Screen PLC - Final Results
May 15 1998 - 12:09PM
UK Regulatory
RNS No 5597w
SCREEN PLC
15th May 1998
Year ended 31 December 1997
Chairman's Statement
I present our results for the year ended 31 December 1997.
As at 31 December 1996, the group only comprised Screen plc and a 60% holding
in Karline. In the Alternative Investment Market admission document,
published on 18 February 1997, a proforma set of results was disclosed as if
Screen PLC had owned the whole of the issued share capital of Karline and
Petards International for the year ended 31 December 1996. When compared with
these proforma results for 1996, turnover increased by 74% to #4.308 million
(1996 on a pro forma basis: #2.472 million). As announced in January the loss
for the year after taxation and minority interest amounted to #1.293 million
(1996 on a proforma basis: #340,000 profit). Furthermore, goodwill has been
received on a company by company basis within the group. Following this
review, goodwill on acquisitions of #612,000 has been written off directly to
reserves in the financial year.
Late in 1997, when it appeared from information presented to the Board that
the group might not meet its targets, we commissioned detailed reviews of both
the group's commercial and financial position from external advisors. This
work revealed that the group would make substantial losses, a significant
proportion of which arose from businesses acquired during the year, which had
not been adequately integrated into the group. Additionally, the group
suffered from a lack of financial and management focus in part brought about
by the management time spent on these acquisitions. One consequence of these
reviews was the departure of our senior line executive director and our
finance director.
We were delighted to be able to appoint in January 1998 Mr Martin Brayshaw as
chief executive. Mr Brayshaw is a successful and experienced line executive
having previously been commercial director of Defence Systems Group Limited
and chief executive of Pex plc.
Following his appointment, Mr Brayshaw instituted further financial analyses,
which revealed that the company needed an urgent capital injection. The
directors and certain senior managers immediately made available #150,000 from
their personal resources and put in place arrangements for a placing of new
equity finance in March 1998 to raise a further #600,000 gross of expenses.
Other key changes initiated include: -
- A restructuring and streamlining of the business.
SecurScan has been fully integrated with Karline with a consequent reduction
in staffing levels. Similarly, the Omniwatch operation has been absorbed into
the Petards International business, again producing manpower savings.
- Disposal of non-core activities.
We have contracted to sell Executive Security, our loss making monitoring and
security services business. The disposal will provide additional cash
resources and free management time.
- Improved financial focus.
This is being achieved through tighter disciplines and emphasis on cash
management.
These and other changes have produced a cohesive management team focused on
delivering profit and growth.
Our principal operations now comprise:
Petards International Limited which continues to promote its command and
control systems with considerable success. Our CCTV systems are now used in
more than 40 town centre schemes by local authorities and the police as well
as with a growing number of commercial organisations and HM Prison Service.
Petards International has also taken responsibility for Omniwatch, the alarm
visual verification product now being sold through intermediaries and where
our first customer installations have now taken place. With the
continued growth of CCTV surveillance and the demonstrable effectiveness of
such systems we are confident demand for our systems will continue to grow.
Petards Datax Limited, a company we formed in June 1997, which specialises in
mobile data systems has got off to a very promising start. Our computer based
systems are located within vehicles and communicate via a diverse
range of secure telecommunications links. A dashboard mounted touch screen
display provides a simple to operate user interface. The emergency services
are our prime market and since our acquisition of the business we have
won contracts with ambulance services, fire brigades and we now number 14
police forces amongst our customers.
Karline Security Systems plc, security systems designers and integrators, has
absorbed the SecurScan business, acquired in July of last year. Karline has
substantially completed its largest ever project in Milton
Keynes town centre. Karline continues to focus on projects capable of
returning an acceptable gross margin together with ongoing maintenance
revenues.
Whilst much work still needs to be done to complete the restructuring of the
business and to return the group to profitability, the order books of our core
business are healthy. We look forward to providing further news of our
progress when we publish our interim results.
