RNS Number:8402I
Photo-Scan PLC
18 March 2003


               PHOTO-SCAN PLC - PRELIMINARY RESULTS FOR THE
                        YEAR ENDED 31 DECEMBER 2002


*    Sales advance 36% to #24.8 million (2001: #18.3 million).  Pre-tax
     profits increase 3% to #3.8 million (2001: #3.65 million).

*    Secured rental income receivable over the next 7 years increases by 9% to
     #23.8 million (2001: #21.9 million), further underpinning future profits 
     and cash flow.

*    Final dividend proposed of 3.85p per share (2001: 3.67p) making the full
     year total dividend 5.41p per share (2001: 5.17p), an increase of 4.6%.

*    The Board anticipates continued growth in the market and is optimistic on
     future long-term prospects for the business.


Peter Hawksworth, Chief Executive of Photo-Scan plc said:


"During 2002, we exceeded expectations and, despite demanding market conditions,
have achieved growth in both turnover and profit.  We are optimistic about
future prospects."


For further information contact:


Peter Hawksworth, Chief Executive
Paul Dinan, Finance Director
Photo-Scan plc
Tel: 01932 898500

Preliminary results of Photo-Scan plc for the year to 31 December 2002

Overview

I am pleased to report that we have made substantial progress during the year
and have exceeded our own expectations.

Photo-Scan has an enviable track record as a provider of premium electronic
security systems for private and public sector companies across the UK. During
2002, despite challenging market conditions, we achieved profitable growth and
increased the rental book while controlling our costs.  Working capital was also
very well managed.

In the full twelve months to 31 December 2002, sales increased by 36% to #24.8m
(2001: #18.3m) and profit before taxation grew by 3% to #3.8m (2001: #3.65m).
The year was characterised by a much higher level of low margin contracts,
mainly won through a competitive tendering process, and an increased level of
operating expenses required to generate and service these orders.  This explains
the disparity between the large increase in sales and the smaller increase in
profit.

Secured rental income receivable in future periods increased by 9% to #23.8m
(2001: #21.9m), further underpinning future profits and cash flow.  This figure
is the contracted value of future rental payments to be made by customers over
the next 7 years.  These payments are only taken into the profit and loss
account in the period to which they relate.

The board is recommending a final dividend of 3.85p (2001:3.67p), which will be
paid on 9 May 2003 to shareholders on the register at 11 April 2003.   The
shares will go ex-dividend on 9 April 2003.  The full year dividend has
therefore been increased to 5.41p per share (2001: 5.17p), representing an
increase of 4.6%.  This is a reflection of our confidence in the future of the
business.

The company's strong trading performance allied to the tight control of working
capital has continued to generate cash from operations.  A large increase in
trade debtors and stock at the 31 December 2002, owing to a significant level of
sales and new sales orders during the last two months of the year has, however,
meant that there was a overall net cash outflow of #0.6m during the year.  The
year end cash balance of #0.6m (2001: #1.2m) is still, nevertheless, a very
positive outcome.

I am greatly encouraged by the work that has been carried out during the year to
develop new business strategies and competitive advantages.  Our plans for 2003
include a number of initiatives to win new long-term rental and maintenance
contracts.  The outlook for the electronic security market is positive and
Photo-Scan's strong performance leads us to expect further progress in building
the business and consequently shareholder value during 2003.

Operational Review

We continue to play a major role in the retail sector and we secured a number of
important rental renewals during the year with existing major customers.

We also performed well in the property sector, particularly with rentals, and we
won major new rental contracts during the year with some of the largest property
management companies in the country.

We won a substantial level of new business in the transport sector with an
integrated security system for one of the rail companies.  This involved the
installation of one of the largest control rooms in Europe.  We also
participated in the first stage of innovative work with some of the bus
companies for the provision of vehicle mounted CCTV systems that incorporate
on-board advertising and promotional schemes.

We further expanded our business in the healthcare sector with a large security
contract for one of the country's largest city centre hospitals.  This involved
the upgrade and integration of existing equipment as well as the installation of
state-of-the-art CCTV and digital recording, operating over a dedicated network.

