ASLR.L Regulatory News (ASLR)

2 Feb 2005 16:51

Pentagon Protection PLC02 February 2005 PENTAGON PROTECTION PLC REPLACEMENT ANNOUNCEMENT THIS ANNOUNCEMENT REPLACES THE ANNOUNCEMENT OF FINAL RESULTS MADE BY THE COMPANYON 17 DECEMBER 2004 (RNS NO. 5347G). CHANGES TO THAT ANNOUNCEMENT ARE ASFOLLOWS: Changes to announcement are as follows: Consolidated Profit and Loss AccountGoodwill amortisation - (Amount not changed) Disclosure changed to include thecost under Administration expenses heading. Consolidated Balance SheetCurrent Year - No adjustmentsPrior Year - Typing error made on conversion as creditors should be £413,105 not£13,105. All other figures not adjusted. Consolidated Cash flow StatementNote 1 Reconciliation of operating profit/(Loss) to net cash outflow fromoperating activitiesOperating profit decreased from £278,489 to £195,495Depreciation charges decreased from £79,651 to £45,350Amortisation has been introduced at £117,302Increase in stock reduced from (£117,002) to (£100,247)Increase in debtors changed from (831,231) to £97,428Decrease in creditors changed from £400,288 to (£110,741)Net Cash inflow changed from (£189,805) to £244,587 Note 2 Analysis of cash flow for headings netted in cash flow statementReturns on investments and servicing of finance - no adjustmentsCapital expenditure and financial investmentsPurchase of tangible fixed assets - Reduced from £121,354 to £75,538Purchase of intangible fixed assets - Reduced from £1,213,162 to £943,365Financing - Share Issue decrease from £2,347,500 to £1,597,500 Note 3 Analysis of changes in net fundsDebts falling due within one year - Opening balance changed from (£18,468) to(£106,224) and the movement in year from £5 to £30,005 and closing balance from(£18,463) to (£76,219).Factor finance has been introduced with an opening balance of (£86,621),movement £14,941 and closing balance of (£71,680).Total closing balances has adjusted with the above accordingly. Reconciliation to net debt cash flow to movement in net fund/(debt)Cash movement relating to debt and lease financing - Increased from £35,976 to£80,917Net debt at 1st October 2003 adjusted to movements on note 3. The corrected version of the announcement follows: FINAL RESULTS YEAR ENDED 30 SEPTEMBER 2004 Turnover up 184%, Profits Turn Around; Record Order Book Pentagon Protection PLC ("Pentagon" or "the Company"), the provider ofprotective glazing products to the commercial and automotive sectors, announcesits final results for the year ended 30 September 2004. The Company went publicon AIM in April 2003. David Thomas, Chairman, in his statement reports: "I am delighted to report ayear of reasonable progress. These results are in line with management'sexpectations, with the contribution from our first acquisition, Filmtek Limited,exceeding expectations. We have strengthened the foundations for the continuedgrowth of our established business and expansion into new product sectors andgeographies. Filmtek underpins our aspirations of becoming a leading globalplayer in overall glass protection." Financial Highlights • Turnover: £3.32m, up 184% - Continuing operations £1.46m (2003: £1.16m) up 25% - Acquisitions £1.85m (2003: nil) • Operating profit: £195,495 (2003: loss £239,231) - Continuing operations £17,980 (2003: nil) - Acquisitions £177,515 • Interest cover 12 x • Pre-tax profit: £178,857 (2003: loss £270,422) • Basic, diluted earnings per share: 0.15p (2003: loss 0.47p) • Net assets: £3.59m (2003: £375,865) - Acquisition of Filmtek - Two successful share placings • Cash £601,782 (2003: £252,109) • No dividend, in line with stated policy Corporate Highlights Pentagon Filmtek • Filmtek acquisition, first since flotation April 2003, broadens international markets for products and services • Pentagon Filmtek's contribution exceeds expectations • Major projects in UK, Middle East and Far East • Contracts completed/ongoing: HSBC, Sony, Boots, Marks & Spencer, Barclays, Credit Suisse First Boston, Asda, Dixons, the British Council, United Nations, DHL, Pepsi, Singapore Changi Airport, and Middle East based groups • Record order book of £1.3m Pentagon Glass-Tech • SupaGlass continues to win recognition, awards and accreditations. • Growing overseas business • VW, Audi, Mazda, Honda, the Post Office, using or approved the product • General Health and Safety policies expected to benefit the business • New product launch planned for early 