Interim Results
Newmark Technology Group PLC
31 January 2002
Embargoed Release: 0700hours, 31st January 2002
NEWMARK TECHNOLOGY GROUP PLC
HALF-YEARLY REPORT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2001
Summary
• Profit before taxation £388,000 (2000: loss £251,000)
• Overall sales in the Asset Protection Division rose 26% on same period
last year
• Successful flotation of Vema N.V. on AIM
Maurice Dwek, Chairman, commented,
'I am pleased to report a substantial increase in profit before taxation
compared with the same period last year. The Asset Protection and Secure Locking
divisions remain profitable and cash generative with the capacity to produce
growth in both new products and geographical markets. There are busy and
exciting times ahead and we look forward to the future with renewed confidence.'
For further details please contact:
Maurice Dwek 01737 788822
Chairman
Newmark Technology Group
Adam Reynolds/Takki Sulaiman 020 7735 9415
Hansard Communications 07778 419218
takki@hansardcommunications.com
CHAIRMAN'S STATEMENT
Results for the six months ended 31 October 2001
The Group made a profit before interest and amortisation of goodwill of £129,000
during the six months ended 31 October 2001 compared to a loss of £95,000 for
the same period in the preceding year. After the inclusion of the gain on the
part disposal of our investment in Vema of £362,000, the profit before tax for
the period under review was £388,000 (2000: loss £251,000).
Asset Protection Division
This division specialises in physical security equipment for the protection of
staff at transaction counters. As stated in previous reports, the historical
major customer base of Drion has been the Belgian banking sector and turnover
has been affected by the consolidation within that business sector. Although
work continues for some of the major banks, gross margins on some contracts have
been reduced due to changes in the type of work being performed. There has been
no export turnover in the period with the release of the third tender for
Algeria still awaited, although recent communications suggest that there should
be progress in this area in the near future. Our new commercial division has
continued to attract interest from new customers and we have received a letter
of intent for a major contract in the transport sector which will add momentum
to our efforts in this area.
The increase in sales of the historical business of Eclipse rising screens in
Safetell that was noted towards the end of the last financial year was
maintained during the period under review. CounterShield sales were also ahead
of expectations with a number of large contracts also secured for the second
half. InterScreen sales have been below expectations and The Post Office
RollerCash programme has been slower than anticipated, although momentum has
increased recently. Overall, sales were 26% higher than for the corresponding
period last year, and margins have been maintained.
Secure Locking Division
Following the successful flotation of Vema N.V. on the Alternative Investment
Market of the London Stock Exchange in May 2001, we were pleased to announce a
substantial increase in profits for the period with a 10% increase in turnover
following a general increase in activity across our range of products. Vema
Belgium has also traded profitably in the period following start up losses
incurred in the corresponding period last year.
Electronic Division
This division specialises in integrated security management systems designed to
control access of personnel and track asset movements. I referred in the last
annual report to the fact that the access control market in the UK had been flat
in the last financial year, most noticeably in the fourth quarter. This low
level of activity continued in the first half, and we have concentrated our
efforts on increasing the customer base for our broader product offering. The
rescheduling of purchase commitments by Lik On Security in Hong Kong that was
announced in our annual accounts has also adversely affected turnover in the
current year.
However, we have now renegotiated the terms of this contract and the benefits of
this settlement which have been received to date, are included in the results
for the period under review.
Although there have been sales by Newmark Technology Inc., in the period these
continue to be below expectations. Steps have therefore been taken to reduce the
level of overhead although this will not be reflected in the results until the
second half.
BALANCE SHEET AND CASH FLOW
The Group balance sheet has changed significantly following the receipt of
proceeds from the Vema flotation, and the subsequent repayment in full of the
bank loan for the acquisition of Safetell.
The last installment of the consideration for the acquisition of Drion is
payable in April 2002 and is therefore included in current liabilities.
the future
The Asset Protection and Secure Locking divisions remain profitable and cash
generative with the capacity to produce growth in both new products and
geographical markets. In view of the problems in gaining critical sales mass
experienced in the past, from 1 March 2002, the day to day management of the
access control and asset tagging businesses will be managed by Grosvenor
Technology Limited, a well established private business in the access control
market with the possibility of joint operations in the future with Grosvenor.
There are busy and exciting times ahead and we look forward to the future with
renewed confidence.
