Final Results

RNS Number : 0905R

Westminster Group PLC

24 April 2009

 



24th April 2009

Westminster Group Plc: 

2008 Preliminary Announcement 

'Global Security achieved through tailor made local solutions'

Westminster Group Plc ('Westminster', 'the Company' or 'the Group'), the AIM listed supplier of system solutions and products to the security, defence, fire protection and safety markets worldwide, is pleased to announce its preliminary results for the 12 months ended 31 December 2008.

Highlights for the period:

• Revenues up 100% on year end 2007 to                          £5.5m        

• Gross profit margin maintained at                                    35%    

• Contracted order book up 180% on year end 2007 to        £4.2m    

• Maiden profit after tax                                                    £204k        

• Strong Cash position with net cash circa                         £600k    

• Group is debt free    

• Bespoke solutions provided worldwide including West Africa, Southern Sudan, Kuwait, Iraq, Egypt, UK 

• Clients predominantly governments and government agencies, non governmental organisations (NGO's) and blue chip commercial organisations worldwide

• Solutions delivered in Covert & Overt Border Protection, Bomb Jamming, Scanning Equipment, RF & GSM Interception, Explosive Detection and Bomb Blast Protection, Harbour and Dam Protection, Integrated Banking Systems, Rapid Deployment Security Portals, High Profile Residence Security

• Opening of Middle East office in Abu Dhabi and Asian office in Malaysia

Post period end:

• Acquisition of 'Close Protection' and Risk Assessment company Longmoor Group for up to £2.4m

• Development of Westminster International's new web site, believed to be the largest security website of its type in the world

Commenting on the results, Peter Fowler, Chief Executive of Westminster Group, said:

'2008 represents a turning point for the Westminster Group. We have delivered a strong performance during the period, despite the challenging economic climate of today, producing significant growth in both turnover and order book as well delivering maiden profits for the Group. The growing spread, size and frequency of contracts secured clearly demonstrates the extent of our global reach and the breadth of the solutions and products provided to our clients.

'We feel that we have barely scratched the surface of the potential market for our services and every member of the team is committed to ensuring that Westminster delivers on this potential.  

'The network of agents and infrastructure, that we have worked tirelessly to build over the last few years, is very scalable and able to support significant future growth. 

'We are debt free with sufficient cash reserves to continue our growth plans and, in addition to the significant organic growth prospects for the Group, we will continue to look for strategic alliances and acquisition opportunities to build a sustainable business and deliver shareholder value. 

'With resources in place to enable the further development of the profile of the business, clear strategic goals and objectives and continuing development of the operational infrastructure, the Board believes that shareholders can look forward confidently to 2009 and beyond'.

  Annual Report and Accounts

Copies of this preliminary results announcement are available from the Company's website (www.wg-plc.com). Copies of the Annual Report and Accounts will be sent to shareholders by 28th May 2009 for approval at the Annual General Meeting to be held on 19th June 2009.

Enquiries:

Peter Fowler                                     01295 756 300

Chief Executive - Westminster Group Plc

Nicholas Mearing-Smith                     01295 756 300

Finance Director - Westminster Group Plc

Charlie Cunningham / Clive Carver       020 7600 1658

FinnCap

Tom Cooper / Paul Vann                    0117 920 0092

Winningtons Financial            

Notes to Editors:

Westminster Group Plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, close protection and risk assessment services. These can range from product only assignments, such as the supply of specialised scanners, to the design and implementation of an integrated system solution such as a border detection and surveillance system. The majority of its customer base, by value, comprises governments and government agencies, non governmental organisations and blue chip commercial organisations.

Chairman's Statement

Overview

I am pleased to present the preliminary announcement of the results for Westminster Group Plc for the year ended 31 December 2008, our first full year's results since the Admission of the Group to the AIM market in June 2007. These results, with a doubling of revenues and profit for the full year, demonstrate the benefits to the Group of having listed on AIM, as well as justifying the growth strategy that has been pursued over the past years. 

Market

The market for security, defence, fire and safety solutions is extremely large and continues to develop, despite the very challenging economic climate in the world at large. The importance of protecting their people continues to be a high priority for all organisations throughout the world.