2005 Pentagon Pro-Marker • Recent launch in Dusseldorf well received Outlook David Thomas says: "The first quarter has started well and the Group has arecord order book. The directors are confident of continued profits across allareas of the business." Contact: David Thomas, Chairman Pentagon Protection PLC 020 8749 9749Peter Binns Binns & Co PR Ltd 020 7786 9600Charlotte Edgar Binns & Co PR Ltd 020 7153 1478 CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER 2004 Final results for the year ended 30th September 2004. Introduction and Financial Review I am delighted to report a year of considerable progress in the development ofPentagon Protection plc. These results are in line with management'sexpectations arising from the strategies announced in the Group's 2003 AnnualReport and deployed across 2004. A significant gain has been recorded inturnover, the Group has moved into profit and we have strengthened thefoundations for the continued growth of our established business and expansioninto new product sectors and geographies. Importantly, we have successfully integrated a major new business - FilmtekLimited, acquired in December 2003 - to underpin the achievement of ouraspirations of becoming a leading global player in overall glass protection. The Group's financial results from continuing operations for the year ending 30September 2004 show turnover up 25 per cent. to £1,462,714, compared with£1,165,914 for the previous year. Including the effects of the Filmtekacquisition, turnover for the year increased to £3,316,554, up 184 per cent.compared to 2003. On operating profit, the continuing operations posted a swing of £288,402 froman operating loss of (£270,422) in 2003 to a profit of £17,980 in 2004. With thecontribution from the Filmtek acquisition, the operating profit in 2004 was£195,495, an improvement of £465,917 over 2003 levels. The Group has benefited from a positive cash flow during the year. The netinterest charge for the year reduced to £16,638 (2003: £31,191). Interest wascovered 12 times by operating profit (2003: interest was not covered due to anoperating loss). Net assets of the Group have increased to £3,596,309 (2003: £375,865) as aresult of the acquisition of Filmtek and the two successful share placingsduring the year: First, in December 2003, to help finance the acquisition ofFilmtek (21 million new Ordinary Shares at 4.75p, which raised £997,500 gross);second, in September 2004 (9.6 million new Ordinary Shares at 6.25p, whichraised £600,000 gross) to finance the organic expansion of the Group. Overallthere was an increase in net funds during the year of £385,649 (2003: £311,097). The net cash Inflow from operating activities of £244,587 (2003: outflow of£340,211) was caused by an increase in working capital of £547,945 (2003:increase in working capital £134,940). The increase in working capital reflectsthe expansion of the business with the acquisition of Filmtek and the broadeningof the geographical spread of the Group's activities. In line with stated policy, the directors do not recommend payment of adividend. Business Review Pentagon Filmtek Filmtek, the Group's first acquisition since flotation, is a leading specialistin the advancement and installation of safety, security and solar window film oncommercial buildings, in the UK and overseas. To recap on the details of theacquisition: it was financed by a placing of 21 million new ordinary shares at4.75p, which raised £997,500 gross, and by the issue of 15,789,474 new OrdinaryShares in Pentagon Protection to the vendors. In addition, deferredconsideration of up to a maximum of £1 million could also be payable over thefollowing three years, depending on Pentagon Filmtek's profits in the threeyears ended 30 April 2006, this to be satisfied by a combination of cash and newOrdinary Shares in Pentagon. The acquisition has significantly broadened the international market forPentagon Protection's products and services under the distinctive Pentagon brandand has added substantial flat-glass expertise to the Company's automotive glassprotection services. Pentagon Filmtek, which was founded as Filmtek Limited in 1996, has grown tobecome a leading specialist in the development and installation of protectivewindow film on commercial buildings, leading to the development of the Filmtek'Anchoring Solution', a unique technology for containing and anchoring glassthat has particular