Final Results

RNS Number : 8611Y
Pentagon Protection PLC
07 March 2012
 



07th March 2012

 

Pentagon Protection Plc
("Pentagon" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2011


Pentagon Protection Plc (AIM:PPR) the AIM listed global specialist in the supply and installation of enhanced glass protection, high-risk security consulting, training and equipment today announces its final results for the year ended 30 September 2011.

 

HIGHLIGHTS
 

Financial benchmarks

 

·      62% increase sales

 

·      38% increase in Gross Profit

 

·      Operating Loss before provisions reduced by 54%

 

 

The annual report and accounts for the year ended 30 September 2011 are being posted to shareholders tomorrow and will be available on the Company's website www.pentagonprotection.com.

 

Enquiries:

 

Pentagon Protection Plc

Haytham ElZayn, Chairman

 

Tel: 01494 793 333

Pentagon Protection Plc

Steve Chambers, Managing Director

 

Tel: 01494 793 333

Seymour Pierce Limited

Jonathan Wright

 

Tel: 0207 107 8000

Rivington Street

Jon Levinson

Tel: 0207 562 3357

 

Chairmans Statement

 

Introduction

I am pleased to present the results for Pentagon Protection Plc for the year ended 30 September 2011.

 

This has been a period of really positive change for the Group, marked by the acquisition of International Glass Solutions LLC (IGS) during the year and the appointment of Steve Chambers as Managing Director. Both these factors have helped the Group not only break into, but really establish itself, in the US market. A key distribution agreement for a liquid solar control product in the US has been another step forward for the Group. In November 2011, the Group also announced the opening of offices in Amman, which will present interesting opportunities in the Middle East and Gulf region where the credibility associated with being a listed, public company will give us a competitive advantage as well as allow us to bid on large government contracts.

 

The results for the year have shown a significant improvement from 2010 in many respects, with turnover increasing significantly in new markets. Whilst the Group is showing an overall loss for the year, the results before the exceptional items which were present in 2010 show a marked improvement over last year. A more detailed financial review is given below.

 

The Group has seen some significant contract gains in its subsidiary companies, SDS Group Limited and IGS, and has some exciting prospects for 2012.

 

Financial review

 

As noted above, turnover has increased dramatically from £1.8m to £2.9m, an increase of 62% and a return to 2009 levels.  Each existing geographical market has seen improved turnover but the largest and most exciting increases for the group have been in the US, European and Far Eastern markets, which are a real indication of the global impact of the Group.

 

Gross profit margins have decreased as a higher proportion of the turnover this year has arisen from some large window film contracts which attract slightly lower margins. However the margin has only dropped to 29%, which is a reduction of 4% on the prior year, but is still a significant improvement on 2009 margins of 24%.

 

Distribution costs have dropped in the year, from £95k to £57k, as cost cutting measures continue to be implemented.

 

Administrative expenses show a drop to £1.07m from £1.18m in 2010, a decrease of 9%.  This is largely due to acquisition related costs in the prior year and a smaller share option cost in the current year. (The cost of share options are a non-cash accounting adjustment only).

 

Although the Group has made an operating loss in the year, this loss has reduced from £681k in 2010 to £315k in 2011, a reduction of £366k or 54%.

 

The Group has no exceptional items in the current year and minimal finance costs.

 

The Group has net assets of £264k, down from £452k in 2010.

 

The Board does not recommend the payment of a dividend.

 

Operational review

 

The Group has continued to make progress this year across both the film and security services sectors.

 

We are nearing completion on the first of the two buildings on our European Commission contract and all indications are that this has been a successful project for the Group. The second building is due to start in 2012 and should provide a solid financial backdrop for the Group over the next twelve months.

 

During the year the UK film division secured a number of high value contracts for major shopping and retail centres and completed some large window film projects in the Middle East.

 

The security products division benefitted from some large equipment orders from the MOD and Police Forces around the country. We have also devoted increased resources to our sales efforts and expect to be awarded some valuable contracts in 2012.

 

Acquisition of International Glass Solutions LLC (IGS)

 

As previously reported, on 25 October 2010, the Group acquired 100% of the share capital of IGS.

