Interim Results
Screen PLC
5 September 2001
SCREEN PLC:
Interim Statement Announcement
Half Year Ended 30 June 2001
Sales up 173%; Demand for Products and Services Remains Buoyant
Screen Plc ('Screen'), a leading provider of advanced security and
communication systems, announces its interim results for the six months ended
30 June 2001. Screen develops and supplies mobile data, in-car video, control
by touch command and control systems, mobilising and management information
systems, wireless CCTV cameras and Customer Relationship Management software
solutions.
Screen's technologies and products provide solutions for the Police and Fire
Services, and prison, local authority, utilities and commercial sectors.
International distribution is through 46 countries in Europe, Africa, the
Middle East and Australasia.
Highlights of the Results
* Results on target and confirm Chairman's optimism in his letter to
Shareholders in May
* Positive progress in extending the product range and value of the IPR
embedded in products
* All businesses contributed positively, except one division due to a
switch from the old product range to the new ProGenie range
* Revenues, including acquisitions, more than doubled to £5.6m
(2000: £2.1m)
* Improved operating profit before goodwill amortisation of £44,000
(2000: loss £247,000)
* Reduced net loss before tax of £95,000 (2000: loss £210,000)
* No dividend is being paid, as forecast
* Completion of two acquisitions took effect, one making a good
contribution to results
* Splitting of Chairman and CEO roles, appointment of a new Group Chief
Executive
* Net cash of £1.8m in significantly larger balance sheet of £14.6m
Operational
* Growth in branded products and availability of such products
internationally
* Sales/installations of wireless based mobile rapid deployment camera
exceeded whole of 2000
* Focus on larger more profitable customers in fixed mobile CRM
Solutions
* Contract gains, new products, innovations in mobile computing and
control systems
* Sales, profits exceeded expectations in software and systems
solutions to Emergency Services
* Strong order books
Regarding the Outlook, Owen Williams, Screen's Chairman said:
'Expansion of our Group of companies continues apace. The drivers for our
growth being the increases in our product range and our market development in
the industry sectors and international markets we address.
Demand for our products and services remains, as we thought it would, buoyant.
Our order books are developing well and we see no diminution in the demand for
our products and services.'
For further information, please contact:
Screen Plc Binns & Co PR Ltd
Owen Williams Peter Binns/Caroline Anderson
Tel: 01628 820 011 Tel: 020 7786 9600
www.screenplc.com
Chairman's Statement
Introduction
I am very pleased to present our results for the six month period ended 30
June 2001. They confirm that the optimism of my last letter to shareholders,
on 3 May 2001, was well founded. At the time I described the very positive
progress being made in extending our range of products following strong
internal development activity and investment. I also highlighted the value of
the Intellectual Property Rights embedded in products owned by us as a result
of the acquisitions we had made.
Together with the extensive marketing and distribution channels being opened
to make these and derivative products more widely available, particularly
internationally, this range will power our growth for the foreseeable future.
All businesses contributed positively to the result except Petards Mobile
Intelligence (PMI) where the switch from the old product range to the new
ProGenie product range caused a short term impact on sales and operating
profit. The new ProGenie product range prospects remain strong and the
Directors are fully confident of its long term potential. These results,
therefore, have been achieved despite below expectation results of PMI,
illustrating the strength and resilience of the Group's overall product range.
Results
Revenues for the 6 months to 30 June 2001, including acquisitions, more than
doubled to £5,601,000 (to 30 June 2000: £2,050,000) exceeding the full year
revenues of 2000. Operating profits for the period improved from a loss of
£247,000 to a profit of £44,000. Net loss before tax for the period was
£95,000 (2000: £210,000). Your Board is not recommending the payment of a
dividend.
The acquisition of the Civil Systems Division of BAe Systems Plc, described in
our last annual report and accounts, was completed in February 2001. These
results therefore reflect the contribution it made for that part of the period
in which it was in our ownership.
Board Appointment
On 1 August 2001 we announced the appointment of Claes Bergstedt as Chief
Executive of Screen Plc. Mr Bergstedt has held a number of senior positions
in the technology industry including from 1995-1997 general manager, business
solutions at Cable & Wireless and more recently deputy managing director of
Psion Teklogix where he played a key role in integrating the Canadian company
into Psion following its acquisition by that company.
The range of products and services we have now assembled has worldwide
application across a range of private and public sector markets. To realise
this potential rapidly, effectively and safely requires a blend of skills and
experience within the executive management team, which, with the arrival of
Claes Bergstedt, is now considerably enhanced.
Acquisition
On 16 July 2001 we announced the acquisition of Pentyre Limited, a company
providing systems for surveillance, imaging, real time control and
communications having amongst its customers London Underground, BT, Bosch and
several local authorities. We believe this will prove to be an important
addition to our Group as it brings highly skilled personnel with relevant
industry and application knowledge; an excellent range of products and an
additional and largely complementary customer set.
We take great care in the selection, integration and control of businesses
coming into the Group. Pentyre Limited is in the process of being re-branded
Petards Projects and whilst we do not anticipate it making a substantial
contribution to the Group this year, it represents a key element of the
Group's development strategy.
