Touchstar Plc Regulatory News (TST)

7 Mar 2007 07:01

Belgravium Technologies PLC07 March 2007 07 March 2007 Belgravium Technologies Plc (BVM:AIM) Preliminary Results for the Year Ended 31 December 2006 The Board of Belgravium Technologies plc ("Belgravium" or "the Group"),designers and manufacturers of real-time data capture systems, is pleased toannounce the Preliminary Results for the year ended 31 December 2006. FINANCIAL HIGHLIGHTS • Turnover up 101% £10,922,000 (2005: £5,430,000) • Pre tax profits* up 88% £1,844,000 (2005: £982,000) • Increased final dividend 0.36p (2005: 0.32p) • Earnings per Ordinary share* up 31% 1.27p (2005: 0.97p) *(before amortisation of goodwill) OPERATIONAL HIGHLIGHTS • Appointment of Chris Phillips to the Group Board • Successful integration of acquired businesses, Touchstar Ltd and Novo IVC Ltd • Opportunities for cross-selling across the enlarged group exploited • Sharing of technical expertise and resources across divisions • Further blue-chip and international contracts Commenting today, Executive Chairman John Kembery said: "The Group completed 2006 with greatly improved results and has beenstrengthened in all operations. Acquisitions have widened the Group's offeringand we now have the technical capability to design both hardware and softwarefor many more uses than we had before. The Group is now better prepared for the continual task of developing andimproving products for changing market needs. We are confident that the progressmade in 2006 will continue into 2007 and that the Group is in a strong positionto seize opportunities for further growth." For further information please contact: Buchanan Communications ltd Kelly-Ann Knight/Eric Burns 020 7466 5000 Belgravium Technologies plc John Kembery Mob: 07770 731021 www.belgraviuminvestorrelations.com CHAIRMAN'S STATEMENT 1. Introduction Belgravium Technologies plc ("the Group") acquired Touchstar Limited ("Touchstar") in October 2005 and Novo IVC Limited ("Novo IVC") in January 2006. During the year a good deal of management time was spent in assimilating thesecompanies into the Group and gaining the optimum benefit from the acquisitions.This has been a big success and the Group completed 2006 with greatly improvedresults and has been strengthened in all operations. 2. Results Group sales in 2006 totalled £10,922,000, a 101% increase on the prior period(2005: £5,430,000). Profit before tax and amortisation of goodwill increased by88% to £1,844,000 (2005: £982,000). Earnings per ordinary share, beforeamortisation, were up 31% at 1.27p per share compared to 0.97p per share in2005. Much of the sales growth came from Touchstar and with the acquisition of NovoIVC contributing as expected. 3. Balance Sheet Cash at the year end was less than historic levels at £171,000 (2005:£1,799,000) due to the net payment of £1,202,000 in corporation tax and netexpenditure of £1,056,000 on the acquisition of Novo IVC (including costs)during the year. Repayment of the term loan commenced in October but forwardprojections show that the Group has more than sufficient cash for its plannedactivities. 4. Dividend Following the good results and improved outlook, the Board is pleased torecommend an increased final dividend of 0.36p per ordinary share (2005: 0.32p). This will be paid on 7 June, subject to approval at the AGM, to shareholderson the register at 11 May 2007. 5. The Enlarged Group Most of what we found in Touchstar, once handover was complete, was as had beenanticipated by due diligence. However, a slow period in the first quarter, atboth Belgravium and Touchstar, exposed a longer term shortage of orderprospects. The Group's sales force was immediately enlarged and strengthened,followed by an extensive campaign aimed at developing the sales pipeline andbuilding upon the Touchstar brand. As expected, opportunities for cross-selling with Belgravium have arisen andbeen exploited. Gradually new sales opportunities have begun to emerge in bothTouchstar's traditional markets and in other sectors. The close workingrelationship with Novo IVC has proved crucial in this process and by the yearend, long term sales prospects are much improved. Sales strategy and organisation have also been changed in Belgravium Ltd. Witheffect from 1 January 2007 Novo IVC has become a sales division of Touchstar,using Touchstar hardware with its own specialised software. This will providegreater focus on central markets and avoid administrative duplication. Duringthe course of the year Novo IVC accounting functions were merged with Touchstarand the two units now run smoothly as a unified operation. 