Interim Results

TG21 Plc
25 September 2007


25 September 2007


                TG21 plc ('TG21', 'the Company' or 'the Group')


             Interim Results for the six months ended 30 June 2007


TG21 today announces its unaudited interim figures for the six months to 30 June
2007. Over the last few years the Company has moved successfully to reposition
itself from being a distributor of in-car entertainment and security systems to
become a vehicle installation service provider with its 75% subsidiary, 21st
Century, supplying public transport CCTV and other monitoring systems.


Financial Highlights


The results are reported under International Financial Reporting Standards
('IFRS') for the first time, with prior year comparatives restated.


  • Turnover reduced to £14.2m (H1 2006: £17.4m), in line with the focus on
    higher margin business;

  • Sales of 21st Century public transport monitoring systems demonstrated
    record growth increasing 70% to £2.7m (H1 2006: £1.5m);

  • EBITDA increased to £0.9m (2006: £0.6m), an increase of 44% despite
    lower distribution and insurance services sales;

  • Basic earnings per share up 119% to 0.35p (H1 2006: 0.16p);

  • Net debt reduced to £3.0m (2006: £3.3m).



Operational Highlights


  • New business wins for 21st Century division with Arriva Scandinavia,
    Go-Ahead Group, Metroline during H1 and Kinch Bus and ACIS post-period end;

  • Innovative new product trials for the public transport market nearing
    completion;

  • As anticipated, the end of in-car hands-free installation business is in
    sight, but the new 'pay as you go' insurance black-box installation business
    is now coming on stream;

  • Exit strategies for legacy businesses being pursued.



Commenting on the results, Peter Ward, Chairman of TG21, said:

'We are pleased with the renewed progress of the business in the first half of
the year. Our best in class public transport CCTV system, sold through 21st
Century, has delivered record profit growth during the period and the Group as a
whole has achieved increased profitability on lower turnover as a result of our
shift in focus toward better quality, higher margin business. We have
repositioned the Group into areas where we see strong opportunities for growth,
namely, public transport on-board monitoring systems and the emerging insurance
'pay as you go' installation market. We have also reduced our net debt in the
period through tight management of costs and we hope to reduce our borrowings
further through exit strategies within our legacy businesses. Current trading
gives us confidence that we are on track to meet analyst expectations for the
year.'


A copy of this interim results announcement is available on the Company's
website: www.tg21plc.com


For Further Information:

TG21 plc                               Wilson Jennings,       020 8710 4000
                                       Finance Director

Hogarth Partnership Limited            Barnaby Fry/           020 7357 9477
                                       Sarah Richardson

Daniel Stewart & Co plc (Nomad)        Graham Webster         020 7776 6550




Notes to editors


Launched in 1993, the Company began as Toad plc and was focused on the
distribution of in-car entertainment systems and vehicle security products.
Under the stewardship of Chairman Peter Ward, former Chairman and CEO of Rolls
Royce Motors and Cunard Line, who joined the board at the end of 2001, TG21's
strategy has been to reposition itself away from its legacy businesses into
markets with better growth potential while leveraging its core strengths -
nationwide field force of vehicle electrical engineers, call centre and
distribution facilities.


In line with this strategy, in 2005 the Company took a controlling stake in 21st
Century Crime Prevention Services Ltd ('21st Century'), the preferred supplier
of on-board CCTV systems for Arriva UK Bus. 21st Century has pioneered the use
of WiFi with on board CCTV systems and was the first company to successfully
launch automatic video downloads and a bus CCTV monitoring system (HeartbeatTM).
In addition to Arriva UK Bus, clients of 21st Century include Arriva
Scandinavia, Go-Ahead Group, Metroline, Kinch Bus and ACIS. In 2006 the Company
bolstered this division, with a strategic investment in another bus CCTV
business, Cyberlyne Communications Limited ('CCL'). This investment was made by
way of a loan of £430,000 to CCL and in parallel with this loan agreement CCL
has granted an option to TG21 to acquire the whole of its share capital.

Recently the Company has completed a number of installations for a pilot 'pay as
you go' motor insurance scheme with a major insurance company and has several
other similar trials in progress. The Company was awarded these opportunities on
the back of the long and valued relationships which it has developed in this
market through its insurance replacement services.


Headquartered in Mitcham, the Group also has leased offices in Blackburn,
Runcorn and Tamworth and employs around 170 staff.



TG21 plc


Chairman's statement


The financial information contained within this interim report is based upon the
Group's unaudited results for the six months to 30 June 2007.


