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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Asfare | LSE:ASF | London | Ordinary Share | GB0033997387 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 169.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5577D
Asfare Group plc
25 May 2006
Press Release 25 May 2006
Asfare Group plc
('Asfare' or 'Asfare Group')
Final Results for the Year Ended 31 March 2006
Asfare Group plc, a leading supplier of products and services to the emergency
and homeland security markets, reports its full year results for the year ended
31st March 2006.
Financial Highlights
* Turnover has increased by 25% to #4.905 million (2005: #3.925 million)
* Profit Before Tax has risen to #358,000 (2005: #109,000)
* Basic Earnings Per Share of 7.0p (2005: 2.8p)
* Earnings Per Share adjusted for goodwill amortisation 10.6p (2005: 6.3p)
* Cash generated from operations #774,000 (2005: #487,000)
* Proposed dividend of 2 pence per share
* Net asset value increased to 80 pence per share (2005: 71 pence)
Significant Business Achievements
* Won a #435,000 order for the replacement of ladders for the London Fire
Brigade
* Developed the business strategy to incorporate a focus on homeland
security products, resulting in the acquisition of Todd Research Limited in
November 2005
* Established a focussed European sales operation in the Netherlands
* Strengthened the senior executive team
Commenting on the final results to March 2006, Chairman Tim Wightman said:
"The last financial year has been one of solid progress for the Asfare Group.
The second half of the year saw a strong trading performance and demonstrated
the ability of Asfare to generate healthy profits and strong cash flow. Our
increasing focus on the European market through the establishment of a European
sales subsidiary will provide wider access to current and potential customers.
The acquisition of Todd Research, represents a key element in our broader
strategy and provides us with a good growth opportunity in the homeland security
sector. The Group is currently in the advanced stages of negotiations to acquire
a business in the fire equipment market. It is intended to fund this through
further debt finance.
I have been encouraged by our recent progress and the Group enters the new
financial year with a strong order book. I look forward to continued positive
development and growth of the business through both organic and acquisitive
activity."
For further information, please contact:
Asfare Group plc www.asfare.com
Tony O'Neill, Chief Executive Tel: +44 (0) 2380 861 966
Tim O'Connor, Finance Director
Seymour Pierce
Mark Percy / John Depasquale Tel: +44 (0) 20 7107 8000
Abchurch Communications
Charles Jack Tel: +44 (0) 20 7398 7700
charlie.jack@abchurch-group.com www.abchurch-group.com
--------------------------------- -------------------------
Chairman's Statement 2006
The financial year ended 31st March 2006 was a year of two halves for Asfare
Group with a challenging beginning and a positive end.
The first six months started poorly as the impact of the review by the Office of
the Deputy Prime Minister (ODPM) on the procurement practices of the fire
service continued to restrict purchasing. During this time the Group remained
focussed on supporting its existing customers, maintaining market share and
generating a positive cash flow. In September the Group received a significant
order for #435,000 to deliver ladders to Assetco for the London Fire Brigade. In
view of the Group's dependency on the UK fire industry, the Board decided during
the first half to broaden the strategy and to strengthen the senior executive
team with managers who have experience outside the fire equipment industry.
The second half of the year was stronger as the business began to deliver the
London Fire Brigade order. In November the Group announced the acquisition of
Todd Research Limited, a market leader in the provision of x-ray scanning
equipment in the security market. The Group strengthened its international
presence with the establishment of AS Security Equipment BV based in the
Netherlands to focus on supplying the European fire equipment market. Trading in
the final quarter was particularly strong across the business buoyed by new
product launches and market initiatives.
Financial Results
Profit & Loss Account
The results for the year ended 31st March 2006 represent twelve months trading
by AS Fire and Rescue Equipment Limited ("AS Fire") and the Asfare Group plc,
and trading for the period from 11th November 2005 for Todd Research Limited
("Todd").