Maurice Dwek
Executive Chairman
30 January 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31 October 2001
Notes Unaudited Six Audited Unaudited Six
months ended Year months ended
31 October 31 October
2001 ended 30 2000
April
2001
£'000 £'000 £'000
TURNOVER 6,480 12,049 6,440
Cost of sales (3,790) (7,037) (4,205)
Gross profit 2,690 5,012 2,235
Administrative expenses (2,561) (5,310) (2,330)
Amortisation of goodwill (64) (116) (60)
OPERATING PROFIT/(LOSS) 65 (414) (155)
Profit on part disposal of investment 2 362 - -
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE INTEREST AND TAXATION 427 (414) (155)
Interest payable (39) (206) (96)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES 388 (620) (251)
BEFORE TAXATION
Tax on ordinary activities 3 (161) (284) (130)
PROFIT/(LOSS) FOR THE PERIOD AFTER TAX 227 (904) (381)
Minority interest 5 (129) - -
4 98 (904) (381)
Pence Pence Pence
Earnings/(loss) per share 6 0.08 (0.77p) (0.34p)
Loss per share before amortisation of (0.17) (0.67p) (0.29p)
goodwill and profit on part disposal of
investment
CONSOLIDATED BALANCE SHEET
as at 31 October 2001
Notes Unaudited Audited Unaudited
31 October 30 April 31 October
2001 2001 2000
£'000 £'000 £'000
FIXED ASSETS
Intangible assets 2,294 2,358 2,410
Tangible assets 1,463 1,483 1,460
3,757 3,841 3,870
CURRENT ASSETS
Stocks 1,827 1,656 1,475
Debtors 2,666 2,454 2,657
Cash at bank and in hand 966 652 892
5,459 4,762 5,024
CREDITORS: amounts falling due within one year (3,685) (5,466) (3,545)
NET CURRENT ASSETS/(LIABILITIES) 1,774 (704) 1,479
TOTAL ASSETS LESS CURRENT LIABILITIES 5,531 3,137 5,349
CREDITORS: amounts falling due after more than (935) (665) (2,380)
one year
Provisions for liabilities and charges (395) (403) (407)
NET ASSETS 4,201 2,069 2,562
CAPITAL AND RESERVES
Called up share capital 6,060 6,060 6,060
Share premium 5,194 5,194 5,195
Profit and loss reserve 4 (7,480) (9,185) (8,693)
EQUITY SHAREHOLDERS' FUNDS 3,774 2,069 2,562
Minority interest 5 427 - -
4,201 2,069 2,562
NOTES TO THE ACCOUNTS
1. BASIS OF ACCOUNTS
The unaudited results for the six months ended 31 October 2001 have
been prepared on a basis consistent with the accounting policies disclosed in
the Group's 2001 Report and Accounts, and do not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The results for the
year ended 30 April 2001 are an abridged version of the full accounts, which
received an unqualified audit report and have been filed with the Registrar of
Companies.
2. PROFIT ON PART DISPOSAL OF INVESTMENT IN SUBSIDIARY
£'000
Proceeds from partial disposal of investment in subsidiary 2,880
Goodwill on partial disposal of investment (note 4) (1,695)
Costs of flotation and share issue (net of tax) (525)
Share of net assets relating to minority interest at date of flotation (298)
Profit on disposal 362
3. TAXATION
The tax charge for the period is disproportionate to the result for
the period due to the non-availability of tax relief on the UK losses for the
period to be offset against the tax charged on the profits in The Netherlands
and Belgium, and the profit on part disposal of the investment in the subsidiary
not being liable to tax.
4. RESERVES
Profit and loss reserve £'000
At 1 May 2001 (9,185)
Retained profit for the period 98
Goodwill on part disposal of investment in subsidiary (note 2) 1,695
Exchange adjustment (88)
At 31 October 2001 (7,480)
5. MINORITY INTERESTS
£'000
Share of net assets relating to minority interests at date of flotation 298
Share of profits in period 129
At 31 October 2001 427
6. EARNINGS/(LOSS) PER SHARE
Pence per £'000
share
Profit after taxation and minority interests 0.08 98
Profit on part disposal of subsidiary (0.30) (362)
Amortisation of goodwill 0.05 64
Adjusted loss (0.17) (200)
The earnings/(loss) per share has been calculated based on the
weighted average number of shares in issue during the period, which was
121,208,952 shares (31 October 2000: 112,042,285).
7. DIVIDENDS
No interim dividend is proposed (2000: Nil).
8. A copy of the interim report has been sent to shareholders and is
available for inspection at the Company's registered office, 21/23 Ormside Way,
Redhill, Surrey RH1 2NT, during normal office hours, Saturdays, Sundays and bank
holidays excepted, for 14 days from today.
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