Interim Results
Embargoed Release: 07:00hrs Tuesday 26th July 2005
TG21 plc
Interim Results for the six month period ended 30 June 2005
Highlights
* Total operating profit up 20%
* Net profit up 10%
* Increased operating profit in associate company - 21st Century
* £1.1m of cash generated from operations
* Speed camera warning device (Inforad) achieves encouraging early sales
* Further growth anticipated from hands free installations and CCTV for
public transport vehicles
* Exit strategies in place for a number of peripheral activities to focus on
proven growth areas
TG21 plc
Chairman's statement - Interims 2005
I am pleased to present our unaudited interim figures for the six months to 30
June 2005.
Total operating profit increased by almost 20% on 30 June 2004 to reach £1.2m
for the half year. While turnover is down by £1.9m on the comparative period
this does not include sales made by our associate company, 21st Century Crime
Prevention Services Ltd ('21st Century'), which recorded sales of £2.1m. The
contribution to profit from our share of the results of 21st Century has
enabled us to increase the group's net profit by 10% to £0.8m.
Cash flow remains strong. We have generated £1.1m (2004: £1.0m) from operations
in the first six months. Net debt stands at £3.9m, an increase of just £0.5m on
this time last year, despite the fact that since that date we have spent £2.6m
on our investment in 21st Century. The results of this associate company and
trading within our Services and Distribution divisions are reviewed below:
21st Century
In April 2005 we increased our stake in 21st Century to 49%. 21st Century
provides CCTV and black box recording systems for use on public transport
vehicles such as buses and trains.
21st Century's unaudited results for the first half of 2005 showed an increased
operating profit on sales of £2.1m (up 10% on the prior year). As we currently
do not hold a controlling interest in 21st Century we have not added its sales
to group turnover but have included our share of its profit in the attached
results. Recently 21st Century received the first order in respect of the
installation of CCTV and black box technology for a regional bus depot. The
total potential value of this one project is £1.5m with the work spread over
the next 6 months.
We believe that the desire of operators, backed by local authority funding, to
encourage the use of public transport by improving safety is a key driver of
long term growth.
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 £6.2m was £0.7m (10%) down on the same period last
year. We have seen a 25% decline in our audio replacement business as this
market continues to contract. The installation of mobile phone hands-free kits
by contrast has grown during the first half of the year and is up by almost
30%. We have now undertaken over 50,000 installations in just over 18 months of
trading in this market. We understand that legislation to be introduced later
this year will impose penalty points for the illegal use of mobile phones while
driving. We believe that this will increase demand for hands-free kits further.
Our partnership with 21st Century has meant that we have invested more
resource, including training our engineers, in the installation of CCTV onto
public transport vehicles. To allow us to focus more efficiently and
effectively on this high growth area we have put in place strategies to exit
several peripheral business areas. We are now in a position to make a managed
withdrawal from the ACTRA telematics business, the camera and computer
replacement businesses and our Vehicle Inspection Service ('VIS').
Distribution
Principal Activities: The distribution of in-car entertainment systems, satnav/
communications equipment,speed camera alerts,audio leads and, own brand
automotive and motorcycle alarms to the retail trade.
Overall the sales in this division fell by £1.2m (11%) to £10.0m at the half
year. Most of this decline was anticipated as it fell within the mature car
security market. In more recent months we have seen very encouraging early
sales figures from our Inforad speed camera warning device which is currently
the least expensive product of its type on the market and has been extremely
well received by the motoring Press. In May 2005, we secured the UK
distribution rights to the product and took orders for in excess of 10,000
units within the first few weeks of launch. Halfords, Woolworths and Argos are
all stocking the product and we are looking forward to further growth in the
second half.
Current trading and the future
The Board is very encouraged by the improved profitability which has been made
with the restructuring of the group during the first half of 2005. The
strategic withdrawal from a number of peripheral activities will enable us to
accelerate our continued integration with 21st Century and focus on business
areas with real potential for the group. Current trading is in line with market
expectations and we are looking forward to the future with confidence.
