from 3 December
2007. We are also appointing Angus MacPherson on 3 December as a non-executive
Director. Angus is an experienced international banker with over 20 years
experience in the corporate finance business. We believe that Angus will greatly
assist in the future development of the Group.
On 24 October 2007, the Share Premium Account was cancelled as confirmed by
Order of the High Court.
Current Trading & Outlook
Perseus has recently commenced a number of discussions with companies which it
believes may lead to contracts in 2008. The broad scope and nature of this
division means it is working within a number of industries, including: defence,
government, security, infrastructure and industrial, in both domestic and
international markets.
As announced earlier in the year, the Group is pursuing acquisition
opportunities within the security sector, which will bolster our presence in
this large and fast expanding market. Negotiations are in progress for the
acquisition of an established, growing and profitable business which would
enable Reflec to establish and develop a new Homeland Security division. We hope
to make a further announcement on this in the New Year.
The Board remains positive for the full year and expects that, in the absence of
unforeseen circumstances, the outcome for the full year will be in line with its
expectations. The Board looks forward to 2008 with confidence.
Tim Hearley
Executive Chairman
Reflec Plc
30 November 2007
For further information, please contact:
Reflec Plc
Tim Hearley, Chairman 020 7240 6960
Seymour Pierce
Mark Percy 020 7107 8000
Conduit PR
Christian Taylor-Wilkinson 020 7429 6666
Condensed consolidated income statement for the half year ended 31 August 2007
(unaudited)
Half year Half year Year ended 28 February 2007
ended 31 ended 31
August 2007 August 2006
Existing New Business Total
Business
#'000 #'000 #'000 #'000 #'000
Revenue 2,252 2,539 4,259 580 4,839
Cost of sales (1,036) (1,167) (2,125) (363) (2,488)
Gross Profit 1,216 1,372 2,134 217 2,351
Distribution costs (7) - (20) - (20)
Administrative costs (1,107) (1,164) (1,803) (353) (2,156)
Loss on partial disposal of - - - (75) (75)
subsidiary
Finance costs (1) (2) (1) (2) (3)
Finance income - 1 5 - 5
Profit /(loss) before tax 101 207 315 (213) 102
Income tax - - 123 - 123
Profit for the period 101 207 438 (213) 225
Earnings per share
- Basic 0.91 1.85 2.01
(pence)
- Diluted 0.90 1.84 2.00
(pence)
There were no new businesses during the current period or the prior comparative
period. All activities relate to continuing operations
Condensed consolidated statement of recognised income and expense for the half
year ended 31 August 2007
(unaudited)
Half year Half year Year to 28
ended 31 ended 31 February
August 2007 August 2006 2007
#'000 #'000 #'000
Exchange differences on translation (28) 88 (141)
of the financial statements of
foreign entities
Exchange differences realised in year - - 39
transferred to income statement
Net gains/(losses) not recognised (28) 88 (102)
in income statement
Profit for the period 101 207 225
Total recognised income and expense 73 295 123
for the period
Condensed consolidated balance sheet at 31st August 2007
(unaudited)
Half year Half year Year to 28
ended 31 ended 31 February 2007
August 2007 August 2006
#'000 #'000 #'000
Assets
Non-current assets
Property, plant and equipment 953 1,096 995
Intangible assets 1,024 815 888
Deferred tax asset 123 - 123
Total non-current assets 2,100 1,911 2,006
Current assets
Inventories 410 684 372
Trade and other receivables 1,690 1,369 1,387
Cash and cash equivalents - 340 356
Total current assets 2,100 2,393 2,115
Total assets 4,200 4,304 4,120
Current liabilities
Bank overdraft 87 139 1
Trade and other payables 517 581 536
Total current liabilities 604 720 537
Total net assets 3,596 3,584 3,584
Capital and reserves attributable
to
equity holders of the company
Share capital 558 558 558
Share premium reserve 13,688 13,749 13,749
Foreign exchange reserve (128) (87) (100)
Retained earnings (10,522) (10,636) (10,623)
Total equity 3,596 3,584 3,584
Condensed consolidated cash flow statement for the half year ended 31 August
2007
Half year Half year Year to 28
ended 31 ended 31 February 2007
August 2007 August 2006
#'000 #'000 #'000
Operating activities
Profit before tax 102 207 102
Adjustments for:
Amortisation 5 10 22
Depreciation 55 42 136
Exchange differences 3 - 13
Effect of joint - exchange - - (39)
venture differences
realised
- - - (36)
intercompany
write down
63 52 96
Operating profit before changes in
working capital and provisions 165 259 198
Increase in trade and other (303) (381) (388)
receivables
(Increase)/decrease in inventories (38) 53 415
Decrease/(increase) in trade and (19) 29 (29)
other payables
(360) (299) (2)
Cash (absorbed by)/generated from (195) (40) 196
operating activities
Investing activities
Purchases of property, plant and (13) (125) (222)
equipment
Purchase of intangibles (67) - -
Disposals - - 103
Research and development (74) (305) (383)
expenditure
Interest received - - 5
(154) (430) (497)
Financing activities
Interest (paid)/received (1) 2 (3)
Share consolidation costs (61) - -
(Decrease) in cash
and cash equivalents (411) (468) (304)
Changes in foreign exchange (31) (3) (13)
Cash and cash equivalents at 355 672 672
beginning of year
Cash and cash equivalents at end (87) 201 355
of year
Notes to the interim statement
1. The interim statement for Reflec plc relates to the consolidated results for
the six months ended 31 August 2007 and the comparative results for the year
ended 28 February 2007 and the six months ended 31 August 2006. This statement
is unaudited but has been reviewed by the group's auditors, whose report is
enclosed below.