Most noteworthy was the winning of the largest single local authority contract
awarded across the UK in 2002.  This contract involved the provision of a
dedicated fibre optic network, vindicating our strategy of presenting a wider
product offering to our client base.

Our service and maintenance activities produced further encouraging growth, with
chargeable service income increasing by 16% to #2.4m (2001: #2.1m).  This
remains a key business activity that should continue to deliver strong growth
over coming years.

For the fourth successive year we retained the Investors in People award and we
continued to invest in training.  We are conscious of the need to develop the
technical and management skills within our team.

In November, the industry recognised our innovative company Intranet system and
our capabilities in customer care, awarding us two prizes at the annual Security
Excellence Awards.

New Technology

The market witnessed increased investment in digital technology during 2002 and,
in particular, we saw an expansion in customer demand for remote monitoring of
CCTV images.  This is proving to be attractive to customers because it offers
them the benefit of cost-effectively monitoring all areas of their business.  We
fully expect that this technology will generate additional business in the
future.

In 2003, our Epos-Scan product celebrates its tenth successful year as the
market leader in point of sale monitoring technology and we continue to develop
its potential.  Retailers which have installed Epos-Scan to reduce store losses
and identify fraud are receiving excellent returns on their investment.  Credit
card procedures at point of sale will come under new legislation by 2005 in an
effort to reduce credit card fraud.  We are well placed to work with retailers
to meet the requirements of these new regulations.

The Strategy for the Future

Our rental contracts will continue to be a core strength of our business,
because they underpin future profitability and cash flow, and build long-term
relationships with customers.  During 2002, we have developed more schemes to
further capitalise on this strength and we now have several innovative ways of
selling rental and maintenance contracts. These schemes include our Capital
Release Programme, which delivers security technology and service over a period
of years, with the added bonus to the customer of a cash payment for all
existing security equipment.  We foresee the potential for expansion in this
area as fundamental to providing profitable growth for the business.

Our business strategy going forward is to move away from the high value, low
margin type of contracts and to concentrate instead on the more profitable,
longer-term rental and maintenance contracts in selected market sectors.  2003
will be a year of transition for the company but we are hopeful that profits and
shareholder value will now grow much more strongly over the next 5 years.  In
the short-term, however, it is unlikely that recent turnover growth will be
maintained.

Outlook

We aim to continue to increase our profitability and in so doing build
shareholder value by focussing on those market sectors where we have significant
competitive advantages.

We are committed to achieving strategic alliances with suppliers, distributors
and manufacturers to widen our product and service offering to attract new
customers and maximise the potential of existing ones.

Trading performance in the first two months of 2003 is in line with expectations
and we continue to receive a strong level of new sales orders.


Andrew Nash
Chairman

18th March 2003


Group Profit and Loss Account
for the year ended 31 December 2002
                                                                                  2002                    2001
                                                                                  #000                    #000

Turnover                                                                        24,767                  18,273
Cost of sales                                                                 (17,118)                (11,264)

Gross profit                                                                     7,649                   7,009
Net operating expenses                                                         (3,900)                 (3,368)

Operating profit                                                                 3,749                   3,641

Net interest receivable                                                             20                      11
Profit on ordinary activities before taxation                                    3,769                   3,652
Tax on profit on ordinary activities                                           (1,169)                 (1,232)

Profit on ordinary activities after taxation                                     2,600                   2,420
Ordinary dividends                                                             (1,216)                 (1,162)
Retained profit for the financial year                                           1,384                   1,258

Basic earnings per share                                                         11.6p                   10.8p
Diluted earnings per share                                                       11.6p                   10.8p

Ordinary dividend per share                                                      5.41p                   5.17p



Group Balance Sheet
As at 31 December 2002


                                                                                  2002                    2001
                                                                                                      Restated
                                                                                                  (see note 2)
                                                                                  #000                    #000
Fixed Assets
Tangible Assets                                                                  4,848                   5,647
Investments in subsidiaries                                                          -                       -
                                                                                 4,848                   5,647

