Interim Results
Immediate Release: 22nd July 2004
Toad Group plc
(`the company')
Interim results for the six months ended 30 June 2004
Highlights
* Turnover for the period up £1.1m to £18.1m
* Operating profit maintained at £1m after further investment in the
company's infrastructure to support new business streams
* Cash inflow from operations for the period of £1m
* Net debt reduced in the six months by a further £0.5m to £3.4m
* Currently installing over 2,500 mobile phone hands-free car kits per month
to major telecoms and fleet providers
* More insurance companies trialing vehicle inspection services and camera/
computer replacement services
Peter Ward, Chairman, commented,
'Our mature businesses continue to generate cash to fund development of new and
growing sectors and current trading is in line with market expectations. As
previously reported we continue to identify potential strategic acquisitions
and would hope that we may be able to report progress before the year end.'
For further information, please contact:
Peter Ward
Chairman, Toad Group plc 020-8710-4016
Adam Reynolds
Andy Tan
Hansard Communications 020-7245-1100
Chairman's statement
I am pleased to present our unaudited interim figures for the six months to 30
June 2004 which show an increase in sales of £1.1m on the same period last
year.
Financials
Turnover increased to £18.1m (six months ended 2003 restated: £17.0m) thanks in
part to the new revenue stream coming from the installation of mobile phone
hands-free car kits which has grown following the new legislation which was
introduced at the end of last year. We have recruited additional call centre
staff and engineers and invested in training so that we can service the
increasing demand in this sector. The higher overheads in the period reflect
this investment and means that, while sales are up, first half operating profit
of £1m showed a marginal increase over last year. However, we now have the
resource in place to service higher sales volumes in the second half.
Cash inflow from operations was £1.0m (six months ended 2003: £1.8m) and net
debt has been reduced to £3.4m (30 June 2003: £4.7m).
Trading within our Services and Distribution divisions is reviewed below.
Services
Principal Activities: Insurance replacement of in-car entertainment systems,
cameras and computers. The supply and installation of mobile phone hands-free
kits, telematics units, in-car entertainment and security systems to fleet and
private customers.
Turnover in this division at £7.3m was £0.3m up on the same period last year.
The installation of mobile phone hands-free kits for major telecoms providers
and fleet operators has grown strongly during the first half of the year.
Currently we are achieving over 2,500 installations a month and anticipate this
rising further in the second half of the year. At the time of the Operating
Review which accompanied the 2003 Annual Report we commented on the maturity of
the replacement car audio insurance market which, as anticipated, has continued
to harden with reduced sales in this sector.
In July we were awarded trials with two further insurance companies for the
replacement or repair of lost, stolen or damaged cameras and computers and we
are looking to increase our presence in this market post trial later in the
year.
Many of the UK's leading insurance companies are trialing our new vehicle
inspection service and we are hopeful that this will lead to a new income
stream for the Services division by the year end.
Distribution
Principal Activities: The distribution of in-car entertainment systems, satnav/
communications equipment, audio leads and own brand automotive and motorcycle
alarms to the retail trade.
Overall the sales in this division increased by £0.8m to £10.8m at the half
year. This growth has been driven by increased sales of in-car audio and
satellite navigation systems to both major retailers and specialist independent
retailers. The Datatool motorcycle security and accessories business increased
penetration in a market where new motorcycle registrations were down over 30%
on the previous year. The audio leads business (ITI Ltd) had an improved first
half through the supply of interface cables for mobile phone hands-free car
kits.
Current trading and the future
Our mature businesses continue to generate cash to fund development of new and
growing sectors and current trading is in line with market expectations. As
previously reported we continue to identify potential strategic acquisitions
and would hope that we may be able to report progress before the year end.
