TIDMNWT
RNS Number : 8917C
Newmark Security PLC
03 October 2018
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
3 October 2018
Newmark Security plc
("Newmark" or the "Group")
Preliminary Results for the year ended 30 April 2018
Newmark Security plc (AIM:NWT), a leading provider of electronic
and physical security systems, today announces its preliminary
results for the year ended 30 April 2018.
Financial highlights:
-- Turnover from continuing business was GBP16.0 million (2017: GBP16.0 million)
-- Gross margin from continuing operations before exceptional item was 36.1% (2017: 36.3%)
-- Cost of sales within the consolidated income statement
includes an exceptional provision for impairment of development
costs of GBP698k (2017: GBP1,341k)
-- Gross margin from continuing operations after exceptional
items increased to 31.7% overall (2017: 27.9%)
-- Loss from continuing operations before exceptional items was GBP1,039k. (2017: GBP1,378k)
-- In addition to the impairment of development costs there were
GBP140k (2017: GBP285k) of exceptional redundancy costs included
within administrative expenses. For the year ended 30 April 2018
there was also GBP2,229k impairment provision of goodwill
-- Loss from continuing operations after exceptional items was GBP1,877k (2017: GBP5,233k)
-- Loss per share of 0.40 pence (2017: 1.11 pence)
-- Cash outflow from operating activities was GBP0.20 million (2017: GBP1.01 million)
-- Net cash reduced to GBP1.07million (2017: GBP1.37 million)
Operational highlights
-- Sateon Advance had delivered a large volume of new systems
and has been the most successful variant of Sateon
-- Revenues from Human Capital Management (HCM) increased by 25.1%
-- New supply agreements signed with Workforce Software (HCM
solution provider in UK and US) and Ultimate Software (US HCM
solution provider) will benefit future years revenue
-- Decision taken to integrate additional platform using a
third-party Integrated Security Management system with our Advance
hardware
-- Within the asset protection division, sales of cash handling
equipment fell by 42% but all other product groups increased by
12%, and service revenue increased by 4.7%
Commenting on the results, Maurice Dwek, Chairman of Newmark,
said "The Janus upgrade programme has continued to contribute to
access control revenues as end users, faced with platform
obsolescence through technology advances, migrate to Sateon.
Development work on the Sateon Advance platform has now been
completed as the current product is considered to be fully mature
and technically robust. A new and additional Access Control
platform is currently being developed in collaboration with a
third-party supplier of Integrated Security Management systems
(ISM) to take advantage of the growing desire for fully integrated
security and building management systems. It is anticipated that
this new offering will be brought to market in the second half of
the current year and will sit alongside Sateon as two distinct
platforms. In Human Capital Management (formerly called Workforce
Management Systems), the GT-10 terminal continues to provide major
opportunities with new and existing partners. Supply agreements
have been executed with two major software partners and a Linux
port of the Android based terminal is currently being developed.
The IT31 is to undergo a mid-life refresh which is anticipated to
create new revenue opportunities and increase contribution with
existing clients".
"During the year, new products were developed in the asset
protection division with the focus on providing counter terror
security equipment for staff and customer protection".
"A programme of product re-certification to the latest UK
security standards which started in the previous financial year was
continued and, when completed, will assist in moving the business
forward as our focus is moved to the increased level of crime and
threat of terrorism within the UK. The final element of the
certification process will be completed in the first half of the
current year".
"The Board expects revenue growth in the electronic division
following the completion of the two major supply agreements
referred to above, and recovery of sales in the asset protection
division boosting both the current and future years. The
development of the new access control platform being developed with
the supplier of ISM systems should also be completed in the year.
The Board expects improved financial results for the current
year.
M. Dwek
Chairman
3 October 2018
Annual Report and Notice of AGM
The Company's Annual Report and Accounts is being posted to
shareholders next week and will be made available on the Company's
website www.newmarksecurity.com. It will contain notice of the
annual General Meeting of the Company to be held at the Quebec
Suite, Radisson Blu Portman, 22 Portman Square, London W1H 7BG
11.00 a.m. on 30 October 2018.
