Last checked at 2 Sep 2010 07:00
| For Immediate Release | 2 September 2010 |
Belgravium Technologies plc
Interim Results for the Six Months ended 30 June 2010
The Board of Belgravium Technologies plc ('Belgravium' or 'the Group'), designers and manufacturers of real-time data capture systems, is pleased to announce Interim results for the six months ended 30 June 2010.
Key Financials:
| 30 June 2010 | 30 June 2009 | |
| ·; Turnover | £3,657,000 | £4,286,000 |
| ·; Profit before tax | £26,000 | £140,000 |
| ·; Basic earnings per share | 0.03p | 0.11p |
Highlights:
·; Progress made on strategy for restoration of profit growth
·; Improvement in sales expected from second half onwards
·; Contract worth £3m over next 30 months will benefit full year outcome
Commenting on the interim results, John Kembery, Chairman of Belgravium, said:
"The first half saw a continuation of previously announced trends in our business, namely a subdued level of order intake as customers' financial concerns weighed on capital expenditure decisions. We nonetheless believe that our strategy for managing the business through the downturn has proved successful and look forward to an improvement in sales from the second half".
For further information please contact:
| Belgravium Technologies Plc | John Kembery: 07770 731021 |
| KPMG Corporate Finance - Nominated Adviser | Christian Mayo: 0113 231 3000 |
| WH Ireland | Jessica Metcalf (Corporate Broking): 0113 3946623 |
KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting for the Company as nominated adviser in relation to the matters set out in this announcement and is not acting for any other person in relation to these matters. KPMG Corporate Finance will not be responsible to anyone other than Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement.
Chairman's Statement
Interim 2010
RESULTS
Delays in confirming contracts due to financial uncertainty in the market place continued to be a problem in the first half of 2010, with the result that some anticipated orders did not mature until the period closed. Sales for the first half of 2010 were down 15% at £3,657,000 compared to £4,286,000 in the first half of 2009. Whilst margins were improved, profit before tax was affected by the low sales falling to £26,000 compared to £140,000 in 2009.
Basic earnings per share were 0.03p per share compared to 0.11p per share in 2009.
Orders gained at the end of the period however, mean that sales and profits should be restored in the second half and that Belgravium is well positioned to achieve its strategic objectives.
THE MARKET
Belgravium manufactures and installs complete systems incorporating both hardware and software for real time data capture in the logistics, petrochemical and mobile retailing markets. Such systems improve efficiency and operating costs and their need is well established and accepted by our customers. Since 2007, however, financial constraints have produced a marked reluctance to commit to capital projects. The process of converting an enquiry from operational management into a financially authorised contract used to take weeks and now takes months, sometimes longer. Upgrades and renewals are equally difficult and whilst there is still an underlying international demand, the market has been frustratingly slow and difficult to forecast. Belgravium's reputation for quality products remains high whilst many competitors have reduced their offering to meet financial constraints.
OPERATIONAL REVIEW
Challenging market conditions remained in force for the majority of the first half of 2010 but late in the period, we gained a major contract for the supply of petrochemical systems in Europe which we anticipate will be worth £3 million sales of hardware and software over the next two and a half years. Sufficient of this order is to be delivered in the second half of 2010 to restore sales and profits for the year and will be further supplemented by some smaller orders received recently. Whilst the logistics market remains difficult there has been a lot of activity in mobile retailing and strategic advances in the area should generate some good opportunities over the next year. It would be dangerous to conclude that we have reached the expected turning point in the market but it would appear that our strategy to deal with the recession is working and that we can now anticipate sustained improvements in sales.
STRATEGY
A five point strategy for restoration of profit growth was outlined in the 2009 annual report. We have made progress as follows:
1. Sales focus.
We have maintained a determined and persistent sales presence. We have pursued new sectors, widened our product offering and never lost sight of the objective. It has been hard work but we have won new orders and customers.
2. Ensuring that products are fit for purpose and the customers stated requirement.
This has been the main thrust of our development effort over the past year. Since the 'Boston' was launched we have sought to develop and improve existing products rather than bring in new designs for which there was no immediate demand.
3. Supply the complete solution with increasing repeat revenue.
This policy remains in force with the aim of improving our margins and the visibility of earnings through repeat business.