Peter Ward
Chairman
Consolidated profit and loss account
Unaudited six months ended 30 June Unaudited Year
2004 six ended
months
ended 30 31
June 2003 December
2003
(Restated (Restated
- see - see
note 4) note 4)
Before After
Amortisation Amortisation Amortisation
of of of
Intangibles Intangibles Intangibles
£'000 £'000 £'000 £'000 £'000
Turnover 18,126 - 18,126 17,040 33,213
Cost of sales (10,997) - (10,997) (10,271) (20,233)
Gross profit 7,129 - 7,129 6,769 12,980
Other operating expenses (5,999) (153) (6,152) (5,829) (11,334)
Operating profit 1,130 (153) 977 940 1,646
Interest payable and similar (232) - (232) (321) (586)
charges
Profit on ordinary 898 (153) 745 619 1,060
activities before taxation
Taxation - - - - 200
Profit on ordinary 898 (153) 745 619 1,260
activities after taxation
Minority interests (6) - (6) 7 (86)
Profit attributable to
members of the
parent company 892 (153) 739 626 1,174
Earnings per share - basic 1.14p (0.20)p 0.94p 0.84p 1.55p
Earnings per share - diluted 1.08p (0.18)p 0.90p 0.81p 1.48p
Consolidated balance sheet
Unaudited Unaudited 31 December
30 June 2004 30 June 2003
2003
£'000 £'000 £'000
Fixed assets
Intangible assets 1,168 1,490 1,321
Tangible assets 3,053 2,618 2,906
4,221 4,108 4,227
Current assets
Stocks 4,337 3,525 3,755
Debtors 6,373 5,268 5,153
Cash at bank and in hand 443 701 541
11,153 9,494 9,449
Creditors: amounts falling due within (7,668) (7,075) (6,281)
one year
Net current assets 3,485 2,419 3,168
Total assets less current liabilities 7,706 6,527 7,395
Creditors: amounts falling due after (1,433) (2,356) (1,892)
more than one year
Minority interests (6) 93 -
Net assets 6,267 4,264 5,503
Capital and reserves
Called-up share capital 8,169 7,775 8,144
Share premium account 12,110 11,788 12,110
Share capital to be issued 43 43 43
Profit and loss account (14,055) (15,342) (14,794)
6,267 4,264 5,503
Shareholders' funds
Equity 5,488 3,485 4,724
Non-equity 779 779 779
6,267 4,264 5,503
Consolidated cash flow statement Unaudited Unaudited
six months six months Year ended
ended ended 31
December
30 June 30 June 2003
2004 2003
£'000 £'000 £'000
Net cash inflow from operating activities 1,049 1,814 2,551
Returns on investments and servicing of finance
Interest payable and similar charges (189) (281) (501)
Taxation
UK Corporation tax refunded - - 155
Capital expenditure and financial investment
Purchase of intangible fixed assets - (6) (9)
Purchase of tangible fixed assets (348) (163) (668)
Sale of tangible fixed assets - 36 38
(348) (133) (639)
Cash inflow before financing 512 1,400 1,566
Financing
Issue of shares 25 - 691
Net movement in long term borrowings (500) (500) (1,000)
Repayment of principal under finance leases (7) (63) (103)
(482) (563) (412)
Increase in cash in period 30 837 1,154
Notes
1. Reconciliation of movements in shareholders' funds
Unaudited Unaudited
six months six months Year ended
ended ended 31
December
30 June 30 June 2003
2004 2003
£'000 £'000 £'000
Net profit for the period 739 626 1,174
Share issue 25 - 691
Net movement in shareholders' funds 764 626 1,865
Opening shareholders' funds 5,503 3,638 3,638
Closing shareholders' funds 6,267 4,264 5,503
2. Reconciliation of operating profit to net cash flow
from operating activities
Unaudited Unaudited
six months six months Year ended
ended ended 31
December
30 June 30 June 2003
2004 2003
£'000 £'000 £'000
Operating profit 977 940 1,646
Depreciation of tangible fixed assets 201 203 417
Loss on disposal of tangible fixed assets - 1 -
Amortisation of intangible fixed assets 153 132 304
(Increase)/decrease in working capital (282) 538 184
balances
Net cash inflow from operating activities 1,049 1,814 2,551
3. Reconciliation of net cash flow to
movement in net debt
Unaudited Unaudited
six months six months Year ended
ended ended 31
December
30 June 30 June 2003
2004 2003
£'000 £'000 £'000
Increase in cash in the period 30 837 1,154
Cash outflow from decrease in net debt 507 563 1,103
Changes in net debt resulting from cash 537 1,400 2,257
flows
Other (43) - (85)
Movement in net debt in the period 494 1,400 2,172
Net debt at start of period (3,916) (6,088) (6,088)
Net debt at end of period (3,422) (4,688) (3,916)
4. Basis of preparation and publication of non-statutory accounts
The interim statement has been prepared on the basis of the accounting policies
set out in the group's statutory accounts to 31 December 2003 with the
exception of rebates received from suppliers and paid to customers, which
represent contribution to marketing costs. Previously, these contributions were
included in turnover and cost of sales respectively. Following the introduction
of FRS 5 application note G, rebate contributions received have been
reclassified from turnover to other operating expenses. Rebates paid have also
been reclassified from cost of sales to other operating expenses as the
directors believe this achieves a consistent treatment of marketing rebates.
Accordingly, the profit and loss accounts above for the comparative periods
(the 6 months to 30 June 2003 and the 12 months to 31 December 2003) have been
restated to reflect this reclassification.
A summary of rebates received and paid are given below:
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2004 2003 2003
£000s £000s £000s
Rebates received 439 575 1,148
Rebates paid (158) (188) (574)
The financial information contained in this interim report does not constitute
statutory accounts as defined by Section 240 of the Companies Act 1985. The
interim report has neither been audited nor reviewed by the Group's auditors.
The financial information for the year ended 31 December 2003 is derived from
the statutory accounts for that period which have been delivered to the
Registrar of Companies and included an audit report which was unqualified and
did not contain any statement under section 237 of the Companies Act 1985.
The interim statement for the six months ended 30 June 2004 was approved by the
directors on 22 July 2004.
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