Touchstar Plc Regulatory News (TST)

5 Sep 2007 07:00

Belgravium Technologies PLC05 September 2007 For Immediate Release 5 September 2007 Belgravium Technologies Plc (BVM:AIM) Interim Results for the six months ended 30 June 2007 The Board of Belgravium Technologies plc ("Belgravium" or "the Group"),designers and manufacturers of real-time data capture systems, is pleased toannounce Interim results for the six months ended 30 June 2007. FINANCIAL HIGHLIGHTS • Turnover £5,222,000 (2006: £4,982,000) +5% • Profits before int. & tax £1,101,000 (2006: £780,000) +41% • Interim dividend 0.14p (2006: 0.13p) +8% • Earnings per Share 0.71p (2006: 0.51p) +39% OPERATIONAL HIGHLIGHTS • Results clearly demonstrate growing strength of business • Touchstar Technologies Ltd and Novo IVC show significant contributions • Opportunities for cross-selling across the enlarged group exploited • Sharing of technical expertise and resources across divisions Commenting today, Executive Chairman John Kembery said: "I am delighted to report a strong start to 2007. The acquisitions of Touchstarand Novo have been very successful in supplementing the Group's profitablegrowth with improved profits and earnings per share in the first half of 2007. "We have worked hard to restructure and refine Belgravium into a Group with aportfolio of first class products, an efficient operational structure and wideroffering through successful integration of new businesses. Belgravium is nowwell positioned to take advantage of opportunities ahead in an internationalmarket." For further information please contact: Belgravium Technologies plc 07770 731021John Kembery, Chairman Buchanan Communications 020 7466 5000Suzanne Brocks www.belgraviuminvestorrelations.com Interim Results 2007 CHAIRMAN'S STATEMENT Results I am delighted to report a strong start to 2007, with profit before interest andtaxation for the six months to 30 June 2007 having increased by 41% to£1,101,000 (2006: £780,000). This is based on sales of £5,222,000, a 5% risefrom the prior year (2006: £4,982,000). These results clearly demonstrate the growing strength of the business, whichnow includes Touchstar Technologies Ltd ("Touchstar") and Novo IVC Ltd ("Novo"),both of whom have contributed well towards the half year numbers. Based onthese figures, and an assumed tax rate of 30%, basic earnings per share for thehalf year to 30 June 2007 increased by 39% to 0.71p (2006: 0.51p). The Market The Group now supplies, installs and maintains data capture systems forwarehousing and distribution, petrochemical delivery systems, mobile retailingand proof of delivery applications. All of these sectors provide real growthopportunities. As information technology becomes more widely understood,Belgravium is perfectly placed with its offering of high quality products,specifically designed to meet the demands of each market in which the Groupoperates. In order to achieve further organic growth, Belgravium has expandedits range of products and has reduced costs through improved efficiencies. Verygood progress has been made in our historical logistics market. At the sametime, we have integrated two acquisitions and phased out the inevitable legaciesin design and services. The result is that the Group now represents arestructured, balanced business with a first class product range in a growingmarket place. Our sales operation has also seen significant improvements, and we are activelyseeking to expand sales partnerships abroad, particularly in Europe and the USA. Operations The acquisition of Touchstar and later Novo was not only aimed at increasing theGroup's turnover. It was also anticipated that a major benefit would be derivedfrom a larger operating base plus a reduction in costs from better use of sharedresources, with less outsourced components and services. A comparison of costsin the first half of 2007 with the same period in 2006 demonstrates this costreduction very clearly, with further benefits to come. This has beenparticularly evident across our technical operations where considerable progresshas been made through a unified development programme. The range and scope ofproducts continues to improve with some excellent new designs in the pipeline.Any technical and operating difficulties have been systematically overcome andwe believe effective management teams are now in place across all divisions. Balance Sheet Our balance sheet clearly demonstrates the benefits of the acquisitions ofTouchstar and Novo for the Group. Of particular note is the cash position,which stood at £590,000 at 30 June 2007 (31 December 2006: £171,000). Thisachievement is even more significant given the monthly repayments of the termloan used to partly fund the purchase of Touchstar, and demonstrates thatBelgravium remains highly cash generative. Employees The integration of Touchstar and Novo into the Group could not have happenedwithout the active co-operation of employees at all levels. The new operationalstructure makes optimum use of individual skills as well as improving jobsatisfaction. Dividend The Directors remain committed to as high a level of dividend as the Group'scash generation will allow. Given the good performance in the first half of2007, we propose paying an interim dividend of 0.14p per share on 6th December2007 to shareholders on the Register on 9th November 2007. This represents anincrease of 