Final Results
Pentagon Protection PLC
17 December 2004
For Release 7:00am 17 December 2004
PENTAGON PROTECTION PLC
FINAL RESULTS YEAR ENDED 30 SEPTEMBER 2004
Turnover up 184%, Profits Turn Around; Record Order Book
Pentagon Protection PLC ('Pentagon' or 'the Company'), the provider of
protective glazing products to the commercial and automotive sectors, announces
its final results for the year ended 30 September 2004. The Company went public
on AIM in April 2003.
David Thomas, Chairman, in his statement reports: 'I am delighted to report a
year of reasonable progress. These results are in line with management's
expectations, with the contribution from our first acquisition, Filmtek Limited,
exceeding expectations. We have strengthened the foundations for the continued
growth of our established business and expansion into new product sectors and
geographies. Filmtek underpins our aspirations of becoming a leading global
player in overall glass protection.'
Financial Highlights
• Turnover: £3.32m, up 184%
- Continuing operations £1.46m (2003: £1.16m) up 25%
- Acquisitions £1.85m (2003: nil)
• Operating profit: £278,489 (2003: loss £239,231)
- Continuing operations £17,980 (2003: nil)
- Acquisitions £260,509
• Interest cover 16 x
• Pre-tax profit: £178,857 (2003: loss £270,422)
• Basic, diluted earnings per share: 0.15p (2003: loss 0.47p)
• Net assets: £3.59m (2003: £375,865)
- Acquisition of Filmtek
- Two successful share placings
• Cash £601,782 (2003: £252,109)
• No dividend, in line with stated policy
Corporate Highlights
Pentagon Filmtek
• Filmtek acquisition, first since flotation April 2003, broadens international
markets for products and services
• Pentagon Filmtek's contribution exceeds expectations
• Major projects in UK, Middle East and Far East
• Contracts completed/ongoing: HSBC, Sony, Boots, Marks & Spencer,
Barclays, Credit Suisse First Boston, Asda, Dixons, the British Council,
United Nations, DHL, Pepsi, Singapore Changi Airport, and Middle East based
groups
• Record order book of £1.3m
Pentagon Glass-Tech
• Supaglass continues to win recognition, awards and accreditations.
• Growing overseas business
• VW, Audi, Mazda, Honda, the Post Office, using or approved the product
• General Health and Safety policies expected to benefit the business
• New product launch planned for early 2005
Pentagon Pro-Marker
• Recent launch in Dusseldorf well received
Outlook
David Thomas says: 'The first quarter has started well and the Group has a
record order book. The directors are confident of continued profits across all
areas of the business.'
Contact:
David Thomas, Chairman Pentagon Protection PLC 020 8749 9749
Peter Binns Binns & Co PR Ltd 020 7786 9600
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 2004
Final results for the year ended 30th September 2004.
Introduction and Financial Review
I am delighted to report a year of considerable progress in the development of
Pentagon Protection plc. These results are in line with management's
expectations arising from the strategies announced in the Group's 2003 Annual
Report and deployed across 2004. A significant gain has been recorded in
turnover, the Group has moved into profit and we have strengthened the
foundations for the continued growth of our established business and expansion
into new product sectors and geographies.
Importantly, we have successfully integrated a major new business - Filmtek
Limited, acquired in December 2003 - to underpin the achievement of our
aspirations of becoming a leading global player in overall glass protection.
The Group's financial results from continuing operations for the year ending 30
September 2004 show turnover up 25 per cent. to £1,462,714, compared with
£1,165,914 for the previous year. Including the effects of the Filmtek
acquisition, turnover for the year increased to £3,316,554, up 184 per cent.
compared to 2003.
On operating profit, the continuing operations posted a swing of £288,402 from
an operating loss of (£270,422) in 2003 to a profit of £17,980 in 2004. With the
contribution from the Filmtek acquisition, the operating profit in 2004 was
£278,489, an improvement of £548,911 over 2003 levels.
The Group has benefited from a positive cash flow during the year. The net
interest charge for the year reduced to £16,638 (2003: £31,191). Interest was
covered 16 times by operating profit (2003: interest was not covered due to an
operating loss).
Net assets of the Group have increased to £3,596,309 (2003: £375,865) as a
result of the acquisition of Filmtek and the two successful share placings
during the year: First, in December 2003, to help finance the acquisition of
Filmtek (21 million new Ordinary Shares at 4.75p, which raised £997,500 gross);
second, in September 2004 (9.6 million new Ordinary Shares at 6.25p, which
raised £600,000 gross) to finance the organic expansion of the Group. Overall
there was an increase in net funds during the year of £385,649 (2003: £311,097).
