Croma Security Regulatory News (CSSG)

28 Mar 2008 07:02

Croma Group PLC28 March 2008 Croma Group PLC Interim Results for the six months to 3l December 2007 Croma Group PLC ("Croma", the "Group", or "the Company") the AIM listed homelandsecurity specialist, announces its interim results for the six months to 31December 2007. Highlights •Turnover up 41% at £3.32m (2006 - £2.36m) •Profit before tax of £275,156 (2006: loss £384,380) •Continued profitability maintained in 2008 •Important and strategic new contracts won after the period end Chairman's Statement This is my first opportunity to report to shareholders in my new capacity asnon-executive chairman and I am very pleased to be able to report the Group'sfirst ever trading profit in the six months to 31 December 2007. Following decisive action over the last year by the Board (including placing anunprofitable and cash hungry subsidiary into liquidation), the Group now hasthree profitable subsidiaries operating generally in the field of homelandsecurity and related businesses, including the provision of access controlsoftware to a number of HM Government Agencies and the supply of enhanced visualimaging software to global defence industries. The results of the Group reflect this activity. During the six months theturnover of the Group grew 41% to £3.32m (2006: £2.36m) and profit before taxwas a respectable £275,156, a significant improvement over last year's loss of£384,380 (as restated for IFRS adjustments). Included in the profit in theperiod is a credit of £97,044 on discontinued activities. The Board confidentlyexpects this growth to be sustained as these businesses develop and strengthentheir customer contacts in these growth markets. I am also delighted to be able to report that the new Chief Executive of theGroup, Sebastian Morley, has made some key new appointments, including a newGroup Finance Director in Gerald McGill and a new divisional Managing Director.Sebastian comments on the businesses in more detail below. The new management team has progressed well with the consolidation process andthe Group has won some profitable and strategically important new contracts. Inthe meantime the central cost base of the Group has been drastically pruned tothe level where it can maintain an efficiently run business and still obtainvalue for money. The Board confidently expects to be able to report continued growth from new andrepeat business in the second half of the year. Nicholas HewsonNon-executive Chairman28th March 2008 Chief Executive's Statement Introduction I am very pleased to report an excellent first half of the Group's trading yearwhich has seen it strengthen its position in the sectors in which it operates. Vigilant Security continues to grow at a rapid rate with turnover growing by 40%to £2,029,468, profit before taxation up to £88,259 from £45,151 in thecomparative six month period to 31st December 2006. The growth has come from newcontract wins along with new business roll out from existing clients. Research and Development Designs Services Ltd has seen turnover grow by 64%compared to the comparative period to £910,186. The company recorded a profitbefore taxation of £146,391 in the period compared to a loss in the equivalentperiod last year of £77,239. Photobase Limited has recorded an increase in turnover by 6% to £378,360, and aprofit before taxation of £20,000 compared to a loss in the comparative periodof £40,683. Group costs are being reduced so as to maintain a leaner, fitter group goingforward. Impact of the adoption of International Financial Reporting Standards ("IFRS") The financial information shown in this interim report is presented inaccordance with IFRS. The comparative information for the six months to 31December 2006 and the year to 30 June 2007 have been restated under thesestandards. The Group's website contains the detail of these reconciliations. The only impact on the Balance Sheet and Income Statement has been the adoptionof IAS 36 'Impairment of Assets'. This has not impacted on either the profit inthe 6 month period to 31 December 2007 or the net assets at that date. There isno difference in Group net assets under IFRS and UK GAAP at 31st December 2007as the impairment review and associated charge in the period