Final Results

Quadnetics Group PLC 27 September 2004 Press Release 27 September 2004 Quadnetics Group plc Preliminary Results for the year ended 31 May 2004 Quadnetics Group plc, a leader in the design, integration and control of advanced CCTV and networked video systems, reports its Preliminary Results for the year ended 31 May 2004. Highlights - Profit before tax, exceptionals and goodwill amortisation of £2.3 million (2003: £1.4 million) - Underlying earnings per share of 21.2p (17.7p) - Net funds of £4.3 million (2003: £3.3 million) - Proposed dividend of 3p per share (2003: 2p) - Acquired Look CCTV and Coex, facilitated by a successful share placing that raised £8 million - Progress in proprietary digital control and recording technologies - Focus on higher-value work in the installation businesses Commenting on the results, Russ Singleton, Chief Executive, said: 'Although they contributed only for a few months in the year to 31 May 2004, the Look CCTV and Coex acquisitions have strengthened our overall service offering, and we expect them to contribute significantly in the future. We have a strong balance sheet and we continue to look out for suitable opportunities that would further enhance our business. As the level of recognition of our advanced products continues to grow, both in the UK and overseas, we remain confident about our prospects.' For further information, please contact: Quadnetics Group plc Tel: +44 (0) 1527 850 080 Russ Singleton Email: r.singleton@quadnetics.com Brewin Dolphin Securities Neil Baldwin Tel: +44 (0) 113 241 0130 Media enquiries: Abchurch Tel: +44 (0) 20 7398 7700 Peter Curtain / Ariane Comstive Email: ariane.comstive@abchurch-group.com Chairman's Statement During the year ended 31 May 2004 the Group has achieved sales of £18.1 million (2003: £20.3 million) and profit before tax of £1.9m (2003: £1.4 million) after providing for an exceptional loss of £240,000 resulting from the unexpected receivership of the parent company of a major customer, and after charging £174,000 for amortisation of goodwill arising mostly from the acquisition of Look CCTV. At the year end the Group had no net borrowings and held net funds of £4.3 million. The Board is recommending the payment of a dividend of 3p per share (2003: 2p per share) on 14 December 2004 to all shareholders on the share register on 19 November 2004. Synectic Systems Limited, our subsidiary which develops systems software and equipment, continued to make real progress in the development of its products. In a separate statement today we are delighted to announce that Synectics has won a contract worth more than US$2 million to supply a digital recording and control system to one of the largest casinos in Canada. This is Synectics' first major contract in North America and is a powerful endorsement of our leading technology. It follows on from our announcement on 30 June 2004 that Synectics has been selected to supply a similar advanced digital recording solution to a major UK police force. Revenue from this new work will only be recognised in the current year ending 31 May 2005 and is not reflected in the financial results announced today. Look CCTV was acquired on 20 February 2004 and has proved to be an excellent investment. Its dominant position in supplying on-board CCTV to the bus market is continuing and both sales and profits are well ahead of our initial expectations. We are particularly pleased that Look is now working with Synectics to enhance and develop Look's products, and we are confident that this will further strengthen its market position. Coex Limited was acquired on 6 February 2004 and has also exceeded our expectations. Its position in the market for hazardous environment CCTV is strong and, helped by the financial and technical resources of the Group, we see very good prospects. The lower sales value within Quadrant Video Systems (£11.1 million compared to £16.8 million in the previous year) is the expected result of our having deliberately pursued higher value-added sales. However, despite the sales value having fallen, the profitability of this subsidiary was in fact slightly ahead of the previous year. Quadrant Video Systems has maintained its leading position in the public space surveillance market and is continuing to work on improving customer service and margin enhancement. The CCTV market continues to migrate to digital solutions involving