For further information:
Newmark Security PLC
Marie-Claire Dwek, Chief Executive Tel: +44 (0) 20 7355
Officer 0070
Brian Beecraft, Finance Director www.newmarksecurity.com
Allenby Capital Limited (Nomad & Broker)
Jeremy Porter/ Liz Kirchner/ James Tel: +44 (0) 20 3328
Reeve/ Graham Bell 5656
Overview
Business model
The Group is principally engaged in the design, manufacture and
supply of products and services for the security of assets and
personnel. The Group manages its operations through two divisions:
Grosvenor Technology, its electronic division and Safetell, its
asset protection division.
The electronic division comprises two main product streams,
being the design and distribution of:
-- access control (AC) systems (hardware and software); and
-- human capital management (HCM) hardware (formerly called
workforce management systems), for time-and-attendance, shop-floor
data collection, and access control systems.
Both activities have their own design teams creating products to
meet the demands of their own markets and specific needs of
customers. That said, the business increasingly sees synergies
between the two lines of business as end user needs are driving
convergence of both access control and human capital management. In
addition, centralised sales and marketing, purchasing, dispatch and
finance functions supplement the requirements of both activities.
Manufacturing is mainly performed by external contractors using our
intellectual property.
The majority of our access control customers are security
installation companies dealing directly with end users. For HCM
equipment, the majority of our customers are value-added resellers
(VARs) dealing with either installation companies or end users. The
division also has the capability to work on special projects
directly with end users, assisting with the design and
specification of systems to meet specific customer requirements.
These tend to be larger contracts where the end user needs to
ensure that their specifications are fully met.
The asset protection division comprises two main product
streams:
-- Design and installation of fixed and reactive security
screens, reception counters, cash management systems and associated
physical security equipment; and
-- Service and maintenance of the above equipment, as well as
CCTV systems, automatic door operators, locks and other 3rd party
equipment utilizing a national network of security vetted
installers.
The certified security products provide protection for staff and
customers against the four main forms of security risk namely
physical attacks and abuse, bomb and blasts from explosive devices,
protection against gun attacks and fire resistant protection
incorporated within the products mentioned previously.
Each security risk requires unique products which are not always
interchangeable and Safetell works with customers, security
consultants and certification bodies to design, develop and test
products to ensure their suitability and provide effective
protection.
Safetell's work is mainly project based and each project has its
own customer specific needs and requires close co-operation with
architects and security consultants to develop cost effective
security solutions.
Safetell has forged key relationships with suppliers of other
security products that complement its own range of products to
provide a complete security solution to customers and will continue
to seek and develop suitable security products to provide a single
source supply of security products on projects.
Customers of the asset protection division range from leading
blue-chip organisations to single sites, including banks and
building societies, post offices, police forces, railway companies,
local authorities and government departments, petrol outlets,
hospitals, convenience stores, retailers and supermarket chains.
The market varies across the product range.
Key performance indicators
2017/18 2016/17
GBP'000 GBP'000
Revenue from continuing operations 16,052 16,036
Gross profit before exceptional items
from continuing operations 5,792 5,815
Gross profit from continuing operations 5,094 4,474
Gross profit percentage before exceptional
items from continuing operations 36.1% 36.3%
Gross profit percentage from continuing
operations 31.7% 27.9%
Financial review
Revenue in the year was again GBP16.0m
analysed as follows:
2017/18 2016/17 Increase/
(decrease)
GBP'000 GBP'000
Electronic division
Access control 3,842 3,801 1.1%
Human capital management 4,118 3,291 25.1%
------- ------- -----------
Total electronic division 7,960 7,092 12.2%
------- ------- -----------
Asset protection division
Products 4,874 5,870 (17.0%)
Service 3,218 3,074 4.7%
------- ------- -----------
Total asset protection division 8,092 8,944 (9.5%)
------- ------- -----------
TOTAL 16,052 16,036 0.1%
======= ======= ===========
A detailed review of the activities, results and future
developments is set out in the divisional sections below.
Electronic division (Grosvenor Technology)
Overview
Overall, this was a 'turn-round' year for the electronic
division. The investment made in product development in recent
years has started to be repaid with double digit revenue growth.
This increase in revenue, combined with a reduction in overheads in
both the UK and US operations, has delivered a significant
reduction in Grosvenor's losses.
Several potential high-volume supply agreements have been
executed in HCM, and although these did not play any major part in
the past year's results, they are expected to contribute
significantly towards the overall revenue ambitions for the current
year.
Sateon Advance has continued the encouraging start it displayed
since its launch in the second half of the previous financial year
and several more major opportunities for both Sateon Advance as a
complete solution and the OEM variants of the Advance Access
Control hardware are currently being investigated. Negotiations are
currently underway with one of the UK's largest security systems
integrators and several US based global Access Control providers.
