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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Belgravium Tech | LSE:BVM | London | Ordinary Share | GB0002961224 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.875 | 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:1391Z
Belgravium Technologies PLC
02 March 2006
02 March 2006
Belgravium Technologies Plc
(BVM:AIM)
Preliminary Results for the
Year Ended December 31 2005
The Board of Belgravium Technologies plc ("Belgravium" or "the Group"),
designers and manufacturers of real-time data capture systems, is pleased to
announce the Preliminary Results for the year ended 31 December 2005.
HIGHLIGHTS
* Turnover up 41% #5,430,000 (2004: #3,859,000)
* Pre tax profits up 31% (before amortisation) #982,000 (2004: #751,000)
* Dividend policy maintained
* Acquisition of Touchstar Technologies Ltd ("Touchstar") in October 2005
(Touchstar sales and profits for the last two months of 2005 are included in
the Group results)
* Integration of Touchstar product range
* Expansion into new markets and territories - international petrochemical
supply and mobile retail
* Acquisition of Novo IVC Ltd in January 2006
* Both acquisitions earnings enhancing and complimentary to the Group's
growth potential 1
Commenting today, Executive Chairman John Kembery said:
"The Group made significant progress in 2005 and delivered a solid result, with
the largest contribution coming from Belgravium Limited.
It is also pleasing to report that a major acquisition was completed in October
and a further acquisition in January 2006, fully consistent with our policy of
augmenting organic growth through acquisition. Due both to their strategic
importance and earnings enhancement 1, the Board believes these to be compelling
deals for Belgravium. Clearly shareholders agreed, the share placement in
relation to the acquisition of Touchstar being over-subscribed and the EGM
endorsing the proposal unequivocally.
The teams in all three companies have made a good start in co-operation on
matters of finance, sales and technology. Order prospects are excellent, and
with the enhanced strength of the enlarged Group, we are optimistic for 2006."
For further information please contact:
Buchanan Communications ltd Kelly-Ann French
Mob: 07958 972164
Belgravium Technologies plc John Kembery
Mob: 07770 731021
www.belgraviuminvestorrelations.com
FULL RESULTS BELOW
Chairman's statement
Introduction
Belgravium Technologies plc ("Belgravium" or the "Group") designs, manufactures
and installs real time, electronic data capture systems. Historically, these
have largely been applied to the UK logistics and the supply chain sectors, but
recent acquisitions have moved the Group into international petrochemical supply
and mobile retail systems.
Results
The Group made significant progress in 2005 and delivered a solid result, with
the largest contribution coming from Belgravium Limited. Turnover for the year
was #5,430,000, 41% up on 2004 (#3,859,000). Profit before tax and amortisation
of goodwill was #982,000, 31% up on prior year (#751,000). An excellent result,
although a little less than expected, due to seasonal delays in some contracts.
Balance Sheet and Acquisitions
The Group balance sheet at the end of 2005 was radically different from that of
2004, due to the major acquisition of Touchstar Technologies Limited ("Touchstar
"), financed partly in cash and partly by a term loan and placement of new
shares. The net worth of the Group increased from #2,646,000 to #7,406,000 and
the year end balance sheet contained #1,799,000 (2004: #2,219,000) in cash, some
of which was used for the acquisition of Novo IVC, subsequent to the year end.
Dividend
It is Belgravium's policy to pay dividends and, even though cash reserves have
been utilised for acquisitions, future prospects for the enlarged Group are
excellent. The Board is therefore pleased to recommend a final dividend of
0.32p per ordinary share. This will be paid on 7 June, subject to the approval
at the AGM of shareholders on the register on 12 May 2005.
Belgravium Limited Operations in 2005
Belgravium Limited had another good year in 2005, completing the company's
biggest ever contract to supply proof of delivery systems for Grattan. Overall
turnover increased by 12% compared to the prior year and the company made good
progress in increasing the range and functionality of its products, whilst
maintaining the quality of its goods and services. The logistics sector
continues to expand but there is no doubt that the market has become more
competitive, such that more rapid growth could only be achieved at the expense
of margin. In this environment the Group needed to be bigger and to have a
larger platform for its technical and geographical development. It is therefore
pleasing to report that a major acquisition was completed in October, fully
consistent with our policy of augmenting organic growth through acquisition.
Touchstar Technologies Ltd
Like Belgravium Limited, Touchstar supplies data capture systems but into the
petrochemical distribution and retail passenger sales market on a much more
international scale. The company has been known to Belgravium for several years
and there had been some discussions in the past on the benefits that would
accrue from a merger. In the second half of 2005 it became clear that many of
the historic barriers to such an agreement could be overcome and the deal was
completed before the year end.