The net cash outflow from operating activities of £189,905 (2003: outflow of
£340,211) was caused by an increase in working capital of £547,945 (2003:
increase in working capital £134,940). The increase in working capital reflects
the expansion of the business with the acquisition of Filmtek and the broadening
of the geographical spread of the Group's activities.
In line with stated policy, the directors do not recommend payment of a
dividend.
Business Review
Pentagon Filmtek
Filmtek, the Group's first acquisition since flotation, is a leading specialist
in the advancement and installation of safety, security and solar window film on
commercial buildings, in the UK and overseas. To recap on the details of the
acquisition: it was financed by a placing of 21 million new Ordinary Shares at
4.75p, which raised £997,500 gross, and by the issue of 15,789,474 new Ordinary
Shares in Pentagon Protection to the vendors. In addition, deferred
consideration of up to a maximum of £1 million could also be payable over the
following three years, depending on Pentagon Filmtek's profits in the three
years ended 30 April 2006, this to be satisfied by a combination of cash and new
Ordinary Shares in Pentagon.
The acquisition has significantly broadened the international market for
Pentagon Protection's products and services under the distinctive Pentagon brand
and has added substantial flat-glass expertise to the Company's automotive glass
protection services.
Pentagon Filmtek, which was founded as Filmtek Limited in 1996, has grown to
become a leading specialist in the development and installation of protective
window film on commercial buildings, leading to the development of the Filmtek
'Anchoring Solution', a unique technology for containing and anchoring glass
that has particular application in overhead glazed roofing.
Pentagon Filmtek's contribution to the Group's overall business has exceeded
expectations. Turnover of this business for the nine months ending September
2004 was £1,853,840, representing 56 per cent. of Group sales. Operating profit
for the same period was £260,509.
Pentagon Filmtek has undertaken several major projects over the year, nationally
and internationally, and has provided a base from which the Group has
established on-the-ground representation in the Far East (Singapore) and will
shortly open in the Middle East (Bahrain), two geographical areas identified as
key to our international expansion. The Group has also established agency
relationships in Dubai and Saudi Arabia. Over the last two years, Pentagon
Filmtek has completed contracts in more than 51 countries worldwide, including
Saudi Arabia, Iraq, Afghanistan, East Timor, Bahrain, China, and Singapore.
Our recent client list comprises an array of blue-chip companies. Domestic and
international contracts recently completed and ongoing include: HSBC, Sony,
Boots, Marks & Spencer, Barclays, Credit Suisse, Asda, Dixons, the British
Council, United Nations, DHL, Pepsi, Singapore Changi Airport and a number of
Middle East based groups.
The prospects for continued progress are also highly encouraging: Pentagon
Filmtek has currently quoted for projects comprising close to £3,000,000 in
value and has an order book of £1,300,000.
Pentagon Glass-Tech
Section 32 of the Construction and Use Regulations (part of the Road Traffic
Act) was changed by Parliament in February 2004 to include reference to window
tint films, the effect of which is to discourage the practice of applying tints
to the driver and forward passenger windows. This had a significant effect on
demand for window tinting and compelled the Group to step up its effort in
promoting SupaGlass as a superior alternative to tinting and to open new markets
internationally, capitalising on the strengthening overall awareness of the
Pentagon brand.
The revised strategy is working. Turnover on continuing operations for the year
ending September 30, 2004 was £1,462,714, up from £1,165,914 for the previous
year. Good progress was also made on profit, with the business posting an
operating profit for the year of £17,980 compared to a loss for the previous
year of £239,231.
Internationally, Pentagon Glass-Tech has secured license-based representation
across the year in Benelux and Brazil and received a deposit for Greece.
Discussions are ongoing with a number of additional licensee prospects,
particularly in the Middle East. The directors are confident that the pace of
international expansion will accelerate over this next year. Pentagon Glass-Tech
and Pentagon Filmtek plan to establish dedicated offices and facilities in
Bahrain, which will act as the base for the Group to fulfil automotive and
commercial building projects within the region.
SupaGlass is continuing to attract commendations, accreditations and praise from
the motor industry. After the VW initiative to promote the product throughout
its dealer network, which is now beginning to be executed, sister company Audi
has recently approved SupaGlass and will soon also offer SupaGlass through its
motor retail network. Similar aspirations exist with respect to Mazda and Honda,
both of which have approved SupaGlass during 2004. In addition, the Post Office
has recently issued an approval for SupaGlass following extensive testing and
this is expected to translate into orders for the application of Supaglass to a
significant number of vehicles from the start of 2005.