 

IGS made a small loss before allocation of overhead expenses for the year and has also contributed to the Group's turnover. It has continued to build its project portfolio over the year with some exciting prospects for the year ahead, including securing an exclusive distribution agreement for a liquid solar control product.

 

Current trading and future prospects

 

The Group continues to expand its global coverage and is looking forward to a profitable year ahead. 2011 saw improvements in the Group's financial picture and we have very high hopes that even greater improvements will be made in 2012.  The Group has a strong sales pipeline and a list of projects for which we are tendering, both for our line of specialist security products as well as for our window films. Whilst one can never be certain we will win a tender, we feel the Group is uniquely qualified and positioned to complete these projects, giving us a better than average probability of winning a significant proportion of tenders made.

 

We are tendering on several large projects within the UK which have arisen in preparation for the Olympic Games and which we feel we are well qualified to undertake.  Several large projects which the Group had previously completed are also coming up for renovation, providing significant opportunities for additional work.  In addition, the Group has tendered for several large overseas projects in Asia, the Middle East and Africa which we hope to be awarded in 2012.

 

I am excited by the potential we have with our new office in Amman.  Aside from re-establishing our presence in the Middle East, this office opens up opportunities to pursue large projects in the region, several of which are already being tendered.  Finally, we expect IGS to outperform last year as the US economy recovers and sales to both the commercial and residential markets in the United States increase.

 

Conclusion

 

This has been an exciting year for the Group and I am looking forward to the year ahead. The Group has established a strong position and has some fantastic opportunities which I am sure we will maximise.

 

On behalf of the Board, I would like to thank all of our employees for their continued hard work and support.

 

H ElZayn

Chairman                               

7 March 2012

 

 

 

 

 

 


 

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2011

                                                                                                                                                  

 

 

                        Group

         Company

 

 

2011

2010

2011

2010

 

Notes

£

£

£

£

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible asset

8

5,366

-

-

-

Investments

9

-

-

641,921

545,921

Goodwill

10

434,536

351,360

-

-

Property, plant and equipment

12

13,075

15,917

5,585

6,946

 

 

452,977

367,277

647,506

552,867

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories

 

252,210

193,151

2,000

2,000

Trade and other receivables

13

544,775

360,417

618,877

383,640

Cash and cash equivalents

 

79,386

178,056    

17,884  

     38,382

 

 

876,371

731,624

638,761

   424,022

 

 

 

 

 

 

TOTAL ASSETS

 

1,329,348

1,098,901

 1,286,267 

976,889

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

14

707,726

568,522

501,989

343,889

Shareholder loan

14

357,931

74,467

357,931

74,467

Borrowings

15

-   

    4,355 

-

    4,355

Total liabilities

 

1,065,657

647,344

859,920

422,711

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Issued capital

17

881,918

801,918

881,918

801,918

Share premium account

 

7,056,785

7,056,785

7,056,785

7,056,785

Share based payments

18

74,230

51,749

74,230

51,749

Other reserves

 

12,444

(4,541)

11,459

(4,541)

Retained earnings

 

(7,761,686)

(7,454,354)

(7,598,045)

(7,351,733)

 

 

 

 

 

 

Total equity attributable to

 

 

 

 

 

equity shareholders of the parent

 

263,691

      451,557

426,347

    554,178 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

1,329,348

 1,098,901   

1,286,267

       976,889

 

 



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2011

                                                                                                                 

 

 

2011

2010

 

Notes

£

£

 

 

 

 

Revenue

2

2,851,631

1,763,809

 

 

 

 

Cost of sales

 

(2,036,104)

(1,173,690)

 

 

 

 

Gross profit

 

815,527

590,119

 

 

 

 

Distribution costs

 

(56,694)

(94,802)

Administrative expenses

 

(1,074,330)

(1,181,394)

Other operating income

 

-

4,610

 

 

 

 

OPERATING LOSS BEFORE PROVISIONS

 

(315,497)

(681,467)

 

 

 

 

Profit on disposal of subsidiary

9

-

461,865

Warranty claim provision

 

-

225,800

 

 

 

 

 

 

 

 

