Final Results
Ross Group PLC
30 April 2007
ROSS GROUP PLC & SUBSIDIARIES
CHAIRMAN'S STATEMENT
for the Year Ended 31 December 2006
RESULTS
The Group result, before tax, for the year ended 31 December 2006 was a loss of
£914,000 (Year ended 31 December 2005: loss £1,507,000). The reason for this and
the steps taken to improve the situation are described below. The turnover
improved (2006 £1,152,000; 2005 £586,000) due to an increase in activity in both
the engineering sector and consumer electronics division.
LITIGATION SETTLEMENT
The Directors have for several years been attempting to recover a substantial
debtor which was written off in the group accounts in a previous year. This was
connected to a legal action brought by the Liquidator of VSI Automation
(Technology) Limited against various parties. The Directors reported last year
an anticipated recovery of a sum between £150,000 and £500,000 including
interest and excluding costs. £230,000 has now been legally agreed as the net
settlement and is expected to be received in April 2007. This amount has been
taken to the Profit and Loss Account.
DIVISIONS OF THE GROUP
The Group trades through its two UK operating subsidiaries which concentrate on
the following activities:-
-The design and manufacturing of engineering projects through GEL Engineering
Ltd.
-The distribution of TVs and electrical branded products through Sansui
Electronics (UK) Ltd.
STRATEGY
The Boards response to the lack of success in winning orders in the Engineering
business in 2005 by changing the top level management has proved to be correct.
The experienced Managing Director recruited at the end of 2005 is bidding for
and winning profitable orders which are forecast by the end of 2007 to bring the
Division into profit. This is later than intended but is forecast to have longer
term benefits through the steady build up of successful repeat orders with major
customers. This was reflected in the repeat order of £1.4m for the training
simulator that was expected in the first half of 2006 but contracted for in the
second half. To increase successful bid activity therefore both the sales and
engineering teams have been strengthening in 2006 and this will continue into
2007.
Sansui Electronics (UK) Ltd presented a wider range of branded goods to
distributors in 2006, TV shopping channels and major retail supermarket chains
across UK and Europe. Branded products were successfully presented at IFA show
Berlin September 2006 with high level of consumer interest. This indicated a
favourable position going forward into 2007. The Company will aggressively push
for market position in the lead up to sales peak in the latter half of 2007.
The Group has used its Hong Kong based subsidiary, San Gain Industrial Company
Ltd, to handle the group financing from the main shareholder's financial
services company.
The Board cannot recommend a payment of a dividend.
APPRECIATION
I would like to take this opportunity to thank our Employees, Shareholders,
Bankers, Advisers, Suppliers and Customers for their continuing support in a
difficult year.
A C C Ma
Chairman
ROSS GROUP PLC & SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
for the Year Ended 31 December 2006
31.12.06 31.12.05
£'000 £'000
CONTINUING OPERATIONS
Revenue 1,152 586
Cost of sales (809) (660)
------ ------
GROSS PROFIT/(LOSS) 343 (74)
Other operating income 2 5
Administrative expenses (1,106) (1,075)
Litigation settlement 230 -
Finance costs (383) (363)
------ ------
LOSS BEFORE TAX (914) (1,507)
Tax - -
------ ------
LOSS FOR THE YEAR (914) (1,507)
====== ======
Attributable to:
Equity holders of the parent (914) (1,507)
====== ======
Earnings per share expressed
in pence per share:
Basic -0.67 -1.11
Diluted -0.67 -1.11
====== ======
ROSS GROUP PLC & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the Year Ended 31 December 2006
Share capital Retained earnings Other reserves Total equity
£'000 £'000 £'000 £'000
Balance at 1
January 2005 11,136 (31,164) 17,711 (2,317)
Reserve
transfer 6 (6)
Exchange
(loss) on
retranslation
of subsidiary 3 3
Profit for the
year (1,507) (1,507)
------- ------- ------- --------
Total
recognised
income for
2005 (1,504) (1,504)
------- ------- ------- --------
Balance at 31
December 2005 11,136 (32,662) 17,705 (3,821)
======= ======= ======= ========
Balance at 1
January 2006 11,136 (32,662) 17,705 (3,821)
Reserve
transfer 4 (4)
Exchange gain
on
retranslation
of subsidiary (8) (8)
(Loss) for the
year (914) (914)
------- ------- ------- --------
Total
recognised
income for
2006 (922) (922)