Governments and companies currently face many difficult choices on how to allocate resources, which are more limited than they were a year ago, for reasons of which we are all aware. Nevertheless, the vital importance of international trade to the rebuilding of the global economy is even more obvious. For such trade to flourish, the facilities through which it is conducted have to be secure and well-protected.

Our business model is based upon having agents located in all the countries in which we wish to operate, currently standing at over 45. This global presence is difficult to replicate and limits the competition we face from companies similar to ourselves. This structure enables us to respond quickly and effectively to our customers' needs.

We focus on niche solutions for niche markets, particularly in parts of the developing world where a significant and growing number of opportunities exist and where there is relatively limited indigenous competition. To do this effectively, our global network of agents, who provide in-country knowledge, logistics, manpower and service support, is critical and enables us to be a very scalable business with the ability to undertake numerous projects simultaneously with relatively few direct employees. We believe this network to be one of our key strengths. This means that we are not focussed on the highly competitive markets of Western Europe or North America, nor on commodity products where competition is at its most intense.

I reported last year that we were well positioned for growth, which is now being achieved. We are looking to continue organic growth at a rapid rate, by building on the successes we have already achieved. We started 2009 with an order book more than double that at the beginning of 2008, which is most encouraging.

Operations

The Group now has an 'open quote bank' of around £300 million at the year end. We continuously review these open quotes and, if they seem a long way from possible realisation, we remove them from the active list. This 'open quote bank' appears very large relative to our current revenues, however, given the very long term nature of much of the business we are targeting, it is further evidence of the confidence the Board has in the growth prospects for the Group.

During 2008 we have been developing our Dubai office. Whilst it has yet to deliver significant orders in the region, we are now involved in many more substantial quotations in the Middle East, which we believe will be of great benefit in the coming year.

The Group has a reputation in our markets which is significantly greater than the current scale of the business would suggest. By building upon this reputation of delivering exciting and innovative solutions to our customers, we believe that we can maintain the growth and momentum of the Group. A key step forward in our mission to deliver high-quality innovative solutions was the award of ISO9000 accreditation early in 2009.

Longmoor Group

On 25th February 2009 we completed the acquisition of Longmoor Services Limited (trading as Longmoor Group), a relatively new business specialising in close protection and security risk advice. Its training courses for close protection are highly regarded. The management team of Longmoor have extensive security experience from their time in the Royal Military Police and UK Police forces.

I am very pleased to report that The Rt Hon Sir John Wheeler DL, JP, KStJ, Longmoor's chairman, has agreed to continue to serve in that capacity. His experience and contacts in the security field will be invaluable to us. He was Chairman of the National Criminal Intelligence Service and the National Crime Squad from 1997 - 2002. He was commissioned in 2002 by HM Government to produce a report on Airport Security in the wake of the attacks on 11 September 2001 and headed an independent review into Airport Security and Policing for the Government of Australia in 2005. 


 

Board Changes

There have been no board changes since I reported the appointment on 1 February 2008 of The Hon Sir Michael Pakenham KBE CMG, as a Non Executive Director and Chairman of the Audit Committee. His experience and contacts are proving of great value to us.

I am also pleased to report that Nicholas Mearing-Smith, our Group Finance Director, was able to join us full-time from July 2008. His experience as a Chief Executive of international businesses, as well as having been a Finance Director of large companies, is strengthening our ability to grow successfully.

Staff

Our staff continue to be very committed to building our business. Their dedication is crucial to how we are able rapidly to grow our business as well as sustaining the quality standards that are essential in our business. I warmly thank them for all that they have done for us.

Summary

I am delighted to be able to report excellent progress in my first full year as Chairman of Westminster Group.

Our Group is continuing to expand both organically and through acquisition. I believe that we have the skills and management capability to continue this expansion. We are in an industry that continues to have excellent growth prospects and I am confident of our future success.

I would also like to thank you, our shareholders, for your continued support for our Company.

Lt. Col Sir Malcolm Ross GCVO, OBE

Chairman

Chief Executive Officer's Report

Overview

2008 was the year during which our investments to date in building the Group have started to show results. Major contracts in Africa have been supported by a broad spread of contracts in other regions and across a broad range of products and solutions.

