Final Results

Screen PLC 3 May 2001 SCREEN PLC PRELIMINARY RESULTS ANNOUNCEMENT for the year ended 31 December 2000 Screen Plc ('Screen'), the provider of systems solutions to the public sector and commercial market, announces preliminary results for the year ended 31 December 2000. Screen develops and supplies mobile data, in-car video, Control by Touch command and control systems, mobilising and management information systems, wireless CCTV cameras and Customer Relationship Management software. Screen's technologies and products provide solutions for the Police and Fire services, and prison, local authority, utilities and commercial sectors. Distribution is through 38 countries in Europe, Africa, the Middle East and Australasia. Highlights of the Results * Record revenues up 54% to £5.08m (1999: £3.3m) * Pre-tax loss of £343,171 (1999 Pre-tax profit: £111,109) - as anticipated by analysts, arising from increased investment and product development * No dividend * Strong balance sheet with current net cash of over £3m * Two acquisitions during period under review and product re-brandings * Board Appointments * SG Securities appointed joint broker * 1-for-10 (1 new for 10 old) share consolidation in February 2001 * £1.5m of orders, since February 2001, at BAe Civil Systems acquisition, re-branded as Petards Civil Systems * £6m total order book at Petards Civil Systems. * Record Q1 revenues exceeded revenues achieved in the first six months of 2000 * Outlook viewed with great confidence. Regarding Current Trading and Prospects, Owen Williams, Chairman of Screen said: 'At the outset of 1999 we had many products still under development and provided few products, primarily to the UK marketplace. Now, we are established as an innovative, international Group, offering a range of solutions, services and proprietary technologies through a 38 country-wide distribution network, and winning increasing volumes of profitable contracts in the process. 'Since then we have accelerated organic growth in certain businesses, made carefully researched acquisitions, which we expect to be earnings enhancing and raised additional capital by way of share placings, attracting a number of institutions to our shareholder base. 'Our strong sales and revenue generation in the first quarter, combined with record order books, give us great confidence regarding our trading performance in the current year.' Contacts: Screen Plc Binns & Co PR Ltd Owen Williams, Chairman Tel: 01628 820011 Peter Binns, Paul McManus James Shand, Finance Director info@screenplc.com http://www.screenplc.com Tel: 020 7786 9600 CHAIRMAN'S STATEMENT INTRODUCTION I am pleased to present our results for the financial year ended 31 December 2000, which was a period of very considerable progress for the Group. We entered the period under review as a business with many products still under development and providing relatively few products primarily to the UK marketplace. Now we are established as an innovative, international Group, offering a range of solutions, services and proprietary technologies, some with significant barriers to entry, through global distribution channels, and winning increasing volumes of profitable contracts in the process. The Directors view your Group's prospects with great confidence. Since writing to you at the interim results stage in September 2000, the Group has been very active. We completed two acquisitions each of which brought substantial intellectual property content; the in-car video business, ProVida, from JAI A/S of Denmark and the Civil Systems division from BAE Systems Plc. These were funded through two Placings, each of which was oversubscribed, which introduced a number of institutional investors. The Directors believed that liquidity in the Group's shares and its ability to attract new institutional investors would be enhanced through a consolidation of the Group's ordinary share capital and, following overwhelming shareholder approval, effected a one for ten consolidation on the 26 February 2001. Consistent with raising our profile with the institutional investor community, we were pleased to appoint SG Securities as joint brokers from 1 February 2001. RESULTS Revenues, including acquisitions, increased 54% to £5,082,325 (1999 - £ 3,304,928). The loss for the year of £279,250 (1999 - £89,465 profit) reflects the planned cost of our investment in improved organisational infrastructure to enable us to manage accelerated growth and the initial cost of introducing new products to a wider market. Your Board is not recommending payment of a dividend. PRODUCT STRATEGY Central to Screen's progress has been the Group's product strategy, accompanied by a supporting sales and marketing strategy, including a comprehensive rebranding programme. These have driven our growth and, in our view, will continue to do so. During the period