Interim Results,etc.

TOAD PLC 11 August 1999 Interim Results (Unaudited) for the six months ended June 22nd 1999 Appointment of new non-executive director - Michael Cornwell Toad plc, the UK's leading vehicle technology and car audio company, announces its third consecutive set of profitable figures and the appointment of Michael Cornwell, the former European Sales Director of Belron International Autoglass and Carglass, as a non-executive director. HIGHLIGHTS Turnover £16.2m up 36% (6 mths to 22 June 1998: £11.9m) Gross Profit £ 6.9m up 48% (6 mths to 22 June 1998: £ 4.7m) Operating Profit £ 1.3m up £1.8m (6 mths to 22 June 1998: loss of £0.5m) Profit before tax £ 1.0m up £ 1.8m (6 mths to 22 June 1998: loss of £0.8m) Undiluted earnings per share 1.4p (6 mths to 22 June 1998: loss of 0.1p) *Group restructured into two divisions - Vehicle Technology and In-Car Services. *Autoglass alliance launched. *Appointment of former Belron International's (Autoglass) European Sales Director, Michael Cornwell as a non-executive director. *Number of cars serviced in the period up to 175,000 6 mths to 22 June 1998: 115,000 Chris Evans OBE, Chairman, said: 'These figures confirm the dramatic turnaround of the group over the past 18 months and I am delighted that Michael is joining us as a non- executive director. He is vastly experienced in setting up European operations and will be invaluable in helping us launch our products and services into Europe.' John Lewin, Chief Executive, said: 'These are excellent figures which confirm the group has turned the corner and is now generating significant profits. The benefits of the Autoglass alliance are now beginning to come through and I am looking forward to working closely with Michael and our corporate sales team to develop partnerships with Autoglass' existing management structure in the key European countries of France, Spain, Holland and Italy.' Enquiries: Wednesday. August 11th 1999. Morning Briefing Line. Tel 0171-680 0350 John Lewin, Chief Executive Toad plc 0181-710 4016 David Baynes, Finance Director Toad plc 0181-710 4016 Tony Edwards Anthony Edwards Publicity 01932 336161 Chief Executive Statement I am delighted to present our interim results unaudited for the six months ended 22 June 1999. These results are our third consecutive set of profitable figures and confirm the dramatic turnaround in the group's performance over the past 18 months. All our staff have worked tremendously hard over this period and these results are a direct result of their hard work. Financial Highlights * Turnover increased by 36% to £16.2m (6 mths to 22 June 1998: £11.9m) * Gross Profit increased by 48% to £6.9m (6 mths to 22 June 1998: £4.7m) * Operating Profit increased to £1.3m (6 mths to 22 June 1998: loss of £0.5m) * Profit before tax increased to £1.0m (6 mths to 22 June 1998: loss of £0.8m) * Number of cars serviced in the period up to 175,000 (6 mths to 22 June 1998: 115,000) * Undiluted earnings per share increased to 1.4p (6 mths to 22 June 1998: loss of 0.1p) During the interim period, the group has performed strongly, building on the structural changes made to the business during March 1998. These changes, which followed the acquisition of the Sextons Group, enabled the group to restructure into two divisions: Vehicle Technology focusing on the supply and distribution of vehicle security products. In-Car Services focusing on supplying vehicle audio and security installation services to businesses. The Vehicle Technology Division The Vehicle Technology Division, which is responsible for the distribution of the Laserline, Sigma and Toad Security vehicle security brands, has performed well in a highly competitive market. Interim turnover was £5.3m 6 months to 22 June 1998: £4.8m and sales to the specialist dealer and multiple retailer markets continued to perform in line with expectations. The directors believe this is a result of our focus on quality of product and service as well as developing innovative new products in the vehicle security market. Product innovations such as the new interchangeable coloured remote cases for the Toad Security range have enabled us to cement our position as the UK's leading car security company. The investment, last year, in developing the Sigma brand of alarms for the original equipment market, continues and has resulted in a number of new contract wins with a number of leading car manufacturers. At the end of the period we restructured the division by closing our Bridgwater site and developing our Runcorn site as our vehicle security centre of excellence. The Bridgwater freehold is currently being sold. The directors believe this will enable the division to increase sales during the second half of the year whilst reducing the support costs involved in distributing three major brands in the market. In-Car Services The In-Car Services Division recorded strong growth during the period, with turnover increasing to £10.8m (6 mths to 22 June 1998: £7.1m). Our mobile installation service to the fleet, insurance and multiple retailers, performed strongly with sales of £7.1m. The agreement with Autoglass was a significant development, bringing together the market's two brand leaders in an alliance that enables insurance and fleet companies to access a one-stop shop for their car glass and audio replacement needs. The potential of this alliance is now being realised with a number of major insurance companies taking advantage of the new joint service and utilising the new on-line booking and ordering system. Toad Audio Express, our audio wholesalers service, also performed strongly, with volume sales up. However the continued price pressures within the specialist audio sector of the market resulted in a flat turnover for the period. New promotional campaigns, based on aggressive targeting of the mid-sized specialist market, should maintain sales during the second half of the year. Our strategy of reducing the company's direct involvement in the specialist retail market, in favour of expanding our franchise' network, was continued. The specialist audio and security retail operation, Sextons Retail, was reduced further as we continued our policy of franchising the individual shops within the network. We now own just one retail shop, with the remaining 18 shops being franchised. New Product Development The development of the revolutionary Spacetrac vehicle location system by Eagle Eye Tech. continues in America. Although there have been delays in the construction of the LEO satellite network and consequent delays in the development of the vehicle tracking technology, the system is currently in the pre-production, board miniaturisation stage, and on schedule for delivery of the first product in the year 2000. Turnover from this product has not yet been factored into our sales budgets for the years 2000 and 2001. Autoglass The alliance with Autoglass is providing an excellent opportunity for us to increase our share of the UK audio re-instatement market. The alliance has been greeted with enthusiasm by the insurance market and discussions are in place with all the major insurance companies. In addition, Autoglass has a well-established European operation. We are currently jointly evaluating the market place for opportunities to work in partnership with Autoglass's existing infrastructure in France, Spain, Holland and Italy. Appointment of new non-executive director As part of the proposed expansion, I am delighted to announce that Michael Cornwell, the former Autoglass and Belron European and Worldwide Sales Director, is joining the board as a non-executive director. This is an excellent appointment for the company, Michael is vastly experienced in setting up European operations and has known the European insurers at a senior level for many years. I will be working closely with Michael and our corporate sales executives to develop the European launch strategy and working partnerships with the existing Autoglass management structure in the key European countries of France, Spain, Holland and Italy. John Morris and Kevin Gray are standing down as non-executive directors and I would like to thank them both for their tremendous support and commitment to the group over the years. John has supported the company from its very earliest days and Kevin's contribution as Chief Executive, during the company's most difficult transitional year of 1997, cannot be overstated. New Web Site launched During June we launched the first phase of our on-line development programme with the opening of our new web site at www.toad.co.uk. The site is designed to convey information about the company and will be the first stepping stone in our e-commerce development strategy which will eventually enable us to interface our national dealer base and provide a substantial increase in service levels. Current Trading The company continued to perform well in July and the directors believe there are continued opportunities to reduce costs and increase turnover during the second half of the year. John Lewin Chief Executive. NOTE. Reference the appointment of Michael Cornwell as a non-executive director, no other information is pertinent regarding listing paragraph 16.4 of the London Stock Exchange Rules. Consolidated Profit & Loss Account (Unaudited) six months (Unaudited) Six months 38 weeks ended ended 22nd June 1999 ended 22nd June 1998 22nd Dec 1998 £'000 £'000 £'000 Turnover Continuing operations 16,157 4,698 8,658 Acquisitions - 7,217 16,405 16,157 11,915 25,063 Costs of Sales Continuing operations (9,223) (2,872) (4,916) Acquisitions - (4,344) (9,919) Gross Profit 6,934 4,699 10,228 Other operating expenses (5,633) (5,233) (9,283) Operating profit/loss Continuing operations 1,301 (1,418) (29) Acquisitions - 884 974 1,301 (534) 945 Interest payable and similar charges. (299) (162) (373) Loss on disposal of fixed assets. - (144) (140) Profit/(loss) on ordinary activities before taxation. 