Total revenues grew by 100% over the year - 110% in our Advanced Technological division and 74% in our Low Voltage Systems division. I am pleased to report that the Group made a profit before tax for the year of £201,000.

The Group's principal activity remains the design, supply and ongoing support of advanced technology security, defence, fire and safety solutions. Target clients are Governments and related agencies, non-governmental organisations, military establishments, airports, sea ports, banks, power stations and blue chip commercial organisations worldwide. 

The focus of our business is to provide niche products for niche markets around the world. We do so through an expanding network of agents in over 45 countries, primarily in the Middle East, Africa, Asia and South America, which are supported by strategically located regional offices.

Our Market

We operate in a large and growing market that is unlikely to experience serious downturn or contraction, even in the challenging economic climate of today. It is a wide and diverse market with intense competition in certain areas, whilst having under-developed, fragmented competition in others. These latter areas are the primary focus of our international activities.

We have developed a business model which is focused on providing niche products and services to niche markets around the world, with particular focus on emerging and third world economies. Many of these have high security requirements but an under-developed indigenous security industry and therefore look to companies such as Westminster to provide the expertise required. Competition in these areas is often extremely fragmented due to logistical, cultural and political complications. Where we face competition it is often from large multi-national companies which, due to their size and structure, are often slow to react, or local but less technically astute companies or single product suppliers who are only part of any solution. Westminster is therefore well placed to secure business within our chosen market, particularly where we have been instrumental in advising on or designing the solutions required.

Thanks to the investment we have made in recent years in building up our international presence and agency network, and the strategy we have developed to capitalise on the market opportunities that undoubtedly exist in these regions, I believe Westminster is developing a competitive advantage and is therefore well placed to achieve significant growth from the many opportunities presented. This belief is borne out by the high level of enquiry activity we are experiencing for large scale and niche solutions, not only from our target client base, but also from a number of the large multi-national and local indigenous security companies, who are increasingly turning to Westminster for niche area solutions.

Our recent acquisition of the Longmoor Group further extends our market focus and capabilities with the provision of risk management, close protection and training services to high net worth clients, corporations and government bodies worldwide. 

Whilst our primary focus is on delivering major projects, equipment and services internationally, the UK nevertheless remains an important market for us. Here we are focused on niche market segments including the provision of low voltage integrated systems, predominantly in high rise-buildings. Despite the economic climate and downturn in construction activity, our UK based subsidiary RMS Integrated Solutions Ltd (RMS), is experiencing growing demand particularly with the provision of large scale multi-disciplinary integrated systems. For example; fire, security, structured cable, data networks and distributed TV systems. RMS delivered a strong performance in 2008 and is a testament to our focus on niche sector solutions.

Strategy

Our strategy and business model is to concentrate on niche products and services in niche markets around the world, particularly where competition is limited or fragmented and to deliver this through a growing and strategically located agent network in the regions in which we operate. Our target clients are potentially high value repeat order customers with demanding performance criteria.

We believe success in our target markets requires meeting exacting criteria: credibility, financial stability, professionalism and experience, with a demonstrable track record and crucially, 'in-country' knowledge and connections. These, together with the political and logistical issues presented in many countries, present a significant barrier to entry for many companies, yet give an opportunity for those like Westminster who have the right credentials and are properly structured with local support.

We have demonstrated our ability to deliver complex and innovative solutions to an impressive list of clients worldwide and have therefore clearly established a credibility and a demonstrable track record with governments and blue chip organisations, which stand us in good stead to secure and deliver increasing business within this target market. 

We have, in recent years, devoted much of our efforts to establishing a credible worldwide network of agents who can provide in-country logistics support, manpower, intelligence and, critically for our clients, ongoing service support once we have provided the goods or services. Agents are chosen for their connections and knowledge of the country or region and for their ability to act as a conduit between Westminster and its target clients. We now have an extensive agent network in over 45 countries covering every continent with the exception of Antarctica and whilst we will continue to grow this network we believe we now have the structure and global reach to begin delivering meaningful growth. 