application in overhead glazed roofing. Pentagon Filmtek's contribution to the Group's overall business has exceededexpectations. Turnover of this business for the nine months ending September2004 was £1,853,840, representing 56 per cent. of Group sales. Operating profitfor the same period was £195,495. Pentagon Filmtek has undertaken several major projects over the year, nationallyand internationally, and has provided a base from which the Group hasestablished on-the-ground representation in the Far East (Singapore) and willshortly open in the Middle East (Bahrain), two geographical areas identified askey to our international expansion. The Group has also established agencyrelationships in Dubai and Saudi Arabia. Over the last two years, PentagonFilmtek has completed contracts in more than 51 countries worldwide, includingSaudi Arabia, Iraq, Afghanistan, East Timor, Bahrain, China, and Singapore. Our recent client list comprises an array of blue-chip companies. Domestic andinternational contracts recently completed and ongoing include: HSBC, Sony,Boots, Marks & Spencer, Barclays, Credit Suisse, Asda, Dixons, the BritishCouncil, United Nations, DHL, Pepsi, Singapore Changi Airport and a number ofMiddle East based groups. The prospects for continued progress are also highly encouraging: PentagonFilmtek has currently quoted for projects comprising close to £3,000,000 invalue and has an order book of £1,300,000. Pentagon Glass-Tech Section 32 of the Construction and Use Regulations (part of the Road TrafficAct) was changed by Parliament in February 2004 to include reference to windowtint films, the effect of which is to discourage the practice of applying tintsto the driver and forward passenger windows. This had a significant effect ondemand for window tinting and compelled the Group to step up its effort inpromoting SupaGlass as a superior alternative to tinting and to open new marketsinternationally, capitalising on the strengthening overall awareness of thePentagon brand. The revised strategy is working. Turnover on continuing operations for the yearending September 30, 2004 was £1,462,714, up from £1,165,914 for the previousyear. Good progress was also made on profit, with the business posting anoperating profit for the year of £17,980 compared to a loss for the previousyear of £239,231. Internationally, Pentagon Glass-Tech has secured license-based representationacross the year in Benelux and Brazil and received a deposit for Greece.Discussions are ongoing with a number of additional licensee prospects,particularly in the Middle East. The directors are confident that the pace ofinternational expansion will accelerate over this next year. Pentagon Glass-Techand Pentagon Filmtek plan to establish dedicated offices and facilities inBahrain, which will act as the base for the Group to fulfil automotive andcommercial building projects within the region. SupaGlass is continuing to attract commendations, accreditations and praise fromthe motor industry. After the VW initiative to promote the product throughoutits dealer network, which is now beginning to be executed, sister company Audihas recently approved SupaGlass and will soon also offer SupaGlass through itsmotor retail network. Similar aspirations exist with respect to Mazda and Honda,both of which have approved SupaGlass during 2004. In addition, the Post Officehas recently issued an approval for SupaGlass following extensive testing andthis is expected to translate into orders for the application of SupaGlass to asignificant number of vehicles from the start of 2005. A major focus for SupaGlass during 2005 will be Health and Safety. GovernmentHealth & Safety policies are encouraging employers to put more diligence intodeveloping duties of care operations for their employees on the road. It isanticipated that this will lead to increased SupaGlass demand for companyvehicles, capitalising on the brand's growing reputation for protection in thisarea. Pentagon Glass-Tech will launch, early in 2005, an upgraded version of SupaGlassthat increases the thickness of the protective laminate from 300 to 450 microns.Not only will the Group secure worldwide exclusivity from the manufacturer fordistribution of this superior-performing material, the initiative willstrengthen Pentagon's position with the Government on the development of a new,anti-theft DIN standard for vehicle glazing. Pentagon Pro-Marker The