Over the last few years, the Company has moved to successfully reposition itself
from being a distributor of in-car entertainment and security systems to become
a vehicle installation service provider with its 75% subsidiary, 21st Century,
supplying public transport CCTV and other monitoring systems.


The Group currently operates in three divisions:


(i)                  Public transport on-board monitoring systems

(ii)                 Vehicle installation services

(iii)                Distribution


Public transport on-board monitoring systems


Principal activities in this division are the supply of CCTV, black box and
other monitoring systems for use on public transport vehicles.


Sales in the first half of 2007 increased 70% to just under £2.7m (H1 2006:
£1.5m). This first half performance is particularly pleasing when viewed against
sales of £2.9m for the whole of last year.


Our 75% subsidiary, 21st Century, is the preferred supplier of on-board CCTV
systems to Arriva UK Bus. Arriva UK Regions are aiming for a roll out of 1,000
systems in the current year and have given 21st Century an advance order for 835
of these units. In addition to this 21st Century has won new business from
Arriva Scandinavia, Go-Ahead Group and Metroline in the first six months of the
current year and has received orders from Kinch Bus and ACIS since the half year
end.


Trials of our new on-board monitoring products aimed at enhancing revenue and
reducing running costs for bus operators are nearing completion and we look
forward to being in a position to begin marketing these products during 2008.


In July of last year we acquired an option to purchase Cyberlyne Communications
Limited ('CCL') which, like 21st Century, specialises in the supply and
installation of on-board CCTV for public transport vehicles and has around 6,000
installed systems. This Company was loss making at the time we acquired our
option but, following the appointment of a TG21 executive as Managing Director,
the business has achieved break-even in the first half of the current year.
While this is encouraging and the synergies are obvious, we are looking for more
from this investment before we take up the option to acquire the business.


Vehicle installation services


The principal activities within this division are:

(i)  the replacement and installation of stolen in-car
     entertainment and navigation systems for insurance company customers;

(ii) the supply and installation of mobile 'phone hands-free
     kits for corporate fleets;

(iii)the installation of public transport monitoring systems for
     21st Century.


The division now also provides black-box installation services for the embryonic
'pay as you go' motor insurance schemes operated by several insurance companies.
We believe that the potential growth from this business is significant.


Turnover in this division fell by £0.7m (14%) to £4.5m with the decline wholly
attributable to the maturing audio insurance replacement business. Our strategy
within this business unit is to phase out of the low margin installation of
mobile 'phone hands-free kits, in line with our previous guidance, as this is a
market in decline. We are therefore currently in negotiations regarding exit
terms from our contract with Unipart who manage the installation logistics for
Vodafone. As a consequence we only have visibility on the income from hands-free
installations to the end of the current year by which stage we aim to have
completed our exit strategy.


Our focus within this division will now be on the installation of public
transport CCTV and 'pay as you go' systems which we anticipate will compensate
in the short term and yield stronger growth in the medium and long term.


Distribution

Principal activities within Distribution consist of the distribution of in-car
entertainment systems, satnav/communications equipment, speed camera alerts,
audio leads and own brand automotive and motorcycle alarms to the retail trade.


Overall the sales in this division fell by £3.6m (34%) from £10.6m to £7.0m at
the half year. Fortunately, however, the negative impact on our operating profit
was less than £0.1m as the reduction in turnover was largely attributable to a
fall in portable satellite navigation sales which attract only very low margins;
whereas, sales of our more profitable own brand security systems held up well.
In addition, the division benefited from an overhead reduction program
implemented in the second half of last year.


Current trading and outlook


The performance within our Public Transport CCTV division and the prospects for
growth from 21st Century's new products and 'pay as you go' are encouraging. We
are executing our strategy of streamlining the business to focus on those areas
where we anticipate higher levels of growth and increasing our focus on higher
margin work. We have reduced net debt to £3.0m at 30 June 2007 from £3.3m at the
end of 2006 and we hope to reduce Group borrowings further as we pursue exit
strategies from some of our legacy businesses. We are pleased to report that
current trading is in line with market expectations.