------- ------- ------- --------
Balance at 31
December 2006 11,136 (33,580) 17,701 (4,743)
======= ======= ======= ========
ROSS GROUP PLC & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
31 December 2006
31.12.06 31.12.05
£'000 £'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 30 27
------- ------
CURRENT ASSETS
Inventories 11 645
Trade and other receivables 948 591
Cash and cash equivalents 12 7
------- ------
971 1,243
TOTAL ASSETS 1,001 1,270
======= ======
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital 11,136 11,136
Share premium 2,317 2,317
Revaluation reserve - 4
Other reserves 15,384 15,384
Profit and loss account (33,580) (32,662)
------- ------
Total shareholders' equity (4,743) (3,821)
------- ------
TOTAL EQUITY (4,743) (3,821)
CURRENT LIABILITIES
Trade and other payables 5,744 5,088
Financial liabilities - borrowing
Bank overdrafts - 3
------- ------
5,744 5,091
------- ------
TOTAL LIABILITIES 5,744 5,091
------- ------
TOTAL EQUITY AND LIABILITIES 1,001 1,270
======= ======
ROSS GROUP PLC & SUBSIDIARIES
CASH FLOW STATEMENT
for the Year Ended 31 December 2006
31.12.06 31.12.05
Notes £'000 £'000
Cash flows from operating activities
Cash generated from operations 1 39 81
Interest paid (2) (3)
Finance costs (9) (79)
------ -------
Net cash from operating activities 28 (1)
------ -------
Cash flows from investing activities
Purchase of tangible fixed assets (20) (6)
------ -------
Net cash from investing activities (20) (6)
------ -------
Cash flows from financing activities
Capital repayments in the year - (2)
------ -------
Net cash from financing activities - (2)
------ -------
------ -------
Increase/(Decrease) in cash and cash
equivalents 8 (9)
Cash and cash equivalents at beginning
of year 2 4 13
------ -------
Cash and cash equivalents at end of year 2 12 4
====== =======
ROSS GROUP PLC & SUBSIDIARIES
NOTES TO THE CASH FLOW STATEMENT
for the Year Ended 31 December 2006
1. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
31.12.06 31.12.05
£'000 £'000
Operating loss (761) (1,144)
Depreciation charges 17 23
Foreign exchange profit on
consolidation - 1
Foreign exchange loss on consolidation (8) -
Decrease/(Increase) in inventories 634 (263)
(Increase)/Decrease in trade and other
receivables (127) 160
Increase in trade and other payables 284 1,304
------ ------
Net cash inflow from operating
activities 39 81
====== ======
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow statement in respect of cash and cash
equivalents are in respect of these balance sheet amounts:
Year ended 31 December 2006
31.12.06 01.01.06
£'000 £'000
Cash and cash equivalents 12 7
Bank overdrafts - (3)
------ ------
12 4
====== ======
Year ended 31 December 2005
31.12.05 01.01.05
£'000 £'000
Cash and cash equivalents 7 13
Bank overdrafts (3) -
------ ------
4 13
====== ======
ROSS GROUP PLC & SUBSIDIARIES
SECTION 240 STATEMENT
for the Year Ended 31 December 2006
1. The financial information set out above does not constitute the
company's statutory accounts for the year ended 31 December 2006 nor for the
comparative period, but is derived from those accounts. Statutory accounts for
the year ended 31 December 2005 have been delivered to the Registrar of
Companies and those for the year ended 31 December 2006 will be delivered
following the company's annual general meeting. The auditors have reported on
the accounts for 2005: their report was unqualified and did not contain
statements under s237 (2) or (3) Companies Act 1985.
2. The total number of shares in issue did not change during 2005 and
2006.
3. The figures for earnings per share and the adjusted earnings per share
are the same for 2006 (and 2005).
4. No ordinary interim or final dividend is proposed.
5. A nil liability to Corporation Tax has been assessed for the year due
to tax losses brought forward.
6. The Accounting Policies set out in the Financial Statements for the
Year Ended 31 December 2005 have been applied during the preparation of the
financial information contained in this statement.
7. A copy of the Financial Statements will be available on request from
Ross Group plc, Brunel Road, Totton, Southampton SO40 3YS.
This announcement has been agreed by the company's auditors, Everett and Son, 35
Paul Street, London, EC2A 4UQ and was approved by the Board of Directors of Ross
Group plc on 27th April 2007
Ross Group PLC
Registered office: 35 Paul Street, London. EC2A 4UQ
Email: Info@ross-group.co.uk
Website: www.ross-group.co.uk
Telephone: 02380 675500
Fax: 02380 675555
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