Current Assets
Stocks                                                                           2,460                   1,359
Debtors
     Due within one year                                                         8,051                   5,202
     Due after more than one year                                                    9                      24
                                                                                 8,060                   5,226

Net investment in finance leases
     Due within one year                                                           836                     373
     Due after more than one year                                                3,139                   1,190
                                                                                 3,975                   1,563
Cash at bank and in hand                                                           607                   1,175

                                                                                15,102                   9,323

Creditors: amounts falling due within one year                                 (9,817)                 (6,221)

Net current assets                                                               5,285                   3,102

Total assets less current liabilities                                           10,133                   8,749

Net assets                                                                      10,133                   8,749

Capital and reserves
Called up share capital                                                          5,620                   5,620
Capital contribution reserve                                                        50                      50
Profit and loss account                                                          4,463                   3,079
Equity shareholders' funds                                                      10,133                   8,749



Reconciliation of Movements in Shareholders' Funds
for the year ended 31 December 2002
                                                                                2002                   2001
                                                                                #000                   #000

Profit for the financial year                                                  2,600                  2,420
Ordinary dividends                                                           (1,216)                (1,162)
Retained profit for the financial year                                         1,384                  1,258
Opening shareholders' funds                                                    8,749                  7,491
Closing shareholders' funds                                                   10,133                  8,749


Group Cash Flow Statement
for the year ended 31 December 2002
                                                                                 2002                   2001
                                                                                 #000                   #000

Net cash inflow from operating activities                                       2,746                  4,264
Returns on investments and servicing of finance                                    20                     11
Taxation paid                                                                 (1,212)                (1,205)
Capital expenditure and financial investment                                    (946)                (1,566)
Equity dividends paid                                                         (1,176)                (1,124)
Cash (outflow) / inflow before use of liquid resources and financing            (568)                    380
Management of liquid resources                                                    466                    130
(Decrease) / increase in cash in the year                                       (102)                    510


Reconciliation of Net Cash Flow to Movement in Net Funds

                                                                                 2002                   2001
                                                                                 #000                   #000

(Decrease)/increase in cash in the year                                         (102)                    510
Cash (outflow) from movement in liquid resources                                (466)                  (130)
Movement in net funds in the year                                               (568)                    380
Net funds at 1 January                                                          1,175                    795
Net funds at 31 December                                                          607                  1,175


Notes on the Preliminary Results
For the year ended 31 December 2002

(1)          The financial information set out above does not constitute the
group's statutory accounts for the years ending 31 December 2002 or 2001, but is
derived from those accounts.  The statutory accounts for 2001 have been
delivered to the Registrar of Companies and those for 2002 will be delivered
following the company's Annual General Meeting.  The auditors have reported on
those accounts; their reports were unqualified and did not contain statements
under S237 (2) or (3) of the Companies Act 1985.  Copies of the 2002 financial
statements will be sent to shareholders within two weeks of this announcement.

(2)   The balance sheet as at 31 December 2001 includes certain presentational
adjustments to the disclosure of finance leases and deferred tax.  There is no
impact on the profit and loss account or cash flow statement from these
adjustments.

(3)   The basic and diluted earnings per share have been calculated by dividing
the profit on ordinary activities after taxation of #2,600,000 (2001:
#2,420,000) by 22,481,435 (2001: 22,481,435) being the weighted average number
of ordinary shares of 25p in issue during the year.  For the purposes of the
diluted earnings per share calculation the share options in issue are not
considered to have any dilution effect at 31 December 2002 (or at 31 December
2001), so the same weighted average number of shares has been used as for the
calculation of the basic earnings per share.

(4)   The board is recommending a final dividend of 3.85p per share (2001:
3.67p) which is expected to be paid on 9 May 2003 to shareholders on the
register at 11 April 2003.  An interim dividend of #351,000 (1.56p per share)
was paid on 18 October 2002.  The proposed final dividend would therefore take
total dividend for the year to 5.41p per share (2001: 5.17p).


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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