Turnover for the twelve months to 31st March 2006 amounted to #4,905,000, a
growth of 25% from the #3,925,000 achieved in the previous twelve months. AS
Fire turnover rose by 4% in the year to #4,092,000 and Todd recorded #813,000 in
sales. Gross margins were strong in the year at 57.8% (2005: 52.9%). The AS Fire
gross margin was improved by the mix of sales and higher margin products
particularly in the second half of the year. The Todd gross margin was strong as
more of the new product range was sold.
Operating profit before goodwill amortisation and curtailment gain for the
twelve month period was #574,000, an increase of #236,000 compared with the
prior year.
The Operating Profit (after goodwill) in the twelve month period was #456,000
(2005: #190,000). The profit before tax for the period was #358,000 (2005:
#109,000). Profit after tax was #313,000 (2005: #119,000). Fully diluted
earnings per weighted average share for the twelve months were 7.0 pence (2005:
2.8 pence). Fully diluted earnings per weighted average share adjusted for
goodwill amortisation were 10.6 pence (2004: 6.3 pence).
Taxation
Tax losses of #514,000 have been utilised during the year (2005: #292,000),
which along with a charge carried over from last year of #4,000, has resulted in
a tax cost of #4,000 in the results for the year ended 31 March 2006. A further
#41,000 of deferred tax charge has been accrued for in the profit and loss
relating to the pension fund deficit acquired with Todd.
Carried forward tax losses amount to #149,000 (2005: #644,000) and will be
available to offset against future profits, thereby reducing the tax charge and
future tax payments. The tax losses are currently estimated and need to be
agreed with the Inland Revenue.
Balance Sheet
At 31st March 2006, shareholders' funds increased to #3,966,000 (2005:
#2,962,000) equivalent to 80 pence per share. Goodwill of #1,007,000 arose on
the acquisition of Todd. An element of the goodwill arose due to the pension
deficit in Todd, as a result of closing the scheme to future accruals the Group
has reduced this liability and has taken the decision to accelerate the
amortisation of the goodwill by #95,000. The carrying value of the remaining
goodwill in the balance sheet has been reviewed and in the Board's opinion there
has been no diminution in the value. The Directors believe the benefits of the
acquisitions will continue for a period not less than 20 years, and accordingly
the goodwill is being amortised over a 20 year period. The normalised amount of
goodwill amortisation charged against profits during the year was #164,000
(2005: #148,000). The Group took the opportunity to revalue the freehold
property at Todd by #605,000 to its current market value of #1,250,000.
Todd Acquisition Financing
The Group acquired Todd on the 11th November 2005 for an initial cash
consideration of #1,650,000 plus the cash balance of #262,000; the costs for
completing the transaction were #284,000 (including #28,000 of financing costs).
In order to finance the acquisition the Group raised #1,250,000 of loan finance
and raised a further #694,000 through a share placing of 771,112 shares at 90
pence per share. There is a potential further #2,080,000 of contingent
consideration. This has not been included in goodwill as the Board considers
that the outcome of this can not be reliably measured at this time.
Cash Balances and Loan Finance
The Group again demonstrated a strong Net Cash Inflow from Operating Activities
of #774,000 (2005: #487,000). This represented a cash conversion rate of 135%
when compared to Operating Profit before Goodwill Amortisation and the
Curtailment Gain.
The Group had loans outstanding of #1,830,000 on the 31st March 2006 after loan
repayments of #280,000 during the year. The Group's cash position has improved
by #326,000 to #501,000 and at the year end the Group had headroom against
facilities of #851,000.
Share Capital and Dividends
Following the share placing of 771,112 ordinary shares on the 11th November 2005
the total number of shares issued is 4,971,112 at a nominal value of 25 pence
per share. The called up share capital of the Company is #1,242,778.
The directors are proposing a final dividend of 2.0 pence per share reflecting
the good performance of the business in the second half of the financial year to
31st March 2006. The dividend is subject to shareholder approval at the AGM on
the 18th July 2006 and will be paid on the 25th July 2006. The associated Record
date will be the 16th June 2006 and the ex-dividend date shall be the 14th June
2006.