under review we have recruited talented individuals into our teams strengthening our senior line management and our marketing expertise. Our acquisitions have augmented our technological capabilities, introduced new products with great potential and enabled us to address incremental markets. Petards Vision (formerly Petards International) This company, in the period under review, enjoyed its best ever trading performance. Our COBYT control systems, which provide advanced realtime video and data management facilities, continue to be in strong demand for electronic security and surveillance applications. Fuelled by the growing need for resources and information to be shared between multiple agencies, surveillance systems are becoming larger and more complex. Our COBYT products are well positioned to address the more sophisticated control and management facilities necessary when multiple disparate systems are integrated into larger more extensive surveillance networks. The introduction of IP (Internet Protocol) based video transmission is driving the electronic security and surveillance market towards more extensive use of IT technologies and system platforms in place of conventional control systems. Petards Vision is well established in this arena and we believe that demand for our skills and experience in this field will grow significantly. Sales and installations of SWIFT, our wireless based mobile rapid deployment camera system, accelerated during 2000. These cameras are being used by an increasing number of local authorities and police forces for a wide range of surveillance applications. In 2001 we have experienced continued strong demand with orders in the first quarter running at some 300% of the level experienced in the same period last year. Work is now underway to make available to mobile vehicles encrypted video (CCTV images) from these and other cameras hosted by our COBYT control systems. We believe this will provide an outstanding additional tool for surveillance and open up significant new revenue potential. The business continues with its strategy of identifying and either developing or acquiring innovative products through which we can demonstrate significant operational benefits and added value to our customers. Petards Mobile Intelligence (formerly Petards Datax) The execution of one of our product concepts, that of providing complete, fully integrated, scaleable wireless based systems that enable personnel to carry out a variety of complex tasks whilst on the move will, we believe, provide a distinct and compelling solution for the public and private sectors and is, we consider, without parallel. In police applications we now routinely provide ruggedised Pentium based systems located in the boot of vehicles that incoporate our dashboard-mounted touch screens. These enable officers to interface with a remote database from moving patrol cars whose position and condition are being transmitted and monitored centrally. Camera technology, acquired with the purchase of the ProVida business in September 2000, enables the video recording of events external to the vehicle. Almost all UK police forces use this technology, which is also being marketed extensively and successfully throughout the rest of Europe and the Middle East. In this connection we were pleased to be awarded a $1.2M contract for the supply of these systems to the national police force in Turkey as part of an initial roll-out. We have recently modified this technology to make it suitable for installation on motorbikes and were pleased to receive early orders for this product, notably from the Hong Kong police force. Combining the computing power of our mobile data systems with our exclusive camera technology has enabled the introduction of a mobile Automatic Number Plate Recognition (ANPR) capability. In this application registration details of moving vehicles can be read entirely automatically by travelling vehicles such as patrol cars equipped with our systems. ANPR recognises, scans and automatically checks vehicle number plates against an on-board database in under a fraction of a second, alerting officers to 'wanted' vehicles, thus considerably enhancing police officers' productivity and detection rates. In April 2001 we announced our first order for ANPR from the Lancashire Police. Strong interest has already been expressed at recent demonstrations of this product in the UK and Europe. Petards Civil Systems (formerly BAE Civil Systems) Systems adopted in the police market can, of course, be equally and effectively used in other emergency service applications. Hence our entry into the fire services market via our acquisition of the Civil Systems Division of BAE Systems Plc in February 2001. This is a business successfully providing software and support systems to fire brigades throughout the country. I am delighted to report