Sateon Advance has delivered a large volume of new systems and
displayed patterns of repeat business from customers throughout the
UK, making it the most successful Sateon variant to date due to its
innovative modular approach and simplified installation.
The research into opportunities for 'as a service' (aaS)
revenues in new markets, facilitated through the provision of the
GT-10 Android terminal, has shown that there is likely to be a
higher return on investment in our existing markets by leveraging
our core competences. Both HCM (particularly in the US) and to a
lesser degree Access Control sectors, demonstrate a trend towards
the downstream provision of cloud first and even cloud only
services. Therefore, a decision has been taken to focus our aaS
development on existing products, services and sectors.
Access Control
As reported previously the decision had been made to retire the
legacy Janus range with no new systems installed or operating
licences issued and consequently revenue declined by 31.7% to
GBP1,254K (2017: GBP1,837K). Market pricing for hardware for site
extensions or replacements has been increased to reflect the higher
costs of manufacturing and supporting legacy products in lower
volumes and, therefore, it is anticipated that this product family
will yield a greater gross margin contribution. Existing Janus
systems will now require either an extended support agreement or
upgrading to Sateon to ensure continuity of service to end users.
The Janus to Sateon upgrade programme continues to help drive
revenues for the latter.
Sateon has continued its robust growth trajectory with an
increase of 31.8% to GBP2,588k (2017: GBP1,964k). Sateon Advance
has proven to be the most successful variant of the product to date
and continues to grow in terms of both revenues and number of
systems installed. During the year a review was conducted on Sateon
to test its feature set and technical stability versus market
expectations and it was concluded that the product was mature and
that all necessary development was complete. A final release
including critical bug fixes was released in the first half of the
current year.
Development work has continued to create non-proprietary
variants of the Advance hardware range to allow it to be integrated
with third party vendors' software. By adopting an 'open protocol'
approach, incremental revenue is being generated as new channels
are developed. As reported previously, a major European Workforce
Management software provider has selected Advance as an OEM product
to integrate with their proprietary access control solution. This
partner's spend increased 80% to GBP710k in the year across the
company. Negotiations are now underway with major global third
party access control providers to supply this line as OEM products
which would integrate with their various software platforms.
Grosvenor's collaboration with US based UniKey Technologies to
launch a "frictionless door experience", was put on hold as
UniKey's product development and delivery was slower than expected
and failed to satisfy our fiscal tests. The market for mobile
and/or biometric credentials is dynamic and rapid, driven in part
by consumer adoption of biometric technologies on smart devices.
Grosvenor is taking a non-proprietary and open protocol stance and
is able to integrate any third party 'point of entry' reader or
device into either its Access Control or HCM range of products.
Human Capital Management (HCM)
Across the UK and US entities, revenues from HCM products and
services increased by 25.1%. Research has shown that demands for
products and services are split by region. In EMEA, HCM providers
have a requirement for an Access Control offering as they seek
additional revenues through diversification. In the US however, it
is recognised that the HCM sector generally and its sub sections,
are large enough for software vendors operating in those markets to
meet their revenue ambitions by crossing into immediately adjacent
spaces, rather than follow the broader diversification seen in
their European counterparts.
This means that product development needs to have a clear
regionalised strategy, as has been the case during this period. In
addition to the Advance OEM Access Control hardware development
(detailed in the previous section) that plays to the trends in
Europe, development has focused on the provision of added services
on a 'as a service' basis, increasingly cloud-based, that aid
software vendors reap additional value from their hardware,
post-deployment.
In the UK based operation, HCM revenues grew 18.4% to GBP2,926k
(2017: GBP2,472k). The Linux based IT series sales increased 32.7%
with organic growth being shown across the majority of clients. A
new supply agreement with Workforce Software, a HCM solution
provider based in the UK and US, helped bolster these figures
although revenues from this client will not reach full potential
until future years.
The GT-10 continues to provide new opportunities in both the UK
and US businesses. During the year under review a contract was
signed to provide a variant of the GT-10 to a major European HCM
partner and during 2018/19 this will become their flagship product.
In the US, a supply agreement was reached with Ultimate Software, a
leading US based provider of HCM solutions, to supply an OEM
variant of the GT-10. The product will be known as the UltiPro and
will host Ultimate Software's flagship SaaS solution that allows
organizations to access greater people management functionality in
the cloud. Revenues came on stream in June 2018.
The US based operation also experienced impressive organic
growth, with increases in spend being seen in almost all of the
client base so that revenues increased 45.5% to GBP1,192k (2017:
GBP819k). As detailed in previous reports, the US HCM market is
seen as holding significant potential for Grosvenor and it is
pleasing that the increased investment in this region is yielding
results.
Asset Protection Division (Safetell)
Revenue in the year decreased by 9.5% to GBP8,092k (2017:
GBP8,944k) a decrease of 9.5% analysed as follows:
Increase/
2017/18 2016/17 (decrease)
GBP'000 GBP'000
Products 4,874 5,870 (17.0%)
Service 3,218 3,074 4.7%
------- ------- ----------
Total 8,092 8,944 (9.5%)
======= ======= ==========
Products revenue decreased partly due to the decreased
contribution from time delayed cash handling equipment sales to the
Post Office so that cash handling equipment sales decreased by 42%.
Overall, revenue in all other product groups increased by 12%. The
revenue in the year was characterised by numerous small projects
with the absence of larger longer term high value projects and,
like the Service Division, continued to be affected by branch
closures in the banking sector. Staff reduction and other measures
in the second half of the year resulted in cost savings.
During the year, new products were developed and certified to UK
security standards with the focus on providing counter terror
security equipment for staff and customer protection. The
distribution agreement entered into with Gunnebo UK in the previous
financial year to distribute their Security Doors and Partitioning
range within the UK increased exposure into new markets but sales
have been disappointing to date. This complements the existing
Safetell product range and the increased product offering enables
entry into new market sectors. A three-year fixed price supply
contract with a leading financial institution ended in October but
margins on this contract had been reduced due to imported component
price increases directly related to the pound/Euro exchange
rate.
A programme of product re-certification to the latest UK
security standards which started in the previous financial year was
continued which, when completed, will assist in moving the business
forward as our focus is moved to the increased level of crime and
threat of terrorism within the UK. The final element of the
certification process will be completed in the second half of the
current year.
Service revenue was 4.7% higher than the previous year. Safetell
continues to upgrade old legacy systems as customers continue to
invest in sites without the need to completely replace rising
screens. Supporting new products with its multi skilled workforce
continues unaltered. TC105 control system upgrades will continue as
customers decide to reinvest in the protection that rising screens
provide.
Taxation
The tax credit for the year reflects the operating loss for the
year and the losses have been carried forward to be used against
future profits.
Statement of financial position and cash flow
Development costs continued to be capitalised in accordance with
the accounting policy and the development costs within intangible
assets on the balance sheet were GBP896k lower than the previous
year with capitalised expenditure of GBP332k more than offset by
amortization GBP530k and an impairment provision GBP698k.
Trade receivables were GBP438k lower than the previous year
reflecting both the timing of that revenue and the timing of
payments by customers across the two divisions.
Overall net assets decreased from GBP8,800k to GBP6,924k.
Cash inflows from operating activities for the year was GBP252k
(2017: outflow GBP1,008k), reflecting the improved trading result
for the year and the movement in receivables referred to above.
Overall there was a decrease in cash and cash equivalents of
GBP297k (2017: GBP2,938k).
Basic loss per share from continuing operations are shown in the
income statement as 0.38 pence (2017: 1.08 pence).
Divisional Strategy
Electronic division
Grosvenor is focussed on delivering growth through the
development of new products providing customers with peace of mind
whilst also improving business efficiency and flexibility through
innovative technology.
Grosvenor's products are at the cutting edge of access control
and human capital management and the business is well positioned to
capitalise on the crossover between these two aspects of electronic
security. Continued investment ensures that the company stays at
the forefront of this marketplace.
Long term strategies are in place to increase recurring revenues
through the provision of more cloud-based services on an ongoing
basis, particularly in the HCM sector. This is envisaged to deliver
greater shareholder value over time as both quantity and quality of
earnings increase through this strategy.
In the UK, growth in the access control market is predicted to
be low double-digit in the short to medium term with the most
significant area of growth in Integrated Systems.
In the HCM markets, (predominately driven by the US based
vendors) growth is driven not only by regulation and compliance but
primarily by the technological drivers of high speed internet
availability and the subsequent mass shift to Cloud based
computing. This shift means that the traditionally challenging to
serve and highly fragmented Small and Medium-Sized Business market
is well within the reach of HCM providers leveraging a SaaS based
business model.
Grosvenor is well positioned with a roadmap which builds on our
core competencies of technical excellence, agility and customisable
products with focus on HCM markets in the US and EMEA and access
control generally, leveraging market growth and emerging trends and
opportunities driven by both legislative and technological
change.
Access Control
Software Platforms- Janus C4 - A next generation Access Control
and Integrated Security Management (ISM) System.
The change in the market, with a move away from stand-alone
access control solutions to integrated Access Control, Intruder,
CCTV and Fire and Building Management into a single platform,
represents the greatest area of growth in the electronic security
market as end users see an open protocol approach, offering
convenience and improved security provision. Having completed the
development of the Sateon access control product, Grosvenor has
taken the decision to bring an additional platform to market to sit
alongside the Sateon offering and to take advantage of the broader
ISM opportunity. Slovakian based Gamanet has been identified as
having developed a world class ISM solution in its C4 product and
the decision was reached to integrate an OEM variant with
Grosvenor's Advance hardware to offer synergy between a full ISM
solution partnered with world-class, modular hardware. Grosvenor
will focus on the UK and EMEA markets with a modern and competitive
solution that spans from a simple 2 door Access Control to full
blown multisite ISM solutions with thousands of access points and
multiple integrations. The decision to utilise a third-party
developer with an existing product reduces project risk and
decreases time to market. The company expects to launch the new
solution towards the end of 2018/19 in parallel with the existing
Sateon platform.
Hardware Advance Platform
The Advance hardware platform has been well received in the UK
offering a unique blend of simplicity, ease of installation,
flexibility in design of the overall solution and powerful Access
Control functionality. The intelligent and standards-based
architecture of the Advance platform offers a wealth of opportunity
for further developing the hardware platform to meet evolving
market needs. Each Advance controller is a powerful computer now
able to connect securely over IP to both "On Premises" and "Cloud
SaaS" based "head ends" thus future proofing the platform as
businesses move from traditional "On Premises" to "Cloud SaaS"
based provision. Grosvenor are already providing "Cloud" based
variants of the Advance Platform to a major HCM and Access Control
service provider based on the mainland of Europe and is in
negotiations with several other potential customers.
The Company recognizes that future Access Control revenues will
be seen through sales of the current variant of the Sateon platform
(Sateon Advance), the Janus C4 platform that will be introduced in
the current year, and the Advance range of hardware. The company
has therefore taken the decision following an impairment review to
write off GBP698k, which relates to sums capitalized for previous,
older versions of the Sateon platform which have now been
superseded.
HCM
Software Platforms
Grosvenor developed the Custom Exchange and Assist IT software
suite over seven years ago, at the time designed to be an
On-Premise deployment. These applications are hugely powerful
solutions, key differentiators for Grosvenor encompassing advanced
data management/transformation and terminal provisioning, remote
diagnostics and service capability - designed to significantly
reduce operating costs and improve ROI for partners.
Over 2018 and 2019, Grosvenor's roadmap propels those On-Premise
solutions into even more powerful Cloud SaaS based offerings. The
first two major clients to take advantage of this model are the
European HCM partner mentioned previously and a blue chip UK high
street retailer and both will be launched in 2018/19.
Over 18/19 and beyond Grosvenor will continue to invest and
develop HCM software platforms with a Cloud and API first approach
positioning the company as an accessible SaaS solution provider.
This shift from "On Prem" to "Cloud SaaS" also affords the
opportunity to move to an attractive business model where Software,
Services and Terminals are 'bundled' as a Clock as a Service
("ClaaS") generating further recurring revenues.
Hardware Platforms
Grosvenor continues to invest in developing its range of
terminals and this remains a key pillar of our growth strategy. The
GT10 Android terminal sales will grow during the current year and
the company will further develop this top end solution to include
connection to the SaaS based remote management platform and rapid
on terminal application development, offering partners a
standardised Android alternative to the IT range. During the
current financial year, the GT10 platform is also being ported to a
Linux based offering, the IT71, thus offering existing "Linux only"
partners access to the premium terminal connected to Grosvenor's
SaaS and rapid application development software solutions. This
dual platform approach offers maximum flexibility to a market which
has traditionally utilised embedded Linux solutions but is now
moving to Android as the benefits of an improved User Experience
and Application portability/flexibility become ever more
apparent.
Biometrics remains an area of key focus. During the year
Grosvenor successfully integrated the world class Innovatrics
Biometric API onto the GT10 and will include the integration on the
IT71 terminal in late 2018. Suprema's SF6020 sensor has been added
to the range of biometric options on the IT range significantly
improving the competitiveness of the IT31 and IT51 terminals and
allowing those products to be utilised on larger estates.
As cyber security concerns continue to increase, it is driving
an arms race in terms of encryption needs and as such existing
hardware is constantly under review to ensure processor and memory
can support current and future cyber security overhead.
Asset protection division
Safetell is one of the industry leaders in a number of
high-demand physical security products and is well placed to
service this market. The market for physical security products and
services is fast growing with the ever- increasing threat of
terrorism and crime placing security high on the priority list for
corporate clients.
Safetell has developed a strategic business model based on a
continuous improvement of skills and processes and apply all
requirements of our quality and environmental policies. The
company's policy is to maintain the highest standards of product
quality, meeting statutory and regulatory requirements by the
control of its sales, purchasing, production, delivery,
installation and service activities.
Safetell has developed a risk-based strategy which has been
deployed, and along with identifying the owners of the risks, the
company is able to quantify the levels of risk and the potential
outcomes, if those risks were to materialise. All identified risks
are monitored and managed by the company directors, senior
management and process owners.
The strategy for the company is to broaden the customer base and
product range and focus on security solutions encompassing all
product groups. Safetell already has a well-established blue-chip
customer list, particularly in the banking and finance sector, but
wants to extend to other sectors whilst at the same time offering a
greater range of products within existing sectors. Specifically,
Safetell will seek to address supermarket and retail chains
particularly with ATM security related products, blast and
ballistic proof doors and walls, and fire-resistant doors. With the
increase in terrorism in the UK, products have been developed and
certified with the government CPNI blast resistant programme and
existing products have been recertified to the latest BSEN 1522/23
(1999) ballistic standards. A programme of product certification
with The Loss Prevention Certification Board (LPCB) will be
completed in the second half of the current year, ensuring these
products comply with the latest UK manual attack resistant
standards. Due to the high cost of certification and testing,
Safetell has entered into strategic partnerships with manufacturers
of various additional security products manufactured within the UK
and in Europe. Although these products are applicable to counter
terrorism applications, the products are marketed to existing
customers and markets who wish to strengthen their security and
provide increased safety to staff.
M DWEK
Chairman
3 October 2018
CONSOLIDATED INCOME STATEMENT for the year
ended 30 April 2018
2018 2017
Note GBP'000 GBP'000
Revenue 16,052 16,036
Cost of sales (2018: including GBP698,000
exceptional development cost impairment (2017:
GBP1,341,000) (10,958) (11,562)
-------- --------
Gross profit 5,094 4,474
Administrative expenses (2018: including
GBP140,000 exceptional redundancy costs)
(2017: including GBP285,000 exceptional redundancy
cost, GBP2,229,000 exceptional impairment
goodwill) (6,971) (9,707)
-------- --------
Loss from operations before exceptional items (1,039) (1,378)
Exceptional impairment provision of goodwill - (2,229)
Exceptional impairment provision of development
costs (698) (1,341)
Exceptional redundancy cost (140) (285)
----------------------------------------------------- ---- -------- --------
Loss from operations (1,877) (5,233)
Interest received - 5
Finance costs (50) (13)
-------- --------
Loss before tax (1,927) (5,241)
Tax credit 2 172 141
-------- --------
Loss for the year from continuing operations (1,755) (5,100)
Loss of discontinued operation net of tax (113) (136)
-------- --------
Loss for the year (1,868) (5,236)
======== ========
Attributable to:
- Equity holders of the parent (1,868) (5,236)
======== ========
Loss per share
- Basic (pence) (0.40p) (1.11p)
======== ========
- Diluted (pence) (0.40p) (1.11p)
======== ========
Loss per share from continuing operations
- Basic (pence) (0.38p) (1.08p)
======== ========
- Diluted (pence) (0.38p) (1.08p)
======== ========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended
30 April 2018
2018 2017
GBP'000 GBP'000
Loss for the year (1,868) (5,236)
Items that will or may be reclassified to profit
or loss:
Foreign exchange gains on retranslation of overseas
operations (8) 48
-------------- ----------------
Total comprehensive income for the year (1,876) (5,188)
============== ================
Attributable to:
- Equity holders of the parent (1,876) (5,188)
============== ================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION at
30 April 2018
2018 2017
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 378 656
Intangible assets 4,734 5,598
-------------- ----------------
Total non-current assets 5,112 6,254
-------------- ----------------