Peter Ward
Chairman
For Further Information:
Peter Ward TG21 Plc 020 8710 4000
Chairman
Andrew Tan Hansard Communications 020 7245 1100
Account Executive
Consolidated profit and loss account
Unaudited six months ended 30 June Unaudited Year ended
2005 six
31
Months ended December
30 June 2004 2004
Before Amortisation After a
amortisation of i mortisation
of i ntangibles of i
ntangibles ntangibles
£'000 £'000 £'000 £'000 £'000
Turnover 16,214 - 16,214 18,126 34,574
Cost of sales (9,250) - (9,250) (10,997) (20,380)
Gross profit 6,964 - 6,964 7,129 14,194
Other operating (5,883) (60) (5,943) (6,152) (12,874)
expenses
Group operating p 1,081 (60) 1,021 977 1,320
rofit
Share of operating 219 (75) 144 - (6)
profit/(loss) of
associate
Total operating 1,300 (135) 1,165 977 1,314
profit
Interest payable and (253) - (253) (232) (547)
similar charges
Profit on ordinary 1,047 (135) 912 745 767
activities before
taxation
Taxation (66) - (66) - -
Profit on ordinary 981 (135) 846 745 767
activities after
taxation
Minority interests (36) - (36) (6) (1)
Profit attributable 945 (135) 810 739 766
to members of the
parent company
Earnings per share - 1.16p (0.17)p 0.99p 0.94p 0.97p
basic
Earnings per share - 1.16p (0.17)p 0.99p 0.90p 0.94p
diluted
Consolidated balance sheet
Unaudited Unaudited 31 December
30 June 30 June 2004
2005 2004
£'000 £'000 £'000
Fixed Assets 592 1,168 634
Intangible assets
Tangible assets 4,424 3,053 4,406
Investments 2,658 - 1,774
7,674 4,221 6,814
Current Assets 3,709 4,337 3,678
Stocks
Debtors 5,558 6,373 5,000
Cash at bank and in 2,370 443 809
hand
11,637 11,153 9,487
Creditors: amounts (8,784) (7,668) (7,626)
falling due within
one year
Net current assets 2,853 3,485 1,861
Total assets less 10,527 7,706 8,675
current liabilities
Creditors: amounts (1,981) (1,433) (975)
falling due after
more than one year
Minority interests (36) (6) -
Net Assets 8,510 6,267 7,700
Capital and reserves 8,169 8,169 8,169
Called-up share
capital
Share premium account 12,110 12,110 12,110
Share capital to be 43 43 43
issued
Revaluation reserve 1,392 - 1,406
Profit and loss (13,204) (14,055) (14,028)
account
8,510 6,267 7,700
Shareholders' funds 8,510 5,488 7,700
Equity
Non equity - 779 -
8,510 6,267 7,700
Consolidated cash flow statement
Unaudited Unaudited Year
six months six ended
ended months
ended 31
30 June December
2005 30 June 2004
2004
£'000 £'000 £'000
Net cash inflow from 1,112 1,049 3,002
operating activities
Returns on investments and (210) (189) (463)
servicing of finance
Interest payable and
similar charges
Capital expenditure and
financial investment
Purchase of tangible fixed (259) (348) (513)
assets
Sale of tangible fixed - - 5
assets
(259) (348) (508)
Acquisitions (805) - (1,780)
Purchase of investment in
associate
Cash inflow before (162) 512 251
financing
Financing - 25 25
Issue of shares
Net movement in long term 1,000 (500) (1,000)
borrowings
Repayment of principal (2) (7) (13)
under finance leases
998 (482) (988)
Increase/(decrease) in cash 836 30 (737)
in period
Notes
1. Basis of preparation
The interim statement has been prepared on the basis of the accounting policies
set out in the group's statutory accounts to 31 December 2004. The financial
information contained in the interim report does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. The interim
report has neither been audited nor reviewed by the group's auditors. A copy of
the group's 2004 statutory accounts has been filed with the Registrar of
Companies: the Auditors' opinion on those accounts 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 2005 was approved by the directors
on 25 July 2005.
2. Reconciliation of movements in shareholders funds
Unaudited six Unaudited Year ended
months ended six
31 December
30 June 2005 Months ended 2004
30 June 2004
£'000 £'000 £'000
Net profit for the period 810 739 766
Revaluation surplus - - 1,406
Exercise of share options - 25 25
Net movement in shareholders' funds 810 764 2,197
Opening shareholders' funds 7,700 5,503 5,503
Closing shareholders' funds 8,510 6,267 7,700
3. Reconciliation of operating profit to net cash flow from operating
activities
Unaudited six Unaudited Year ended
months ended six
31 December
30 June 2005 Months 2004
ended
30 June
2004
£'000 £'000 £'000
Operating profit 1,165 977 1,314
Depreciation of tangible fixed assets 223 201 414
Amortisation of intangible fixed assets 60 153 690
Share of operating (profit)/loss in (144) - 6
associate
(Increase)/decrease in working capital (192) (282) 578
balances
Net cash inflow from operating 1,112 1,049 3,002
activities
4. Reconciliation of net cash flow to movement in net debt
Unaudited six Unaudited Year ended
months ended six
31 December
30 June 2005 Months 2004
ended
30 June
2004
£'000 £'000 £'000
Increase/(decrease) in cash in the 836 30 (737)
period
Cash (inflow)/outflow from (increase)/ (998) 507 1,013
decrease in net debt
Changes in net debt resulting from cash (162) 537 276
flows
Other (43) (43) (85)
Movement in net debt in the period (205) 494 191
Net debt at start of period (3,725) (3,916) (3,916)
Net debt at end of period (3,930) (3,422) (3,725)
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