Tekmar Group Regulatory News (TGP)

26 Jul 2005 06:00

Embargoed Release: 07:00hrs Tuesday 26th July 2005 TG21 plc Interim Results for the six month period ended 30 June 2005 Highlights * Total operating profit up 20% * Net profit up 10% * Increased operating profit in associate company - 21st Century * ‚£1.1m of cash generated from operations * Speed camera warning device (Inforad) achieves encouraging early sales * Further growth anticipated from hands free installations and CCTV for public transport vehicles * Exit strategies in place for a number of peripheral activities to focus on proven growth areas TG21 plcChairman's statement - Interims 2005I am pleased to present our unaudited interim figures for the six months to 30June 2005.Total operating profit increased by almost 20% on 30 June 2004 to reach ‚£1.2mfor the half year. While turnover is down by ‚£1.9m on the comparative periodthis does not include sales made by our associate company, 21st Century CrimePrevention Services Ltd ("21st Century"), which recorded sales of ‚£2.1m. Thecontribution to profit from our share of the results of 21st Century hasenabled us to increase the group's net profit by 10% to ‚£0.8m.Cash flow remains strong. We have generated ‚£1.1m (2004: ‚£1.0m) from operationsin the first six months. Net debt stands at ‚£3.9m, an increase of just ‚£0.5m onthis time last year, despite the fact that since that date we have spent ‚£2.6mon our investment in 21st Century. The results of this associate company andtrading within our Services and Distribution divisions are reviewed below:21st CenturyIn April 2005 we increased our stake in 21st Century to 49%. 21st Centuryprovides CCTV and black box recording systems for use on public transportvehicles such as buses and trains.21st Century's unaudited results for the first half of 2005 showed an increasedoperating profit on sales of ‚£2.1m (up 10% on the prior year). As we currentlydo not hold a controlling interest in 21st Century we have not added its salesto group turnover but have included our share of its profit in the attachedresults. Recently 21st Century received the first order in respect of theinstallation of CCTV and black box technology for a regional bus depot. Thetotal potential value of this one project is ‚£1.5m with the work spread overthe next 6 months.We believe that the desire of operators, backed by local authority funding, toencourage the use of public transport by improving safety is a key driver oflong term growth.ServicesPrincipal Activities: Insurance replacement of in-car entertainment systems,cameras and computers. The supply and installation of mobile phone hands-freekits, telematics units, in-car entertainment and security systems to fleet andprivate customers.Turnover in this division at ‚£6.2m was ‚£0.7m (10%) down on the same period lastyear. We have seen a 25% decline in our audio replacement business as thismarket continues to contract. The installation of mobile phone hands-free kitsby contrast has grown during the first half of the year and is up by almost30%. We have now undertaken over 50,000 installations in just over 18 months oftrading in this market. We understand that legislation to be introduced laterthis year will impose penalty points for the illegal use of mobile phones whiledriving. We believe that this will increase demand for hands-free kits further.Our partnership with 21st Century has meant that we have invested moreresource, including training our engineers, in the installation of CCTV ontopublic transport vehicles. To allow us to focus more efficiently andeffectively on this high growth area we have put in place strategies to exitseveral peripheral business areas. We are now in a position to make a managedwithdrawal from the ACTRA telematics business, the camera and computerreplacement businesses and our Vehicle Inspection Service ("VIS").DistributionPrincipal Activities: The distribution of in-car entertainment systems, satnav/communications equipment,speed camera alerts,audio leads and, own brandautomotive and motorcycle alarms to the retail trade.Overall the sales in this division fell by ‚£1.2m (11%) to ‚£10.0m at the halfyear. Most of this decline was anticipated as it fell within the mature carsecurity market. In more recent months we have seen very encouraging earlysales figures from our Inforad speed camera warning device which is currentlythe least expensive product of its type on the market and has been extremelywell received by the motoring Press. In May 2005, we secured the UKdistribution rights to the product and took orders for in excess of 10,000units within the first few weeks of launch. Halfords, Woolworths and Argos areall stocking the product and we are looking forward to further growth in thesecond half.Current trading and the futureThe Board is very encouraged by the improved profitability which has been madewith the restructuring of the group during the first half of 2005. Thestrategic withdrawal from a number of peripheral activities will enable us toaccelerate our continued integration with 21st Century and focus on businessareas with real potential for the group. Current trading is in line with marketexpectations and we are looking forward to the future with confidence.Peter