OPERATING (LOSS)/PROFIT BEFORE FINANCING ACTIVITIES

 

(315,497)

6,198

 

 

 

 

Finance income

3

29

41

Finance costs

4

(2,500)

        (4,695)     

 

 

 

 

(LOSS)/PROFIT BEFORE TAX

5

(317,968)

           1,544

 

 

 

 

Tax

6

10,636

-

 

 

 

 

(LOSS)/PROFIT FOR THE YEAR

 

(307,332)

1,544

 

 

 

 

Other comprehensive expense

 

985

-

 

 

 

 

TOTAL COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR

 

 (306,347)

        1,544

 

 

(Loss)/profit attributable to:

 

 

 

Equity holders of the parent

 

(307,332) 

           1,544

 

 

 

 

Total comprehensive (expense)/income for the year attributable to:

 

 

 

Equity holders of the parent

 

(306,347)

            1,544

 

 

 

 

(Loss)/earnings per share (pence per share)

 

 

 

 

 

 

 

Basic

7

(0.04)p

            0.00p

 

 

 

 

Diluted

7

(0.04)p

            0.00p

 

Revenue and operating (loss)/profit for the year all derive from continuing operations.


STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2011

 

Group








 

Share capital

Share

premium account

Share based payments

 

Other reserves

 

Retained earnings

 

 

Total


£

£

£

£

£

£








At 1 October 2009

641,418

6,914,366

-

(4,541)

(7,455,898)

95,345

For the year to







30 September 2010:







Total comprehensive income







for the year

-

-

-

-

1,544

1,544

Transactions with owners







Shares issued - proceeds

160,500

160,500

-

-

-

321,000

Shares issued - costs

-

(18,081)

-

-

-

(18,081)

Share based payments

-

-

51,749

-

-

51,749








At 1 October 2010

801,918

7,056,785

51,749

(4,541)

(7,454,354)

451,557

For the year to







30 September 2011:







Total comprehensive expense

-

-

-

985

(307,332)

(306,347)

for the year







Transactions with owners







Shares issued on acquisition of subsidiary

 

80,000

-

-

 

16,000

 

-

 

96,000

Share based payment

-

-

22,481

-

-

22,481

At 30 September 2011

881,918

7,056,785

74,230

12,444

(7,761,686)

263,691

 






Group - Other reserves

Merger reserve

Currency reserve

Shares held by ESOP

Total







£

£

£

£






At 1 October 2009

-

-

(4,541)

(4,541)

For the year to





30 September 2010:





Total comprehensive income





for the year

-

-

-

-

Transactions with owners





Shares issued - proceeds

-

-

-

-

Shares issued - costs

-

-

-

-

Share based payments

-

-

-

-






At 1 October 2010

-

-

(4,541)

(4,541)

For the year to





30 September 2011:





Total comprehensive income





for the year

-

985

-

985

Transactions with owners





Shares issued on acquisition of subsidiary

 

16,000

 

-

 

-

 

16,000

At 30 September 2011

16,000

985

(4,541)

12,444

 

All equity is attributable to equity shareholders of the parent.

 

 

Company








 

Share capital

Share

premium account

Share based payments

Other reserves

 

Retained earnings

 

 

Total


£

£

£

£

£

£








At 1 October 2009

641,418

6,914,366

-

(4,541)

(4,565,748)

2,985,495

For the year to







30 September 2010:







Total comprehensive expense







for the year

-

-

-

-

(2,785,985)

(2,785,985)

Transactions with owners







Shares issued - proceeds

160,500

160,500

-

-

-

321,000

Shares issued - costs

-

(18,081)

-

-

-

(18,081)

Share based payments

-

-

51,749

-

-

51,749








At 1 October 2010

801,918

7,056,785

51,749

(4,541)

(7,351,733)

554,178

For the year to







30 September 2011:







Total comprehensive expense







for the year

-

-

-

-

(246,312)

(246,312)

Transactions with owners







Shares issued on acquisition of subsidiary

 

80,000

 

-

 

-

 

16,000

 

-

 

96,000

Share based payments

-

-

22,481

-

-

22,481

At 30 September 2011

881,918

7,056,785

74,230

11,459

(7,598,045)