Strategy & Business Update
During the year the directors carried out a strategic review and concluded that
the Group would be stronger if the Group was positioned so that it could benefit
from opportunities within the broader Homeland Security market rather than being
dependent on the fire and rescue sector.
The aim of the new strategy is to provide high quality Homeland Security related
equipment and services to agencies, rescue services and end-users
internationally. By creating a Group of specialist suppliers we can utilise our
management skills, expert market knowledge and excellent product reputation to
forge strong and lasting relationships with customers.
In order to service the customers in the most effective manner the business is
focussing on two areas: 'Detection & Protection' and 'Fire, Search & Rescue'.
Whilst there will be continued shared knowledge, access to resources and
management across the Group the product development and marketing strategies
will be centred on the divisions.
Fire, Search & Rescue - AS Fire
AS Fire is currently focussed on the fire markets, with much of its business in
the UK, this market has now been through the purchasing restrictions imposed
during the ODPM procurement review. In the year to the 31st March 2006 the
business saw the development of a number of new products including the AS Lite
roller shutter designed for fire appliances, which is lighter for ease of use,
very robust and is offered at a competitive price.
The business saw a strengthening in the financial positions of its OEM customers
and an increase in the numbers of new vehicles planned for production. AS Fire
strengthened its position in Europe with the establishment of a sales focussed
company AS Security BV in Holland.
During the financial year to March 2007 the business aims to continue to develop
its product lines and offer them for wider use.
Detection & Protection - Todd
Since November our Chief Executive Tony O'Neill has worked successfully to
integrate Todd into the overall business and in March we announced the
appointment of Chris Awcock as the Managing Director for Todd. Chris was
previously Managing Director of Call Performance Limited and prior to that a
Sales and Marketing Director within the Pitney-Bowes Group.
Todd supplies x-ray scanning equipment that is mainly used in mail rooms. Its
customers include government departments, embassies, police, broadcasters,
pharmaceutical companies and banks.
During the year Todd released its first new product range for 5 years. The new
products provide enhanced powder detection capability and a remote operation
facility as well as updated aesthetics. Customer response to the new range has
been very positive and the market interest is high.
During the financial year to March 2007 Todd will build on its early success
with the new product range. The addition of Chris Awcock brings a heavy weight,
professional sales approach into an untapped market.
People & Management
The Board is grateful for the strong support, enthusiasm and flexibility shown
by the staff of AS Fire and Todd during what has been a year of change for many
of them. The Board looks forward to continuing to build and develop the business
with them in the future.
The Group has seen a number of key personnel changes in the year including the
appointment of Tony O'Neill as Chief Executive in August 2005 and Tim O'Connor
as Group Finance Director in September 2005. On the 1st April 2006 David
Chisnall became the Non-Executive Deputy Chairman.
Future Prospects
The Board has been encouraged by a strong second half in the financial year to
31st March 2006. We expect there to be good opportunities for both AS Fire and
Todd in the Homeland Security market during the new financial year with the
Group entering the new financial year with a strong order book. The Board
believes the current organisation can continue to grow organically and that
there are also a number of acquisition opportunities which would strengthen its
position in its chosen markets. The Group is currently in the advanced stages of
negotiations to acquire a business in the fire equipment market. It is intended
to fund this through further debt finance.