WardChairmanFor Further Information:Peter Ward TG21 Plc 020 8710 4000 Chairman Andrew Tan Hansard Communications 020 7245 1100 Account Executive Consolidated profit and loss account Unaudited six months ended 30 June Unaudited Year ended 2005 six 31 Months ended December 30 June 2004 2004 Before Amortisation After a amortisation of i mortisation of i ntangibles of i ntangibles ntangibles ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Turnover 16,214 - 16,214 18,126 34,574 Cost of sales (9,250) - (9,250) (10,997) (20,380) Gross profit 6,964 - 6,964 7,129 14,194 Other operating (5,883) (60) (5,943) (6,152) (12,874)expenses Group operating p 1,081 (60) 1,021 977 1,320rofit Share of operating 219 (75) 144 - (6)profit/(loss) of associate Total operating 1,300 (135) 1,165 977 1,314profit Interest payable and (253) - (253) (232) (547)similar charges Profit on ordinary 1,047 (135) 912 745 767activities before taxation Taxation (66) - (66) - - Profit on ordinary 981 (135) 846 745 767activities after taxation Minority interests (36) - (36) (6) (1) Profit attributable 945 (135) 810 739 766to members of the parent company Earnings per share - 1.16p (0.17)p 0.99p 0.94p 0.97pbasic Earnings per share - 1.16p (0.17)p 0.99p 0.90p 0.94pdiluted Consolidated balance sheet Unaudited Unaudited 31 December 30 June 30 June 2004 2005 2004 ‚£'000 ‚£'000 ‚£'000 Fixed Assets 592 1,168 634 Intangible assets Tangible assets 4,424 3,053 4,406 Investments 2,658 - 1,774 7,674 4,221 6,814 Current Assets 3,709 4,337 3,678 Stocks Debtors 5,558 6,373 5,000 Cash at bank and in 2,370 443 809 hand 11,637 11,153 9,487 Creditors: amounts (8,784) (7,668) (7,626) falling due within one year Net current assets 2,853 3,485 1,861 Total assets less 10,527 7,706 8,675 current liabilities Creditors: amounts (1,981) (1,433) (975) falling due after more than one year Minority interests (36) (6) - Net Assets 8,510 6,267 7,700 Capital and reserves 8,169 8,169 8,169 Called-up share capital Share premium account 12,110 12,110 12,110 Share capital to be 43 43 43 issued Revaluation reserve 1,392 - 1,406 Profit and loss (13,204) (14,055) (14,028) account 8,510 6,267 7,700 Shareholders' funds 8,510 5,488 7,700 Equity Non equity - 779 - 8,510 6,267 7,700 Consolidated cash flow statement Unaudited Unaudited Year six months six ended ended months ended 31 30 June December 2005 30 June 2004 2004 ‚£'000 ‚£'000 ‚£'000 Net cash inflow from 1,112 1,049 3,002 operating activities Returns on investments and (210) (189) (463) servicing of finance Interest payable and similar charges Capital expenditure and financial investment Purchase of tangible fixed (259) (348) (513) assets Sale of tangible fixed - - 5 assets (259) (348) (508) Acquisitions (805) - (1,780) Purchase of investment in associate Cash inflow before (162) 512 251 financing Financing - 25 25 Issue of shares Net movement in long term 1,000 (500) (1,000) borrowings Repayment of principal (2) (7) (13) under finance leases 998 (482) (988) Increase/(decrease) in cash 836 30 (737) in period Notes 1. Basis of preparation The interim statement has been prepared on the basis of the accounting policiesset out in the group's statutory accounts to 31 December 2004. The financialinformation contained in the interim report does not constitute statutoryaccounts as defined in Section 240 of the Companies Act 1985. The interimreport has neither been audited nor reviewed by the group's auditors. A copy ofthe group's 2004 statutory accounts has been filed with the Registrar ofCompanies: the Auditors' opinion on those accounts was unqualified and did notcontain any statement under section 237 of the Companies Act 1985. The interimstatement for the six months ended 30 June 2005 was approved by the directorson 25 July 2005.2. Reconciliation of movements in shareholders funds Unaudited six Unaudited Year ended months ended six 31 December 30 June 2005 Months ended 2004 30 June 2004 ‚£'000 ‚£'000 ‚£'000 Net profit for the period 810 739 766 Revaluation surplus - - 1,406 Exercise of share options - 25 25 Net movement in shareholders' funds 810 764 2,197 Opening shareholders' funds 7,700 5,503 5,503 Closing shareholders' funds 8,510 6,267 7,7003. Reconciliation of operating profit to net cash flow from operatingactivities Unaudited six Unaudited Year ended months ended six 31 December 30 June 2005 Months 2004 ended 30 June 2004 ‚£'000 ‚£'000 ‚£'000 Operating profit 1,165 977 1,314 Depreciation of tangible fixed assets 223 201 414 Amortisation of intangible fixed assets 60 153 690 Share of operating (profit)/loss in (144) - 6associate (Increase)/decrease in working capital (192) (282) 578balances Net cash inflow from operating 1,112 1,049 3,002activities 4. Reconciliation of net cash flow to movement in net debt Unaudited six Unaudited Year ended months ended six 31 December 30 June 2005 Months 2004 ended 30 June 2004 ‚£'000 ‚£'000 ‚£'000 Increase/(decrease) in cash in the 836 30 (737)period Cash (inflow)/outflow from (increase)/ (998) 507 1,013decrease in net debt Changes in net debt resulting from cash (162) 537 276flows Other (43) (43) (85) Movement in net debt in the period (205) 494 191 Net debt at start of period (3,725) (3,916) (3,916) Net debt at end of period (3,930) (3,422) (3,725)ENDTG21 PLC