As this company was acquired after the end of the period about which we are
reporting it made no contribution to the results being reviewed.
Petards Vision
This company provides systems and products supporting CCTV and other
electronic surveillance applications.
Sales and installations of Swift, our wireless based mobile rapid deployment
camera, continued to grow with revenues in the six months from this source
exceeding those of the entire 2000 year albeit at slightly lower margins to
our conventional business. During the period we introduced new models to the
Swift range increasing transmission technology and deployment options. We
also completed the groundwork to ensure the entire Swift range can be
successfully marketed internationally.
A new video system, Gemini, was introduced to the range of products now
offered by the company. This enables multiple concurrent video signals to be
run over a single video transmission channel giving customers the ability to
make more effective and greater economical use of their fibre, microwave or
copper network communications infrastructure. This provides the ability to
feed the video signal from a Swift camera into an existing fixed location
camera network, facilitating the onward long-haul transmission of video
signals. A new version of our successful COBYT command and control system has
been introduced, for which the first order has already been received. This
latest offering, COBYTNet, operates on the Microsoft Windows operating system
platform and further extends the functionality of our control system
offerings.
With CCTV coverage increasing, it is becoming important to our users that they
can, at all times, monitor the use of their CCTV systems. Therefore, a new
version of our management information product, COBYT Management Tool (CMT),
has been developed and released. This product provides management information
and analysis concerning the usage and operation of our COBYT command and
control systems. We anticipate that this will become an essential tool for
many, if not all, our existing users - particularly those in the public sector
- and thus opens up further upgrade opportunities.
With the growing focus on public safety issues and confirmation of the value
of urban center CCTV coverage further funds are being made available from
central government to extend their use. Petards Vision expects to benefits
from this development and as a result the prospects for this company continue
to look promising.
Petards Corporate Knowledge
Petards Corporate Knowledge (PCK) develops and supports fixed mobile Customer
Relationship Management (CRM) solutions that markedly improve an
organisation's ability to find, win and retain customers. Its leading product
CRMsoft can be deployed as a corporate knowledge delivery system making
company information wherever contained, available to all.
We believe that the combination of this product together with our ProGenie
hand held product, referred to in more detail later, will open up considerable
new business opportunities.
During the period under review the company has strengthened its senior
management team and implemented a new business model in which it focuses on
large and more profitable customers with sales of lower value or less
complexity being re-directed towards our growing number of resellers.
Performance in the period was good with notable sales successes including a
contract approaching £0.5m for the Computer Patents Annuities in Jersey where
it is working alongside the international IT consultancy Perot Systems.
Another recent win was the contract to supply IT Direct, the recently
privatised IT support arm of Lloyds of London.
Petards Mobile Intelligence
Petards Mobile Intelligence (PMI) designs and supplies mobile computing and
control systems.
During the first half of 2001, PMI has successfully augmented its core skills
and products to address not only the Emergency Services but also the
commercial sector for mobile computing.
The development activities required to maintain our strong market position
have continued throughout the full range of Mobile Data Terminals (MDTs) and
hand held PC products. The product development capabilities of the company
have also been enhanced by the recruitment of an experienced team of software
development engineers to supplement existing staff. This enabled the rapid
launch of new variants of the ProGenie hand held PC with GSM and shortly GPRS
capability; a 1GHz Pentium III option of the 'in-vehicle' PC and Automatic
Number Plate Recognition (ANPR) software applications.
We consider that the prospects for the whole of this product range are
excellent, with customer requirements driving product enhancements and new
product development.
The police market for MDTs has been slow due to delay in the introduction of
their new voice and data system. However, the development of the new high
speed MDT for the ANPR market has provided PMI with another leap in technology
that will establish a new standard for others to follow. With the Emergency
Services starting to emerge with new mobile requirements, the MDT and ProGenie
platforms provide a wide range of solutions ready to supply immediately.
The company has established a good UK reference base for the ProGenie hand
held PC and has achieved above expectation success in establishing a
distributor base in other European countries. The chosen distribution
partners have extensive experience in selling enterprise solutions to their
own vertical sectors. Marketing attention is now focused on the support of
the indirect channel to introduce ProGenie into high-volume mobile worker
based projects through these distributors. An in-house development support
team capable of adapting ProGenie's core software to achieve project specific
requirements back this up. The forecasts of the ProGenie sales are steadily
increasing with new potential projects appearing on a weekly basis.
Our in-car video system, ProVida, is in a very positive development phase.
The sales organisation has been enhanced and trained to meet the increasing
and fast-growing demands from the export markets. A further 4 countries have
granted approvals for the use of our in-car vehicle products. Major bids have
been submitted where we are expecting successful outcomes. We anticipate
further growth in the use of this technology over the next few years.
A re-designed in-car video system, based on NTSC technology, is expected to be
introduced to the North American market during the fourth quarter.
The announcement of the first order for Automatic Number Plate Recognition
(ANPR) in April 2001 has been followed by a steady flow of UK orders. We have
launched the product through our international distribution network and have
already received considerable non-UK interest for ANPR. The level of
integration and ease of use qualities provided by the ProVida ANPR system has,
in our view, positioned the product well ahead of any competitive offering.
