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TG21 Plc (TGP)

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Wednesday 06 August, 2008

TG21 Plc

Interim Results

RNS Number : 7231A
TG21 Plc
06 August 2008
 



6 August 2008


TG21 plc ('TG21', 'the Company' or 'the Group')


Interim Results for the six months ended 30 June 2008



TG21the vehicle installation service provider supplying public transport CCTV and other monitoring systems, today announces its unaudited interim figures for the six months to 30 June 2008 Over the last few years the Group has moved successfully to reposition itself away from being a distributor of in-car entertainment and security systems to become a vehicle installation service provider with its subsidiary, 21st Century, supplying public transport CCTV and other monitoring systems.


Group Highlights

  • Group revenue from continuing operations of £6m (2007: £8.2m);

  • Loss of £26,000 (2007: profit of £0.5m) following the business reorganisation;
  • Net debt position reduced significantly to £0.4m (30 June 2007: £3.0m).


21st Century Highlights

  • 21st Century revenue up 27% at £3.4m (H1 2007: £2.7m), including first sales of EcoManager;
  • Pipeline orders for 1,000 EcoManager systems and potential to roll out across Arriva's UK bus fleet;

  • EcoManager also to be trialed in mainland Europe by Arriva;

  • New CCTV business win with Go-Ahead.



Commenting on the results, Peter Ward, Chairman of TG21, said:

'The first half of the year has undoubtedly been challenging, however our strategy of exiting mature and declining markets and reducing net debt means that we are well placed to deal with the challenges we face and exploit opportunities going forward. 


'We are particularly excited by the prospects for EcoManager which is aimed at reducing fuel costs for bus operators and other fleet managers.  EcoManager has received excellent results from recently completed trials.  In the current economic climate with the spiraling cost of crude oil the launch of this product, which is the culmination of two years' development and testing, is very timely.


'Current trading is in line with expectations.'


A copy of this interim results announcement is available on the Company's website: www.tg21plc.com


For Further Information:

TG21 plc

Wilson JenningsFinance Director

020 8710 4016

Hogarth Partnership Limited

Barnaby Fry/Sarah Richardson

020 7357 9477

Daniel Stewart & Co plc (Nomad)

Graham Webster

020 7776 6550











Notes to editors


Launched in 1993, the Company began as Toad plc and was focused on the distribution of in-car entertainment systems and vehicle security products. Under the stewardship of Chairman Peter Ward, former Chairman and CEO of Rolls Royce Motors and Cunard Line, who joined the board at the end of 2001, TG21's strategy has been to reposition itself away from its legacy businesses into markets with better growth potential while leveraging its core strengths - nationwide field force of vehicle electrical engineers, call centre and distribution facilities. 


In line with this strategy, in 2005 the Company took a controlling stake in 21st Century Crime Prevention Services Ltd ('21st Century'), the preferred supplier of on-board CCTV systems for Arriva UK Bus. 21st Century has pioneered the use of WiFi with on-board CCTV systems and was the first company to successfully launch automatic video downloads and a bus CCTV monitoring system (HeartbeatTM).  In addition to Arriva UK Bus, clients of 21st Century include Arriva Scandinavia, Go-Ahead Group, Metroline, Kinch Bus and ACIS. 


The Group also provides vehicle installation services to the insurance market for the replacement of stolen in-car entertainment and navigation systems. On the back of this business the Group now supplies installation services for an embryonic black-box motor insurance scheme aimed at the corporate fleet market. 


Headquartered in Mitcham, the Group also has leased offices in Blackburn and Runcorn and employs around 100 staff.


  TG21 plc


Chairman's statement


The financial information contained within this interim report is based upon the Group's unaudited results for the six months to 30 June 2008.


The Company's strategy has been to reposition itself away from its legacy in-car entertainment and security distribution businesses and move into markets with higher growth and profit potential. At the end of last year I was pleased to announce the disposal of our in-car entertainment and car security businesses and we are now in a transitional period as we invest to develop the growth opportunities within public transport monitoring systems and vehicle installations.


Turnover from continuing operations was £6m in the period (2007: £8.2m) and the Group made a small loss of £26,000 (2007 profit: £0.5m). Net debt has been reduced considerably standing at just £0.4m at 30 June 2008 (2007: £3.0m).



Public transport on-board monitoring systems


Principal activities in this division are the supply of CCTV, black box and other monitoring systems for use on public transport vehicles, including products such as EcoManager and our passenger counting system, PAS.


Sales in the first half of 2007 increased 27% to just under £3.4(H1 2007: £2.7m) and we are on track to complete 1,000 CCTV installations for Arriva UK Bus in the current year.  