6. Product Development One of the big advantages of the acquisition of Touchstar for the Group was theintegration of the product development plans of Belgravium and Touchstar. Thishas been put in place with a sharing of technical expertise and resourcesagainst a single development plan and with clear targets. New products havebeen introduced to the market and bought-in goods and services reduced. TheGroup is now better prepared for the continual task of developing and improvingproducts for changing market needs. Newly introduced products have been wellreceived by customers. 7. Employees We expected to find some very capable and motivated people in both Touchstar andNovo IVC and were not disappointed. Staff in these companies have fullyembraced the changes and worked well with the ever resilient Belgraviumemployees. We have an extremely competent team in place, in all our operations.Chris Phillips has done an excellent job in managing Touchstar through thisintegration process and we are delighted that he has accepted the Directors'invitation to join the Board with effect from 6 March 2007. 8. Future Strategy There is plenty of growth potential within the real time data capture marketsand few companies who can match the Group's combined expertise in theinstillation of fully working systems in critical applications. Acquisitionshave widened the Group's offering and we now have the technical capability forthe design of both hardware and software for many more uses than we had before. We shall go on seeking organic growth with wider geographic coverage and innew applications. We also continue to seek further acquisitions but have been disappointed by thequality of those companies we looked at in 2006. We will remain committed toseeking targets which demonstrate the kind of real synergy that we have found inTouchstar and Novo IVC. The Board is aware that this may take some time. 9. Outlook There was an upturn in orders in the last quarter of 2006, some of which havecarried over into 2007. The first quarter is more buoyant than in previous yearsand, based upon our improved products and good customer service, there areencouraging contracts in the pipeline. We are confident that the progress madein 2006 will continue into 2007 and that the Group is in a strong position toseize opportunities for further growth. FULL RESULTS BELOW Audited Group profit and loss account for the year ended 31 December 2006 2006 2005 Continuing Acquisitions Total operations Total £'000 £'000 £'000 £'000 Turnover 8,328 2,594 10,922 5,430Cost of sales 2,881 1,671 4,552 2,280 Gross profit 5,447 923 6,370 3,150 Distribution costs 112 - 112 44Administrative expenses 3,595 670 4,265 2,200 3,707 670 4,377 2,244 Operating profit before goodwill amortisation 1,740 253 1,993 906Goodwill amortisation (411) (53) (464) (80) Operating profit 1,329 200 1,529 826Net interest (payable)/ receivable (149) 76 Profit on ordinary activities before taxation 1,380 902Tax charge on profit on ordinary activities (569) (273) Profit for the financial year 811 629 Basic earnings per ordinary share 0.81p 0.86p Diluted earnings per ordinary share 0.80p 0.85p There are no recognised gains or losses other than the profit for the year andtherefore no separate statement of total recognised gains and losses has beenpresented. There is no difference between the profit on ordinary activities before taxationand the retained profit for the year as stated above, and their historical costequivalents. Audited Group balance sheet as at 31 December 2006 2006 2005 £'000 £'000Fixed assetsIntangible assets 8,861 8,232Tangible assets 361 325 9,222 8,557Current assetsStocks 1,157 1,103Debtors 3,325 2,479Cash at bank and in hand 171 1,799 4,653 5,381Creditors: amounts falling due within one year (4,304) (6,189)Net current assets/(liabilities) 349 (808)Total assets less current liabilities 9,571 7,749Creditors: amounts falling due after more than one year (1,755) (170)Provisions for liabilities and charges (51) (173)Net assets 7,765 7,406Capital and reservesCalled up share capital 5,021 5,021Share premium account 2,915 2,915Capital redemption reserve 2,100 2,100Profit and loss account (2,271) (2,630)Total equity shareholders' funds 7,765 7,406 Audited Group cash flow statement for the year ended 31 December 2006 2006 2005 £'000 £'000 Net cash inflow from operating activities 1,759 870 Returns on investment and servicing of financeInterest received 37 96Interest paid (183) (20) (146) 76 TaxationCorporation tax paid (1,382) (396)Corporation tax received 180 - (1,202) (396) Capital expenditure and financial investmentPurchase of intangible fixed assets (108) (28)Purchase of tangible fixed assets (169) (52) (277) (80) AcquisitionsAcquisition of subsidiary company (1,316) (8,170)Acquisition expenses (356) (633)Cash at bank and in hand acquired with subsidiary 616 3,362 (1,056) (5,441) Equity dividends paid to shareholders (452) (344) Net cash outflow before financing (1,374) (5,315) FinancingRepayment of bank loan (250) -Repayment of hire purchase contracts (4) -Repayment of loan notes (2,580) -Issue of ordinary share capital - 4,704Expenses of share issue - (229)New bank loans 2,580 420 (254) 4,895 Decrease in cash in the year (1,628) (420) Audited reconciliation of net cash flow to movement in net debt 2006 2005 £'000 £'000 Decrease in cash in the year (1,628) (420)Cash outflow/(inflow) from decrease/(increase) in debt and lease 254 (420)financingNon cash changesNew hire purchase contracts (14) -Loan notes issued in connection with acquisition - (2,580) Movement in net debt during year (1,388) (3,420)Net (debt)/funds at 1 January (1,201) 2,219 Net (debt) at 31 December (2,589) (1,201) Audited reconciliation of operating profit to net cash inflow from operatingactivities 2006 2005 £'000 £'000 Operating profit 1,529 826Depreciation 199 123Amortisation 520 85Movement in provisions (122) (16) Funds generated by operations 2,126 1,018 Decrease/(increase) in stocks 91 (156)Increase in debtors (576) (41)Increase in creditors 118 49 Increase in working capital (367) (148) Net cash inflow from operating activities 1,759 870 Audited reconciliation of movements in Group equity shareholders' funds 2006 2005 £'000 £'000 Profit for the year 811 629Dividends (452) (344) 359 285Issue of ordinary share capital - 4,704Expenses of share issue - (229) Net change in equity shareholders' funds 359 4,760Opening equity shareholders' funds 7,406 2,646 Closing equity shareholders' funds 7,765 7,406 Audited earnings per ordinary share 2006 2005 Basic earnings per ordinary share 0.81p 0.86pDiluted earnings per ordinary share 0.80p 0.85pBasic earnings per ordinary share before goodwill amortisation 1.27p 0.97pDiluted earnings per ordinary share before goodwill amortisation 1.26p 0.96p Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the year. For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive ordinary shares. Thedilutive ordinary shares represent the share options and warrants granted toemployees where the exercise price is less than the average market price of theCompany's ordinary shares during the year. Basic earnings per ordinary share before goodwill amortisation and dilutedearnings per ordinary share before goodwill amortisation is based on profit onordinary activities after taxation but before goodwill amortisation of£464,000, being £1,275,000. (2005: profit on ordinary activities after taxationbut before goodwill amortisation of £80,000 being £709,000). Reconciliations of the earnings and weighted average number of shares used inthe calculation are set out below: 2006 2005 Earnings Weighted average Earnings Weighted average number of shares number of shares £'000 (in thousands) £'000 (in thousands)Basic EPSEarnings attributable to ordinary 811 100,426 629 73,454shareholdersEffect of dilutive securitiesOptions - 500 - 649 Diluted EPSAdjusted earnings 811 100,926 629 74,103 Earnings per share before goodwillamortisationBasic EPS 811 100,426 629 73,454Goodwill amortisation 464 - 80 - Basic EPS before goodwill amortisation 1,275 100,426 709 73,454 Diluted EPS 811 100,926 629 74,103Goodwill amortisation 464 - 80 - Diluted EPS before goodwill amortisation 1,275 100,926 709 74,103 Basis of reporting This preliminary announcement, which has been prepared on a basis consistentwith the previous year, does not constitute statutory accounts within themeaning of Section 240 of the Companies Act 1985. This announcement has beenagreed with the company's auditors for release. This preliminary announcement contains information extracted from the auditedfinancial statements of the group for the year ended 31 December 2006. Thestatutory accounts for the year ended 31 December 2006 will be sent to theshareholders shortly. The information for the year ended 31 December 2005 is an extract from thestatutory accounts to that date which have been delivered to the Registrar ofCompanies. These accounts included an audited report which was unqualified andwhich did not contain a statement under Section 237(2) or (3) of the CompaniesAct 1985. This information is provided by RNS The company news service from the London Stock Exchange