A major focus for SupaGlass during 2005 will be Health and Safety. Government
Health & Safety policies are encouraging employers to put more diligence into
developing duties of care operations for their employees on the road. It is
anticipated that this will lead to increased SupaGlass demand for company
vehicles, capitalising on the brand's growing reputation for protection in this
area.
Pentagon Glass-Tech will launch, early in 2005, an upgraded version of SupaGlass
that increases the thickness of the protective laminate from 300 to 450 microns.
Not only will the Group secure worldwide exclusivity from the manufacturer for
distribution of this superior-performing material, the initiative will
strengthen Pentagon's position with the Government on the development of a new,
anti-theft DIN standard for vehicle glazing.
Pentagon Pro-Marker
The Group has been working on the development of a product that provides a
patented, technically superior glass-etched certification mark for use by glass
and glazing industries in the face of impending legislation. This new
legislation dictates that all safety glass produced and installed in any
building within a critical location must be marked in accordance with the
relevant impact accreditation. Failure to do so could deem the glass unfit for
purpose and non-compliant with UK building regulations with the penalties in
line with UK law. Pro-Marker has been developed in close consultation with the
glass industry and with the support of the Glass & Glazing Federation.
Pentagon Pro-Marker was officially launched in November at 'Glasstech 2004' in
Dusseldorf, the leading international glass exhibition. The response received
from representatives of many countries was extremely encouraging and the
directors are now in advanced discussions with a leading distributor for the UK
and Europe. In addition, the Group is in discussions with a number of companies
both inside and outside of the glass industry, from whom significant orders for
Pro-Marker are also expected to mature over the next year.
Conclusion and Outlook
It is encouragingly evident that the steps taken by the directors to strengthen
both critical mass and senior management over the last year, in combination with
a clear spirit of commitment and dedication at all levels from within the Group,
have resulted in a significantly stronger business and platform for future
growth.
In our two lead companies, Pentagon Filmtek and Pentagon Glass-Tech, we have
clear evidence of the internationally growing product appeal of our other
protection technologies.
The need for protection across glass of all types continues to grow, driven by
urban criminal violence, terrorism and intensifying Health & Safety
considerations. We have also seen a growth in the confidence of our clients to
increase levels of business with us, resulting from continuing improvements in
product and service and further accreditations of our technologies.
The first quarter has started well and the Group has a record order book. With
the Group pressing ahead over the coming year with its plans to expand the
Pentagon Protection brand geographically into new markets, introduce better
technologies and launch superior new products, the directors are confident of
continued progress across all areas of the business.
David Thomas
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH SEPTEMBER 2004
30.9.04 30.9.03
Notes £ £ £ £
TURNOVER 2
-------- --------
Continuing operations 1,462,714 1,165,914
Acquisitions 1,853,840 -
-------- --------
3,316,554 1,165,914
Cost of sales 1,364,463 354,100
-------- --------
GROSS PROFIT 1,952,091 811,814
-------- --------
Distribution costs 501,997 261,496
Administrative costs 1,192,343 807,303
-------- --------
1,694,340 1,068,799
-------- --------
257,751 (256,985)
Other operating income 20,738 17,754
-------- --------
OPERATING PROFIT/(LOSS) 4
-------- --------
Continuing operations 17,980 (239,231)
Acquisitions 260,509 -
-------- --------
278,489 (239,231)
Interest receivable and 3,125 988
similar income -------- --------
281,614 (238,243)
Interest payable and 5 19,763 32,179
similar charges -------- --------
PROFIT/(LOSS) BEFORE 261,851 (270,422)
GOODWILL
AMORTISATION
Goodwill amortisation (82,994) -
-------- --------
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES 178,857 (270,422)
BEFORE
TAXATION
Tax on profit/(loss) on 6 - 111,500
ordinary activities -------- --------
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES 178,857 (381,922)
AFTER -------- --------
TAXATION
PROFIT/(LOSS) FOR THE 178,857 (381,922)
FINANCIAL YEAR -------- --------
RETAINED PROFIT/
(DEFICIT) FOR THE YEAR 178,857 (381,922)
FOR THE
GROUP
======== ========
Basic and diluted 7 0.15p (0.47)p
earnings/(loss) per
share
TOTAL RECOGNISED GAINS AND LOSSES
The Group has no recognised gains or losses other than the profit for the
current year and the loss for the previous year.