21st Century has completed the development of its EcoManager system aimed at reducing fuel costs for bus operators.  EcoManager works by monitoring individual driving styles and giving computer generated feedback, so that driver training can be focused to reduce harsh acceleration and braking, excessive idling and other factors which increase fuel consumption.  Trials of the EcoManager system resulted in considerable fuel savings and changes to driving style which lead to increased safety.  Arriva PLC have embraced the project within their UK Regional Bus division, with a depot awareness campaign and driver briefings. I am very pleased to report that June's results were boosted by our first sales of EcoManager to Arriva as part of an initial pipeline order for 1,000 systems and thereafter Arriva will be reviewing the rollout of EcoManager throughout its UK bus fleet.  We are also very encouraged by the fact that Arriva are to trial the product in mainland Europe where they operate over 8,000 buses. 


While Arriva remains our main customer in the CCTV market, I am also delighted to report that in the first half of the year 21st Century has won new CCTV business from Go-Ahead and has significant pipeline orders from non-Arriva customers to be fulfilled through the second half of the year and into next year. 


In 2006 we acquired an option to purchase Cyberlyne Communications Limited ('CCL') which, like 21st Century, specialises in the supply and installation of on-board CCTV for public transport vehicles.  While CCL was loss making and in need of management direction we felt that the company's synergies and customer base presented a good opportunity for us to expand our presence in the CCTV market.  We account for CCL as an associate company under the equity method of accounting and our share of its result for the period is included in the consolidated profit and loss account.  Further investment will be needed in CCL to move the business onto the next generation of products; however, in our view the more immediate opportunity for growth lies with 21st Century and so our strategy for growth is currently focused on EcoManager and other innovations in the 21st Century pipeline. 



Vehicle installation services 


The principal activities within this division are:

  • replacement and installation of stolen in-car entertainment and navigation systems for insurance company customers; 

  • installation of public transport monitoring systems for 21st Century;

  • installation services for the embryonic black-box motor insurance market.


Turnover in this division excluding intercompany installation charges to 21st Century fell by £2.9m (64%) to £1.6m.  This decline is attributable to the maturing audio insurance replacement business and our exit from the mobile 'phone installation contract with Unipart at the end of last year.  Moreover, and as I flagged in the pre-close trading update of 19 June, the growth in black box installations for the motor insurance market has been disappointing.  


Whilst continuing to work with our insurance clients in this market we are also making strategic investment in the pursuit of other vehicle installation opportunities. 


Distribution 


Following the disposals referred to above, our only remaining business in this division is Datatool which distributes motor cycle security and accessory products to the retail trade. Datatool continues to make a positive contribution to our central overheads.


Current trading and outlook


Having disposed of a significant part of our declining legacy business and successfully reduced the Group's bank indebtedness, we have been able to ride out the disappointments within our vehicle installation services business.  We are excited by the initial market response to EcoManager, which in light of the recent increases in fuel costs, could generate significant new business for the Group.  


We continue to work with new technology in the public transport industry and we look forward to strengthening existing and new relationships in the coming year.


Current trading is in line with market expectations.  


Peter Ward
Chairman







Consolidated income statement


Unaudited 

six months ended 

30 June

2008

£'000

Unaudited 

six months ended 

30 June 

2007

£'000

Year ended 31 December

2007



£'000

Continuing operations




Revenue (note 2)

6,008

8,225

15,455





Cost of sales

(2,500)

(3,858)

(7,020)





Gross profit

3,508

4,367

8,435

Other operating income

57

54

108

Administrative expenses

(3,492)

(3,656)

(7,183)

Share of results of associate

(50)

-

-





Operating profit

23

765

1,360





Finance costs

(49)

(78)

(271)





(Loss)/profit before taxation

(26)

687

1,089





Taxation

-

(150)

(100)





(Loss)/profit for the period from continuing operations

(26)

537

989





Discontinued operations




Loss for the period from discontinued operations

-

(188)

(353)





(Loss)/profit for the period

(26)

349

636

Attributable to:




Equity holders of the parent

(126)

289

503

Minority interest

100

60

133






(26)

349

636





Earnings per share




From continuing operations




Basic and diluted

(0.15)p

0.58p

1.05p

From continuing and discontinued operations




Basic and diluted

(0.15)p

0.35p

0.62p




Consolidated balance sheet


Unaudited 

30 June 2008

Unaudited

30 June 2007

31 December

2007



£'000

£'000

£'000

Non-current assets

Goodwill


4,850


4,850


4,850

Other intangible assets

457

369

511

Property, plant and equipment

3,744

4,046

3,837

Deferred tax asset

226

256

226


9,277

9,521

9,424

Current assets

Inventories


1,316


3,191


1,291

Trade and other receivables

3,190

6,239

4,566

Cash and cash equivalents

1,631

2,420

2,965


6,137

11,850

8,822

Total assets

15,414

21,371

18,246

Liabilities

Current liabilities







Trade and other payables

(2,626)

(5,628)

(3,682)

Tax liabilities

(70)

(150)