CONSOLIDATED PROFIT AND LOSS
Year Year
Ended Ended
31 March 31 March
Note 2006 2005
------ --------- ---------
#000 #000
Turnover
Continuing Operations 1 4,092 3,925
Acquisitions 813 -
Group Turnover 4,905 3,925
Cost of sales (2,069) (1,847)
--------- ---------
Gross profit 2,836 2,078
Administrative expenses (2,380) (1,888)
Operating profit before goodwill amortisation &
curtailment gain 574 338
Curtailment gain 5 141 -
Goodwill amortisation 4 (259) (148)
Operating Profit
Continuing operations 346 190
Acquisitions 110 -
--------- ---------
Group operating profit 456 190
Interest receivable 8 3
Interest payable and similar charges (106) (84)
--------- ---------
Profit on ordinary activities before taxation 2 358 109
Tax on ordinary activities (45) 10
--------- ---------
Profit for the financial year 313 119
========= =========
Earnings per share 3
Basic earnings per share 7.0p 2.8p
========= =========
Diluted earnings per share
Diluted basic earnings per share 3 7.0p 2.8p
========= =========
CONSOLIDATED BALANCE SHEET
At 31 March Note 2006 2005
------- ------ ------
#000 #000
FIXED ASSETS
Intangible assets 4 3,510 2,762
Tangible assets 1,280 131
------- ------
4,790 2,893
CURRENT ASSETS
Stock and work in progress 6 697 506
Debtors 7 1,269 914
Cash at bank and in hand 501 175
------- ------
2,467 1,595
CREDITORS: amounts falling due within one year 8 (1,786) (889)
------- ------
NET CURRENT ASSETS 681 706
------- ------
TOTAL ASSETS LESS CURRENT LIABILITIES 5,471 3,599
CREDITORS: amounts falling due after more than
one year 9 (1,443) (637)
------- ------
NET ASSETS EXCLUDING PENSION LIABILITY 4,028 2,962
------- ------
Pension Liability (62) -
------- ------
NET ASSETS 3,966 2,962
======= ======
CAPITAL AND RESERVES
Called up share capital 1,243 1,050
Share premium account 10 2,346 1,872
Profit and loss account 10 377 40
------- ------
EQUITY SHAREHOLDERS' FUNDS 11 3,966 2,962
======= ======
CONSOLIDATED CASH FLOW STATEMENT
Year Year
Ended Ended
31 March 31March
Note 2006 2005
----- ------- -------
#000 #000
Net cash inflow from operating activities 12 774 487
------- -------
Returns on investment and servicing of finance
Interest received 8 3
Interest paid (92) (74)
New loans issue costs (18) -
------- -------
(102) (71)
------- -------
Taxation
Corporation tax paid (4) (2)
Capital expenditure and financial investment
Purchase of tangible fixed assets (73) (30)
Sale of tangible fixed assets 7
------- -------
(73) (23)
------- -------
Acquisitions and disposals
Purchase of subsidiary undertakings (2,168) -
Net cash acquired with subsidiaries 262 -
------- -------
(1,906) -
------- -------
Equity dividends paid - (42)
------- -------
Net cash (outflow)/inflow before financing (1,311) 349
------- -------
Financing
Placing Costs (27)
Share Issue 694 -
New long term loan 1,250 -
Long-term loan repayments (280) (240)
------- -------
Net cash inflow/(outflow) from financing 1,637 (240)
------- -------
Increase in cash for the year 326 109
======= =======
NOTES TO ACCOUNTS
BASIS OF PREPARATION
The accounts have been prepared in accordance with applicable accounting
standards and under the historical cost accounting rules. The accounts cover the
year ended 31 March 2006.
1 Analysis of turnover
By Division Period Year
Ended Ended
31 March 31 March
2006 2005
#000 #000
AS Fire & Rescue Equipment (1) 4,092 3,925
Todd Research (from 11/11/05) (2) 813 -
--------- ---------
Total 4,905 3,925
========= =========
There were two classes of business for the year:
1) Manufacture of ladders, gantries and ancillary equipment, sold under several brand names to emergency and rescue
services.
2) Manufacture of x-ray scanning equipment for post and baggage aimed at the mail room market.
