Interim Results

Ross Group PLC 28 September 2007 Ross Group plc Released 28 September 2007 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Chairman's statement The result for the Group for the six months ended 30 June 2007 was an operating loss of £427,000 before tax (June 2006 loss £541,000). Whilst the result for the half year is disappointing, we envisage that the second half of the year will be profitable along with a good order book carried forward into 2008. Business review The engineering activities operated through GEL Engineering Ltd (GEL) have seen a slower than expected start to 2007 partly due to delays caused by customer changes and partly due to slower than expected order intake. The first half of the year saw activities centre around 3 major projects, including a high fidelity Hercules Loadmaster trainer and 2 export vehicle supply contracts for North Africa (both of which are due to be completed before the end of the financial year). GEL is also currently negotiating a repeat vehicle supply contract for North Africa at a value of around £2.1m. All three of the current contracts will contribute towards a rising output figure in Q3 & Q4 2007, with the Hercules trainer also giving flows of gross margin during 2008 along with the repeat vehicle supply contract. The improved opening order book and significant ongoing prospects, especially with North Africa, is expected to result in greatly improved turnover in 2008 compared to 2007. Sansui Electronics (UK) Ltd (Sansui) has seen a small number of sales in the half year under review. These are from stock of electronic consumer product acquired from an associated company. It is intended for the company to make further use of this relationship and grow the sales by expanding the range of available products and increased market awareness. The Directors continue to pursue the development of other opportunities for the Group with a view to bringing new activities into the business profile and the Directors are confident that a suitable package of potential opportunities will be put together to allow the re-generation of the Group. Business Outlook The output derived from the recent sales orders will not be sufficient to turn the half year loss into a full year profit. However the increase in value of the sales order book and ongoing prospects carried into 2008 should, combined with the activities of Sansui, push the Group back in to profit. This could be enhanced further by the potential significant changes in the structure and operation of the Group. Dividend No ordinary interim dividend is proposed after considering the result for the first half of the year, and the continuing deficiency on retained reserves (2006 - £Nil). A C C Ma Chairman Approved 28 September 2007 GROUP INCOME STATEMENT UNAUDITED 6 Months 6 Months Year Ended Ended Ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Group Revenue Continuing Operations 1,009 592 1,152 Operating (Loss) Continuing Operations (199) (404) (531) (Loss) Before Finance Cost (199) (404) (531) Finance Cost (228) (137) (383) (Loss) Before Taxation (427) (541) (914) Taxation 0 0 0 (Loss) For The Period (427) (541) (914) Earnings Per Share (pence) (0.31) (0.39) (0.67) Adjusted Earnings Per Share (pence) (0.31) (0.39) (0.67) GROUP BALANCE SHEET UNAUDITED 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Non Current Assets 31 21 30 Current Assets Inventories 691 388 11 Trade and Other Receivables 367 404 948 Cash and Cash Equivalents 29 99 12 -------- -------- -------- 1,088 891 971 -------- -------- -------- Total Assets 1,118 912 1.001 -------- -------- -------- Equity and Liabilities Shareholders' Equity Share Capital 11,136 11,136 11,136 Share Premium Account 2,317 2,317 2,317 Other Reserves 15,384 15,387 15,384 Retained Earnings (34,007) (33,203) (33,580) -------- -------- -------- Total Equity (5,170) (4,363) (4,743) Non-Current Liabilities Long Term Borrowings (Group) 0 0 0 Current Liabilities Trade and Other Payables 6,288 5,275 5,744 Bank Overdraft and Loans 0 0 0 -------- -------- -------- 6,288 5,275 5,744 Total Liabilities 6,288 5,275 5,744 -------- -------- -------- Total Equity and Liabilities 1,118 912 1,001 -------- -------- -------- GROUP CASH FLOW STATEMENT UNAUDITED 6 Months 6 Months Year Ended Ended Ended 30 June 2007 30 June 2006 31Dec. 2006 £'000 £'000 £'000 Net Cash (Used in) Operating Activities 25 96 28 Cash Flows From Investing Activities Purchase Of Plant and Machinery (8) (1) (20) --------- --------- --------- Net Cash Used In Investing Activities (8) (1) (20) Cash Flows From Financing Activities Net Increase In Borrowings 0 0 0 Repayment of Capital Element of Finance Lease 0 0 0 --------- --------- --------- Net Cash Flow Used In Financing Activities 0 0 0 --------- --------- --------- Net Increase/(Decrease) In Cash And Cash Equivalents 17 95 8 Cash and Cash Equivalents at beginning of Period 12 4 4 --------- --------- --------- Cash and Cash Equivalents at end of Period 29 99 12 ========= ========= ========= Notes to the Interim Report (1) The interim financial statements have been prepared on the basis of the accounting policies set out in the audited statutory accounts for the year ended 31 December 2006. The financial information contained in these statements for the six months ended 30 June 2007 and 30 June 2006 is unaudited and does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. (2) Reconciliation of Operating Loss to Net Cash Flows From Operating Activities 6 Months 6 Months Year Ended Ended Ended 30 June 2007 30 June 2006 31Dec. 2006 £'000 £'000 £'000 Operating (Loss) On Continuing Activities (199) (404) (761) Depreciation And Amortisation 7 8 17 Decrease/(Increase) In Inventories (680) 256 634 Decrease/(Increase) In Trade And Other Receivables 581 187 (127) (Decrease) In Trade And Other Payables 316 49 265 --------- --------- -------- Cash Generated From Operations 25 96 28 ========= ========= ======== (3) No ordinary interim dividend is proposed for 2007 (2006-£nil). Notes to the Interim Report (Continued) (4) The comparative cash flow for the year ended 31 December 2006 has been extracted from the audited accounts. The cash flows for the six months ended 30 June 2007 and 30 June 2006 are unaudited. (5) Reconciliation of Movements In Equity 6 Months 6 Months Year Ended Ended Ended 30 June 2007 30 June 2006 31 Dec 2006 £'000 £'000 £'000 Share premium Account - Brought Forward 2,317 2,317 2,317 Movement 0 0 0 Carried Forward 2,317 2,317 2,317 Other Reserves - Brought Forward 15,384 15,388 15,388 (Depreciation) 0 (1) (4) Carried Forward 15,384 15,387 15,384 Retained Earnings - Brought Forward (33,580) (32,663) (32,663) (Loss) for Period (427) (541) (914) Profit on Translation of Subsidiary 0 0 3 Transfer from Revaluation Reserve 0 1 4 Carried Forward (34,007) (33,203) (33,580) (6) The Group is supported by short term borrowings from it's larger shareholders by way of formal agreements. At 30 June 2007 total borrowings from Keniworth Capital Ltd were £3,484k and £1,721k from The Grande Group and its subsidiary companies. Keniworth Capital Ltd hold 29% of the issued ordinary share capital and The Grande Holding Ltd has direct or indirect control of 41.4%.. (7) These Statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU. (8) The Interim Report will be sent by mail to all registered shareholders and copies will be available from the Company's head office at Ross Group PLC, Brunel Road, Totton, Hampshire, SO40 3YS. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk Ross Group plc Registered Office 35 Paul Street London EC2A 4UQ Contact - P.Neal, Financial Controller Tel. - 02380 675500 Fax - 02380 675555 Email - p.neal@geleng.com Website - www.ross-group.co.uk This information is provided by RNS The company news service from the London Stock Exchange

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