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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Petards Group Plc | LSE:PEG | London | Ordinary Share | GB00B4YL8F73 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.50 | 7.00 | 8.00 | 7.50 | 7.50 | 7.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Security Systems Service | 9.42M | -1.05M | -0.0173 | -4.34 | 4.55M |
TIDMPEG
RNS Number : 6709Q
Petards Group PLC
03 September 2014
3 September 2014
PETARDS GROUP PLC
INTERIM RESULTS ANNOUNCEMENT
Petards Group plc ('Petards'), the AIM quoted developer of advanced security and surveillance systems, reports its interim results for the six months to 30 June 2014.
Key points:
-- Operational
o Order book remains in excess of GBP20 million giving strong position for the second half 2014 and future years.
-- Approximately one third of order book is scheduled for delivery in the second half of 2014
-- Orders secured in first half of 2014 included;
-- Over GBP1.5 million for Petards eyeTrain CCTV systems from Siemens for new super high-speed trains it is building for the Turkish State Railway. This was the first order placed under a framework agreement signed with Siemens in June 2014 for thesupply ofPetards train related products and services.
-- Over GBP4.5 million for modification programme relating to countermeasures equipment for the MOD.
-- Financial
o Results for the six months to 30 June 2014
-- Revenues up 101% to GBP7.2 million (2013: GBP3.6 million)
-- Gross margin 27% (2013: 40%), a reflection of higher defence equipment supplies
-- EBITDA GBP441,000 profit (2013: GBP158,000 loss before exceptionals)
-- Operating profit GBP346,000 (2013: GBP299,000 loss)
-- Profit after tax GBP273,000 (2013: GBP338,000 loss)
o Finance
-- Cash inflow from operating activities GBP181,000 (2013: GBP1,029,000 outflow)
-- Cash at 30 June 2014 GBP1.5 million (31 Dec 2013: GBP1.4 million) and no bank debt
-- Basic EPS of 0.79p per share (2013: 3.11p loss per share)
-- Diluted EPS of 0.62p per share (2013: 3.11p loss per share)
Commenting on the current outlook, Raschid Abdullah, Chairman, said:
"The second half of 2014 has started well and the Group continues to trade profitably. The Group's overall order book is in excess of GBP20 million of which over one third is expected to be delivered before the end of the current year.
There continues to be opportunities for development and growth in all of our current product areas and we expect customers to be placing orders on a number of projects in the coming months which we believe we are well placed to secure.
The Board is confident about the Group's prospects for the second half and beyond as whilst there is still work to be done this year in closing out new business, the present order book already provides a strong base going forward into 2015."
Contacts:
Petards Group plc www.petards.com Raschid Abdullah, Chairman Mb: 07768 905004 Andy Wonnacott, Finance Director Tel: 0191 420 3000 WH Ireland Limited, Nomad and www.wh-ireland.co.uk Joint Broker Mike Coe, Ed Allsopp Tel: 0117 945 3470 Hybridan LLP, Joint Broker www.hybridan.com Claire Louise Noyce Tel: 020 3713 4581 claire.noyce@hybridan.com
Chairman's Statement
Corporate Overview
I am pleased to report that having entered the year with a strong order book the Group has produced a much improved trading performance in the six months ended 30 June 2014. Revenues totalled GBP7.2 million and the pre-tax profit was GBP273,000. In addition the Group has secured a number of significant contracts within both the rail and defence industries and has a strong order book.
The financing transactions completed in the latter part of 2013 coupled with positive cash flows on the larger projects currently flowing through the business have put the Company in a much stronger position with no bank debt and cash balances of GBP1.5 million as at 30 June 2014.
Operating Review
The Group continued to make progress on a number of fronts with the award of some key projects during the period.
Petards' strategic position within the new train build market was strengthened with a five year framework agreement being entered into with Siemens' rail vehicle business to supply Petards train related products and services. The first order under that agreement was placed to supply Petards eyeTrain on-board digital CCTV systems for the new super high-speed Velaro type trains that Siemens are building for the Turkish State Railway.
The project is currently worth in excess of GBP1.5 million and has the potential to increase in size over time providing that Siemens is successful in winning additional train orders from the Turkish State Railway which has announced plans to procure up to a further 90 high speed trains.
The UK rail market offers a number of near term order opportunities for Petards eyeTrain systems for fitment onto new build trains for rolling stock for which orders have been placed on train builders already and for rolling stock for which orders are expected to be placed soon. Also as previously anticipated, enquiry levels for retrofit applications are increasing as a result of the letting of new franchises to UK train operators.