(70)

Bank overdrafts and loans

(1,486)

(3,953)

(2,444)

Provisions

(72)

-

(72)


(4,254)

(9,731)

(6,268)





Net current assets

1,883

2,119

2,554


Non-current liabilities







Bank loans

(500)

(1,489)

(1,150)

Provisions

(290)

-

(337)

Deferred tax liabilities

(626)

(626)

(626)


(1,416)

(2,115)


(2,113)


Total liabilities


(5,670)


(11,846)


(8,381)


Net assets


9,744


9,525


9,865


Shareholders' equity

Share capital


8,169


8,169


8,169

Share premium account

3,387

3,387

3,387

Special reserve

1,206

1,206

1,206

Other reserve

43

43

43

Retained earnings

(3,179)

(3,358)

(3,091)

Total equity shareholders' funds


9,626


9,447


9,714



Minority interests


118


78


151






Total equity (note 4)


9,744


9,525


9,865




Consolidated cash flow statement




Unaudited six months ended

30 June 2008

Unaudited six months ended

30 June 2007

Year ended

31 December 2007



£'000

£'000

£'000

Net cash inflow from operating activities (note 3)


219


354


1,373


Investing activities




Disposal of discontinued operations in 2007


250


-


1,547

Purchases of property, plant and equipment


(33)


(74)


(78)

Purchases of intangible fixed assets

(29)

-

(158)

Net cash generated by/(used in) investing activities


188


(74)


1,311


Financing activities







Repayment of borrowings

(650)

(500)

(1,350)

(Decrease)/increase in bank overdrafts


(958)


1,921


912

Dividend paid to minority interest

(133)

(26)

(26)

Net cash (used in)/generated by financing activities


(1,741)


1,395


(464)


Net (decrease)/increase in cash and cash equivalents


(1,334)


1,675


2,220


Cash and cash equivalents at beginning of period


2,965


745



745


Cash and cash equivalents at end of period


1,631


2,420


2,965


   Notes



1.    Basis of preparation and approval of interim statement 


The interim financial statement for the six months to 30 June 2008 has been prepared in accordance with IFRSs as adopted by the European Union and specifically in accordance with IAS 34 'Interim Financial Reporting'.  They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2007.


The accounting policies adopted in the preparation of the interim financial statements are the same as those set out in the Group's Annual Report and Financial Statements 2007.


The financial information herein does not amount to full statutory accounts within the meaning of Section 240 of the Companies Act 1985. The Annual Report and Financial Statements 2007 have been filed with the Registrar of Companies. The auditors' report on these financial statements was unqualified and did not include a statement under Section 237(2) or s237(3) of the Companies Act 1985.


The interim financial statement is unaudited and was approved by the Board of Directors on 5 August 2008.




2.    Segmental reporting



Continuing operations

by business sector with revenue reflecting sales to external customers

Public transport monitoring systems

Vehicle

Installation

Services

Distribution

Total


£'000

£'000

£'000

£'000

Unaudited six months ended 30 June 2008 





  Revenue

3,366

1,623

1,019

6,008

  Contribution to shared overheads

723

344

285

1,352

  Operating result

38

(15)

-

23

Unaudited six months ended 30 June 2007 





  Revenue

2,652

4,529

1,044

8,225

  Contribution to shared overheads

593

863

230

1,686

   Operating result

343

368

54

765

Year ended 31 December 2007





  Revenue

4,957

8,625

1,873

15,455

  Contribution to shared overheads

1,045

1,706

396

3,147

   Operating result

545

736

79

1,360




 


3.    Cash generated from operations



Unaudited six months ended

30 June 2008

Unaudited six 

months ended

30 June 2007

Year ended

31 December 2007


£'000

£'000

£'000

(Loss)/profit for the period

(26)

349

636

  Share of results of associate

50

-

-

  Finance costs

49

136

346

  Income tax expense

-

150

100

  Gain on disposal of discontinued operations

-

-

(957)

  Depreciation/amortisation

209

259

437

  Share based payments

38

53

106

  (Decrease)/Increase in provisions

(47)

-

409

 (Increase)/decrease in working capital balances

(5)

(419)

639

  Cash inflow from operations

268

528

1,716

  Interest paid

(49)

(174)

(343)

Net cash inflow from operating activities

219

354

1,373






4.    Statement of changes in equity



Unaudited six months ended

30 June 2008

Year ended

31 December 2007


£'000

£'000

Opening equity 

9,865

9,149

  (Loss)/profit for the period attributable to equity holders of the parent

(126)

503

  Profit for the period attributable to the minority interest

100

133

Total recognised (loss)/profit for the period

(26)

633

  Dividend paid to the minority interest

(133)

(26)

  Increase in share based payment reserve

38

106

Closing equity 

9,744

9,865








This information is provided by RNS
The company news service from the London Stock Exchange
 
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