networks and extensive data management. This market is large and worldwide and we are delighted to look forward with the knowledge that our key products have been selected by the most discerning and sophisticated buyers in North America and the UK. I am pleased to report that Steve Coggins, who currently heads the Europe, Middle East and Africa operations of Silicon Graphics, Inc. has agreed to join the board as an independent non-executive director with effect from 1 January 2005. Prior to joining Silicon Graphics, he previously held senior positions with Fujitsu and IBM. I look forward to Steve's contribution to the next stage in the development of the Group. Peter Rae CREATEDATE /@ 'd MMMM yyyy' /* MERGEFORMAT 27 September 2004 Consolidated Profit & Loss Account For the year ended 31 May 2004 Before exceptional items and Unaudited goodwill Exceptional Goodwill 2004 2003 amortisation items amortisation Total Total Notes £'000 £'000 £'000 £'000 £'000 Turnover Continuing operations 1 14,128 - - 14,128 20,299 Acquisitions 1 3,951 - - 3,951 - Total turnover 18,079 - - 18,079 20,299 Cost of sales (11,570) - - (11,570) (15,110) Gross profit 6,509 - - 6,509 5,189 Net operating expenses 2 (4,223) (240) (174) (4,637) (3,773) Operating profit Continuing operations 1,447 - (63) 1,384 1,416 Acquisitions 839 (240) (111) 488 - Total operating profit 2,286 (240) (174) 1,872 1,416 Net interest receivable/(payable) 42 - - 42 (9) Profit before taxation 2,328 (240) (174) 1,914 1,407 Tax charge on ordinary activities 3 (494) - Profit on ordinary activities after taxation 1,420 1,407 Minority interests - (232) Profit on ordinary activities after taxation and minority interests 1,420 1,175 Dividends 4 (346) (150) Retained profit for the year - transferred to reserves 1,074 1,025 Basic earnings per ordinary share 5 16.4p 17.4p Diluted earnings per ordinary share 5 16.3p 17.0p Underlying earnings per ordinary share 5 21.2p 17.7p All activities are continuing. In 2003 there were no exceptional items and amortisation of goodwill was £23,000. Consolidated Balance Sheet 31 May 2004 Notes Unaudited 2003 2004 £'000 £'000 Fixed assets Intangible assets 6 7,721 1,233 Tangible assets 956 501 8,677 1,734 Current assets Stocks 2,710 1,767 Debtors 7,945 4,375 Cash at bank and in hand 4,711 3,376 15,366 9,518 Creditors: amounts falling due within one year (7,767) (5,722) Net current assets 7,599 3,796 Total assets less current liabilities 16,276 5,530 Creditors: amounts falling due after more than one year (375) (25) Provisions for liabilities and charges (83) (48) Net assets 15,818 5,457 Capital and reserves Called up share capital 7 2,305 1,496 Share premium account 7 12,248 3,770 Other reserves 715 835 Profit and loss account 550 (644) Equity shareholders' funds 15,818 5,457 Consolidated Cash Flow Statement For the year ended 31 May 2004 Unaudited 2004 2003 Notes £'000 £'000 Net cash inflow from operating activities 4 3,719 Returns on investments and servicing of finance 42 (14) Taxation (13) - Net capital expenditure and financial investment (331) (88) Acquisitions and disposals 8 (6,409) 593 Equity dividends paid (150) - Cash (outflow)/inflow before use of liquid resources and financing (6,857) 4,210 Management of liquid resources - amounts placed on bank deposit 9 (2,500) - Financing 7 8,192 (14) (Decrease)/increase in cash (1,165) 4,196 Reconciliation of Net Cash Flow to Movements in Net Funds For the year ended 31 May 2004 Unaudited 2004 2003 Notes £'000 £'000 (Decrease)/increase in cash in the year (1,165) 4,196 Increase in bank deposits 9 2,500 - Decrease in debt and lease financing 35 35 Change in net funds resulting from cash flows 1,370 4,231 Acquisitions (410) - Movement in net funds in the year 960 4,231 Opening net funds/(debt) 3,326 (905) Closing net funds 4,286 3,326 Reconciliation of Movements in Shareholders' Funds For the year ended 31 May 2004 Unaudited Notes 2004 2003 £'000 £'000 Total recognised gains in the year 1,420 1,175 Proposed dividend 4 (346) (150) 1,074 1,025 Issue of shares 7 9,287 1,380 Net movement in shareholders' funds 10,361 2,405 Opening shareholders' funds 5,457 3,052 Closing shareholders' funds 15,818 5,457 Notes 1. Continuing operations comprise Quadnetics Group plc, Quadrant Video Systems plc, Synectic Systems Limited, Coex Limited ('Coex') and Look CCTV Limited ('Look'), with Coex and Look representing acquisitions made during the year, as follows: (1) On 6 February 2004 the Company acquired the entire issued ordinary share capital of Coex, a specialist manufacturer of CCTV equipment and systems for extreme or hazardous environments, for an initial consideration of £1.165 million in cash. A further £0.2 million of deferred cash consideration is payable on 30 September 2004. (2) On 20 February 2004 the Company acquired the entire issued ordinary share capital of Look, which develops and supplies CCTV systems to bus manufacturers and operators, for an initial consideration of £6.3 million made up of cash (£4.9 million), loan notes (£0.3 million) and new Ordinary Shares (£1.1 million). A further £0.2 million of deferred cash consideration is payable in October 2004. 2. Exceptional operating expenses relate to the post-acquisition element of bad debts incurred by Look with subsidiaries of the Mayflower Corporation plc which went into receivership in March 2004. 3. The 2004 tax charge on ordinary activities comprises a corporation tax charge of £573,000 offset by a deferred tax credit of £79,000. 4. The Directors recommend the payment of a final dividend of 3p per share (2003: 2p per share), totalling £346,000 on 14 December 2004 to shareholders registered on 19 November 2004. 5. The calculation of basic earnings per ordinary share is based on the profit after taxation and minority interests for the year of £1,420,000 (2003: £1,175,000)) and on 8,633,489 shares, being the weighted average number of shares in issue and ranking for dividend during the year (2003: 6,766,627). The calculation of diluted earnings per share is based on the profit after taxation and minority interests for the year of £1,420,000 (2003: £1,175,000) and on 8,694,400 shares, being the weighted average number of shares that would be in issue after conversion of all the dilutive potential ordinary shares into ordinary shares (2003: 6,904,185). The calculation of underlying earnings per ordinary share is based on the profit after taxation and minority interests for the year, but before deducting exceptional items and amortisation of goodwill, of £1,834,000 (2003: £1,198,000) and on 8,633,489 shares, being the weighted average number of shares in issue and ranking for dividend during the year (2003: 6,766,627). 6. Intangible assets represent goodwill arising on consolidation and include additions in the year of £6.7 million arising from the acquisitions of Coex and Look. 7. Issued share capital and the share premium account have increased by £9.3 million during the year as a result of the following events: (1) On 13 February 2004, 617,567 new Ordinary Shares were issued as a result of share options being exercised, raising £0.5 million in cash. (2) Following approval by the Company's shareholders at an extraordinary general meeting on 18 February 2004, the Company issued 3,031,368 new Ordinary Shares at £2.65 each under a placing agreement dated 23 January 2004. The proceeds of £7.7m, net of expenses, were used to finance the acquisition of Look and provide further working capital for the development of the Group. (3) 400,000 new Ordinary Shares were issued at a valuation of £1.1 million as part consideration for Look on 20 February 2004. 8. Cash outflows on acquisitions during the year reflect the initial consideration for Coex and Look of £6.1 million, and acquisition expenses of £0.4 million offset by bank balances acquired within the two businesses of £0.1 million. 9. Cash outflows of £2.5 million shown as management of liquid resources represents a term investment in a bank deposit account which matured on 4 June 2004. 10. The preliminary results for the year have not been audited by the Group's auditors and do not constitute statutory accounts. The comparative figures for 2003 have been abridged from the statutory accounts for the year ended 31 May 2003. The auditors' opinion on these accounts was unqualified and did not contain any statements under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 31 May 2003 have been filed with the Registrar of Companies. 11. Copies of this preliminary statement are available from Quadnetics Group plc, North Court House, Morton Bagot, Studley, Warwickshire B80 7EL or on the Company website at www.quadnetics.com. - Ends - This information is provided by RNS The company news service from the London Stock Exchange

Companies

Synectics (SNX)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today