Final Results
Quadrant Group PLC
29 September 2000
Quadrant Group plc
Preliminary Announcement of Unaudited Results
For the year ended 31 May 2000
Chairman's Statement
In the year to 31 May 2000 Quadrant Group made an
overall profit before tax of £254,000. This figure
comprises:
1. a net exceptional gain of £785,000 derived from
realised gains and provision for asset impairment and
losses on disposals
2. an operating loss on continuing operations of
£159,000
3. an operating loss on discontinued operations of
£226,000, and
4. interest expense of £146,000.
The comparative figures for 1999 were an overall loss
of £60,000 and an operating profit on currently
continuing businesses of £458,000.
This year's operating performance is clearly
unsatisfactory. I would however like to put that
performance into perspective with regard to the very
important corporate developments that have been
concluded since May 1999.
Firstly, Quadrant's three full flight simulators were
sold at a considerable profit as part of a continuing
relationship with FlightSafety Boeing. Secondly, our
50% owned special purpose joint venture company, Quest
Flight Training, won selection by the UK Ministry of
Defence for exclusive provision of simulator flight
training for the RAF's fleet of E-3 AWACS aircraft for
a minimum of 25 years, in a contract expected to
generate sales of £60 million over its life. Thirdly,
agreement was reached for the sale of the Audio Visual
and Presentations business of Quadrant Video Systems
('QVS'), enabling QVS to focus on the growing success
of its CCTV security activities.
These disposals enabled the Group to largely repay its
debts, shed a consistently loss making business and
concentrate on the profitable ongoing activities. The
operating loss on these activities, which I have just
reported, requires further explanation. At Quadrant
Systems the operating result was seriously adversely
affected by the 4 month delay in signing the E-3 AWACS
contract. During the period of that delay our costs
were significantly increased by the presence of
additional personnel and other resources which were
necessary to finalise what is a very complex contract.
The current order book for Quadrant Systems' equipment
business is now £4.9 million which should support
turnover growth of at least 50% this year. This
business has taken much time, effort and expenditure to
reach its current position and we fully expect very
positive results from now on - it has been a long wait.
QVS' CCTV activities rebounded sharply in the second
half as indicated in our half year statement. The
backlog of town centre projects began to flow after a
frustrating delay in government funding in the first
half. The second half produced a record result in both
turnover and profit. Now that the Audio Visual and
Presentations business has gone we expect good
financial returns as the management are able to
concentrate fully on the retained profitable CCTV
activities.
Axiom Design and Print (formerly Quick Imaging Centre)
produced another good result with an operating profit
of £137,000 on turnover of £2.1 million. Although
Axiom is a small part of the Group when measured by
turnover, its management is to be congratulated on
their consistently excellent results.
We do believe that finally this year we will deliver
sustainable operating and bottom line profits.
Peter Rae
Chairman
29 September 2000
Consolidated Profit and Loss Account
For the year ended 31 May 2000
Unaudited
Notes 2000 1999
£'000 £'000
Turnover
Continuing operations 1 13,192 11,280
Discontinued operations 1 6,096 6,147
19,288 17,427
Cost of sales 12,493 11,434
Gross profit 6,795 5,993
Net operating expenses 7,180 5,816
Operating profit/(loss)
Continuing operations (159) 458
Discontinued operations (226) (281)
(385) 177
Exceptional items
- continuing operations
Profit on disposal of fixed 1,235 63
assets
- discontinued operations
Provisions and asset (450) -
impairment on disposal of
business
785 63
Profit before interest 400 240
Net interest payable (146) (300)
Profit/(loss) before taxation 254 (60)
Tax charge on ordinary activities - -
Profit/(loss) on ordinary 254 (60)
activities after taxation
Minority interests - -
Profit/(loss) for the year - 254 (60)
transferred to reserves
Basic earnings/(loss) per 2 4.1p (1.0)p
ordinary share
Diluted earnings/(loss) per 2 4.1p (1.0)p
ordinary share
Consolidated Balance Sheet
31 May 2000
Unaudited
2000 1999
£'000 £'000
Fixed assets
Intangible assets 46 48
Tangible assets 2,044 5,209
2,090 5,257
Current assets
Stocks 936 981
Debtors 4,837 3,965
Cash at bank and in hand 109 10
5,882 4,956
Creditors: amounts falling due 4,650 5,319
within one year (including
convertible debt)
Net current 1,232 (363)
assets/(liabilities)
Total assets less current 3,322 4,894
liabilities
Creditors: amounts falling due 92 2,036
after more than one year
(including convertible debt)
Provisions for liabilities and 120 202
charges
Net assets 3,110 2,656
Capital and reserves
Called up share capital 1,288 1,254
Share premium account 6,934 6,798
Other reserves 4,387 4,387
Profit and loss account (9,499) (9,783)
Equity shareholders' funds 3,110 2,656
Consolidated Cash Flow Statement
For the year ended 31 May 2000
Unaudited
Notes 2000 1999
£'000 £'000
Net cash inflow/(outflow) from (51) 356
operating activities
Returns on investments and (183) (283)
servicing of finance
Net capital expenditure and 3,567 (1,430)
financial investment
Acquisitions and disposals 3 - 509
Cash inflow/(outflow) before 3,333 (848)
financing
Financing (2,217) 229
Increase/(decrease) in cash 1,116 (619)
Notes
1 Continuing operations comprise the businesses of
Quadrant Systems, Synectic Systems, Axiom Design &
Print (formerly Quick Imaging Centre) and the CCTV
business of Quadrant Video Systems,. Discontinued
operations comprises the audio-visual business of
Quadrant Video Systems, which was sold to its
management following shareholder approval of the
disposal at an extraordinary general meeting on 1
September 2000.
2 The calculation of earnings per share is based on
the profit after taxation for the year of £254,000
(1999: loss of £60,000) and on 6,271,349 shares (1999:
6,254,888), being the weighted average number of shares
in issue and ranking for dividend during the year.
There were no dilutive potential ordinary shares in
either the year ended 31 May 2000 or the previous
year.
3 Cash inflows from acquisitions and disposals in
the year ended 31 May 1999 arose from the receipt of
deferred consideration for Quadrant Precision
Manufacturing, Inc, less the cost of acquiring 'A'
ordinary shares in Quadrant Video Systems plc.
4 The preliminary results for the year have not been
audited by the Group's auditors and do not constitute
statutory accounts. The comparative figures for 1999
have been abridged from the statutory accounts for the
year ended 31 May 1999. The Auditors' opinion on these
accounts was unqualified and did not contain any
statements under section 237(2) or (3) of the Act. The
statutory accounts for the year ended 31 May 1999 have
been filed with the Registrar of Companies.