By Geographical Market Year Year
Ended Ended
31 March 31 March
2006 2005
#000 % #000 %
UK 4,159 85% 3,288 84%
Rest of World 746 15% 637 16%
-------- ------- ------- ------
4,905 100% 3,925 100%
======== ======= ======= ======
2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
Profit on ordinary activities before taxation
is stated after charging Year Year
Ended Ended
31 March 31 March
2006 2005
-------- -------
#000 #000
Research and Development current year 21 21
Operating leases : land and buildings 133 138
Operating leases : plant and machinery 3 3
Amortisation of goodwill 259 148
Depreciation of tangible fixed assets 72 49
Profit on disposal of tangible fixed assets - 1
Auditor remuneration - Audit fees 30 18
Auditor remuneration - Further assurance service - 34
Auditor remuneration - Tax compliance 4 2
======== =======
3. EARNINGS PER SHARE
Year Year
Ended Ended
31 March 31 March
2006 2005
-------- --------
#000 #000
Profit after taxation 313 119
Adjustments :
Goodwill amortisation* 164 148
-------- --------
Adjusted profit 477 267
-------- --------
Number Number
Basic weighted average number of shares 4,496,582 4,200,000
Dilutive effect of ordinary shares: Share - 22,057
options
Warrants - -
--------- ---------
4,496,582 4,222,057
--------- --------
Year Year
Ended Ended
31 March 31 March
2006 2005
-------- --------
Basic earnings per share 7.0p 2.8p
Loss per share on goodwill amortisation 3.6p 3.5p
-------- --------
Adjusted earnings per share 10.6p 6.3p
======== ========
Diluted basic earnings per share 7.0p 2.8p
Diluted loss per share on goodwill
amortisation 3.6p 3.5p
-------- --------
Diluted adjusted earnings per share 10.6p 6.3p
======== ========
The dilutive effect of share options has been calculated in accordance with
accounting standards. For this purpose the fair value of the shares has been
taken as the average market price of the Group's shares for the year ended 31
March 2006 of 89.7p. The share warrants and share options are anti-dilutive in
the year as their exercise price exceeds the fair value of the shares.
*The goodwill amortisation is normalised, it does not include the accelerated
amortisation of goodwill of #95,000 which arose from a movement on the pension
deficit resulting from the closure of the defined benefit scheme acquired in
November 2005.
4. INTANGIBLE FIXED ASSETS
GROUP Note Goodwill
------ #000
Cost
At 31 March 2005 2,946
-------
Acquired Goodwill
Todd Research Limited 11th November 2006 5 1,007
-------
Cost
At 31 March 2006 3,953
-------
Provision for amortisation
At 31 March 2005 184
Accelerated amortisation* 95
Charge for the year 164
-------
At 31 March 2006 443
-------
Net book value
At 31 March 2005 2,762
=======
At 31 March 2006 3,510
=======
The Directors believe the benefits to be derived from having acquired Speed 5019
Limited in 2004 and Todd Research Limited in 2005 will continue for a period of
not less than 20 years and accordingly the Directors are amortising goodwill
over this period.
*The accelerated amortisation of goodwill adjusts the goodwill that arose
through the acquisition of the defined benefit pension scheme fund deficit, this
deficit was subsequently reduced by the closure of the scheme to the accrual of
new benefits.
5. ACQUISITION of todd research limited
On the 11th November 2005 the Asfare Group plc acquired ordinary shares with a
nominal value of #13,500 in Todd Research Limited, being 100% of its nominal
share capital. The total consideration of #2,168,000 (including #256,000 of
costs) was satisfied in cash and financed via the placing of 771,112 ordinary
shares for #694,000, cash resources of #224,000 and the raising of #1,250,000 in
debt. Goodwill arising on the acquisition of Todd Research Limited has been
capitalised. The purchase of Todd Research Limited has been accounted for by the
acquisition method of accounting.