that since this business came into our ownership earlier this year, it has performed well and we are also announcing today an influx of orders of £1.5M taking their total order book for this subsidiary to over £6M, £1.8M of which we expect to fulfil in the current year. Petards Corporate Knowledge (formerly Tranzline) Petards Corporate Knowledge are authors of Customer Relationship Management (CRM) software and implementers of sophisticated CRM systems for businesses who want to increase their performance and profitability through improvements in the way they service their customers. The company's software has wide application and functionality especially in database interrogation. The system can enable improved customer service and retention in a wide range of e-commerce activities. The functionally rich eCRM software business that came with our purchase is being installed on our hand-held products providing a portable product which enables mobile workers to access critical corporate information from their point of work. The company has signed its first customers for Application Service Provider (ASP) use, fired up the re-seller channel and is trading well. OUTLOOK We have introduced the ProGenie hand-held device capable of delivering many of the benefits of our 'in vehicle' systems. Whilst this development is still at a relatively early stage, it has been well received and we remain confident of its outstanding potential. We plan to accelerate the rollout of our expanded range of systems to other vertical markets, both in the UK and internationally, and have targeted the North American market for early attention. The Group has an active and ongoing acquisition programme and is seeking additional opportunities that will either enhance or extend the Group's product range and/or markets within the general wireless communications sector. Our strong sales and revenue generation in the first quarter, combined with record order books, give us substantial confidence regarding our trading performance in the current year. In this context I am delighted to report that revenues for the first quarter of the current year exceeded those achieved in the first six months of 2000. We recognise that there are dangers of a further economic downturn, but consider that in currently predictable circumstances our increasing geographic diversity and the preponderance of sales to the more stable public sector should underpin the company's prospects. ACKNOWLEDGEMENTS As always, the talent of our employees especially the senior management team has served the company well. Without their imagination, commitment and expertise our excellent progress would not have been possible. Three appointments strengthened your Board. In May 2000, we appointed James Shand BSc, FCA, AMCT to the Board as Finance Director. He has considerable experience of acquiring companies and managing rapid growth situations. Earlier in the year, the Company appointed two senior non-executive directors, Ian Taylor MBE MP, and Charles Hughes. Ian Taylor was Minister of Science and Technology from 1994 to 1997. Charles Hughes was, until 1999, a director of Fujitsu ICL and had held board appointments with high technology companies in Australia, Germany, the UK and USA. Their combined knowledge and experience of the technology sectors in which we now operate continues to be invaluable. SUMMARY To achieve our current position we have accelerated organic growth in certain businesses, made carefully researched acquisitions which we expect to be earnings enhancing and raised additional capital by way of share placings, in the process attracting a number of institutions to our shareholder base. In my last annual report I referred to the attention being paid to companies offering trajectory, a term used to express potential for growth. Markets are now once again attaching more importance to immediate revenue, profits and cash flow; in this regard we are able to demonstrate an excellent trend. Today we enjoy a strong balance sheet with net cash in excess of £3 million and we confidently expect to generate operating profits in the current year from our existing trading activities. Owen Williams Chairman and Chief Executive 3rd May 2001 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 December 2000 Unaudited Audited Year ended Year ended Note 31 December 31 December 2000 1999 £ £ Turnover Continuing operations 3,351,567 3,304,928 Acquisitions 1,730,758 - ________ ________ 5,082,325 3,304,928 Cost of sales (2,835,604) (1,767,017) ________ _________ Gross profit 2,246,721 1,537,911 Administrative expenses (2,548,932) (1,270,988) Goodwill write-off (125,669) (23,042) ________ _________ Total Administrative expenses (2,674,601) (1,294,030) ________ _________ Operating (loss) / profit Continuing operations (785,198) 257,609 Acqusitions 357,318 - Discontinued operations - (13,728) ________ ________ Total Operating (Loss) / Profit 2 (427,880) 243,881 Exceptional loss on disposal of - (75,832) discontinued operation Net interest receivable/(payable) 84,709 (56,940) ________ ________ (Loss) / profit on ordinary activities before (343,171) 111,109 taxation Taxation - 158 ________ ________ (Loss) / profit on ordinary activities after (343,171) 111,267 taxation Minority interest - equity 63,921 (21,802) ________ ________ (Loss) / profit for the financial year (279,250) 89,465 ====== ====== Basic (loss)/earnings per share 4 (0.08)p 0.03p Diluted (loss)/earnings per share 4 (0.08)p 0.03p Statement of Total Recognised Gains and Losses for the year ended 31 December 2000 Unaudited Audited 31 December 31 December 2000 1999 £ £ Loss for the financial year (279,250) 89,465 Currency translation difference on foreign current 99,729 - net investments ________ ________ Total recognised gains and (losses) relating to the (179,521) 89,465 year ________ ________ CONSOLIDATED BALANCE SHEET For the year ended 31 December 2000 Unaudited Audited 31 December 31 December 2000 1999 £ £ Fixed assets Intangible assets 6,834,169 733,746 Tangible assets 628,198 337,207 ________ ________ 7,462,367 1,070,953 _______ _______ Current assets Stocks 909,526 513,572 Debtors 2,584,509 1,508,188 Cash at bank and in hand 1,526,934 503,100 ________ ________ 5,020,969 2,524,860 Creditors: amounts falling due within one (2,280,038) (2,075,434) year ________ ________ Net current assets 2,740,931 449,426 Total assets less current liabilities 10,203,298 1,520,379 Creditors: amounts falling due after more (63,951) (55,306) than one year ________ _______ Net assets 10,139,347 1,465,073 ======= ====== Capital and reserves Called up share capital 378,750 308,687 Share premium account 12,743,907 3,896,254 Profit and loss account deficit (2,925,282) (2,745,761) ________ ________ Equity shareholders' funds 10,197,375 1,459,180 Minority interest - equity (58,028) 5,893 ________ _______ 10,139,347 1,465,073 ======= ====== NOTES TO THE PRELIMINARY ANNOUNCEMENT For the year ended 31 December 2000 1. Basis of preparation These statements do not constitute financial statements within the meaning of Section 240 of the Companies Act 1985. The statutory accounts for the year ended 31 December 2000 have not been audited. They will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's Annual General Meeting. The financial information for the year ended 31 December 1999 is extracted from the statutory financial statements for the year which have been delivered to the Registrar of Companies. The auditors reported on those financial statements and their report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. 2. Acquisitions The consolidated Profit and Loss Account includes the results of two acquisitions made during the year. The results of Petards Corporate Knowledge (formerly Tranzline) are included for 7 months and Petards Mobile Intelligence A/S (formerly ProVida) for 3 months post acquisition. 3. Dividend The Board of Directors does not recommend the declaration of a dividend for the year ended 31 December 2000. 4. (Loss) / earnings per share The basic earnings per share for the year ended 31 December 2000 is based on the loss for the year on ordinary activities after taxation and minority interest of £279,250 (1999: profit £89,465) and on the weighted average number of ordinary 0.1p shares of 350,800,472 (1999 - 273,929,709). The diluted earnings per share for the year ended 31 December 2000 is based on a loss on ordinary activities after taxation and minority interest of £279,250 (1999 - £89,465) and on an adjusted weighted average number of ordinary 0.1p shares of 370,165,694 (1999 - 276,583,118). The difference between this weighted average number of shares and the weighted average number of shares used for the basic earnings per share relates to the share options and warrants in issue. 5. Balance Sheet The balance sheet strength has been considerably enhanced over the year, with share Placings together with the small current year loss, yielding a net increase in shareholder funds of £8.6M. The Group assets have substantially increased, with the two acquisitions mentioned above being the main reasons behind the year on year changes. In particular, goodwill arising on the consolidations and acquired intellectual property amounted to approximately £ 5.5M of the £6.1M increase in intangible assets. Cash at bank and in hand was approximately £1.5M at 31 December 2000. Since the year end cash has increased through the £4.5M (net) placing and open offer in February 2001, £1.1M of which has been applied to the acquisition of the Civil Systems division from BAE Systems Plc. 6. Report and Accounts Copies of the 2000 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. 3rd May 2001
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