4. Controlling costs.
Numbers employed have fallen slightly through natural wastage. Particularly in the technical area, this has produced operational strain and must be reviewed as and when sales pick up.
5. Seek strategic partnerships in areas where we lack specific expertise:
This has proved particularly important in mobile retailing where airlines have been seeking an in-flight "chip and pin" device. It is a very specialised area in which we have developed a relationship with Ingenico, Europe's leading chip and pin hardware suppliers. Together with our own new software products and arrangements to reduce the initial capital cost of a system, we now have products to re-awaken interest in this strained market. This policy should bring in some important new contracts over the next year.
BALANCE SHEET
Despite the reduced turnover, cash generation has remained strong and we have continued to pay off the Bank term loan as quickly as possible. For this reason we are unable to pay an interim dividend in 2010 but it remains the Board's policy to restore dividends as soon as conditions permit.
OUTLOOK
There is still no general restoration of the international market for Belgravium's products but sales won towards the end of the first half of the year mean that prospects are better for the year as a whole. It is expected that this outlook will be sustained into 2011.
Over the longer term, the identification of suitable acquisition opportunities remains an important part of our growth strategy. We seek primarily software businesses which would increase our sectoral coverage gaining entry into new markets. Since such businesses are notoriously difficult to find, we have re-opened the search to be ready when conditions allow.
| Consolidated income statement for the six months ended 30 June 2010 |
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|
| Notes | 6 months to 30 June 2010 Total (Unaudited) £'000 | 6 months to 30 June 2009 Total (Unaudited) £'000 |
|
Revenue |
|
3,657 |
4,286 |
|
Operating profit |
|
56 |
182 |
|
Finance costs |
|
(30) |
(42) |
|
Profit before tax |
|
26 |
140 |
|
Income tax expense
|
|
- |
(33) |
| Profit for the period attributable to equity shareholders |
| 26 | 107 |
|
Basic earnings per ordinary share (pence) |
2 |
0.03 |
0.11 |
|
Diluted earnings per ordinary share (pence) |
2 |
0.03 |
0.11 |
| Consolidated statement of changes in equity for the six months ended 30 June 2010 |
|
|
| ||
|
| Called up share capital
(Unaudited) £'000
| Share premium account (Unaudited) £'000 | Capital redemption reserve (Unaudited) £'000 | Profit and loss account
(Unaudited) £'000 | Total
(Unaudited) £'000 |
| At 30 June 2009
| 5,047 | 2,932 | 2,100 | (771) | 9,308 |
| Profit
| - | - | - | 330 | 330 |
| At 31 December 2009
| 5,047 | 2,932 | 2,100 | (441) | 9,638 |
| Profit
| - | - | - | 26 | 26 |
| At 30 June 2010 | 5,047 | 2,932 | 2,100 | (415) | 9,664 |
| Consolidated balance sheet at 30 June 2010 |
|
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|
|
| As at 30 June 2010 (Unaudited) £'000 | As at 30 June 2009 (Unaudited) £'000 | At at 31 December 2009 (Audited) £'000 |
|
Non-current assets |
|
|
|
| Intangible Assets |
|
|
|
| Goodwill | 9,124 | 9,124 | 9,124 |
| Other intangible assets | 294 | 280 | 298 |
| Property, plant and equipment | 275 | 378 | 316 |
|
| 9,693 | 9,782 | 9,738 |
| Current assets |
|
|
|
| Inventories | 1,317 | 1,443 | 1,223 |
| Trade and other receivables | 1,581 | 2,076 | 2,527 |
| Current tax asset | 39 | - | 50 |
| Cash and cash equivalents | 161 | 3 | 2 |
|
| 3,098 | 3,522 | 3,802 |
|
|
|
|
|
| Total assets | 12,791 | 13,304 | 13,540 |
|
|
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables | 2,199 | 2,197 | 2,420 |
| Current corporation tax liabilities | - | 67 | - |
| Deferred income tax liabilities | 39 | 21 | 39 |
| Financial liabilities: Borrowings |
523 |
814 |
815 |
| Short term provisions
| 17 | 26 | 17 |
|
| 2,778 | 3,125 | 3,291 |
|
Non current liabilities |
|
|
|
| Financial liabilities: Borrowings
|
349 |
871 |
611 |
| Total liabilities | 3,127 | 3,996 | 3,902 |
|
Capital and reserves attributable to equity holders of the company |
|
|
|
| Ordinary shares | 5,047 | 5,047 | 5,047 |
| Share premium reserve | 2,932 | 2,932 | 2,932 |
| Capital redemption reserve | 2,100 | 2,100 | 2,100 |
| Profit and loss account
| (415) | (771) | (441) |
| Total equity | 9,664 | 9,308 | 9,638 |
|
|
|
|
|
| Total equity and liabilities | 12,791 | 13,304 | 13,540 |
| Consolidated statements of cash flow For 6 months to 30 June 2010 |
|
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| 6 months to 30 June 2010 (Unaudited) £'000 | 6 months to 30 June 2009 (Unaudited) £'000 |