The assets and liabilities of Todd Research Limited acquired were as follows:
Book Revaluation Accounting Other Fair Value
Values Policy adjustments
#000 #000 #000 #000 #000
Fixed Assets
Tangible 596 605 (33) (20) 1,148
Current Assets
Stock 480 (68) (135) 277
Debtors 129 129
Bank & Cash 262 262
Total Assets 1,467 537 (33) (155) 1,816
Creditors
Trade Creditors 355 30 385
Other Creditors 35 35
Accruals 8 8
Provisions
Pension 181 181
Taxation 46 46
------- --------- -------- ----- ------ -------
Total
Liabilities 535 90 - 30 655
------- --------- -------- ----- ------ -------
Net assets excluding
pension
liability 1,023 537 (33) (185) 1,342
Pension
Liability 181 181
------- --------- -------- ----- ------ -------
Net Assets 842 537 (33) (185) 1,161
------- --------- -------- ----- ------ -------
Purchased
goodwill
capitalised 1,007
-------
-------
2,168
Satisfied by:
Share placing 694
Loan Financing 1,250
Cash 224
-------
Initial
Consideration 2,168
Contingent
Consideration 2,080
-------
Total
Potential
Consideration 4,248
=======
Included in the above table are accounting policy related adjustments on fixed
assets of #33,000, these have been made to bring the Todd Research depreciation
policy in line with the policy of the Group. The fixed assets have been reduced
by #20,000 in relation to the disposal of assets and #135,000 of stock has been
written down.
Fair value adjustments were made to the freehold property which was increased by
#605,000 to the current market value, the stock was re-valued and reduced by
#68,000 and the pension deficit of #181,000 (net of the associated deferred tax
asset of #78,000) has been recognised. During the period post acquisition the
Group closed the defined benefit scheme to the accrual of future benefits, this
resulted in a curtailment gain of #141,000 which was credited to the profit &
loss account.
There is a potential further #2,080,000 of contingent consideration, this has
not been included in goodwill as the Board considers that the outcome of this
can not be reliably measured at this time.
6. STOCKS AND WORK IN PROGRESS
2006 2005
GROUP #000 #000
Work in progress 152 2
Raw materials and finished goods 545 504
------- -------
697 506
======= ======
7. DEBTORS
2006 2005
#000 #000
Trade debtors 1,099 836
Other debtors 2 3
Prepayments and accrued income 168 75
------ ------
1,269 914
====== ======
8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2006 2005
#000 #000
Bank loans 387 231
Trade creditors 912 388
Social security and other taxes 209 156
Other creditors - 2
Accruals 275 112
Corporation tax 3 -
------- ------
1,786 889
======= ======
9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2006 2005
#000 #000
Bank loan 1,443 637
------ ------
1,443 637
====== ======
The amounts are repayable as follows:-
Amounts falling due:
in one year or on demand 398 240
after one year and within two 398 240
after two years and within five 638 420
In more than five 437 -
------ ------
1,871 900
Less: Issue costs (41) (32)
------ ------
1,830 868
Included in creditors falling due within one year (387) (231)
------ ------
1,443 637
====== ======
10. SHARE PREMIUM AND RESERVES
Share Profit and
Premium Loss
Account Account
GROUP #000 #000
At 31 March 2005 1,872 40
Actuarial net gain 24
Share premium arising on placing 474 313
Retained profit
------- -------
At 31 March 2006 2,346 377
======= =======
11. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
Group
#000
Equity shareholders' funds at 31 March 2005 2,962
Called up share capital 193
Share premium account 474
Actuarial net gain 24
Profit for the financial year 313
--------
Equity shareholders' funds at 31 March 2006 3,966
========
12. NET CASHFLOW FROM OPERATING ACTIVITIES
Year Year
Ended Ended
31 March 31 March
2006 2005
-------- --------
#000 #000
Operating profit 411 190
Depreciation 72 49
Goodwill amortisation 164 148
Profit on sale of tangible fixed assets - (1)
Decrease in stock 86 129
Increase in debtors (226) (84)
Increase in creditors 267 56
-------- --------
Net cash inflow from operating activities 774 487
======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAESLAEEKEAE
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