426,347

 

 





Company - Other reserves

Merger reserve

Shares held by ESOP

Total






£

£

£





At 1 October 2009

-

(4,541)

(4,541)

For the year to




30 September 2010:




Total comprehensive income




for the year

-

-

-

Transactions with owners




Shares issued - proceeds

-

-

-

Shares issued - costs

-

-

-

Share based payments

-

-

-





At 1 October 2010

-

(4,541)

(4,541)

For the year to




30 September 2011:




Total comprehensive expense




for the year

-

-

-

Transactions with owners




Shares issued on acquisition of subsidiary

 

16,000

 

-

 

16,000

At 30 September 2011

16,000

(4,541)

11,459

 

 

Share capital

Represents the par value of shares in issue.

Share premium

Represents amounts subscribed for share capital in excess of nominal value, net of directly attributable issue costs.

Share based payments

Represents the reserve account which is used for the corresponding entry to the share based payment charge through the income statement.

Merger reserve

Represents the difference between the fair value and nominal value of the equity consideration provided in exchange for 90% or more of the equity instruments acquired in another entity.

Shares held by ESOP

These relate to shares held by the Pentagon Employee Share Ownership Plan and are used to assist in meeting the obligations under employee remuneration schemes.

Foreign currency translation reserve

 

The translation reserve represents the exchange gains and losses that have arisen on the retranslation of overseas operations.


STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2011

                                                                                                     

 

      Group

      Company

 

2011

2010

2011

2010

 

£

£

£

£

Operating activities

 

 

 

 

(Loss)/Profit before tax

(317,968)

1,544

(246,312)

(2,785,985)

Adjustments for:

 

 

 

 

Depreciation of property, plant and equipment

5,222

7,133

1,589

429

Amortisation of intangibles

409

18,540

-

-

(Profit)/Loss on disposal of subsidiary

-

(461,865)

-

221,416

Share based payments

22,481

51,749

22,481

51,749

Loss on disposal of property, plant and equipment

-

14,960

-

-

Exchange adjustment

985

-

-

-

Changes in working capital:

 

 

 

 

Increase in inventories

(59,059)

(20,093)

-

(2,000)

(Increase)/Decrease in trade and other receivables

(169,167)

438,127

(235,237)

1,924,413

Increase in trade and other payables

129,324

15,639

158,100

253,314

Decrease in provisions

-

(225,800)

-

-

Net finance cost

2,471

       4,654

-

      3,331

Net cash used in operating activities

(385,302)

 (155,412)

(299,379)

(333,333)

 

Investing activities

 

 

 

 

Payments to acquire property, plant and equipment

(829)

(8,071)

(228)

(3,020)

Receipts from sales of property, plant and equipment

-

5,224

-

-

Disposal of a subsidiary net of cash disposed of

-

(29,759)

-

1

Acquisition of a subsidiary net of cash received

187

-

-

-

Interest received

29

41

-

-

Net cash used in investing activities

(613)

 (32,565)

(228)

(3,019)

 

Financing activities

 

 

 

 

Decrease in factor finance

-

(45,915)

-

-

Capital element of finance lease contracts

(4,355)

(5,210)

(4,355)

-

Shareholder loan

283,464

74,467

283,464

74,467

Net proceeds from issue of shares

-

302,919

-

302,919

Interest paid

(2,500)

  (4,695)

-

  (3,331)

Net cash from financing activities

276,609

321,566

279,109

374,055

 

Taxation

10,636

-

-

-

 

 

 

 

 

Net (decrease)/increase in cash and cash

 

 

 

 

equivalents

(98,670)

133,589

(20,498)

37,703

 

 

 

 

 

Cash and cash equivalents at the start of the year

178,056

44,467

38,382

679

 

 

 

 

 

Cash and cash equivalents at the end of the year

79,386

 178,056

17,884

 38,382

 

 

 

 

 

Cash and cash equivalents consists of:                                                                                                                                                                                                 

 

 

 

 

 

Cash and cash equivalents

79,386

178,056

17,884

38,382

 

 

79,386

178,056

17,884

38,382

 


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