8% (2006: 0.13p). Acquisitions To continue the progress of the past year, Belgravium is exploring new sectorswithin the vast data capture markets. Our experience tells us that the mostsuccessful way of achieving this is by acquiring specialised market focusedbusinesses that trigger each new application. This is not easy to do becausesuch companies are not always classified in a way that makes their synergy withBelgravium obvious. But, when identified and added to a group with existinghardware, the results can be very worthwhile, as we successfully experiencedwith our acquisition of Novo. Our search for further suitable acquisitionopportunities continues and has already resulted in close investigation of manycompanies. Outlook The acquisitions of Touchstar and Novo have been very successful insupplementing the Group's profitable growth with improved profits and earningsper share in the first half of 2007. Whilst we have fully met our expectations for the first half of 2007 andsucceeded in building a full pipeline of sales opportunities for the second halfof 2007 and beyond, recent economic uncertainty has introduced some caution intocustomers' buying patterns. So, while we have every reason to believe that theGroup will continue to successfully convert its pipeline of sales opportunitiesin the second half, there remains the prospect of some small delays in thetiming of certain contracts. In overall terms, however, we remain confident thatthe progress achieved in the first half will continue into the second and thatplans already actioned will continue to bring further benefits. In summary, we have worked hard to restructure and refine Belgravium into aGroup with a portfolio of first class products, an efficient operationalstructure and wider offering through successful integration of new businesses.Belgravium is now well positioned to take advantage of opportunities ahead in aninternational market. Consolidated income statementfor the six months ended 30 June 2007 Notes 6 months to 6 months to 30 June 2007 30 June 2006 Total Total (Unaudited) (Unaudited) £'000 £'000 Revenue 5,222 4,982 Operating profit 1,101 780 Finance income 19 24 Finance costs (96) (73) Profit before income tax 1,024 731 Income tax expense (307) (218) Profit for the period 717 513 Basic earnings per ordinary share (pence) 2 0.71 0.51 Diluted earnings per ordinary share (pence) 2 0.71 0.51 Consolidated statement of changes in shareholders' equityfor the six months ended 30 June 2007 Called up share Share premium Capital redemption Retained Total capital account reserve earnings (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 £'000 £'000 At 1 January 2006 5,021 2,915 2,100 (2,630) 7,406 Profit - - - 513 513 Equity dividends - - - (321) (321) At 30 June 2006 5,021 2,915 2,100 (2,438) 7,598 Profit - - - 762 762 Equity dividends - - - (131) (131) At 31 December 2006 5,021 2,915 2,100 (1,807) 8,229 New shares issued 16 14 - - 30 Profit - - - 717 717 Equity dividends - - - (363) (363) At 30 June 2007 5,037 2,929 2,100 (1,453) 8,613 Consolidated balance sheetat 30 June 2007 As at As at As at 30 June 2007 30 June 2006 31 December 2006 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000Non-current assetsIntangible assets Goodwill 9,124 9,124 9,124 Development expenditure 193 177 201Property, plant and equipment 308 381 361Deferred tax asset 27 7 27 9,652 9,689 9,713Current assetsInventories 1,078 1,225 1,157Trade and other receivables 2,585 2,264 3,298Cash and cash equivalents 590 817 171 4,253 4,306 4,626 Current liabilitiesBorrowings 1,000 750 1,000Trade and other payables 2,521 2,721 2,980Current corporation tax liabilities 475 593 324Provision for other liabilities and charges 46 83 51 4,042 4,147 4,355 Net current assets 9,863 9,848 9,984 Non current liabilitiesBorrowings 1,250 2,250 1,755 Net assets 8,613 7,598 8,229 Shareholders' equityShare capital 5,037 5,021 5,021Share premium reserve 2,929 2,915 2,915Capital redemption reserve 2,100 2,100 2,100Profit and loss account (1,453) (2,438) (1,807) Total equity 8,613 7,598 8,229 Consolidated cash flow statementfor 6 months to 30 June 2007 6 months to 6 months to 30 June 2007 30 June 2006 (Unaudited) (Unaudited) £'000 £'000Cash flows from operating activities Operating profit 1,101 780Depreciation 89 97Amortisation 32 25Movement in provisions (5) (90) Inventories 79 23Trade and other receivables 715 457Trade and other payables (452) (180) Cash generated from operations 1,559 1,112 Interest received 17 26Interest paid (98) (35)Corporation tax paid (156) (714)Corporation tax received - 150 Net cash generated from operating activities 1,322 539 Cash flows from investing activities Acquisition of subsidiary, net of cash acquired - (700)Acquisition expenses - (357)Purchase of intangible fixed assets (24) (56)Purchase of tangible fixed assets (36) (87) Net cash used in investing activities (60) (1,200) Cash flows from financing activities Proceeds from issuance of ordinary shares 30 -Proceeds from bank borrowings - 2,580Repayment of bank borrowings (500) -Repayment of loan notes - (2,580)Repayment of hire purchase contracts (10) -Equity dividends paid to shareholders (363) (321) Net cash used in financing activities (843) (321) Net increase/(decrease) in cash and cash equivalents 419 (982) Cash and cash equivalents at the beginning of the period 171 1,799 Cash and cash equivalents at the