The comparative figures for the year ended 28 February 2007 are not the group's
statutory accounts for the financial year. Those accounts have been reported on
by the group's auditors and delivered to the Registrar of Companies. The report
of the auditors was unqualified and did not include any references to any
matters to which the auditors drew attention by way of emphasis without
qualifying their reports and did not contain statements under Section 237 (2) or
(3) of the Companies Act 1985.
2. The interim statement has been prepared on the basis of the accounting
policies set out in the statutory financial statements for the year ended 28
February 2007, prepared in accordance with International Financial Reporting
Standards as adopted by the European Union. The balance sheet at 28 February
2007 and the results for the year then ended have been abridged from the audited
accounts for the year ended 28 February 2007.
The comparative figures for the half year ended 31 August 2006 have been
restated from those previously reported under UK GAAP to International Financial
Reporting Standards as adopted by the European Union on a basis consistent with
the restatement adjustments set out in the accounts for the full year ended 28
February 2007. The impact of the restatement on profit before tax and net assets
was an increase of #10,000 and an increase of #75,000 respectively.
3. An Extraordinary General Meeting of Reflec plc was held on 26th April 2007
and resolutions were passed consolidating the shares of the company so that 50
shares of 0.1 pence became one new share of 5 pence.
A resolution was also passed, subject to Court approval, cancelling the share
premium account which amounted to #13,688,000. Final approval to this change was
obtained from the Court on 24 October 2007 after the Balance Sheet date. If
Court Approval had been obtained prior to the 31st August, 2007 the Group's
retained earnings would have amounted to a positive balance of #3,166,000.
Costs associated with the consolidation of shares amounted to #61,215 and has
been written off to the Share Premium account.
4. As a result of the share consolidation effective 26 April 2007 and in
accordance with the provisions of IAS 33 Earnings per share, the weighted
average number of ordinary shares in issue has been restated as if the share
consolidation had occurred prior to 31 August 2006. Therefore the calculation of
earnings per share for the period to 31 August 2007 is based upon earnings of
#101,166 and a weighted average number of ordinary shares in issue during the
period of 11,268,257. The calculation of the earnings per share for the year
ended 28 February 2007 is based on a profit of #225,000 and a weighted average
number of ordinary shares of 11,268,257. The calculation of the earnings per
share for the period ended 31 August 2006 is based on a profit of #206,860 and
on a weighted average number of ordinary shares of 11,268,257.
5. Copies of the interim statement will be posted on the Reflec.com web site and
are available from the Company Secretary at the Registered Office, Road One,
Winsford Industrial Estate, Winsford, Cheshire, CW7 3QQ.
Independent Review Report to Reflec plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
August 2007 which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Total Recognised Income and Expense, the
Condensed Consolidated Balance Sheet, the Condensed Consolidated Cash flow
Statement and the related notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the rules of the
London Stock Exchange for companies trading securities on the AIM market which
require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of the London Stock
Exchange for companies trading securities on the AIM market and for no other
purpose. No person is entitled to rely on this report unless such a person is a
person entitled to rely upon this report by virtue of and for the purpose of our
terms of engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for this report
to any other person or for any other purpose and we hereby expressly disclaim
any and all such liability.
Scope Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'', issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 August 2007 is not prepared, in all material
respects, in accordance with the rules of the London Stock Exchange for
companies trading securities on the AIM market.
BDO STOY HAYWARD LLP
Chartered Accountants and Registered Auditors
Manchester
30 November 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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