Touchstar Plc Regulatory News (TST)

Belgravium Technologies plc

Interim Results for the Six Months ended 30 June 2015

The Board of Belgravium Technologies plc ((AIM:BVM) 'Belgravium' or 'the Group'), suppliers of mobile data computing solutions and managed services to a variety of industrial sectors, is pleased to announce its interim results for the six months ended 30 June 2015.

Key Financials:

30 June 2015 30 June 2014

· Turnover £4,431,000 £4,568,000

· Adjusted post tax profit* £90,000 £223,000

· Adjusted earnings per share* 0.09p 0.22p

· Adjusted EBITDA* £266,000 £422,000

· Cash & cash equivalents £414,000 £1,409,000

* Calculated before exceptional items

Commenting on the interim results, Ian Martin, Chairman of Belgravium, said:

"This year will be a year of transformation for Belgravium. A restructuring programme is underway which will see the Group benefit next year and in subsequent years from a much lower cost base, coherent structure and new energy.

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Information on Belgravium Technologies plc can be seen at: www.belgravium-technologies.com

CHAIRMAN'S INTERIM STATEMENT - 2015

In my first communication to you since becoming Chairman I not only want to cover the financial results for the six month period ending 30 June 2015, but to share my first impressions of the Company, the challenges ahead, articulate the real opportunity that exists and that attracted me to the business in the first place.

My initial feeling is that Belgravium's structure is overly complex and disparate and that its strategy requires greater coherence. On a more positive note I have been struck by the high quality of the Company's customer base. The people within the business I have found to be professional, diligent and committed to what we do and to ensuring that our customers receive very high service levels. At all levels employees have told me clearly that there is a real mandate for change. It is also clear the Company has a strong cash generative ability and maintains a conservative balance sheet.

These factors give a solid foundation to build from. However, Belgravium can only thrive if it is structured in the right way, its product and services are competitive, it has a sustainable cost base and, at all levels, management and staff believe we are heading in the right direction. I believe there is much that can be done in this regard which will better shape Belgravium for the future and that will create a more secure platform for profitable future growth.

The immediate areas of focus are;

· reviewing our costs which are too high;

· improving our products and services which would benefit from further investment; and

· simplifying our organisation which is overly complex and inefficient.

I am pleased to report that significant progress is already underway.

Our plan is to reduce the cost base by approximately £500,000 on an annualized basis and make the business more effective. We are eliminating duplication where it exists. This means we can operate with fewer people and from a lower cost base. Controls and the flow of information are being improved and the business is being moved to a standard reporting system.

We need to improve our commercial capability and accelerate the development of a newer generation of products and services. Only then can we drive real organic revenue growth. This investment is now being made, although it will take a while for the returns to flow through into our financial results.

These are some of the first steps as we begin to rebuild the confidence of our shareholders, our customers, our partners and our employees.

Results

Revenue in the six months ended 30 June 2015 saw a decline to £4,431,000 (six months ended 30 June 2014: £4,568,000). This decline is due to a general flatness in the market and a specific internal issue caused by the distraction of integrating the recently acquired AFS business, which resulted in a loss of sales momentum at Feedback Data.

Exceptional charges relating to the Group's restructuring programme have further impacted the financial results. In the six months ended 30 June 2015 an exceptional charge of £95,000 was taken, the largest items of which relates to the restructuring of the board. The company is reporting a loss for the six months ended 30 June 2015 of £ 5,000 (six months ended 30 June 2014: £223,000 profit).

Adjusted profits after tax (which exclude restructuring costs, compensation for loss of office, payments and other non-recurring costs) for the six months ended 30 June 2015 were £ 90,000 (six months ended 30 June 2014: £223,000 profit).

The adjusted earnings per share from continuing operations decreased to 0.09p (six months ended 30 June 2014: 0.22p).

Taxation continues to be positive for the Group; the company received a tax credit of £45,000 for the six months ended 30 June 2015 (six months ended 30 June 2014: £9,000).

The cash balance declined to £414,000 at 30 June 2015 (30 June 2014: £1,409,000). The prior year cash position, as mentioned in last years' report, was flattered by a substantial pre-payment from one customer. The Company also paid £500,000 to acquire Access Fire and Security Limited during the period.

As the Board has previously indicated there will be no interim dividend this year (2014: nil).

Current Outlook and Trading

After a review of current trading I expect that although at a trading level the Group will be profitable for the year as a whole, this result will be below the current market expectations.

Additionally the restructuring programme, which is now underway will mean that the full year results will include substantial exceptional costs, this will result in the group making a loss overall.

This year will therefore be a year of transformation. As we move into next year we will be moving out of this current period of consolidation and restructuring. Next year and subsequent years will benefit from a much lower cost base, coherent structure and a new energy.

Acceleration of our product and service development should enable us to drive revenue growth and rebuild sales momentum during 2016.

People

Competition in our markets is an on-going factor; it is made easier due to the real commitment, quality and technical expertise of our staff giving us an advantage. They continue to deliver a high level of service to our customers. I cannot thank them enough - as I mentioned earlier it is one of the key reasons I joined the business.

Conclusion

To conclude, although financial results in the short term may be disappointing, the changes that are now being made are essential to the future prosperity of the business. In a turnaround situation it is always difficult to predict the actual point when the benefits will become visible, but change is happening. We are investing in our future and have not been afraid to sacrifice some of the present to do so.

This is the start of the journey. I look forward to helping to build a profitable and successful Belgravium, one that is capable of exploiting the opportunities as they arise.

Many thanks for your patience and support; it is greatly appreciated.