Journeo Regulatory News (JNEO)

9 Sep 2009 07:00



9 September 2009

21st Century Technology plc 

("21st Century", "the Company" or "the Group")

Interim Results for the six months ended 30 June 2009

21st Century, a leading supplier of public transport CCTV and other monitoring systems, today announces its unaudited interim figures for the six months to 30 June 2009.  

Highlights

Commenting on the results, Peter Ward, Chairman of 21st Century, said:

"It is very pleasing to hit our full year City profit expectation in the first six months and we are looking forward to building on this success in the second half of the year. So far in this second half, we have won a significant new contract with Go-Ahead Group and we are moving forward with justified confidence." 

A copy of this interim results announcement is available on the Company's website: www.21stplc.com

For further information:

  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, the Group'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 which recently merged with fellow subsidiary, Toad (UK) Ltd, to form 21st Century Technology Solutions Ltd ("Solutions"). Solutions is the preferred supplier of on-board CCTV systems for the UK bus divisions of Arriva and Go-Ahead and has pioneered the use of WiFi with on-board CCTV systems. Solutions was also the first company to successfully launch automatic video downloads and a bus CCTV monitoring system (HeartbeatTM).

Solutions' new EcoManager product has contributed significantly to the recent increase in revenue in the Group's Public Transport Solutions division. The EcoManager system, which incorporates a passenger counting facility, is aimed at reducing fuel costs, improving safety and enhancing revenues for bus operators by monitoring driving styles against fuel consumption. 

The Company was renamed "TG21 plc" in 2005 and, to reflect the repositioning of the Group, changed this name to "21st Century Technology plc" in June 2009.

  21st Century Technology 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 2009.

Profit after tax for the 6 months ended 30 June 2009 was £0.2m which compares to a small loss recorded in the same period last year.

In April this year we announced that we had acquired the remaining 25% shareholding in 21st Century Crime Prevention Services ("CPS"). CPS was the principal operating company within our Public Transport Monitoring Systems division. The purchase price for the final 25% tranche in CPS was established in an option agreement dated 18 December 2004 at £2.1m in cash. However we successfully renegotiated the option and the vendor agreed to take half of the consideration in 21st Century Technology plc shares fixed at 10p per share in lieu of cash. 

Subsequent to the acquisition, CPS was merged with our other operating subsidiary Toad (UK) Limited to form 21st Century Technology Solutions Limited and the holding company changed its name from TG21 plc to 21st Century Technology plc.

Total Group turnover from continuing operations for the six months to 30 June 2009 was £7m (2008: £6m) and is broken down by division below.

Total turnover included an increase in our Public Transport Monitoring Systems division of 58% from £3.4m to £5.3m. The Group made an operating profit of £329,000 for the half year (2008: £73,000) and a net profit after tax of £204,000 (2008 loss: £26,000). Net debt due to the bank was £0.3m at 30 June 2009 (2008: £0.4m) and total net debt of £0.8m includes £0.5m of deferred consideration on the CPS acquisition.

Public transport 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" (Passenger Analysis System).

Sales in the first half of 2009 increased by 58% to £5.3m compared to the same period last year (2008: £3.4m). In addition to the regular turnover from CCTV sales to Arriva UK, the first half of the year also benefitted from £2.4m (2008: £0.2m) of sales of our new EcoManager and PAS products (representing over 1,000 installations), £0.5m (2008: £0.1m) of CCTV sales to Arriva in Europe and £0.8m (2008: £0.3m) of CCTV sales to Go-Ahead in the UK.

The 21st Century EcoManager system is aimed at reducing fuel costs and improving safety by monitoring bus driver behaviour. The system gives 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. Following a successful trial in the North West of England which resulted in considerable fuel saving and improved safety, we made our first sales to Arriva in June last year and they have committed to roll out EcoManager installations on all new buses and 1,800 retrofit vehicles in the UK this year.