Group has been working on the development of a product that provides apatented, technically superior glass-etched certification mark for use by glassand glazing industries in the face of impending legislation. This newlegislation dictates that all safety glass produced and installed in anybuilding within a critical location must be marked in accordance with therelevant impact accreditation. Failure to do so could deem the glass unfit forpurpose and non-compliant with UK building regulations with the penalties inline with UK law. Pro-Marker has been developed in close consultation with theglass industry and with the support of the Glass & Glazing Federation. Pentagon Pro-Marker was officially launched in November at "Glasstech 2004" inDusseldorf, the leading international glass exhibition. The response receivedfrom representatives of many countries was extremely encouraging and thedirectors are now in advanced discussions with a leading distributor for the UKand Europe. In addition, the Group is in discussions with a number of companiesboth inside and outside of the glass industry, from whom significant orders forPro-Marker are also expected to mature over the next year. Conclusion and Outlook It is encouragingly evident that the steps taken by the directors to strengthenboth critical mass and senior management over the last year, in combination witha clear spirit of commitment and dedication at all levels from within the Group,have resulted in a significantly stronger business and platform for futuregrowth. In our two lead companies, Pentagon Filmtek and Pentagon Glass-Tech, we haveclear evidence of the internationally growing product appeal of our otherprotection technologies. The need for protection across glass of all types continues to grow, driven byurban criminal violence, terrorism and intensifying Health & Safetyconsiderations. We have also seen a growth in the confidence of our clients toincrease levels of business with us, resulting from continuing improvements inproduct and service and further accreditations of our technologies. The first quarter has started well and the Group has a record order book. Withthe Group pressing ahead over the coming year with its plans to expand thePentagon Protection brand geographically into new markets, introduce bettertechnologies and launch superior new products, the directors are confident ofcontinued progress across all areas of the business. David ThomasChairman PENTAGON PROTECTION PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH SEPTEMBER 2004 30.9.04 30.9.03 Notes £ £ £ £ TURNOVER 2 -------- --------Continuing operations 1,462,714 1,165,914Acquisitions 1,853,840 - -------- -------- 3,316,554 1,165,914Cost of sales 1,364,463 354,100 -------- -------- GROSS PROFIT 1,952,091 811,814 -------- --------Distribution costs 501,997 261,496Administrative costs 1,192,343 807,303Amortisation of goodwill 82,994 - -------- -------- 1,777,334 1,068,799 -------- -------- 174,757 (256,985)Other operating income 20,738 17,754 -------- -------- OPERATING PROFIT/(LOSS) -------- --------Continuing operations 17,980 (239,231)Acquisitions 177,515 - -------- -------- 195,495 (239,231) Interest receivable and 3,125 988similar income -------- -------- 198,620 (238,243)Interest payable and 19,763 32,179similar charges -------- -------- PROFIT/(LOSS) ONORDINARY ACTIVITIES 178,857 (270,422)BEFORETAXATIONTax on profit/(loss) on - 111,500ordinary activities -------- -------- PROFIT/(LOSS) ONORDINARY ACTIVITIES 178,857 (381,922)AFTER -------- --------TAXATION PROFIT/(LOSS) FOR THE 178,857 (381,922)FINANCIAL YEAR -------- -------- RETAINED PROFIT/(DEFICIT) FOR THE YEAR 178,857 (381,922)FOR THEGROUP ======== ========Basic and diluted 0.15p (0.47)pearnings/(loss) pershare TOTAL RECOGNISED GAINS AND LOSSESThe Group has no recognised gains or losses other than the profit for thecurrent year and the loss for the previous year. CONSOLIDATED BALANCE SHEET 30TH SEPTEMBER 2004 30.9.04 30.9.03 Notes £ £ £ £FIXED ASSETS -------- --------Intangible assets 2,430,844 -Tangible assets 237,814 161,808 -------- -------- 2,668,658 161,808CURRENT ASSETS --------- --------Stocks 156,276 39,274Debtors 1,219,965 388,734Cash at Bank 601,782 252,109 --------- -------- 1,978,023 680,117CREDITORSAmounts falling due within 777,972 413,105one year --------- -------- NET CURRENT ASSETS 1,200,051 267,012 -------- -------- TOTAL ASSETS LESS CURRENT 