Touchstar turnover, in its financial year to the end of May 2005, was #7.4
million with a profit before interest and tax of #2.1 million. The acquisition
by Belgravium was therefore, a reversal, requiring shareholders' approval. The
benefits of this protracted and expensive process were to add to the Group:
- an established brand name with international recognition and real
growth opportunities in its target sectors and territories
- additional routes to market and cross-selling opportunities into new
geographical areas
- increased buying power and leverage with suppliers of components
- opportunity to streamline product development and realise synergies
from combined technical capability
- a higher profile from which to target new markets
In addition, the Directors' believe that the acquisition will enhance earnings
in the first year of operation and, partly funded by a share placement, has left
the Group's gearing at an appropriate level. Touchstar was acquired for a total
of #10.75 million in cash but, since the vendors agreed to leave a minimum of
#2.55 million cash in the balance sheet at completion, the debt free/cash free
price for the company was #8.2 million, or 3.9 times Touchstar's pre-tax
earnings in the year to May 2005.
Due both to the strategic importance and the earnings enhancement,, the Board
believes this to be a compelling deal for Belgravium. Clearly shareholders
agreed, the share placement being over-subscribed and the EGM endorsing the
proposal unequivocally. Touchstar sales and profits for the last two months of
2005 are included in the Group results.
Future Group Operations
We believe it to be important to maintain the brand names of Belgravium and
Touchstar since both have significant value in their chosen market sectors.
Beyond this aspect, many of the functions of the two companies can be merged
with substantial benefits, arising not so much from cost saving but from shared
use of resources and experience. This is particularly true on the technical
front where both companies have, in the past, solved the same technical issues
in different ways. Coordination of this function is already bringing benefits.
However, we do not intend to rush the merger process, preferring to let the
operations grow together rather than force synergies which may not exist. This
is a process predicated much more on growth potential than on cost saving.
Novo IVC
Touchstar's other main market is in the travel industry where its data capture
hardware is used in retail systems, largely on aircraft but more recently on
trains. This sector has historically been handled exclusively by a Leamington
Spa based company called Novo IVC ("Novo"), owned by the Swedish software Group,
WM-Data.
This company has historically been very profitable and, with its software
combined with Touchstar hardware, offers substantial growth opportunities in yet
another sector. Subsequent to the year end, Belgravium completed the purchase of
this company from WM-Data on 13 January 2006. The consideration of #1,316,000
was paid in cash. At the time of the acquisition Novo had over #600,000 in cash
and although the costs of the transaction were high at #350,000, the purchase is
highly attractive as the company is expected to make a profit before tax of
#250,000 in 2006.1
Novo works closely with WM-Data whose products include software for data
collection analysis. As part of the deal, the two companies have signed a
co-operation agreement aimed at future development of the mobile retail markets.
The whole of Novo staff will be retained and, as with Touchstar, many of its
functions will be gradually assimilated into the Group. Thus, the acquisition
will be both earnings enhancing and complimentary to the growth potential of the
whole Group. 1
Product Development
In 2005, we launched the vehicle mounted Monaco terminal with Windows CE
capability. Work has been completed on integrating Radio Frequency
Identification (RFID) into the Atlanta terminal and two contracts have been
completed in Europe. The functional range of the Atlanta was significantly
increased to include voice recognition and GPRS communication. An extensive
programme of product development was inherited at Touchstar and has been
complimented by sharing resources between the two sites.
Employees
As in previous years Belgravium's staff have coped admirably with all of the
changes inevitable in such an active year. The two acquisitions more than
double the numbers employed within the Group and bring additional skills with
which to approach the substantial growth potential of our chosen markets. We
welcome these new members to Belgravium, and they may look forward to a secure
future in the enlarged Belgravium.
Outlook
The Group has made two investments which the Board believes to be earnings
enhancing. The teams in all three companies have made a good start in
co-operating on matters of finance, sales and technology. Seasonality in trading
has repeatedly shown us that the early part of the year is typically a quiet
period and the trend has continued in 2006. However, order prospects are
excellent and with the enhanced strength of the enlarged Group, we are
optimistic for 2006.1
J P Kembery
Executive Chairman
1 March 2006
1 This statement should not be taken to mean that the earnings per share of the
Group will necessarily match or exceed the historical reported earnings per
share of the Group and no forecast is intended or implied.