CONSOLIDATED BALANCE SHEET
30TH SEPTEMBER 2004
30.9.04 30.9.04
Notes £ £ £ £
FIXED ASSETS
-------- --------
Intangible assets 9 2,430,844 -
Tangible assets 10 237,814 161,808
-------- --------
2,668,658 161,808
CURRENT ASSETS
--------- --------
Stocks 12 156,276 39,274
Debtors 1,219,965 388,734
Cash at Bank 601,782 252,109
--------- --------
1,978,023 680,117
CREDITORS
Amounts falling due within 13 777,972 13,105
one year --------- --------
NET CURRENT ASSETS 1,200,051 267,012
-------- --------
TOTAL ASSETS LESS CURRENT 3,868,709 428,820
LIABILITIES
CREDITORS
Amount falling due after 14 (22,400) (52,955)
more than one year
PROVISIONS FOR LIABILITIES 17 (250,000) -
AND CHARGES -------- --------
3,596,309 375,865
======== ========
CAPITAL AND RESERVES
Capital up share capital 18 135,556 89,167
Share premium 19 3,029,370 784,172
Merger reserve 19 192,150 192,510
Shares to be issued 750,000 -
Profit and loss account 19 (510,767) (689,624)
-------- --------
SHAREHOLDERS' FUNDS 22 3,596,309 375,865
======== ========
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 2004
30.9.04 30.9.03
Notes £ £ £ £
Net cash outflow from 1 (189,805) (340,211)
operating activities
Returns on investments and
servicing of 2 (16,638) (31,191)
finance
Taxation - (29,354)
Capital expenditure and
financial 2 (1,669,500) 5,977
investment -------- --------
(1,875,943) (394,779)
Financing 2 2,225,616 651,851
-------- --------
Increase in cash in the 349,673 257,072
period
======== ========
-------------------------------------------------------------------------------
Reconciliation of net cash
flow to movement 3
in net funds
Increase in cash in the 349,673 257,072
period
Cash outflow from decrease
in debt and 35,976 54,025
lease financing --------- --------
Change in net funds
resulting from cash 385,649 311,097
flows -------- --------
Movement in net funds in the 385,649 311,097
period
Net funds/(debt) at 1st 163,475 (122,511)
October -------- --------
Net funds at 30th September 549,124 188,586
======== ========
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 2004
1. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
30.9.04 30.9.03
£ £
Operating profit/(loss) 278,489 (239,231)
Depreciation charges 79,651 35,823
Profit on disposal of fixed assets - (1,863)
Increase in stocks (117,002) (13,200)
(Increase)/Decrease in debtors (831,231) 7,923
Increase/(Decrease) in creditors 400,288 (129,663)
________ ________
Net cash outflow from operating activities (189,805) (340,211)
======== ========
2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
30.9.04 30.9.03
£ £
Returns on investments and servicing of finance
Interest received 3,125 988
Interest paid (18,793) (30,446)
Interest element of hire purchase payments (970) (1,733)
________ ________
Net cash outflow for returns on
investments and servicing of finance (16,638) (31,191)
======== ========
Capital expenditure and financial investment
Purchase of intangible fixed assets (1,213,162) -
Purchase of tangible fixed assets (121,354) (15,695)
Sale of tangible fixed assets - 21,672
Development expenditure (334,984) -
_________ ________
Net cash (outflow)/inflow for capital
expenditure and financial investment (1,669,500) 5,977
========= ========
Financing
Loans repaid to financial institution (18,462) (18,462)
Increase in factor finance - 42,201
Flotation and share issue costs (55,913) (290,826)
Capital element of finance lease rental (17,509) (35,539)
Net decrease in director's loan (30,000) (155,423)
Share issue 2,347,500 1,109,900
_________ ________
Net cash inflow from financing 2,225,616 651,851
========== =========
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 2004
3. ANALYSIS OF CHANGES IN NET FUNDS
At 1.10.03 Cash flow At 30.9.04
£ £ £
Net cash:
Cash at bank 252,109 349,673 601,782
------------ ------------ ------------
252,109 349,673 601,782
Debt: ------------ ------------ ------------
Hire purchase (49,395) 17,509 (31,886)
Debts falling due within one year (18,468) 5 (18,463)
Debts falling due after one year (20,771) 18,462 (2,309)
------------ ------------ ------------
(88,634) 35,976 (52,658)
------------ ------------ ------------
Total 163,475 385,649 549,124
======== ======== ========
Copies of the Company's full Report and Accounts will be sent to shareholders in
due course and will be available from:
Pentagon Protection Plc
Pentagon House
4 Acton Park Estate
The Vale
London
W3 7QE
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP