Final Results
Newmark Security PLC
16 July 2007
NEWMARK SECURITY PLC
Final results for the year ended 30 April 2007
HIGHLIGHTS
• Turnover from continuing operations up by 13% from £11.8m to £13.4m,
with 16% increase in electronic division and 10% growth in asset protection
division
• Gross margin increase from 41.2% to 43.3% overall
• Profit from operations for continuing businesses 66% higher, £1.632m
compared to £0.981m
• Earnings per share for continuing businesses increased by 127% (basic and
diluted) to 0.25p (2006: 0.11p)
• Earnings per share before interest discount, losses of discontinued
operations, provision for exchange losses and warrant revaluation increased
by 43% to 0.30p (2006: 0.21p)
• Total net assets increased by 51%, from £3.446m to £5.210m
• Cash flow from operating activities increased by 173% from £0.539m to
£1.470m
• Completion of earn-out period for Grosvenor Technology and maximum
payable under the earn-out. Grosvenor Executive directors have agreed to
sign contracts for a further three years
• Financial statements produced for the first time in accordance with
International Financial Reporting Standards
• Trading for the start of the current year have been encouraging and the
Board is confident that further growth in the business will be achieved in
this year
CHAIRMAN'S STATEMENT
Overview
The year has been a period of consolidation with all businesses continuing to be
profitable, the completion of the earn out period for Grosvenor Technology and
the repayment of the loan note.
Our financial statements have been produced in accordance with International
Financial Reporting Standards (IFRS) for the first time. Comparative information
for the year ended 30 April 2006 has been restated on an IFRS basis. Full
details of IFRS accounting policies applied and reconciliation of comparative
figures between UK GAAP and IFRS are included within the financial statements.
The major ongoing impact on the operating profit of the Group is that we are now
required to capitalise development costs which fulfill certain criteria as set
out in the accounting policies. Previously such expenditure was written off as
incurred.
The earn out period for the acquisition of Grosvenor Technology expired on 31
October 2006, and, as expected, the maximum payable of £3.5 million has been
achieved over the four year period. On agreement of the accounts for the period,
unsecured loan notes denominated in Euros were issued in accordance with the
acquisition agreement. These may be settled in cash on 1 November 2007 at the
earliest. Unfortunately, the loan notes were issued at a time when the Euro was
particularly strong and we have been required to make a £111,000 exchange loss
provision. Interest payable on these loan notes was fixed at a quarter per cent.
below base as part of the agreement, and has been accrued in the income
statement accordingly. However, in order to comply with IFRS, we are required to
discount the valuation of the loan notes using an assumed third party market
rate and this has been adjusted as a finance charge in the income statement. The
three directors of the company who remained with the Group after acquisition
have agreed to remain with the Group for at least a further three years.
The loan notes issued by the Company in 2003 were settled on 24 July 2006. When
the loan notes were issued, warrants were attached so that the loan note holders
could subscribe for ordinary shares of 1p each in the Company at a price of 1p
per ordinary share. These warrants are captured under the heading of embedded
derivatives under IFRS, and therefore were fair valued at the date of
transition. The warrants were then revalued at April 2006 and the exercise date,
and the changes in valuation are accounted for as other finance gains or losses
in the income statement. The loan note holders exercised these warrants so that
half of the loan notes were settled by issue of shares, the other half by cash
payments.
Turnover for the year from continuing businesses was £13,422k compared to
£11,839k, an increase of 13 per cent. Gross margin for the year from continuing
operations was £5,817k (43.3 per cent. of sales) compared to £4,876k (41.2 per
cent.).
Safetell turnover increased by 10 per cent. whilst Grosvenor Technology
benefited from the BAE Systems contract announced in the year. The US market for
Custom Micro Products recovered from the low levels of the previous year. Within
the Electronic Division, there was an improvement in margin overall, whilst
there was also an improvement within Safetell as the increase in turnover
improved utilisation of staff and yielded other efficiencies.
Earnings per share are shown in the income statement as 0.25p (2006: 0.11p).
However, the earnings per share before interest discount adjustments, losses of
discontinued operations, provision for exchange loss and warrant revaluation are
0.30p (2006: 0.21p) as calculated in note 10 to the accounts.
As a consequence of the increase in turnover and fall in number of employees,
turnover per employee rose from £100,390 to £117,737.
Both CMP and Safetell are the leaders in their particular markets whilst
Grosvenor is a major force at the upper price end of the access control market.
There were no environmental issues having a major impact on the Group in the
year.
The Group continues to invest in research and development which will benefit the
results in the future.
The Disability Discrimination Act will, we believe, have an increasing impact on
the needs of some of our customers when the requirements are realised more
fully, and this would benefit Safetell in particular.
The Group net assets have increased in the year from £3.4 million to £5.2
million partly reflecting the translation of half of the outstanding loan notes
into shares.
Turnover varies month by month due to the timing and amounts of the types of
contracts that we are involved in, particularly within Safetell. The asset
protection division had two very busy months before the year end which has
inflated the working capital position on the balance sheet at the year end.
A detailed review of their activities, results and future developments is set
out in the divisional results below.
Financial results
The operating profit for the year was £1,632,000 (2006: £981,000).
Turnover for the year for continuing operations was £13.4 million (2006: £11.8
million). The main commercial factors affecting the results of the divisions are
set out below.
Electronic Division
Turnover £7,441,000 (2006: £6,407,000)
Operating profit £1,685,000 (2006: £1,100,000)
Turnover in Grosvenor Technology increased by some 19 per cent. in the year to
£4.3 million, and was accompanied by a 2 per cent. increase in margin. Each year
turnover includes a number of larger contracts which vary in size and are
difficult to predict in terms of timing. During the year under review, we
completed the sale of our JANUS access control and security management system to
BAE Systems at their major sites in Warton, Samlesbury, Brough and others. The
total sales value, including JANUS software exceeded £0.5 million. BAE Systems
has been using JANUS for some years on other sites and now has the potential to
link all of the systems together as an all encompassing 'Enterprise Solution.'
As predicted, the eSeries door controller, due to its ease of connectivity on
corporate networks around the world, has played a large part in this success and
looks set to be the deciding factor for other large contracts still to come.
To further support these larger 'Enterprise' type access control systems we have
developed a brand new web connected application called Admin Manager. Admin
Manager is part of the Head Office suite of programs and has the potential to
combine multiple systems together in a world-wide network of systems. The
benefits to the user are many fold and include connections to corporate HR
systems, centralisation of employee records and a secure web connection from
anywhere in the world. There are separate versions of Admin Manager for JANUS,
N-TEC (Simplex distributorship) and Siteguard (Tyco distributorship) and for
commercial reasons the different Admin Manager applications are not
interchangeable and do not support each other's protocols.
Turnover in Newmark Technology increased in the year by 6 per cent. to £451k but
this was offset by a reduction in margin. We now have two distributors in Russia
via the Simplex Fire distributorship and the first order for our Russian version
of N-TEC has been received (£50K) for the prestigious Naberezhnaya Tower Complex
in Moscow, again using eSeries controllers and has been shipped already in the
current year.
We have temporarily suspended UL approvals on the N-TEC product as there are new
ideas that we wish to incorporate within the certification application and
changes or additions to an already UL certified product requires re-evaluation.
At Custom Micro Products, turnover increased by 14 per cent. overall and was
aided by a recovery in sales to the US following a drop in the previous year.
We have started manufacturing the RS21 terminal (Revised Series) ready for
product launch and as announced last year, the RS21 is fully compatible with the
existing 2100 terminals and eliminates the need for our own in-house
manufacturing. The Revised Series offers snap-together components which the
customer assembles at the point of installation. This idea has been very well
received and allows us to ship the product within a couple of days from
receiving an order rather than the traditional 3-4 week delay for manufacturing.
There will be a crossover period between the 2100 terminal phasing out and the
RS21 terminal phasing in.
On 14 June we announced the strategic merger of Grosvenor Technology and Custom
Micro Products. The two companies will merge under the name of Grosvenor
Technology and continue to operate from their respective facilities in Bishop's
Stortford in Hertfordshire and Poole in Dorset. The remit of the
newly combined business is to provide innovative products and services targeted
directly to the needs of key channels within the access control and
data-collection industries.
Combining the two businesses under a single brand enables us to better position
the company to meet the future needs of our customers. The development
proposition, with the two teams working as one, is an easier migration to newer
and more powerful technologies and the opportunity for wider and greatly
enhanced product offerings. The merger also offers the best use of company
synergies and consistency of application, with more efficient systems and
procedures throughout. To this end it is envisaged that we will embark upon a
staff restructuring process as soon as the merger process has been completed.
It is important that we maintain the identity and the unique branding of the
Custom Micro products and to this end we have created the 'CUSTOM' brand-name as
an umbrella for the existing catalogue of products and the brand-new Revised
Series products. This will make it easier for customers to identify and manage
the CUSTOM products from within the Grosvenor Technology product range.
Our next generation product, also announced last period, has been branded as
'SATEON' Intelligent Time Clocks and Terminals. The SATEON range also takes on
the new form of snap- together modules enabling off-shore manufacturing and
installer assembly on-site. To facilitate this, intelligence has been designed
on-board each module so that they are aware of each other and automatically
configure themselves when connected.
SATEON terminals are specifically targeted at the ASP.NET environment and will
allow us to enter the business of recurring revenue streams where terminals and
internet hosted services are offered by us on a monthly rental to our existing
customer base where they will benefit from our economies of scale and our
centralised and managed back-end systems. The first SATEON terminal, the IT3100,
is at an advanced stage of development on the hardware side and we expect to
enter this business during the course of 2008.
Asset Protection Division
Turnover £5,981,000 (2006: £5,432,000)
Operating profit £520,000 (2006: £490,000)
Total sales increased by 10.1 per cent. from product/contract sales growth of
6.9 per cent. and service revenue growth of 15.5 per cent.
Eclipse rising screen programmes were maintained with various long-term
customers in retail finance, petrol retailing and some Police forces. Two
previous major customers who had completed their branch programmes some years
ago have renewed purchases for a fresh round of branch refurbishments. Another
customer lost to a competitor in 2000 has been won back. The value of
reconfiguration/ refurbishment works for Eclipse dropped below the value of new
installations with less work required for Abbey.
Eye2Eye sales were disappointing in the first half of the year but accelerated
dramatically in the second half, 8 of the 11 units sold in the year arose in the
last two months to new customers with repeat business expected in the new
financial year. Two more new rail customers placed orders in the last two months
of the year under review for delivery in the current year. Rail Operating
Companies remain the market focus for this product with additional demand from
Police and Local Authorities.
Sales to the Post Office of RollerCash and BiDi Safe were similar to last year
with the notable addition of the first six Post Office branches in WH Smith.
That trial proved successful and a programme has been announced of approximately
70 more such combinations before the end of 2008. Woolwich branches invested in
the third and final phase of equipment for their branches before adopting a
Barclays format.
A client driven development contract for payment/merchandise transfer hatches
was completed at the end of the year with the first prototype installed in May.
Although unit prices are relatively low, the volume for this retail customer
could be substantial with opportunities to sell to other retailers.
Following 18 months of preparation, the South African market has been opened
with a partner who will act as a manufacturing licensee for Eclipse rising
screens and as a sub-distributor for RollerCash. The first order was taken in
March for rising screens that was installed in June and one RollerCash is
undergoing branch trials.
Service and maintenance revenue increased by 15 per cent. mainly due to the
comprehensive contract for all Abbey branches won at the beginning of 2006 and
new work for Shell night pay window maintenance. This part of the business is
set to grow further.
Percentage gross margin was maintained at last year's level on the increased
turnover. Manufacturing efficiencies were achieved in the last 2 months on the
increased volume in Eye2Eye resulting in much better margin for this product.
Other manufacturing efficiencies are being introduced to improve margin on other
products.
The first months of the new financial year have continued at the average rate of
the year under review but with increases expected to occur from the late summer
onwards. Some of this additional business has been announced by customers but
not yet confirmed.
Balance sheet and cash flow
The change to IFRS accounts has resulted in changes to both the balance sheet
and cash flow although, in respect of the latter, these are mainly
presentational. Goodwill has been frozen at the amortised cost figure at the
date of transition to IFRS, 1 May 2005. This figure will now remain unchanged
subject only to annual impairment reviews. Intangible assets also now include
development costs which meet the criteria set out in note 1, and will be written
off over the expected life of the new product. Trade debtors and creditors are
both higher than the previous year end, due in particular to very busy trading
months towards the end of the year in the Asset Protection Division. Both
operating divisions also undertake substantial contracts which impinge upon the
level of working capital at any one point in time.
The Grosvenor deferred consideration of £3.5 m will be paid from cash balances,
which at the end of April were close to £2 million, and the balance from
facilities currently being agreed with the Group's bankers. Current liabilities
last year included £1.5 million loan notes which have been settled in the year,
half by the issue of shares and the other half in cash from the proceeds of a
bank loan repayable over three years. Overall net assets increased from £3.4
million to £5.2 million.
The improvement in profit for the year increased the cash flow from operating
activities by £0.9 million, from £0.6 million to £1.5 million. Cash outflow from
investing activities fell from £2.3 million to £0.3 million, primarily due to
the previous year including the payment of the deferred consideration for the
acquisition of Custom Micro Products Limited, £1.9 million. There was however a
cash outflow from financing activities of £0.5 million compared to an inflow of
£0.3 million last year. The figures for the year under review include the
partial repayment of the loan taken out to finance the repayment of the loan
notes, whilst the previous year included the proceeds from loan notes issued.
Employees
The Board would again like to express their gratitude to all employees for their
contribution to the success of the business in which they work.
Summary
The Board is pleased by the results achieved in the year and believe that this
has resulted from the efforts made in previous years to secure a solid base for
the Group. Trading for the start of the current year has been encouraging.
Although the results for the first half of the current year may be lower than
the profit for the first six months of the year under review due to the impact
of the contract for BAE Systems last year, the Board believes that further
growth will be achieved in the current year.
M DWEK
Chairman
16 July 2007
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
for the year ended 30 April 2007
2007 2006
£'000 £'000
Revenue 13,422 11,839
Cost of sales (7,605) (6,963)
Gross profit 5,817 4,876
Provision for exchange loss (111) -
Administrative expenses (4,074) (3,895)
Profit from operations 1,632 981
Finance income 30 31
Finance costs (113) (102)
Other finance (losses)/gains (44) 147
Profit before tax 1,505 1,057
Tax expense (368) (149)
Profit for the year from continuing operations 1,137 908
Post-tax loss related to discontinued (48) (519)
operations
Profit for the year 1,089 389
Attributable to:
- Equity holders of the parent 1,089 389
Earnings per share
Continuing operations
- Basic and diluted (pence) 0.25p 0.11p
Discontinued operations
- Basic and diluted (pence) (0.01p) (0.14p)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 30 April 2007
Profit for the year 2007 2006
£'000 £'000
Profit for the year 1,089 389
Foreign exchange gains/(losses) on retranslation of overseas
operations 1 (39)
Total recognised income and expense for the year 1,090 350
Attributable to:
- Equity holders of the parent 1,090 350
CONSOLIDATED BALANCE SHEET
at 30 April 2007
2007 2007 2006 2006
£'000 £'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 880 941
Intangible assets 7,136 6,944
Deferred tax assets 37 116
Total non-current assets 8,053 8,001
Current assets
Inventories 1,381 1,256
Trade and other receivables 3,196 2,326
Cash and cash equivalents 1,948 1,373
Total current assets 6,525 4,955
Total assets 14,578 12,956
LIABILITIES
Current liabilities
Trade and other payables 3,173 2,608
Other short term borrowings 3,930 1,623
Corporation tax liability 1,443 1,324
Provisions 113 113
Total current liabilities 8,659 5,668
Non-current liabilities
Long term borrowings 553 301
Provisions 156 172
Other creditors - 3,369
Total non-current liabilities 709 3,842
Total liabilities 9,368 9,510
TOTAL NET ASSETS 5,210 3,446
Capital and reserves attributable to equity
holders of the company
Share capital 4,490 3,740
Share premium reserve 493 493
Merger reserve 801 801
Foreign exchange difference reserve (38) (39)
Warrant reserve - 248
Retained earnings (600) (1,861)
5,146 3,382
Minority interest 64 64
TOTAL EQUITY 5,210 3,446
The financial statements were approved by the Board of Directors and authorised
for issue on 16 July 2007.
M Dwek
Director
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 April 2007
Note 2007 2007 2006 2006
£'000 £'000 £'000 £'000
Cash flow from operating activities
Net profit after tax from ordinary
activities 1,089 389
Adjustments for:
Depreciation 348 302
Investment income (30) (31)
Interest expense 113 311
Other finance losses 158 251
Loss on sale of discontinuing operations - 192
Income tax expense 347 57
Costs settled by share issues - 184
Share option charge 38 21
Warrant revaluation (114) (398)
Operating profit before changes in working
capital and provisions 1,949 1,278
(Increase)/decrease in trade and other
receivables (798) 385
(Increase)/decrease in inventories (125) 316
Increase/(decrease) in trade and other
payables 654 (1,017)
Cash generated from operations 1,680 962
Income taxes paid (210) (423)
Cash flows from operating activities 1,470 539
Cash flow from investing activities
Acquisition of subsidiary, net of cash
acquired - (1,937)
Disposal of subsidiary, net of cash
disposed - (25)
Payments for property, plant & equipment (242) (329)
Sale of property, plant & equipment 47 24
Research & development expenditure (269) (112)
Interest received 30 31
(434) (2,348)
Cash flow from financing activities
Proceeds from loan notes - 225
Proceeds from loan 750 -
Repayment loan notes (750) -
Repayment of bank loans (194) -
Repayment of finance lease creditors (154) (106)
Interest paid (113) (112)
(461) 7
Increase/(decrease) in cash and cash
equivalents 575 (1,802)
Earnings per share
2007 2006
£'000 £'000
Numerator
Earnings used in basic and diluted EPS-continuing
operations 1,137 908
(Losses) used in basic and diluted
EPS-discontinued operations (48) (519)
No. No.
Denominator
Weighted average number of shares used in basic and
diluted EPS
-continuing and discontinued operations 429,437,268 367,856,416
Employee share options have been excluded from the calculation of diluted EPS as
their exercise price is greater than the weighted average share price during the
year (i.e. they are out-of-the-money) and therefore would not be advantageous
for the holders to exercise those options. Further information concerning share
options is set out in note 28.
The basic earnings per share before interest discount, losses of discontinued
operations, provision for exchange losses and warrant revaluation has also been
presented since, in the opinion of the directors, this provides shareholders
with a more appropriate measure of earnings derived from the Group's businesses.
It can be reconciled to basic earnings per share as follows:
2007 2006
pence pence
Basic earnings per share (pence) 0.25 0.11
Discount charge on deferred consideration 0.04 0.07
Losses of discontinued operations 0.01 0.14
Provision for foreign exchange loss 0.03 -
Warrant revaluation (0.03) (0.11)
Earnings per share before interest discount, losses of
discontinued operations, provision for foreign exchange loss
and warrant revaluation 0.30 0.21
2007 2006
£'000 £'000
Reconciliation of earnings
Profit used for calculation of basic earnings per share 1,089 389
Discount charge on deferred consideration 158 251
Losses of discontinued operations 48 519
Provision for foreign exchange loss 111 -
Warrant revaluation (114) (398)
Earnings before interest discount, losses of discontinued
operations, provision for foreign exchange loss and warrant
revaluation 1,292 761
Basis of preparation
The financial information set out above for the years ended 30 April 2007 and
2006 does not constitute the Group's statutory accounts within the meaning of
Section 240 of the Companies Act 1985 but is derived from those accounts.
Statutory accounts for the year ended 30 April 2006 have been filed with the
Registrar of Companies. The results have been prepared using accounting
policies consistent with those used in the preparation of the statutory
accounts.
The financial information for the year ended 30 April 2006 has been extracted
from the statutory accounts for that year and then adjusted for International
Financial Reporting Standards (IFRS). The accounts have been filed with the
Registrar of Companies and contain an unqualified audit report. The financial
information for 2007 has been extracted from the unaudited statutory accounts
for the year ended 30 April 2007. The audited accounts for the year ended 30
April 2007 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
Dividend
No dividend has been proposed in respect of the year.
RESTATED INTERIM RESULTS TO 31 OCTOBER 2006 IN ACCORDANCE WITH IFRS
NEWMARK SECURITY PLC
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 October 2006
Note Unaudited Audited Unaudited
Six months Year ended Six months
ended ended
31 October 2006 30 April 2006 31 October 2005
£'000 £'000 £'000
Revenue 6,398 11,839 5,825
Cost of sales (3,620) (6,963) (3,473)
---------- ---------- ----------
Gross profit 2,778 4,876 2,352
Administrative expenses (1,871) (3,895) (1,884)
---------- ---------- ----------
Profit from operations 907 981 468
Finance income 16 31 22
Finance costs (36) (102) (47)
Other finance
(losses)/gains (17) 147 (4)
---------- ---------- ----------
Profit before tax 870 1,057 439
Tax expense 2 (241) (149) (97)
---------- ---------- ----------
Profit for the year
from continuing
operations 629 908 342
Post-tax loss related
to discontinued
operations (30) (519) (305)
---------- ---------- ----------
Profit for the year 599 389 37
========== ========== ==========
Attributable to: 599 389 37
-Equity holders of the parent
========== ========== ==========
Earnings per share
Continuing operations
-Basic and diluted (pence) 5 0.15p 0.11p 0.09
========== ========== ==========
Discontinued operations
-Basic and diluted (pence) (0.01p) (0.14p) (0.08p)
========== ========== ==========
CONSOLIDATED BALANCE SHEET
At 30 April 2007
Notes Unaudited Audited Unaudited
31 October 2006 30 April 31 October
2006 2005
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 981 941 872
Intangible assets 7,059 6,944 6,850
Deferred tax assets 65 116 42
--------- --------- ----------
Total non-current assets 8,105 8,001 7,764
--------- --------- ----------
Current assets
Inventories 1,482 1,256 1,330
Trade and other receivables 2,889 2,326 1,928
Cash and cash equivalents 1,148 1,373 1,300
--------- --------- ----------
Total current assets 5,519 4,955 4,558
--------- --------- ----------
Total assets 13,624 12,956 12,322
--------- --------- ----------
LIABILITIES
Current liabilities
Trade and other payables 2,643 2,608 2,330
Other short term borrowings 375 1,623 874
Corporation tax liability 1,420 1,324 549
Provisions 113 113 113
--------- --------- ----------
Total current liabilities 4,551 5,668 3,866
--------- --------- ----------
Non-current liabilities
Long term borrowings 718 301 1,037
Provisions 158 172 141
Other creditors 3,500 3,369 4,086
--------- --------- ----------
Total non-current liabilities 4,376 3,842 5,264
--------- --------- ----------
Total liabilities 8,927 9,510 9,130
--------- --------- ----------
TOTAL NET ASSETS 4,697 3,446 3,192
========= ========= ==========
Capital and reserves attributable
to equity holders of the company
Share capital 3 4,490 3,740 3,617
Share premium reserve 4 493 493 432
Merger reserve 4 801 801 801
Foreign exchange difference
reserve 4 (42) (39) -
Warrant reserve 4 - 248 511
Retained earnings 4 (1,109) (1,861) (2,232)
--------- --------- ----------
4,633 3,382 3,129
Minority interest 64 64 63
--------- --------- ----------
TOTAL EQUITY 4,697 3,446 3,192
========= ========= ==========
CONSOLIDATED CASH FLOW STATEMENTS
For the year ended 30 April 2007
Notes Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 October 2006 30 April 2006 31 October
2005
£'000 £'000 £'000
Cash flow from operating
activities
Net profit after tax from
ordinary activities 599 389 37
Adjustments for:
Depreciation 178 302 140
Investment income (16) (20) (22)
Interest expense 36 300 47
Other finance losses 131 251 139
Loss on sale of
discontinuing - 192 149
operations
Income tax expense 226 57 43
Costs settled by share - 184 -
issues
Share option charge 19 21 -
Warrant revaluation (114) (398) (135)
---------- --------- -----------
Operating profit before
changes in working capital and
provisions 1,059 1,278 398
(Increase)/decrease in trade
and other receivables (560) 385 655
(Increase)/decrease in
inventories (225) 316 226
(Increase)/Decrease in trade
and other payables (71) (1,017) (1,110)
---------- --------- -----------
Cash generated from 203 962 169
operations
Income taxes paid (21) (423) (201)
Cash flows from operating
activities 182 539 (32)
---------- --------- -----------
Cash flow from investing
activities
Acquisition of subsidiary,
net of cash acquired - (1,937) (1,825)
Disposal of subsidiary, net
of cash disposed - (25) (11)
Payment for property, plant
and equipment (143) (329) (190)
Sale of property, plant and
equipment - 24 -
Research and development
expenditure (115) (112) (18)
Interest received 16 31 22
---------- --------- -----------
(242) (2,348) (2,022)
---------- --------- -----------
Cash flow from financing
activities
Proceeds from loan notes - 225 225
Proceeds from loans 750 - -
Repayment loan notes (750) - -
Repayment of bank loans (62) - -
Repayment of finance lease
creditors (74) (106) (29)
Interest paid (36) (112) (47)
---------- --------- -----------
(172) 7 149
---------- --------- -----------
Decrease in cash and cash
equivalents (232) (1,802) (1,905)
========== ========= ===========
NOTES TO THE ACCOUNTS
1. BASIS OF ACCOUNTS
The unaudited interim figures for the six months ended 31 October 2006 have been
restated in accordance with International Financial Reporting Standards (IFRSs)
and its interpretations issued by the International Accounting Standards Board
(IASB) and with those parts of the Companies Act 1985 applicable to companies
preparing their reports under IFRS. The comparative figures for the year ended
30 April 2006 and six months ended 31 October 2005 have been restated on the
same bases.
These figures do not constitute statutory accounts within the meaning of Section
240 of the Companies Act 1985. The results for the year ended 30 April 2006 are
an abridged version of the full accounts, which received an unqualified audit
report and have been filed with the Registrar of Companies, as restated for
IFRS.
2. TAXATION
The tax charge is disproportionate to the profit for the period due to the
effect on profits of items not deductible for tax purposes, and the use of
losses brought forward.
3. SHARE CAPITAL
During the period, the following shares were issued:
Number of Share capital
shares
£'000
Shares in issue at 1 May 2006 373,957,816 3,739,578
Share issues 1p per share 75,000,000 750,000
----------- -----------
Shares in issue at 31 October 2006 448,957,816 4,489,578
=========== ===========
The shares issued in the period related to the exercise of warrants by loan note
holders to subscribe for ordinary shares of 1p each in the company.
4. SHARE PREMIUM AND RESERVES
Share premium Merger Retained Foreign exchange Warrant reserve
reserve earnings reserve
£'000 £'000 £'000 £'000 £'000
At 1 May 2006 493 801 (1,861) (39) 248
Retained
profit for
the - - 599 - (114)
period
Share based
payments
provision - - 19 - -
Exchange
differences
on
foreign
currency - - - (3) -
investments
------- -------- -------- -------- --------
As at 31
October 2006 493 801 (1,243) (42) 134
======= ======== ======== ======== ========
5. EARNINGS PER SHARE
Pence per share £'000
Profit after taxation and minority interest 0.15 599
Discount charge on deferred consideration 0.03 131
Losses of discontinued operation 0.01 30
Warrant revaluation (0.03) (114)
----------- ------------
Earnings per share before interest discount,
losses 0.16 646
of discontinued operations, and warrant =========== ============
revaluation
The earnings per share has been calculated based on the weighted average number
of shares in issue during the period, which was 414,311,077 shares (2005:
361,755,016).
Unaudited Audited Unaudited
Six months Year ended Six month ended
ended
31 October 2006 30 April 2006 31 October 2005
Total Total Total
Pence Pence Pence
Earnings per share before
losses of discontinued
operations, discount
charge and warrant
valuation 0.16 0.21 0.10
6. DIVIDENDS
No interim dividend is proposed (2005;Nil).
Enquiries
Maurice Dwek, Chairman, Newmark Security PLC 020 7355 0070
Brian Beecraft, Finance Director, Newmark Security PLC
Mark Percy, Seymour Pierce Limited 020 7107 8000
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 2nd August 2024
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