The contract awarded at the end of June, worth over GBP4.5 million, by the Ministry of Defence ("MOD") to modify countermeasures equipment fitted to many of its aircraft will contribute to revenues in 2014 and the two following years. This programme will replace obsolete components within ALE-47 Threat Adaptive Countermeasure Dispensing System (TACDS) Programmers which form part of the integrated Defensive Aids Suite installed on a variety of aircraft. We are hopeful that some other smaller countermeasures projects will be approved in the second half of the year.
Petards has been the long standing operator of an MOD enabling contract to supply it with private mobile radio equipment, ancillaries and engineering services and the Group's expertise in this field was recognised when it was awarded the GBP7 million Secure Management Radio Equipment ("SMRE") project in 2013. We were therefore extremely pleased to have learned yesterday that Petards has been awarded, subject to contract, the new enabling contract that commences later this month. Revenues from this new two year contract are estimated to be similar to those under the previous contract which were in excess of GBP0.5 million per annum and the MOD have the option to extend the contract by up to a further two years.
Trading in our Emergency Services products remained similar to that for the equivalent period in 2013 and continues to make a small but positive contribution to the Group's profitability. Consideration is presently being given to how the Group's business in this area could be enhanced through product development.
Our 'Fit 4 Growth' programme is on-going and is now focused on the continuous improvement and development of our businesses. To support this programme and our current business levels of activity, additional resources have been recruited but operating costs will continue to be closely monitored to ensure they remain in step with both revenues and margins.
Overview of the Results
Group revenues for the six months ended 30 June 2014 of GBP7.2 million were double the GBP3.6 million achieved in the equivalent period last year and were almost 15% higher than the total revenues for the prior year (2013: GBP6.3 million). Equipment deliveries for the SMRE project accounted for a substantial proportion of this growth, although revenues from both equipment and one-off engineering services provided to Bombardier, Siemens and Hyundai Rotem were also notable contributors.
In line with our expectations, gross margins were down to 27% (June 2013: 40%). While margins on our different product lines were generally maintained, the main cause of the reduction in the margin percentage was the mix of business compared with that of 2013. In particular, the SMRE project had a significant effect due to its high material cost content as did some of the one-off rail engineering services which were competitively priced in order to gain market position for potential future equipment orders from those customers.
Administrative expenses totalled GBP1.6 million (June 2013: GBP1.7 million) and after net financial expenses of GBP73,000 (June 2013: GBP39,000) and no tax charge, the Group recorded a profit after tax of GBP273,000 (June 2013: GBP338,000 loss).
Despite working capital increasing in the six months by approximately GBP0.2 million due to higher revenues, net cash inflow from operating activities was GBP0.2 million which compared favourably with a net cash outflow of GBP1.0 million in the same period last year. Cash balances at 30 June 2014 were GBP1.5 million and were similar to those at 31 December 2013 (GBP1.4 million).
Board changes
I am pleased to announce that Paul Negus was appointed as a director of the Company on 3 September 2014. Paul has responsibility for business development for the Group's rail products and brings considerable commercial experience having spent eight years as Managing Director of PIPS Technology Limited, a developer of automatic number plate recognition and CCTV systems first under private ownership and latterly under the ownership of Federal Signal Inc.
During the implementation of the 'Fit 4 Growth' programme, Osman Abdullah assumed an interim role chairing the board of the Company's main operating subsidiary, Petards Joyce-Loebl. In recognition that this role is likely to continue for the foreseeable future the Board considers that the nature of his contribution will be as an executive director of the Company.
Outlook
The second half of 2014 has started well and the Group continues to trade profitably. The Board anticipates securing some additional business during the latter part of this year that is expected to make a contribution to revenues during the second half year. The Group's overall order book is in excess of GBP20 million of which over one third is expected to be delivered before the end of the current year.
There continue to be opportunities for development and growth in all of our current product areas and we expect customers to be placing orders on a number of projects in the coming months which we believe we are well placed to secure.
The Board is confident about the Group's prospects for the second half and beyond as whilst there is still work to be done this year in closing out new business, the present order book already provides a strong base going forward into 2015.
Raschid Abdullah
3 September 2014
Condensed Consolidated Income Statement
for the six months ended 30 June 2014
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December Note 2014 2013 2013 GBP000 GBP000 GBP000 Revenue 7,163 3,572 6,259 Cost of sales (5,202) (2,147) (3,733) Gross profit 1,961 1,425 2,526 Administrative expenses (1,615) (1,724) (3,856) Operating profit/(loss) 346 (299) (1,330) ------------------------------------ ----- --------- --------- ------------------ Analysed as: Earnings before interest, tax, depreciation and amortisation ('EBITDA') 441 (158) (716) Depreciation and amortisation (95) (69) (308) Share based payments - - - Restructuring costs - (72) (306) 346 (299) (1,330) Financial income 2 15 20 Financial expenses 2 (75) (54) (1,078) Profit/(loss) before tax 273 (338) (2,388) Income tax 3 - - 95 Profit/(loss) for the period attributable to equity shareholders of the company 273 (338) (2,293) Basic earnings per share (pence) 4 0.79 (3.11) (15.87) Diluted earnings per share (pence) 4 0.62 (3.11) (15.87)
The above results are derived from continuing operations.
Condensed Consolidated Statement of Comprehensive Income
for the six month period ended 30 June 2014
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2014 2013 2013 GBP000 GBP000 GBP000 Profit/(loss) for period 273 (338) (2,293) Other comprehensive income Currency translation on foreign currency net investments - (13) (13) Total comprehensive income for the period 273 (351) (2,306)
Condensed Consolidated Statement of Changes in Equity
for the six month period ended 30 June 2014
Currency Share Share Merger Equity Retained translation Total capital premium reserve reserve earnings differences equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Balance at 1 January 2013 (audited) 6,412 24,152 - - (28,849) (198) 1,517 Loss for the period - - - - (338) - (338) Other comprehensive income - - - - - (13) (13) Total comprehensive income for the period - - - - (338) (13) (351) Balance at 30 June 2013 (unaudited) 6,412 24,152 - - (29,187) (211) 1,166 Balance at 1 January 2013 (audited) 6,412 24,152 - - (28,849) (198) 1,517 Loss for the year - - - - (2,293) - (2,293) Other comprehensive income - - - - - (13) (13) Total comprehensive income for the year - - - - (2,293) (13) (2,306) Purchase of own shares (592) - - - - - (592) Sale of own shares 592 - - - 3 - 595 Water Hall transaction (note 2) 110 - 1,112 213 - - 1,435 Share issue: placing 115 1,035 - - - - 1,150 Expenses of share issue - (87) (37) - - - (124) Conversion of convertible loan notes 8 53 - (7) 7 - 61 Balance at 31 December 2013 (audited) 6,645 25,153 1,075 206 (31,132) (211) 1,736 Balance at 1 January 2014 (audited) 6,645 25,153 1,075 206 (31,132) (211) 1,736 Profit for the period - - - - 273 - 273 Other comprehensive - - - - - - - income Total comprehensive income for the period - - - - 273 - 273 Conversion of convertible loan notes 3 17 - (1) 1 - 20 Balance at 30 June 2014 (unaudited) 6,648 25,170 1,075 205 (30,858) (211) 2,029
Condensed Consolidated Balance Sheet
at 30 June 2014
Unaudited Unaudited Audited 30 June 30 June 31 December 2014 2013 2013 ASSETS GBP000 GBP000 GBP000 Non-current assets Property, plant and equipment 170 182 165 Goodwill 401 401 401 Development costs 618 488 640 Deferred tax assets 647 587 653 1,836 1,658 1,859 Current assets Inventories 1,900 1,924 1,779 Trade and other receivables 2,283 1,311 983 Cash and cash equivalents - escrow deposits 35 - - Cash and cash equivalents 1,508 256 1,440 5,726 3,491 4,202 Total assets 7,562 5,149 6,061 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 6,648 6,412 6,645 Share premium 25,170 24,152 25,153 Equity reserve 205 - 206 Merger reserve 1,075 - 1,075 Currency translation reserve (211) (211) (211) Retained earnings deficit (30,858) (29,187) (31,132) Total equity 2,029 1,166 1,736 Non-current liabilities Interest-bearing loans and borrowings 1,515 - 1,518 Deferred tax liabilities 124 122 128 1,639 122 1,646 Current liabilities Interest-bearing loans and borrowings - 1,334 - Trade and other payables 3,894 2,527 2,679 3,894 3,861 2,679 Total liabilities 5,533 3,983 4,325 Total equity and liabilities 7,562 5,149 6,061
Condensed Consolidated Statement of Cash Flows
for the six month period ended 30 June 2014
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2014 2013 2013 GBP000 GBP000 GBP000 Cash flows from operating activities Profit/(loss) for the period 273 (338) (2,293) Adjustments for: Depreciation 24 24 47 Amortisation of intangible assets 71 45 261 Financial income (2) (15) (20) Financial expense 75 54 1,078 Income tax charge - - (95) Exchange differences - (13) (13) Operating cash flows before movement in working capital 441 (243) (1,035) Change in trade and other receivables (1,336) 217 647 Change in inventories (121) (713) (568) Change in trade and other payables 1,206 (251) (267) Cash generated from operations 190 (990) (1,223) Interest received 2 - 20 Interest paid (49) (39) (60) Income tax received 38 - - Net cash from operating activities 181 (1,029) (1,263) Cash flows from investing activities Acquisition of property, plant and equipment (29) (34) (40) Capitalised development expenditure (49) (3) (371) Cash deposits held in escrow (35) 77 77 Net cash (outflow)/inflow from investing activities (113) 40 (334) Cash flows from financing activities Proceeds from share issue - - 1,150 Expenses of share issue - - (87) Water Hall transaction (note 2) - - (83) Proceeds from sale of own shares - - 595 New short term borrowings - 1,334 - Repayment of bank borrowings - (42) (42) Net cash inflow from financing activities - 1,292 1,533 Net increase/(decrease) in cash and cash equivalents 68 303 (64) Water Hall transaction: Settlement of working capital facility (note 2) - - 1,551 Total movement in cash and cash equivalents in the period 68 303 1,487 Cash and cash equivalents at start of period 1,440 (47) (47) Cash and cash equivalents at end of period 1,508 256 1,440 Cash and cash equivalents comprise: Cash and cash equivalents per balance sheet 1,508 256 1,440
Notes
1 Basis of preparation
The interim financial information set out in this statement for the six months ended 30 June 2014 and the comparative figures for the six months ended 30 June 2013 are unaudited. This financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.
The comparative figures for the financial year ended 31 December 2013 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
This interim statement, which is neither audited nor reviewed, has been prepared in accordance with the measurement and recognition criteria of Adopted IFRSs. It does not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 December 2013. It does not comply with IAS 34 'Interim Financial Reporting' as is permissible under the rules of the AIM Market ("AIM").
The accounting policies applied in preparing these interim financial statements are the same as those applied in the preparation of the annual financial statements for the year ended 31 December 2013, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 January 2014 and were adopted by the Group. These have had no significant impact on the Group's profit for the period or equity. The Board approved these interim financial statements on 2 September 2014.
Copies of this interim statement will be available on the Company's website (www.petards.com) and from the Company's registered office at 390 Princesway, Team Valley, Gateshead, Tyne and Wear, NE11 0TU.
2 Financial expenses Unaudited Unaudited Audited 6 months ended 6 months year ended 30 June ended 31 December 2014 30 June 2013 GBP000 2013 GBP000 GBP000 Interest expense on financial liabilities at amortised cost: * Convertible loan notes at 7% p.a. (cash) 59 - 34 15 - 9 - 52 54 * Convertible loan notes amortisation (non-cash) 1 2 3 * Bank finance (cash) * Other (cash) Net foreign exchange loss - - - Water Hall transaction (see below) - - 978 Financial expenses 75 54 1,078
On 29 August 2013 the Group completed a debt for equity swap with Water Hall Group plc ('the Water Hall transaction'). Under the terms of the arrangement, the Group issued equity, share options, and convertible loan notes with a combined fair value of GBP2,975,000 to:
(i) settle its working capital facility of GBP1,551,000
(ii) purchase its own shares to the value of GBP592,000 and
(iii) acquire the remaining net assets of Water Hall Group plc which comprised cash of GBP72,000 and net liabilities of GBP68,000 relating to trade and other payables net of VAT receivables.
The loss on this transaction of GBP860,000 was included in total exceptional finance costs for the year ended 31 December 2013 of GBP978,000; the balance included transaction expenses of GBP118,000. The net cash effect of this transaction was an outflow of GBP83,000. In addition the Group's overdraft of GBP1,551,000 was settled. The debt for equity swap resulted in the Group obtaining control of the Water Hall Group plc legal entity with the result that, from 29 August 2013, Water Hall Group plc has been consolidated into the accounts.
3 Taxation
No provision for taxation has been made in the Condensed Consolidated Income Statement for the six months to 30 June 2014 based on the estimated tax provision required for the year ending 31 December 2014. No provision was required in the six months to 30 June 2013.
4 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the period attributable to the shareholders by the weighted average number of shares in issue.
The calculation of earnings per share is based on the profit for the period and on the weighted average number of ordinary shares outstanding in the period.
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2014 2013 2013 Earnings Profit/(loss) for the period (GBP000) 273 (338) (2,293) Number of shares Weighted average number of ordinary shares ('000) 34,347 10,866 14,456
Diluted earnings per share
Diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, which arise from both convertible loan notes and share options, and is calculated by dividing the adjusted profit for the period attributable to the shareholders by the assumed weighted average number of shares in issue. The adjusted profit for the period comprises the profit for the period attributable to the shareholders after adding back the interest on convertible loan notes for the period.
Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2014 2013 2013 Adjusted earnings Profit/(loss) for the period (GBP000) 347 (338) (2,293) Number of shares Weighted average number of ordinary shares ('000) 55,983 10,866 14,456
At 30 June 2013 and 31 December 2013 diluted earnings per share was identical to the basic earnings per share as the Group was loss making.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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