to 30th June 2007aligns the carrying value of the goodwill under UK GAAP and IFRS. However, theadoption of IAS36 has had an impact on the net assets at 1st July 2006, 31stDecember 2006 and on losses incurred in the period to 31st December 2006. The impact of the adoption of IAS 36 is set out below: Balance Sheet implication of As stated Effect of As restatedimpact of IAS 36 under UK IAS36 under IFRS GAAPNet Assets at 1 July 2006 £4,017,812 £697,226 £4,715,038Net Assets at 31December 2006 £3,471,352 £962,173 £4,433,525Net Assets at 30 June2007 £1,283,786 - £1,283,786 Income Statement implication ofimpact of IAS 36 Loss in 6 month period to 31stDecember 2006 (£649,327) £264,947 (£384,380)Loss in period to 30th June 2007 (£3,819,595) (£697,226) (£4,516,821) Outlook The new board of directors have made considerable progress and while there ismuch still to be done, the strong results in the six months to 31 December 2007will provide the Group with a platform to continue to grow the business andimprove profitability. I believe that the Group is well placed to exceed marketexpectations for the year. Sebastian Morley, Chief Executive 28th March 2008 CROMA GROUP PLC CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2007 6 Months ended 6 Months ended Year ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Unaudited £ £ £ Revenue 3,318,014 2,356,358 5,052,508Cost of Sales (2,006,771) (1,497,287) (3,512,227) __________ __________ __________Gross Profit 1,311,243 859,071 1,540,281Operating Expenses-Goodwill impairment - - (2,792,693)-Other operating expenses (1,076,873) (1,154,182) (2,537,705) __________ __________ __________Profit/(Loss) from operations 234,370 (295,111) (3,790,117)Financial income 1,423 673 1,505Financial expenses (57,681) (26,291) (90,397) __________ _________ _________Profit/(Loss) before taxation 178,112 (320,729) (3,879,009)Taxation - - - Profit/(Loss) for period 178,112 (320,729) (3,879,009)Profit/(Loss) from discontinued operations 97,044 (63,651) (637,812) _________ _________ _________Profit / (Loss) attributable to equity shareholders 275,156 (384,380) (4,516,821) ========= ========= ========= Profit/(Loss) per share - undiluted 0.17p (0.26p) (3.01p)Profit/(Loss) per share - diluted 0.15p (0.26p) (3.01p) CROMA GROUP PLCCONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2007 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Unaudited £ £ £ Non-current assetsGoodwill 2,594,136 5,646,832 2,594,136Property, plant and equipment 200,619 235,422 191,109 _________ __________ _________ 2,794,755 5,882,254 2,785,245 _________ __________ _________Current assetsInventories 253,558 581,442 311,212Trade and other receivables 1,507,942 1,081,475 1,427,328Cash 145,681 30,717 131,792 __________ _________ _________ 1,907,181 1,693,634 1,870,332Current liabilitiesTrade and other payables (1,251,908) (2,516,690) (1,750,184)Bank loans and overdrafts (561,842) (79,192) (482,329) _________ _________ _________Net current assets/(liabilities) 93,431 (902,248) (362,181) ________ _________ _________Total assets less currentliabilities 2,888,186 4,980,006 2,423,064Non-current liabilities Long term borrowings (42,217) (3,787) (45,373)Loan Notes (1,186,544) (515,280) (1,091,077)Deferred tax (2,828) (27,414) (2,828) ________ ________ ________ 1,656,597 4,433,525 1,283,786 ========= ========= ========= EquityShare capital 9,829,935 8,976,145 9,829,935Other reserves 460,636 234,069 362,981Retained earnings (8,633,974) (4,776,689) (8,909,130) ________ ________ ________ 1,656,597 4,433,525 1,283,786 ========== ========== ========= This interim financial information was approved by the Board of Directors on28th March 2008 G M McGillDirector CROMA GROUP PLCCONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 6 Months 6 Months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Unaudited £ £ £ Cashflow from operatingactivitiesProfit/(Loss) before taxation 275,156 (384,380) (4,516,821) Adjustments for:Depreciation 13,259 25,143 76,827Impairment of Goodwill - - 2,792,693FRS20 charge 73,122 53,447 106,893Interest received (1,423) (673) (1,655)Interest expense 57,681 27,837 97,815(Increase)/Decrease ininventories 57,657 (40,481) 229,749(Increase)/Decrease in tradeand other receivables (80,614) 225,360 (120,493)(Decrease)/Increase in tradeand other payables (498,276) 64,378 845,182 __________ __________ __________Cash generated from operations (103,438) (29,369) (489,810) Tax paid - (167,294) (222,021) __________ __________ __________Net cash from operatingactivities (103,438) (196,666) (711,831) Cash Flows from investingactivitiesPurchase of property, plant andequipment (22,772) (23,227) (35,990)Proceeds on disposal ofproperty, plant and equipment - - 5,909Interest received 1,423 673 1,655 __________ __________ __________Net cash from investingactivities (21,349) (22,554) (28,426)Cash flows from financingactivitiesInterest paid (57,681) (27,837) (97,815)Issue of Loan Notes 120,000 562,754 750,000Repayment of borrowings (3,156) (1,630) 77Issue of Share Capital - - 100,000 __________ __________ __________Net cash from financingactivities 59,163 533,287 752,262 __________ __________ __________Net (decrease)/increase in cashand cash equivalents (65,624) 314,067 12,005 __________ __________ __________Cash and cash equivalents atbeginning of period (350,537) (362,542) (362,542) __________ __________ __________Cash and cash equivalents atend of period (416,161) (48,475) (350,537) ========== ========== ========== NOTES TO THE INTERIM FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 1. Financial Information Croma Group PLC has adopted International Financial Reporting Standards ("IFRS")as adopted by the European Union with effect from 1st January 2006. The Groupwill apply IFRS in its consolidated financial statements for the year ended 20thJune 2008. Therefore, these interim financial statements for the 6 months to31st December 2007 are prepared using accounting policies in accordance withIFRS and International Financial reporting Committee ("IFRIC") interpretationsthat are expected to be applicable to the consolidated financial statements forthe year ended 20th June 2008. These standards remain subject to ongoingamendment and/or interpretation and are therefore still subject to change.Accordingly, information contained in these interim financial statements mayneed updating for subsequent amendments to IFRS required for first time adoptionor for new standards issued post the balance sheet date. The basis of preparation and accounting policies followed in this interim reportdiffer from those set out in the Annual Report and Accounts for the year ended30th June 2007 which where prepared in Accordance with United Kingdom accountingstandards (UK GAAP). As permitted, this interim report has not been prepared inaccordance with IAS 34 "Interim Financial reporting". The interim financial statements do not constitute statutory accounts as definedby Section 240 of the Companies Act 1985. The financial information for the year to 30th June 2007 has been extracted fromthe statutory accounts for the Group for that period now amended to conform withthe IFRS accounting policies expected to be applied in the consolidatedfinancial statements for the year ended 30th June 2008. These published accountsin a form consistent with UK GAAP were reported on by the auditors withoutqualification or an emphasis matter reference and did not include a statementunder section 237(2) or (3) of the Companies Act 1985 and have been delivered tothe Registrar of Companies. A detailed explanation of the transition from UK GAAP to IFRS is contained onthe Company's website. 2. Earnings per share The earnings per share is based on the profit/(loss) for the period and theweighted average number of ordinary shares in issue and ranking for dividend. 6 Months ended 6 Months ended Year ended 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited Unaudited £ £ £Profit/(Loss) for the period 275,156 (384,380) (4,516,821) ========== ========== ==========Weighted average number ofshares 162,983,164 148,226,744 150,111,909 ========== ========== ==========Profit/(Loss) per share 0.17p (0.26p) (3.01p) ========== ========== ==========Fully diluted profit/(loss)per share 0.15p (0.26p) (3.01p) ========== ========== ========== Enquiries: Croma Group plcSebastian Morley, Chief Executive 07768 006 909 Seymour Pierce LimitedMark Percy / Jeremy Garrett-Cox 020 7107 8000 This information is provided by RNS The company news service from the London Stock Exchange