end of the period 590 817 Notes to the Interim reportfor 6 months to 30 June 2007 1. This financial information comprises the consolidated interim balancesheet as at 30 June 2007 and 30 June 2006 and related consolidated interimstatements of income and cash flows for the six months then ended of BelgraviumTechnologies plc (hereinafter referred to as 'financial information'). Theinterim consolidated financial statements for the half year ended 30 June 2007are unaudited and do not comprise statutory accounts within the meaning ofsection 240 of the Companies Act 1985 These interim financial statements have been prepared in accordance withInternational Financial Reporting Standards and IFRIC interpretations as adoptedby the EU and with those parts of the Companies Act 1985 applicable to companiesreporting under IFRS. The Group has chosen not to adopt IAS 34, 'Interimfinancial statements' in preparing its interim statements. The financialstatements have been prepared under the historical cost convention. The comparative figures for the financial year ended 31 December 2006 are notthe Group's statutory accounts for the financial year, but have been extractedfrom the statutory accounts, which were unqualified by the auditors and did notcontain statements under section 237(2) or (3) of the Companies Act 1985 andhave been delivered to the Registrar of Companies. 2. Earnings per ordinary share 2007 2006 (Unaudited) (Unaudited) £'000 £'000 Basic earnings per ordinary share 0.71p 0.51pDiluted earnings per ordinary share 0.71p 0.51p 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 shares inissue 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 period. 2007 2006 (Unaudited) (Unaudited) Weighted Weighted average number average number Earnings of shares Earnings of shares £'000 (in thousands) £'000 (in thousands)Basic EPSEarnings attributable to ordinary shareholders 717 100,541 513 100,426Effect of dilutive securitiesOptions - 461 - 679 Diluted EPSAdjusted earnings 717 101,002 513 101,105 3. The record date for the interim dividend for Belgravium Technologiesplc is 9 November 2007 (Ex-Dividend date 7 November 2007) 4. Explanation of transition to IFRS The only adjustment on transition to IFRS from UK GAAP relates to theamortisation of goodwill £232,000 at 30 June 2006 and £464,000 at 31 December2006 Reconciliation of profit for the half-year ended 30 June 2006 UK GAAP Goodwill IFRS Revenue 4,982 - 4,982 Operating profit 548 232 780 Finance income 24 - 24 Finance costs (73) - (73) Profit before income tax 499 232 731 Income tax expense (218) - (218) Profit for the year 281 232 513 Basic earnings per ordinary share (pence) 0.28 0.51 Diluted earnings per ordinary share (pence) 0.28 0.51 Reconciliation of profit for the year ended 31 December 2006 UK GAAP Goodwill IFRS Revenue 10,922 - 10,922 Operating profit 1,529 464 1,993 Finance income 32 - 32 Finance costs (181) - (181) Profit before income tax 1,380 464 1,844 Income tax expense (569) - (569) Profit for the year 811 464 1,275 Basic earnings per ordinary share (pence) 0.81 1.27 Diluted earnings per ordinary share (pence) 0.80 1.26 Reconciliation of the consolidated balance sheet as at 30 June 2006 UK GAAP Goodwill IFRSNon-current assetsIntangible assets Goodwill 8,892 232 9,124 Development expenditure 177 - 177Property, plant and equipment 381 - 381Deferred tax asset 7 - 7 9,457 232 9,689Current assetsInventories 1,225 - 1,225Trade and other receivables 2,264 - 2,264Cash and cash equivalents 817 - 817 4,306 - 4,306 Current liabilitiesBorrowings 750 - 750Trade and other payables 2,721 - 2,721Current corporation tax liabilities 593 - 593Provision for other liabilities and charges 83 - 83 4,147 - 4,147 Net current assets 9,616 232 9,848 Non current liabilitiesBorrowings 2,250 - 2,250 Net assets 7,366 232 7,598 Shareholders' equityShare capital 5,021 - 5,021Share premium reserve 2,915 - 2,915Capital redemption reserve 2,100 - 2,100Profit and loss account (2,670) 232 (2,438) Total equity 7,366 232 7,598 Reconciliation of the consolidated balance sheet as at 31 December 2006 UK GAAP Goodwill IFRSNon-current assetsIntangible assets Goodwill 8,660 464 9,124 Development expenditure 201 - 201Property, plant and equipment 361 - 361Deferred tax asset 27 - 27 9,249 464 9,713Current assetsInventories 1,157 - 1,157Trade and other receivables 3,298 - 3,298Cash and cash equivalents 171 - 171 4,626 - 4,626 Current liabilitiesBorrowings 1,000 - 1,000Trade and other payables 2,980 - 2,980Current corporation tax liabilities 324 - 324Provision for other liabilities and charges 51 - 51 4,355 - 4,355 Net current assets 9,520 464 9,984 Non current liabilitiesBorrowings 1,755 - 1,755 Net assets 7,765 464 8,229 Shareholders' equityShare capital 5,021 - 5,021Share premium reserve 2,915 - 2,915Capital redemption reserve 2,100 - 2,100Profit and loss account (2,271) 464 (1,807) Total equity 7,765 464 8,229 Consolidated cash flow statement The adoption of IFRS does not impact the amount of cash previously disclosedunder UK GAAP in any of the periods of account in the interim results 5. Copies of this statement will be posted to shareholders and furthercopies will be made available to the public at the Company's office :- 2 CampusRoad, Listerhills Science Park, Bradford, West Yorkshire, BD7 1HR. This information is provided by RNS The company news service from the London Stock Exchange