Peter Ward

Chairman







Consolidated income statement



                                           Unaudited six   Unaudited  Year ended
                                            months ended  six months          31
                                                      30    30 ended    December
                                               June 2007   June 2006        2006
                                                           Restated*   Restated*
                                                   £'000       £'000       £'000
------------------------                      ----------  ----------  ----------
Turnover                                          14,175      17,403      31,228

Cost of sales                                    (8,283)    (11,105)    (19,310)
------------------------                      ----------  ----------  ----------
Gross profit                                       5,892       6,298      11,918

Administrative expenses                          (5,257)     (5,917)    (11,000)
------------------------                      ----------  ----------  ----------
Group operating profit                               635         381         918

Share of operating profit/(loss) of                    -           -        (60)
associate       
------------------------                      ----------  ----------  ----------
Profit from operations                               635         381         858

Finance costs                                      (136)       (237)       (432)
------------------------                      ----------  ----------  ----------
Profit before tax                                    499         144         426

Taxation                                           (150)           -           1
------------------------                      ----------  ----------  ----------
Profit for the period                                349         144         427

Minority interests                                  (60)        (15)        (27)
------------------------                      ----------  ----------  ----------
Profit attributable to members of
the parent company                                   289         129         400
========================                      ==========  ==========  ==========
Earnings per share - basic                         0.35p       0.16p       0.49p
Earnings per share - diluted                       0.35p       0.16p       0.49p


* As restated for the adoption of International Financial Reporting Standards -
  see note 1




Consolidated balance sheet

                                                   Unaudited        31 December
                                                          30
                                                   June 2007               2006
                                                                      Restated*
                                                       £'000              £'000
------------------------                          ----------         ----------
Non-current assets
Goodwill                                               4,850              4,850
Other intangible assets                                  369                397
Property, plant and equipment                          4,046              4,203
Deferred tax asset                                       256                256
------------------------                          ----------         ----------
                                                       9,521              9,706
Current assets
Inventories                                            3,191              3,114
Trade and other receivables                            6,239              4,562
Cash and cash equivalents                              2,420                745
------------------------                          ----------         ----------
                                                      11,850              8,421
Total assets                                          21,371             18,127

Current liabilities
Trade and other payables                             (5,628)            (4,302)
Tax liabilities                                        (150)                  -
Bank overdrafts and loans                            (3,953)            (2,032)
Derivative financial instruments                           -               (29)
------------------------                          ----------         ----------
                                                     (9,731)            (6,363)
------------------------                          ----------         ----------
Net current assets                                     2,119              2,058
------------------------                          ----------         ----------
Non-current liabilities
Bank loans                                           (1,489)            (1,989)
Deferred tax liabilities                               (626)              (626)
------------------------                          ----------         ----------
                                                     (2,115)            (2,615)

Total liabilities                                   (11,846)            (8,978)
------------------------                          ----------         ----------
Net assets                                             9,525              9,149
========================                          ==========         ==========
Equity
Share capital                                          8,169              8,169
Share premium account                                  3,387              3,387
Special reserve                                        1,206              1,206
Other reserve                                             43                 43
Revaluation reserve                                    1,350              1,350
Profit and loss account                              (4,708)            (5,050)
------------------------                          ----------         ----------
Total equity shareholders' funds                       9,447              9,105
Minority interests                                        78                 44
------------------------                          ----------         ----------
Total equity                                           9,525              9,149
========================                          ==========         ==========


* As restated for the adoption of International Financial Reporting Standards -
  see note 1





Consolidated cash flow statement


                                           Unaudited six   Unaudited  Year ended
                                            months ended  six months          31
                                                      30    30 ended    December
                                               June 2007   June 2006        2006
                                                           Restated*   Restated*
                                                   £'000       £'000       £'000
-------------------------                      ---------   ---------   ---------
Net cash inflow from operating
activities (note 3)                                  528         959       1,621
-------------------------                      ---------   ---------   ---------
Investing activities
Costs of acquisition of associate                      -           -        (25)
Purchases of property, plant and equipment          (74)       (275)       (446)
-------------------------                      ---------   ---------   ---------
Net cash used in investing activities               (74)       (275)       (471)

Financing activities

Repayment of borrowings                            (500)       (500)     (1,500)

Interest paid                                      (174)       (223)       (407)

Dividend paid to minority interest                  (26)           -       (205)
-------------------------                      ---------   ---------   ---------
Net cash used in financing activities              (700)       (723)     (2,112)
-------------------------                      ---------   ---------   ---------
Net decrease in cash and cash equivalents          (246)        (39)       (962)
Cash and cash equivalents
at beginning of period**                           (287)         675         675
-------------------------                      ---------   ---------   ---------
Cash and cash equivalents at end of period**       (533)         636       (287)
=========================                      =========   =========   =========



* As restated for the adoption of International Financial Reporting Standards -
  see note 1

** Net of bank overdrafts



Notes



1. Basis of preparation

As required by the AIM Rules for Companies and European Union Law, the Company
was required to adopt International Financial Reporting Standards ('IFRS') with
effect from 1 January 2007. Consequently, the results for the six months ended
30 June 2007 represent the Group's first interim financial statements prepared
in accordance with its accounting policies under IFRS. The Group's first IFRS
Report and Accounts will be for the year ending 31 December 2007. Previously the
Group reported using UK generally accepted accounting principles ('UK GAAP').
Detailed UK GAAP to IFRS reconciliations of equity for the date of transition (1
January 2006) and 31 December 2006, and reconciliations of profit and recognised
income and expense for the six months ended 30 June 2006 and the year ended 31
December 2006 along with a commentary and the Group's accounting policies under
IFRS were issued on 21 September 2007 and are available on the Group's website
www.tg21plc.com.