1,002 (840) 432 Taxation. (100) 12 - Profit/(loss) for the period 902 (828) 432 Undiluted profit/(loss) per share. 1.40p (0.14p) 0.76p Diluted profit/(loss) per share. 1.13p (0.14p) 0.59p Consolidated Balance Sheet (Unaudited) Six months (Unaudited) Six months 38 weeks ended ended 22nd June 1999 ended 22nd June 1998 22nd Dec 1998 Notes £'000 '000 £'000 Fixed assets 4,595 3,449 3,486 Current assets Stocks 3,985 3,939 4,212 Debtors 5,375 7,716 5,316 Cash at bank and in hand 959 467 1,126 10,319 12,122 10,654 Creditors: amounts falling due within one year. (10,293) (14,934) (13,921) Net current assets/(liabilities) 26 (2,812) (3,267) Total assets less current liabilities. 4,621 637 219 Creditors: amounts falling due after more than one year. (3,182) (1,412) (1,214) Net assets (liabilities) 1,439 (775) (995) Capital and reserves Called-up share capital. 6,846 5,872 5,872 Share capital to be issued. 3,043 3,938 3,743 Share premium account. 10,373 9,695 9,095 Profit & Loss account. (18,823) (20,280) (19,705) 2 1,439 (775) (995) Consolidated Cash Flow Statement (Unaudited) (Unaudited) Six months Six months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 Notes £'000 £'000 £'000 Net cash inflow/(outflow) from operating activities 3 1,248 (1,186) (1,130) Returns on investments and servicing of finance Interest payable and similar charges. (299) (162) (373) Taxation - - - Capital expenditure and financial investment. Purchase of tangible fixed assets (652) (108) (187) Sale of tangible fixed assets. 157 116 281 (495) 8 94 Acquisitions & disposals Purchase of interest in group undertakings. (2,590) (6,049) (6,049) Purchase of Foxguard & Code Alarm business. - - (488) Net cash acquired with acquisition of group. - 204 204 Net cash transferred with group undertakings. - (20) (20) (2,590) (5,865) ( 6,353) Cash outflow before management of liquid resources and financing (2,136) (7,205) (7,762) Management of liquid resources - - - Financing Issue of shares (net of expenses) 795 6,385 6,385 Net movement in short-term borrowings. 1,059 - (509) Net movement in long-term borrowings. 2,128 - (325) Repayment of principal under finance leases. (71) (7) (17) 3,911 6,378 5,534 Increase/(decrease) in cash in the period. 4 1,775 (827) (2,228) Notes to the Interim Statement 1. Basis of preparation The interim statement has been prepared on the basis of the accounting policies set out in the group's statutory accounts. The financial information on the group does not constitute statutory accounts and is not audited. A copy of the group's 1998 statutory accounts has been filed with the Registrar of Companies; The auditors' opinion on these accounts was unqualified. The interim statement for the six months ended 22nd June 1999 was approved by the directors on August 10th 1999. 2. Reconciliation of movements in shareholders' funds (Unaudited) (Unaudited) Six Months Six Months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 £'000 £'000 £'000 Net profit/(loss) for the period 902 (828) 432 Goodwill written off (20) (10,812) (11,008) Shares issued 1,552 7,385 7,385 Shares to be issued 700 2,500 2,305 Net movement in shareholders' funds 2,434 (1,755) (886) Opening shareholders' funds (995) 980 (109) Closing shareholders' funds (deficit) 1,439 (775) (995) 3. Reconciliation of operating profit/loss to net cash flow from operating activities. (Unaudited) (Unaudited) Six Months Six Months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 £'000 £,000 £'000 Operating profit/(loss) 1,301 (535) 945 Depreciation of fixed assets 203 105 280 Amortisation of intangible fixed assets 20 - - Increase in working capital balances (276) (756) (2,285) Decrease in provisions (70) Net cash inflow/(outflow)from operating activities 1,248 (1,186) (1,130) 4. Reconciliation of net debt (Unaudited) (Unaudited) Six Months Six Months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 £'000 £,000 £'000 Increase/(decrease) in cash in the period 1,775 (827) (2,228) Cash (inflow)/outflow from (increase)/decrease in net debt (3,116) 7 851 Changes in net funds resulting from cash flows (1,341) (820) (1,377) Net debt acquired with subsidiaries - (1,370) (1,370) New finance leases (311) (12) - Movement in net debt in the period(1,652) (2,202) (2,747) Net debt at start of period (6,125) (2,463) (3,378) Net cash at end of period (7,777) (4,655) (6,125) 5. Exceptional Items (a) Recognised before operating profit (Unaudited) (Unaudited) Six Months Six Months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 £'000 £'000 £'000 Rationalisation costs 55 338 453 (b) Recognised after operating profit (Unaudited) (Unaudited) Six Months Six Months 38 Weeks ended ended ended 22nd June 22nd June 22nd Dec 1999 1998 1998 £'000 £'000 £'000 Rationalised costs - 190 140 6. Dividend The directors have not declared an interim dividend.

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