Owen Williams
Chairman
Screen PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1997
Audited Audited Proforma
12 months 13 months 12 months
ended ended ended
31 December 31 December 31 December
1997 1996 1996
#000s #000s #000s
Turnover 4,308 1,787 2,472
Cost of sales (3,047) (1,200) (1,353)
----- ----- -----
Gross profit 1,261 587 1,119
Administrative expenses (2,621) (426) (699)
----- ----- -----
Operating(loss)/profit (1,360) 161 420
Profit/(loss)on disposal 37 (12) -
of investments
Net interest payable (23) (13) (31)
----- ----- -----
(Loss)/profit on (1,346) 136 389
ordinary activities
before taxation
Taxation 49 (62) (49)
----- ----- -----
(Loss)/profit on (1,297) 74 340
ordinary activities
after taxation
Minority interest 4 (33) -
- equity ----- ----- -----
(Loss)/profit for the (1,293) 41 340
financial year ----- ----- -----
(Loss)/earnings per (0.7p) 2.3p 0.2p
share
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 1997
Audited Audited Proforma
31 December 31 December 31 December
1997 1996 1996
#000s #000s #000s
Fixed assets
Intangible assets 509 136 268
Tangible assets 610 137 205
----- ------ -----
1,119 273 473
Current assets
Stocks 378 105 142
Debtors 1,586 660 1,128
Cash at bank 381 4 1,327
and in hand ----- ------ ------
2,345 769 2,597
Creditors: amounts (2,928) (909) (1,171)
falling due within ------ ------ -----
one year
Net current (liabilities)/ (583) (140) 1,426
assets
Total assets less 536 133 1,899
current liabilities
Creditors: amounts
falling due after more
than one year (168) (18) (143)
------ ----- -----
Net assets 368 115 1,756
------ ----- -----
Capital and reserves
Called up share capital 204 -
Share premium account 2,019 -
Capital reserve - 2
Profit and loss account (1,856) 39
----- -----
367 41
Minority interest 1 74
- equity ----- -----
368 115
----- -----
Notes
1. Non statutory accounts
These statements do not constitute financial statements within the
meaning of section 240 of the Companies Act 1985.
2. Structure of group
Significant differences in the group structure exist for the two years
being reported on. The group consisted of Screen PLC and a 60% holding of
Karline Security Systems PLC as at 31 December 1996. The group structure had
changed by 31 December 1997 and consisted of Screen PLC, 100% holdings in
Karline Security Systems PLC, Petards International Limited, Petards OmniWatch
Limited (formerly Screen Security Limited), Executive Security (Wentworth)
Services Limited, Executive Security (Yorkshire) Services Limited and
SecurScan Limited and a 90% holding in Petards Datax Limited. Screen PLC, as
set out in its Placing and Admission to the Alternative Investment Market
prospectus, disclosed pro forma financial information showing the Profit and
Loss account for the year ended 31 December 1996 as if Screen, Karline and
Petards were a group at that date. Additionally, a pro forma Balance Sheet was
disclosed in the same prospectus on the basis that Screen, Karline and Petards
were a group at 31 December 1996. This pro forma Balance Sheet was then
further modified as if the placing which took place pursuant to Screen's
admission to the Alternative Investment Market had occurred prior to 31
December 1996. These pro forma figures are included in this announcement for
illustrative purposes only.
3. Taxation
A tax refund arises from carrying back losses sustained in the year
against tax paid on 1996 profits.
4. Earnings per share
The loss per share for the year to 31 December 1997 is based on the
weighted averaged number of 0.1p ordinary shares of 189,138,406. The earnings
per share for the 13 months to 31 December 1996 is based on a weighted average
number of ordinary shares of 1,800,995 to allow for the sub-division of share
which occurred during the year. The exercise of share options would not
significantly dilute the earnings per share.
5. Capital raised after the year end
In March 1998 additional share capital of #750,000 gross was raised,
#150,000 from directors and certain senior managers and #600,000 through a
Placing with investors.
6. 1997 Report and Accounts
Copies of the 1997 report and accounts will be sent to shareholders in
due course.
7. Announcement
Copies of this announcement will be available from the nominated
adviser: Smith & Williamson, No.1 Riding House Street, London, W1A 3AS for 14
days from the date of this announcement.
END
FR SFIFIIUAUFII
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