Audited Group profit and loss account for the year ended 31 December 2005
2005 2004
Continuing Acquisitions Total (as restated)
operations Total
#'000 #'000 #'000 #'000
Turnover 4,351 1,079 5,430 3,859
Cost of sales 1,700 580 2,280 1,369
Gross profit 2,651 499 3,150 2,490
Distribution costs 32 12 44 31
Administrative expenses 1,936 264 2,200 1,800
1,968 276 2,244 1,831
Operating profit before goodwill amortisation 683 223 906 659
Goodwill amortisation - (80) (80) -
Operating profit 683 143 826 659
Net interest receivable 76 92
Profit on ordinary activities before taxation 902 751
Tax charge on profit on ordinary activities (273) (148)
Profit for the financial year 629 603
Basic earnings per ordinary share 0.86p 0.90p
Diluted earnings per ordinary share 0.85p 0.89p
There are no recognised gains or losses other than the profit for the year and
therefore no separate statement of total recognised gains and losses has been
presented.
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year as stated above, and their historical cost
equivalents.
Audited Group balance sheet as at 31 December 2005
2004
2005 (as restated)
#'000 #'000
Fixed assets
Intangible assets 8,232 -
Tangible assets 325 237
8,557 237
Current assets
Stocks 1,103 443
Debtors 2,479 1,458
Cash at bank and in hand 1,799 2,219
5,381 4,120
Creditors: amounts falling due within one year (6,189) (1,657)
Net current (liabilities)/assets (808) 2,463
Total assets less current liabilities 7,749 2,700
Creditors: amounts falling due after more than one year (170) -
Provisions for liabilities and charges (173) (54)
Net assets 7,406 2,646
Capital and reserves
Called up share capital 5,021 3,341
Share premium account 2,915 120
Capital redemption reserve 2,100 2,100
Profit and loss account (2,630) (2,915)
Total equity shareholders' funds 7,406 2,646
Audited Group cash flow statement for the year ended 31 December 2005
2005 2004
#'000 #'000
Net cash inflow from operating activities 870 672
Returns on investment and servicing of finance
Interest received 96 92
Interest paid (20) -
76 92
Taxation
Corporation tax paid (396) (180)
Corporation tax received - 55
(396) (125)
Capital expenditure and financial investment
Purchase of intangible fixed assets (28) -
Purchase of tangible fixed assets (52) (51)
(80) (51)
Acquisitions
Acquisition of subsidiary company (8,170) -
Acquisition expenses (633) -
Cash at bank and in hand acquired with subsidiary 3,362 -
(5,441) -
Equity dividends paid to shareholders (344) (291)
Net cash (outflow)/ inflow before financing (5,315) 297
Financing
Purchase of own ordinary share capital - (121)
Issue of own ordinary share capital 4,704 -
Expenses of share issue (229) -
New bank loans 420 -
4,895 (121)
(Decrease)/increase in cash in the year (420) 176
Audited reconciliation of net cash flow to movement in net funds
2005 2004
#'000 #'000
(Decrease)/increase in cash in the year (420) 176
Cash inflow from increase in debt (420) -
Non cash changes
Loan notes issued in connection with acquisition (see note 24) (2,580) -
Movement in net funds during year (3,420) 176
Net funds at 1 January 2,219 2,043
Net (debt)/funds at 31 December (1,201) 2,219
Audited reconciliation of operating profit to net cash inflow from operating
activities:
2005 2004
#'000 #'000
Operating profit 826 659
Depreciation 123 108
Amortisation 85 -
Movement in provisions (16) (16)
Funds generated by operations 1,018 751
Increase in stocks (156) -
Increase in debtors (41) (239)
Increase in creditors 49 160
Increase in working capital (148) (79)
Net cash inflow from operating activities 870 672
Audited reconciliation of movements in Group equity shareholders' funds
2004
2005 (as restated)
#'000 #'000
Profit for the year 629 603
Dividends (344) (291)
285 312
Issue of own ordinary share capital 4,704 -
Expenses of share issue (229) -
Purchase of own ordinary share capital - (121)
Net change in equity shareholders' funds 4,760 191
Opening equity shareholders' funds as at 31 December 2004
(previously #2,432,000 before prior year adjustment of
#214,000) 2,646 2,455
Closing equity shareholders' funds 7,406 2,646
Basis of reporting
This preliminary announcement, which has been prepared on a basis consistent
with the previous year (except for the adoption of new accounting standards as
explained in Note 20 of the audited financial statement for the year ended 31
December 2005), does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.
This preliminary announcement contains information extracted from the audited
financial statements of the group for the year ended 31 December 2005. The
statutory accounts for the year ended 31 December 2005 will be sent to the
shareholders shortly.
The information for the year ended 31 December 2004 is an extract from the
statutory accounts to that date (except as explained in Note 20 of the audited
financial statements for the year ended 31 December 2005) which have been
delivered to the Registrar of Companies. These accounts included an audited
report which was unqualified and which did not contain a statement under Section
237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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