Our position with Go-Ahead was further strengthened in August of this year when we secured a three year contract to supply The Go-Ahead Group with its on vehicle CCTV for buses and static CCTV for train stations and other commercial premises. In addition to the provision of CCTV equipment for railway stations, the contract also assigns the management of these station platform installations to 21st Century. The total contract is estimated to be worth around £6m in sales value over the three years. This contract underpins our existing service to them and also extends our field of activities into train station platform CCTV.

Vehicle installation services 

The principal activities within this division are:

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

installation services for the black-box motor insurance market.

Due to the maturity of the ICE insurance replacement market, which we have acknowledged for some time and the disappointing take up of black box installations in the insurance market, the activities within this division are in decline. Sales for the first six months of the current year fell in line with our expectations by 50% to £0.8m (2008: £1.6m).

During the period we reduced headcount within the division and, while we remain alert to other vehicle installation opportunities, our focus will continue to be installations of public transport monitoring systems. 

Distribution 

Datatool continues to make a contribution to central overheads but recorded a small loss at the operating profit line (after allocation of a proportionate share of central overheads) for the first six months of the year on turnover which was 17% down compared to the same period last year.

Current trading and outlook

The profit recorded for the first half of the year is already equal to that anticipated within the City expectation for the entire year and we continue to trade ahead of this expectation.

We are looking forward to consolidating our position with Go-Ahead and building on the early success of EcoManager in the UK by taking this product into the European market. At the same time we will be actively looking for opportunities to expand into related markets.

Peter Ward

Chairman

Nick Grimond

Chief Executive Officer

Consolidated statement of comprehensive income

Consolidated statement of changes in equity shareholders' funds

Consolidated statement of financial position

Consolidated statement of cash flows 

   Notes

1. Basis of preparation and approval of interim statement 

The interim financial statement for the six months to 30 June 2009 has been prepared in accordance with IFRSs as adopted by the European Union and specifically in accordance with IAS 34 'Interim Financial Reporting'.  It does 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 2008.

The financial information has been prepared on the basis of IFRSs that the directors expect to be applicable as at 31 December 2009.

Except as described below, the accounting policies adopted in the preparation of the interim financial statements are consistent with those set out in the Group's Annual Report and Financial Statements 2008, which were prepared in accordance with IFRSs.

The presentation of the primary financial statements has been modified in order to comply with IAS 1 (revised). However the revised standard has no impact on the reported results or financial position of the Group. The improvements to the IFRSs resulted in a number of amendments to the various standards to clarify the treatment in circumstances where practice previously varied. The improvements had no impact on the reported results or financial position of the Group.

IFRS 3 (2008) has been adopted in accounting for the acquisition of the final 25% of 21st Century Crime Prevention Services Limited (see note 3).

IFRS 8 requires operating segments to be identified on the basis of internal reports used to assess performance and allocate resources. The adoption of this standard has not resulted in any change to the segments reported previously.

These interim financial results do not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2008 were approved by the Board on 25 March 2009 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or section 498(3) of the Companies Act 2006.

The interim financial statement is unaudited and was approved by the Board of Directors on 8 September 2009.

2. Segmental reporting

The segmental reporting of operating profit/(loss) for the year ended 31 December 2008 has been restated to reflect the allocation of central overheads on a basis consistent with that applied for the current period interim results. 

3. Acquisition

On 14 April 2009 the Group acquired the remaining 25% of the issued ordinary share capital of 21st Century Crime Prevention Services Ltd ("CPS") and as a consequence CPS became a wholly owned subsidiary of the Group. The consideration for this final 25% was satisfied as follows:

The fair value of the non cash consideration above represents the market price of the shares in 21st Century Technology plc at the date of the acquisition being 4.63p per share. 

In accordance with IFRS 3 (2008), the difference between the above consideration and the balance on non controlling interest and the difference between the nominal value and the fair value of the shares issued as non cash consideration have been recognised directly in equity and attributed to equity holders in the parent within the consolidated statement of changes in equity shareholders' funds:

4. Cash generated from operations