We are not a manufacturer and are not therefore tied to any one single product or technology. As a solutions provider / systems integrator, we offer a broad range of products and services from manufacturers all over the world, wherever possible negotiating advantageous or exclusive rights prior to promoting them to our target client base. We believe that one of the key strengths of the Group is our ability to bring together and integrate a wide range of technologies from different sources to produce comprehensive bespoke solutions suited to clients' needs.

Websites

Due to the global nature of our business, an effective web presence is an important aspect of our marketing strategy. We have therefore invested heavily in our various group websites not only in design and functionality but also in search engine optimisation. 

Our multi-lingual Group website (www.wg-plc.com) is fully compliant with rule 26 of the London Stock Exchange and has been designed to provide shareholders access to a wide range of shareholder information, including an email alert system, as well as acting as a portal to our various group companies and services. 

Our international web site (www.wi-ltd.com) is the main portal to our core business. The site, which runs to hundreds of pages and is extensively used as a reference site by clients and industry consultants alike, is, we believe, one of the largest security websites of its type in the world. The site has tens of thousands of hits per month, generating a high level of enquiry activity and is an important marketing tool for international buyers. At the time of the IPO we announced our intention to expand on this and a new multi-lingual version of the site, which has been under construction for most of 2008, was launched in April 2009. The site has been completely restructured and rewritten to ensure that its already high presence is greatly enhanced through the application of modern tools that promote web-effectiveness. With an international client base, the combination of local agents and the ability of the customer to see the breadth and quality of our products and services through the web is a powerful marketing weapon. 

In 2008 we also launched the new RMS website (www.rms-is.com), which covers the extensive range of their services and helps promote our UK services to a far wider audience.

Following our recent acquisition of the Longmoor Group we will be developing the Longmoor website (www.longmoor-group.com) as an integrated part of the Group. A key driver for acquiring Longmoor is our belief that we can greatly enhance their marketing reach through our website and agents. 

All websites are fully interactive and provide an excellent showcase for the Group's extensive range of products and services.

Business review

This year has been significant in two ways; the securing of our largest contract to date in Africa and the continued enhancement in the quality and size of enquiries in which we are involved. 

A review of activities by region is given below:

In Africa 

We were awarded the contract to provide all the security for Juba airport by the Government of Southern Sudan. This contract was for $4.7 million and is likely to be the foundation of a productive long-term relationship with Southern Sudan. The country has been rebuilding its infrastructure after a long period of civil war. The challenges of such a project are therefore quite different from those we encounter in other countries. Southern Sudan is roughly three times the size of the UK, with limited road infrastructure. Airports are therefore a crucial element of the transport infrastructure. Without proper security the country's airports cannot be used by normal airlines. 

Our project involves providing high-security fencing for the entire perimeter of the airport, protecting it with the latest fibre optic detection equipment, as well as providing scanners, road blockers, cameras and all the other components of a complete airport security system. What we are doing will greatly assist Southern Sudan in rebuilding its economy.

We also supplied a bomb jamming system, scanning equipment and a GSM interception system to various Sub Saharan governments. Such systems are a vital part of the security services' armoury in their fight against terrorism.

We continued our work on providing security systems for the branches of a major West African bank. This contract follows the original work that we did for the headquarters of the bank.

We also supplied baggage scanning equipment for an agency of the UN for use in North Africa.

We supplied a diver detection and deterrence sonar system to protect a North African government's harbour. This product was developed by Westminster to enable the authorities to detect intrusion by divers and then to persuade them to leave. In harbours visibility is very low, so interception by the authorities' own divers can be difficult. Our deterrence system allows the authorities to speak directly to the diver and, if they do not respond, to use specialist tones that force the diver to surface. The client was so pleased with the results a further system has now been ordered for deployment during 2009.

In the Middle East

Whilst our strategy is to develop and operate through our agent network, we recognise that we also need a strategic 'regional office' presence in some regions to support our agents and provide additional credibility. The Middle East is the most important region in question and during the year we have invested heavily in establishing our Middle East office operations in Dubai and Abu Dhabi and on developing much stronger relationships in the region. This investment, amounting to some £350,000, all of which has been written off in the P&L during the year, is already proving to be a sound strategy as shown below and will, I believe, lead to valuable business in the coming years. 