The analysis below shows a summary reconciliation of the opening transition date
balance sheet net equity attributable to ordinary shareholders as at 1 January
2006 under UK GAAP to the revised net equity under IFRS:



Reconciliation of net equity attributable to ordinary shareholders as      £'000
at 1 January 2006
Net equity under UK GAAP                                                   9,035
Full recognition of deferred tax asset on decelerated capital                155
allowances
Deferred tax provision on property revaluation                             (626)
Inclusion of financial instruments at their fair value                      (24)
                                                                        --------
Net equity under IFRS                                                      8,540
                                                                        ========



The analysis below shows summary reconciliations of the profit attributable to
equity shareholders under UK GAAP for the year ended 31 December 2006 and for
the six months ended 30 June 2006 to the revised profit under IFRS as reported
in these financial statements:

Reconciliation of profit attributable to equity shareholders for the       £'000
year ended

31 December 2006
Profit under UK GAAP                                                           1
Reverse goodwill amortisation                                                576
Reverse hindsight adjustment                                               (173)
Other IFRS adjustments                                                       (4)
                                                                        --------
Profit under IFRS                                                            400
                                                                        ========

Reconciliation of profit attributable to equity shareholders for the       £'000
six months ended 30 June 2006
Profit under UK GAAP                                                          17
Reverse goodwill amortisation                                                288
Reverse hindsight adjustment                                               (173)
Other IFRS adjustments                                                       (3)
                                                                        --------
Profit under IFRS                                                            129
                                                                        ========


These interim financial statements have been prepared by the Group in accordance
with the disclosure requirements of the AIM Rules and using those reporting
standards it expects to be applicable when the accounts are prepared for the
year ending 31 December 2007. IFRS is currently being applied to AIM companies
for the first time and practice is continuing to evolve. Therefore, at this
preliminary stage, the full financial effect of reporting under IFRS as it will
be applied and reported on in the Group's first full IFRS financial statements
for the year ending 31 December 2007 may be subject to change.


The financial information herein does not amount to full statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The figures for the
year to 31 December 2006 have been extracted from the IFRS restatements issued
on 21 September 2007 and were themselves based on the Annual Report and Accounts
2006 which have been filed with the Registrar of Companies and on which the
auditors gave an unqualified report and did not include a statement under
section 237 of the Companies Act 1985.






2.                   Segmental reporting

By business sector with revenue            Public    Vehicle  Distribution Total
reflecting sales to external            transport   Install-
customers                                    CCTV      ation
                                                    Services
                                            £'000      £'000     £'000     £'000
---------------------                    --------  ---------  --------  --------
Unaudited six months ended 30 June 2007

Revenue                                     2,652      4,529     6,994    14,175

Operating result                              343        368      (76)       635

Unaudited six months ended 30 June 2006
Restated*

Revenue                                     1,530      5,266    10,607    17,403

Operating result                              184        264      (67)       381

Year ended 31 December 2006 Restated*

Revenue                                     2,895      9,890    18,443    31,228

Operating result                              310        582      (34)       858





3. Cash generated from operations



                                           Unaudited six   Unaudited  Year ended
                                            months ended  six months          31
                                                      30    30 ended    December
                                               June 2007   June 2006        2006
                                                           Restated*   Restated*
                                                   £'000       £'000       £'000
------------------------                      ----------   ---------   ---------
Continuing operations
Operating profit                                     635         381         918

Hindsight adjustment                                   -         173         173

Depreciation/amortisation                            259         241         491
                                                                
Share based payments                                  53          80         165

(Increase)/decrease in working capital             (419)          84          66
balances                                      
------------------------                      ----------   ---------   ---------
Cash generated from operations                       528         959       1,813

Tax paid                                               -           -       (192)
------------------------                      ----------   ---------   ---------
Net cash inflow from operating activities            528         959       1,621
=========================                     ==========   =========   =========



* As restated for the adoption of International Financial Reporting Standards -
see note 1







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