| Cash flows from operating activities
|
|
|
| Operating profit | 56 | 182 |
| Depreciation | 74 | 89 |
| Amortisation | 67 | 69 |
| Movement in: |
|
|
| Inventories | (94) | (85) |
| Trade and other receivables | 946 | 571 |
| Trade and other payables | (221) | (619) |
| Cash generated from operations
| 828 | 207 |
| Interest paid | (30) | (44) |
| Corporation tax received | 11 | - |
| Net cash generated from operating activities
| 809 | 163 |
| Cash flows from investing activities
|
|
|
| Expenditure on intangible fixed assets | (63) | (64) |
| Purchase of property, plant and equipment
| (33) | (113) |
| Net cash used in investing activities | (96) | (177) |
|
Cash flows from financing activities
|
|
|
| Repayment of bank borrowings | (195)
| (81) |
| Net cash used in financing activities | (195) | (81) |
|
Net increase/(decrease) in cash and cash equivalents
|
518 |
(95) |
| Cash, cash equivalents and bank overdrafts at the beginning of the period
| (357) | (460) |
| Cash, cash equivalents and bank overdrafts at the end of the period | 161 | (555) |
| Notes to the interim report For 6 months to 30 June 2010 |
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1. |
This financial information comprises the condensed consolidated interim balance sheet as at 30 June 2010 and 30 June 2009 and related consolidated interim statement of income and cash flows for the six months then ended of Belgravium Technologies plc (hereinafter referred to as 'financial information'). Belgravium Technologies plc is listed on the Alternative Investment Market. This financial information for the half year ended 30 June 2010 is unaudited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. This financial information was approved by the Board on 1 September 2010.
This financial information has been prepared in accordance with pronouncements on interim reporting issued by the ASB, AIM rule 18 and the accounting policies set out in the 2009 annual report and financial statements which are prepared in accordance with IFRS as adopted by the European Union. The Group has chosen not to adopt IAS 34 'Interim financial statements' in preparing this financial information. This financial information has been prepared under the historical cost convention.
The audited accounts for the year ended 31 December 2009 upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. The audit report on the 2009 accounts did not contain an emphasis of matter paragraph and did not contain a statement made under section 498 of the Companies Act 2006.
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| 2. | Earnings per ordinary share |
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| 2010 (Unaudited) £ | 2009 (Unaudited) £ | |||||
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Basic earnings per ordinary share |
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0.03p |
0.11p | |||||
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| Diluted earnings per ordinary share
|
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| 0.03p | 0.11p | |||||
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Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive ordinary shares. The dilutive ordinary shares represent the share options and warrants granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period.
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| 2010 (Unaudited) | 2009 (Unaudited) | |||||||
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Earnings £'000 | Weighted average number of shares (in thousands) |
Earnings £'000 | Weighted average number of shares (in thousands) | |||||
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| Basic EPS |
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| Earnings attributable to ordinary shareholders | 26 | 100,937 | 107 | 100,937 | |||||
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| Effect of dilutive securities |
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| Options | - | - | - | - | |||||
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Diluted EPS |
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| Adjusted earnings | 26 | 100,937 | 107 | 100,937 | |||||
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3. |
The Company did not declare any dividends in the half year ended 30 June 2010.
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| 4. | Copies of this statement be will be made available to the public at the Company's office:- 2 Campus Road, Listerhills Science Park, Bradford, West Yorkshire, BD7 1HR, or can be obtained from our website at www.belgravium-IR.com | |||||||||