The benefits of this approach were recently demonstrated when we announced a £1 million contract for the supply of Westminster's newly developed 'ThruPORT' rapid deployment, high security scanning portals which are to be deployed at airports within Iraq. The contract will be delivered within the next few months with the revenue being fully recognised in 2009.

ThruPORT is a complete self contained scanning solution designed by Westminster and utilising a range of overt and covert scanning systems, built within a specialised ISO shipping container which is rapidly deployable and can be shipped throughout the world. Once it has arrived on site the unit can be set up and fully operational within hours.

All systems are remotely controlled and monitored from a safe distance together with CCTV surveillance and audio communications links. Should a suspect device be detected, the person can be directed to a separate 'safe' blast controlled search area.

Typical deployment would be some distance from the main building, such as an airport terminal, to ensure that potential blast damage is minimised through its containment in a controlled environment. The system can, in addition, be deployed together with Westminster's vehicle scanning solutions providing a secure environment for thorough and effective scanning of both people and baggage entering vulnerable or high security sites, such as airports, borders, embassies, military compounds and government buildings, whilst at the same time eliminating or minimising any collateral blast damage should an incident occur.

Post the period end we were awarded an important and prestigious 2 million Euro contract for the supply and installation of an advanced security net across the river Nile to protect the new Nagaa Hammadi Dam complex in Egypt, which was the culmination of extensive surveying, consultation and detailing work during 2008.  

The security net comprises a steel wire mesh with an integral fibre optic core woven into every strand. Any attempted attack on the net will signal an alarm and indicate the location of attack within the security control room. The net, spanning the entire width of the river Nile, will be fitted with an automatic gate which can be remotely opened and closed from within the control room, allowing authorised ships passage into the lock complex.

The net will rise from the river bed to circa 2 metres above the surface to prevent climb over and will also be fitted with a bespoke strain gauge and stress system in order to provide early warning alarms within the control room of pressure building up from the estimated 60 tons of weed floating down the Nile every day.

In addition, advanced thermal imaging surveillance cameras will be installed to monitor the net and river approaches. Thermal imaging cameras can work under extreme conditions, including zero light levels, allowing for uninterrupted monitoring from within the security control room.

The ability to design and deliver wide and diverse creative solutions of this nature, addressing difficult security issues is, we believe, what distinguishes Westminster in the market.

Amongst the many other contracts in the region we have also supplied and commissioned a specialist intruder detection system to protect the perimeter of a petrochemical plant in Kuwait utilising our FOSS fibre optic security solution which involved the installation of a high security, covert detection system, concealed below an area of 'no-mans-land' between the two external perimeter fences. The system has been designed to detect any movement by intruders trying to gain entry to the facility at any point along the 2km perimeter fence and to pinpoint the exact location of the intrusion to within a few metres. 

The Americas 

In South America, although we have won some valuable smaller orders, the major contracts on which we have been working have yet to materialise. We currently have several major enquiries under discussion and now that our website is available in Spanish, we believe that this market could be more promising for us.

In Asia and Pacific

The Asia and Pacific region is also a focus area for the Group where we anticipate growing demand for our services. We have received a number of significant enquiries for our products and services in the region and we are hopeful of announcing important contract wins later in 2009.

During the year we secured contracts for a range of equipment and services in the region including bomb jamming equipment and explosive detection solutions to Far Eastern countries, mine clearance equipment for an Asian MOD and delivered scanning equipment for an Asian Government department to help counter rising terrorism within that country.

In UK & Europe

We continue to be active in the UK and Europe, expanding our customer base in the region with a broader range of products and services and potential security solutions. 

During the year we installed a large scale integrated security solution for a stately home within the UK. The same customer has now asked us to provide extensive security solutions to protect his London home.

We have continued to provide a wide range of products and services in the region to a wide variety of customers including HM Prison Services, Police Forces and Law Courts throughout the UK.

We are currently negotiating with an Eastern European country to provide a sophisticated security solution to their extensive network of pipelines to protect not only against potential terrorist attack but also against illegal tapping and theft of products which costs them tens of millions USD per annum. Not only have we visited the country in question and held high level discussions but also hosted a client delegation in the UK and demonstrated, very successfully, a solution we have for the problem. We are hopeful of securing a contract for a trial system later in 2009.

Our RMS division was extremely busy during 2008, with its revenues up by 74%. The company provided integrated security and safety solutions to a number of high rise buildings and student accommodation facilities including Woburn Place, WC1, Chelsea Bridge Wharf, Goodmarriott & Hursthouse, Oasis Academy Centro Purbeck Road, Cambridge, Park Street, Camberley as well as many other projects. The company ended the year with a strong order book going into 2009.

Our UK headquarters have been significantly improved with enhanced facilities for visiting clients and a more extensive demonstration suite to cover a greater range of product offerings.

Longmoor Group

On 25 February 2009 we acquired Longmoor Services Limited, which trades as Longmoor Group. The founders of Longmoor are highly experienced experts in the field of close protection. The company offers a range of services in this field, including training and consultancy, as well as close protection for individuals. This is a specialist field that is of considerable interest to many of our customers around the world. Their services complement our existing range of services.

We will be using our website and network of agents to promote Longmoor, which we believe will enable their business to grow much more rapidly within Westminster. We will also have the benefit of the support of the non-executive chairman of Longmoor, The Rt Hon Sir John Wheeler DL, JP, KStJ, whose significant experience and range of contacts within the security field will be invaluable to us.

Management & Staff

We started 2008 with 33 staff which by the year end had grown to 44, including our overseas operatives, reflecting our increased activity levels. 

Current Trading and Outlook

The business has already started to demonstrate the potential that we outlined when floating the Company on AIM in June 2007. We had an order book worth £4.2 million at 31 December 2008, 180% higher than a year ago. We have a substantial, active quote bank and are starting to see an increasing rate at which orders are being won. 

We have demonstrated our ability to deliver complex and innovative solutions and secure a broad range of contracts in our target markets globally. Westminster's reputation in these markets is significantly enhanced with each contract delivered.

We are debt free with sufficient cash reserves to continue our growth plans and, in addition to the significant organic growth prospects for the Group, we will continue to look for strategic alliances and acquisition opportunities to build a sustainable business and deliver shareholder value. 

With resources in place to enable the further development of the profile of the business, clear strategic goals and objectives and continuing development of the operational infrastructure, the Board is confident of a solid performance for 2009 and exciting growth beyond.

P.D. Fowler

Chief Executive Officer

Consolidated income statement

for the year ended 31 December 2008

		Note		Year  ended  31 Dec 2008		Year ended   31 Dec  2007
				£'000		£'000
Revenue				5,477		2,744
Cost of sales				(3,568)		(1,765)
Gross profit				1,909		979
Administrative expenses
General				(1,743)		(1,349)
IPO preparation expenses				-		(66)
Total				(1,743)		(1,415)
Profit/(loss) before financing costs				166		(436)
Financial costs				(4)		(34)
Financial income				39		46
Profit/(loss) before tax				201		(424)
Income tax (charge)/benefit		3		3		71
Profit/(loss) for the year				204		(353)
Profit/(loss) attributable to equity shareholders				204		(353)
Profit/(loss) per share (expressed in pence per share)
Basic		4		1.45		(3.16)
Fully diluted		4		1.43		(3.16)

  Consolidated statement of changes in equity 

for the year ended 31 December 2008

		Ordinary share capital	Share premium account	Share based payment reserve	Revaluation reserve	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2006		713	-	-	253	(388)	578
Loss for the year  from continuing activities		-	-	-	-	(353)	(353)
Total recognised income and expense for the year		-	-	-	-	(353)	(353)
Directors' loans converted into ordinary share capital		191	-	-	-	-	191
Share capital issued for cash		498	2,879	-	-	-	3,377
Expenses in connection with IPO		-	(575)	-	-	-	(575)
Share based payments		-	-	8	-	-	8
Deferred tax adjustments		-	-	3	12	-	15
Total recognised changes in equity for the year		689	2,304	11	12	-	3,016
Balance at 31 December 2007		1,402	2,304	11	265	(741)	3,241
Profit for the year  from continuing activities		-	-	-	-	204	204
Revaluation of non-current assets					(100)		(100)
Deferred tax liability on revaluation of non-current assets					(49)		(49)
Total recognised income and expense for the year		-	-	-	(149)	204	55
Share based payments		-	-	4	-	-	4
Deferred tax adjustments		-	-	(1 )	-	-	(1)
Total recognised changes in equity for the period		-	-	3	-	-	3
Balance at 31 December 2008		1,402	2,304	14	116	(537)	3,299

  Consolidated balance sheet

as at 31 December 2008

				Group		Group
		Note		31 Dec  2008		31 Dec  2007
				£'000		£'000
Assets
Non-current assets
Property, plant and equipment				1,102		1,060
Intangible asset				47		-
Deferred tax assets		5		183		181
Total non-current assets				1,332		1,241
Current assets
Inventories				186		61
Trade and other receivables				2,796		884
Cash and cash equivalents				588		1,588
Total current assets				3,570		2,533
Total assets				4,902		3,774
Shareholders' equity
Issued capital				1,402		1,402
Share premium				2,304		2,304
Share based payment reserve				14		11
Revaluation reserve				116		265
Retained earnings				(537)		(741)
Total equity				3,299		3,241
Liabilities
Non-current liabilities
Trade and other payables				2		-
Deferred tax liabilities		6		101		52
Total non-current liabilities				103		52
Current liabilities
Borrowings				16		14
Trade and other payables				1,484		467
Total current liabilities				1,500		481
Total liabilities				1,603		533
Total equity and liabilities				4,902		3,774

  Consolidated cash flow statement

for the year ended 31 December 2008

				Group		Group
				Year to  31 Dec  2008		Year to  31 Dec  2007
				£'000		£'000
Cash flows from operating activities
Profit/(loss) for the financial period				204		(353)
Income tax (benefit)/liability				(3)		(71)
Finance income				(39)		(46)
Finance costs				4		34
Depreciation and amortisation				82		37
(Increase)/decrease in inventories				(352)		25
(Increase)/decrease in trade and other receivables				(1,796)		(541)
Increase in trade and other payables				1,131		212
Loss on disposal of fixed assets				1		-
Share-based payment				4		8
Interest paid				(4)		(34)
Interest received				39		44
Net cash used from operating activities				(729)		(685)
Cash flows from investing activities
Purchase of property, plant and equipment				(273)		(112)
Net cash used in investing activities				(273)		(112)
Cash flows from financing activities
Gross proceeds from the issue of ordinary share capital				-		3,377
IPO costs paid				-		(575)
Loans from Directors				-		96
Finance lease repayments				(14)		(4)
Net cash generated from financing activities				(14)		2,894
Net change in cash and cash equivalents				(1,016)		2,097
Cash and cash equivalents at start of period				1,588		(509)
Cash and cash equivalents at end of period				572		1,588

  Notes to Financial Statements

1.  Preliminary announcement

This preliminary announcement was approved by the directors on 23 April 2009.

The financial information set out above is unaudited and does not constitute the Company's statutory financial statements for the year ended 31 December 2008 but is derived from those financial statements. The comparative figures are those of the financial statements for the 12 month period ended 31 December 2007. The statutory financial statements for the year ended 31 December 2008 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The financial information contained in this Preliminary Statement does not constitute statutory accounts.

2.  Segment reporting

(i) Business segments

For management purposes, the Group has been organised into two operating divisions:

(a)  Advanced technological;

(b)  Low voltage systems; and

These segments are the basis on which the Group reports its primary segment information. 

Segment information about these business segments is presented below:

Unallocated segmental information are items relating to the Group activity as a holding company or those that cannot be practicably attributed to any other segment.

		Advanced technological	Low voltage systems	Unallocated	Group
		£'000	£'000	£'000	£'000
Year ended 31 December 2007
Supply of goods		2,111	713	-	2,824
Supply of services		11	86	6	103
Intragroup sales		(146)	(37)	-	(183)
Revenue		1,976	762	6	2,744
Segment result		(70)	(3)	(363)	(436)
Net finance costs		(9)	(3)	24	12
Income tax benefit		68	1	2	71
Profit/(loss) for the financial year		(11)	(5)	(337)	(353)
Segment assets		1,404	241	2,129	3,774
Segment liabilities		264	80	189	533
Capital expenditure		51	1	60	112
Depreciation		16	9	12	37

		Advanced technological	Low voltage systems	Unallocated	Group
		£'000	£'000	£'000	£'000
Year ended 31 December 2008
Supply of goods		4,179	1,299	-	5,478
Supply of services		2	73	-	75
Intragroup sales		(33)	(43)	-	(76)
Revenue		4,148	1,329	-	5,477
Segment result		723	(31)	(526)	166
Net finance income		21	-	14	35
Income tax benefit		-	-	3	3
Profit/(loss) for the financial year		744	(31)	(509)	204
Segment assets		3,234	748	1,031	5,013
Segment liabilities		2,519	826	(1,678)	1,667
Capital expenditure		127	12	135	274
Depreciation		31	8	43	82

(ii) Geographical segments

The Group's international business is conducted on a global scale, with agents present in all major continents. The following table provides an analysis of the Group's sales by geographic market, irrespective of the origin of the goods/services:

						Group Year ended		Group Year ended
						31 December		31 December
						2008		2007
						£'000		£'000
United Kingdom						2,140		1,507
Africa						3,048		244
Asia & Australasia						79		847
Europe						99		146
Middle East						98		-
South America						13		-
						5,477		2,744

Some of the Group's assets are located outside the United Kingdom where they are being put to operational use on specific contracts. At 31 December 2008 fixed assets with a net book value of £89k were located in Africa and the Middle East (2007: £11k).

3.  Income tax expense 

						Group Year ended		Group Year ended
						31 December		31 December
						2008		2007
						£'000		£'000
Current year
Corporation tax						-		-
Deferred tax						66		(71)
						66		(71)
Prior year
Corporation tax						-		-
Deferred tax						(69)		-
Deferred tax credit in income statement						(3)		(71)

4.  Earnings per share

Earnings/(loss) per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

The weighted average number of ordinary shares is calculated as follows:

		Group Year ended		Group Year ended
		31 December		31 December
		2008		2007
		£'000		£'000
Issued ordinary shares
Start of period		14,022		7,125
Effect of shares issued during the period		-		4,046
Weighted average basic number of shares for period		14,022		11,171
Weighted average diluted number of shares for period		14,274		11,281

Basic and fully diluted earnings/(loss) per share is calculated as follows:

		Group Year ended		Group Year ended
		31 December		31 December
		2008		2007
		£'000		£'000
Profit/(loss) for the year attributable to equity shareholders of the Company		204		(353)
Weighted average basic number of shares		14,022		11,171
Basic earnings/(loss) per share (pence)		1.45		(3.16)

Diluted earnings/(loss) per share (pence)

1.43

(3.16)

 5.  Deferred tax asset

		Group		Group
		31 December		31 December
		2008		2007
		£'000		£'000
Beginning of the year		181		107
(Charge)/benefit for the current year (income statement)		(66)		71
(Charge)/benefit for the prior year (income statement)		69
(Charge)/benefit for the year (equity)		(1)		3
Deferred tax asset		183		181

The deferred tax asset relates to accumulated tax losses carried forward.

Based on future forecast and orders, the Group is anticipating having sufficient profits to utilise these tax losses.

6.  Deferred tax liabilities

Deferred tax is calculated in full on temporary differences under the liability method. 

The movement on the deferred tax liability account is as shown below:

		Group		Group
		31 December		31 December
		2008		2007
		£'000		£'000
Beginning of the year		52		64
Movement for the year/period		49		(12)
End of the period/year		101		52

The deferred tax liability wholly relates to the revalued property. In previous years the provision was based upon treating the property as if it was to be sold in due course, as this reflected the valuation basis of the property. It has been decided that the liability should be calculated on the basis that the property will continue to be used for the purposes of the business. This has required an increase in the deferred tax provision, even though the valuation has been reduced.

 

END

 

 

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