Petards Civil Systems
This business supplies software and systems solutions to the Emergency
Services and in particular the Fire Service where they are seen as market
leaders in Management Information Systems (MIS) solutions.
Sales, revenue and profits have exceeded our expectations and the outstanding
order book remains at a high level. The company has been relocated to
strategically placed new premises where it also hosts the sales and
demonstration facilities for all the products of the Group.
Petards Civil Systems (PCS) progress under our ownership has been excellent
and we remain confident of the value of the recent acquisition.
Outlook
Expansion of our Group of companies continues apace. The drivers for our
growth being the increases in our product range - the results of skilled
development on the part of our technical staff - and our market development in
the industry sectors and international markets we address. Our strategy
remains that of providing advanced technological solutions to business users
in market sectors where we are or believe we can become dominant players.
Demand for our products and services remains, as we thought it would, buoyant.
Furthermore the geographical diversity of our activities and the
preponderance of sales to the more stable public sectors will underpin our
future prospects, which we view with considerable confidence. Our order books
are developing well and we see no diminution in the demand for our products
and services. Following the Placing in February to raise the funds for the
purchase of the Civil System Division of BAe Systems Plc, our balance sheet
stands at £14.5m. We have net cash of £1.8m and anticipate operating
cashflow, excluding acquisitions, to be positive during the second half of the
year.
Owen Williams
Executive Chairman
5 September 2001
Group Summary Profit and Loss Account
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
£000's £000's £000's
Turnover
Continuing operations 3,939 1,845 3,351
Acquisitions 1,662 205 1,731
5,601 2,050 5,082
Cost of sales (3,231) (1,192) (2,835)
Gross profit 2,370 858 2,247
Administrative expenses (2,326) (1,105) (2,549)
Operating profit/(loss) before
goodwill
Continuing operations (304) (295) (758)
Acquisitions 348 48 456
44 (247) (302)
Net interest receivable 30 50 85
Goodwill amortisation (169) (13) (126)
Profit/(loss) before taxation (95) (210) (343)
Taxation - - -
Profit/(loss) after taxation (95) (210) (343)
Minority interest - equity - 23 64
Profit/(loss) for the financial (95) (187) (279)
period
Earnings/(loss) per share (0.23)p (0.56)p (0.80)p
Group Balance Sheet
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2001 2000 2000
£000's £000's £000's
Fixed assets
Intangible assets 8,323 2,797 6,834
Tangible assets 821 465 628
9,144 3,262 7,462
Current assets
Stocks 1,376 552 910
Debtors 4,745 2,047 2,585
Cash at bank 2,313 2,067 1,527
8,434 4,666 5,022
Creditors: amounts falling due
within one year
Bank overdraft (513) - (95)
Other creditors (2,433) (1,858) (2,186)
Net current assets 5,488 2,808 2,741
Creditors: amounts falling due after more
than one year (53) (10) (64)
Net assets 14,579 6,060 10,139
Capital and reserves
Called up share capital 17,599 9,034 13,122
Reserves (3,020) (2,956) (2,925)
Equity shareholders' funds 14,579 6,078 10,197
Minority interest - equity - (18) (58)
14,579 6,060 10,139
Notes
1. Non Statutory Accounts
These statements do not constitute financial statements within the
meaning of section 240 of the Companies Act 1985. These statements have
not been audited. No financial statements will be filed for the six
months ended 30 June 2001.
2. Basis of preparation
The statements have been prepared in accordance with the accounting
policies set out in the Group's 2000 annual report and accounts.
3. Taxation
No provision for taxation has been made in profit and loss account for
the six months to 30 June 2001. No provision was required in the six
months to 30 June 2000.
4. Earnings/(loss) per share
The loss per share for the six months to 30 June 2001 is based on the
weighted average number of ordinary 1 pence shares of 41,275,877. The
loss per share for the six months to 30 June 2000 is based on the
weighted average number of ordinary 1 pence shares of 33,512,543,
formerly reported as 335,125,436 ordinary 0.1 pence shares, but now
restated following the 1-for-10 consolidation effected 26 February 2001.
5. Intangible assets
Intangible assets have risen by £1,489,000 since 31 December 2000, mainly
due to the goodwill acquired with the purchase of the Civil Systems
Division of BAe Systems Plc in February 2001, together with the purchase
of the remaining minority interest in Petards Mobile Intelligence Ltd.
6. Further copies
Copies of the interim statement will be sent to shareholders. Further
copies will be available from the Company's registered office at
Stubbings Barn, Burchetts Green Lane, Burchetts Green, Maidenhead, Berks,
SL6 3QP for the next 14 days.
Audit Committee Report
The Audit Committee consists of the Non-Executive Directors, Mr Ian Taylor MBE
and Mr Charles Hughes. It reviews the Group's financial controls, accounting
policies and financial reporting.
The Audit Committee has reviewed the unaudited interim financial statements
and is satisfied that they have been prepared using accounting policies
consistent with those adopted by Screen Plc in its financial statements for
the year ended 31 December 2000. The Committee in the course of its review
has not become aware of any material modifications that should be made to the
interim financial statements as presented.