3,868,709 428,820LIABILITIES CREDITORSAmounts falling due after 22,400 52,955more than one year PROVISIONS FOR LIABILITIES 250,000 -AND CHARGES -------- 3,596,309 375,865 -------- -------- CAPITAL AND RESERVESCalled up share capital 135,556 89,167Share premium 3,029,370 784,172Merger reserve 192,150 192,150Shares to be issued 750,000 -Profit and loss account (510,767) (689,624) -------- -------- SHAREHOLDERS' FUNDS 3,596,309 375,865 ======== ======== CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER 2004 30.9.04 30.9.03 Notes £ £ £ £ Net cash inflow / (outflow)from operating 1 244,587 (340,211)activities Returns on investments andservicing of 2 (16,638) (31,191)finance Taxation - (29,354)Capital expenditure andfinancial 2 (410,522) 5,977investment Acquisitions 2 (943,365) - -------- -------- (1,125,938) (394,779) Financing 2 1,475,611 651,950 --------- --------Increase in cash in the period 349,673 257,171 ======== ======== Reconciliation of net cashflow to movement in net funds/(debt) Notes 2004 2003 £ £Increase/(decrease) in cash in 3 349,673 257,171the yearCash movements relating todebt and lease 80,917 167,223financing -------- --------- Movement in net debt resultingfrom cash 430,590 424,394flows -------- --------- Inception of new finance - (25,186)leases -------- --------- Change in net debt 430,590 399,208 Net debt at 1 October 2003 (10,902) (410,110) -------- --------- Net funds/(debt) at 30 419,688 (10,902)September 2004 ======== ======== NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER 2004 1. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 30.9.04 30.9.03 £ £ Operating profit/(loss) 195,495 (239,231)Depreciation charges 45,350 35,823Amortisation 117,302 -Profit on disposal offixed assets - (1,863)Increase in stocks (100,247) (13,200)Decrease in debtors 97,428 7,923Decrease in creditors (110,741) (129,663) ________ ________Net cash inflow/(outflow) fromoperating activities 244,587 (340,211) ======== ======== 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 30.9.04 30.9.03 £ £ Returns on investments and servicing offinanceInterest received 3,125 988Interest paid (18,793) (30,446)Interest element of hire purchasepayments (970) (1,733) ________ ________Net cash outflow for returns oninvestments and servicing of finance (16,638) (31,191) ======== ======== Capital expenditure and financialinvestmentPurchase of tangible fixed assets (75,538) (15,695)Sale of tangible fixed assets - 21,672Development expenditure (334,984) - __________ ________Net cash (outflow)/inflow for capitalexpenditure and financial investment (410,522) 5,977 ======== ======== AcquisitionsPurchase of subsidiary undertaking (860,510) -Net overdrafts acquired withsubsidiary (82,855) - ---------- ---------Net cash outflow for acquisitions (943,365) - ---------- --------- The subsidiary undertaking acquired during the year contributed £288,418 to thegroup's net operating cash flows, paid £3,059 in respect of net returns oninvestments and servicing of finance, and utilised £169,442 for capitalexpenditure FinancingLoans repaid to financial institution (18,467) (18,462)Increase in factor finance - 42,201Flotation and share issue costs (55,913) (290,826)Capital element of finance leaserental (17,509) (35,539)Net decrease in director's loan (30,000) (155,423)Share issue 1,597,500 1,109,900 _________ ________Net cash inflow from financing 1,475,611 651,950 ======== ======== NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER 2004 3. ANALYSIS OF CHANGES IN NET FUNDS At 1.10.03 Cash flow Other non-cash At 30.9.04 changes £ £ £ £Net cash:Cash at 252,109 349,673 - 601,782bank ------------ ------------ ------------ ------------Debtsfallingdue within (106,224) 30,005 - (76,219)oneyear ------------ ------------ ------------ ------------Debt dueafter (20,771) 18,462 - (2,309)one year ------------ ------------ ------------ ------------Finance (49,395) 17,509 - (31,886)leases ------------ ------------ ------------ ------------Factor (86,621) 14,941 - (71,680)finance ------------ ------------ ------------ ------------ Total (10,902) 430,590 - 419,688 ======== ======== ======== ======== Copies of the Company's full Report and Accounts will be sent to shareholders indue course and will be available from: Pentagon Protection PlcPentagon House4 Acton Park EstateThe ValeLondonW3 7QE This information is provided by RNS The company news service from the London Stock Exchange