Current assets
Inventories 1,608 1,646
Trade and other receivables 2,834 3,286
Cash and cash equivalents 1,069 1,370
-------------- ----------------
Total current assets 5,511 6,302
-------------- ----------------
Total assets 10,623 12,556
LIABILITIES
Current liabilities
Trade and other payables 3,051 3,282
Other short term borrowings 491 79
Provisions - 100
-------------- ----------------
Total current liabilities 3,542 3,461
-------------- ----------------
Non-current liabilities
Long term borrowings 53 98
Provisions 100 100
Deferred tax 4 97
-------------- ----------------
Total non-current liabilities 157 295
-------------- ----------------
Total liabilities 3,699 3,756
-------------- ----------------
TOTAL NET ASSETS 6,924 8,800
============== ================
Capital and reserves attributed to equity holders
of the company
Share capital 4,687 4,687
Share premium reserve 553 553
Merger reserve 801 801
Foreign exchange difference reserve (133) (125)
Retained earnings 976 2,844
-------------- ----------------
6,884 8,760
Non-controlling interest 40 40
-------------- ----------------
TOTAL EQUITY 6,924 8,800
============== ================
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended
30 April 2018
2018 2018 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Net loss after tax (1,868) (5,236)
Adjustments for:
Depreciation, amortisation and
impairment 1,582 4,848
Net interest expense 50 8
Gain on sale of property, plant
and equipment (21) (33)
Income tax credit (80) (230)
------- --------------
Operating cash flow before changes
in working capital (337) (643)
Decrease in trade and other receivables 453 458
Decrease/(increase) in inventories 38 (232)
(Decrease) in trade and other
payables (349) (586)
------- --------------
Cash generated from operations (195) (1,003)
Income taxes paid - (5)
Cash flows from operating activities (195) (1,008)
Cash flow from investing activities
Payments for property, plant &
equipment (1,576) (211)
Sale of property, plant & equipment 1,525 48
Capitalised intangible assets (368) (1,182)
(419) (1,345)
Cash flow from financing activities
Proceeds from bank loan 840 -
Repayment of bank loan (840) -
Repayment of finance lease creditors (80) (108)
Proceeds from invoice discounting 447 -
Dividends paid - (469)
Net interest paid (50) (8)
------- --------------
317 (585)
----------------- ----------------
Net decrease in cash and cash
equivalents (297) (2,938)
Cash and cash equivalents at
beginning of year 1,370 4,299
Exchange gain on cash and cash
equivalents (4) 9
----------------- ----------------
Cash and cash equivalents at
end of year 1,069 1,370
================= ================
2018 2017
GBP'000 GBP'000
Cash and cash equivalents for
purposes of the statement of cash
flow comprises:
Cash available on demand 1,069 1,370
============== ================
Significant non-cash transactions
are as follows:
Financing activities
Assets acquired under finance
leases - 125
============== ================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Foreign Non-Retained Earnings Total
capital premium reserve exchange controlling interest equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
1 May 2016 4,687 553 801 (173) 8,549 40 14,457
Loss for the year - - - - (5,236) - (5,236)
Other comprehensive
income - - - 48 - - 48
------------------------------------------- ------- ------- -------- -------------- ---------------- -------
Total comprehensive
loss for the year - - - 48 (5,236) - (5,188)
Contributions by and
distributions to owners
Dividends - - - - (469) - (469)
------------------------------------------- ------- ------- -------- -------------- ---------------- -------
Total contribution
by and distributions
to owners - - - - (469) - (469)
------------------------------------------- ------- ------- -------- -------------- ---------------- -------
30 April 2017 4,687 553 801 (125) 2,844 40 8,800
=========================================== ======= ======= ======== ============== ================ =======
1 May 2017 4,687 553 801 (125) 2,844 40 8,800
Loss for the year - - - - (1,868) - (1,868)
Other comprehensive
income - - - (8) - - (8)
------------------------------------------- ------- ------- -------- -------------- ---------------- -------
Total comprehensive
loss for the year - - - (8) (1,868) - (1,876)
Contributions by and
distributions to owners
Dividends - - - - - - -
------------------------------------------- ------- ------- -------- -------------- ---------------- -------
Total contribution - - - - - - -
by and distributions
to owners
30 April 2018 4,687 553 801 (133) 976 40 6,924
=========================================== ======= ======= ======== ============== ================ =======
NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 April
2018
1. Basis of preparation
The financial information set out above for the years ended 30
April 2018 and 2017 does not constitute the Group's statutory
accounts within the meaning of Section 434 of the Companies Act
2006 but is derived from those accounts. Statutory accounts for the
year ended 30 April 2017 have been delivered to the Registrar of
Companies and those for 2018 will be delivered following the
Company's Annual General Meeting. The auditors have reported on
those accounts. The auditors' reports were unqualified and did not
contain statements under s.498 (2) or (3) Companies Act 2006. The
results have been prepared using accounting policies consistent
with those used in the preparation of the statutory accounts.
The financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS"), IFRIC interpretations and the parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
The Financial Statements have been prepared under the historical
cost convention.
The preparation of Financial Statements in conformity with IFRS
require the use of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
information, including the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of current events and actions,
actual results may ultimately differ from those estimates.
2. Taxation
The tax credit for the year reflects the operating loss for the
year and the losses have been carried forward to be used against
future profits.
3. Segment information
Description of the types of products and services from which
each reportable segment derives its revenues
The Group has 2 main reportable segments:
-- Electronic division - This division is involved in the
design, manufacture and distribution of access-control systems
(hardware and software) and the design, manufacture and
distribution of HCM hardware only, for time-and-attendance,
shop-floor data collection, and access control systems. This
division contributed 49.6 per cent. (2017: 44.2 per cent.) of the
Group's revenue.
-- Asset Protection division - This division is involved in the
design, manufacture, installation and maintenance of fixed and
reactive security screens, reception counters, cash management
systems and associated security equipment. This division
contributed 50.4 per cent. (2017: 55.8 per cent.) of the Group's
revenue.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products and services. The two divisions are
managed separately as each involves different technology, and sales
and marketing strategies. Operating segments are reported in a
manner consistent with the internal reporting provided to the chief
operating decision maker.
Segment assets and liabilities exclude group company
balances.
Electronic Asset Protection Total
2018 2018 2018
GBP'000 GBP'000 GBP'000
Revenue
Total revenue 7,960 8,092 16,052
---------- ------------------------ -------
Revenue from external customers 7,960 8,092 16,052
---------- ------------------------ -------
Finance cost 28 5 33
Depreciation 111 214 325
Amortisation 534 - 534
Impairment provision 698 - 698
Segment (loss)/profit before income tax
from continuing activities (1,234) 379 (855)
Loss before income tax of discontinued operation (21) - (21)
---------- ------------------------ -------
Total (loss)/profit before income tax (1,255) 379 (876)
---------- ------------------------ -------
Additions to non-current assets 1,926 16 1,942
Disposals non-current assets 1,525 - 1,525
Reportable segment assets 4,615 3,214 7,829
Reportable segment liabilities 1,554 1,716 3,270
Asset
Electronic Protection Total
2017 2017 2017
GBP'000 GBP'000 GBP'000
Revenue
Total revenue 7,092 8,944 16,036
---------- ------------------------ -------
Revenue from external customers 7,092 8,944 16,036
---------- ------------------------ -------
Finance cost 1 4 5
Depreciation 125 261 386
Amortisation 873 - 873
Impairment provision 1,341 - 1,341
Segment (loss)/profit before income tax
from continuing activities (2,049) 130 (1,919)
Loss before income tax of discontinued operation (225) - (225)
---------- ------------------------ -------
Total (loss)/profit before income tax (2,274) 130 (2,144)
---------- ------------------------ -------
Additions to non-current assets 1,296 156 1,452
Disposals non-current assets 14 34 48
Reportable segment assets 6,062 2,761 8,823
Reportable segment liabilities 1,469 2,052 3,521
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities to the Group's corresponding amounts:
2018 2017
GBP'000 GBP'000
Revenue
Total revenue for reportable
segments 16,052 16,036
---------- --------
2018 2017
GBP'000 GBP'000
Profit or loss after income
tax expense
Total profit or loss for reportable
segments (855) (1,919)
Parent company salaries and
related costs (525) (522)
Other parent company costs (547) (571)
Impairment provision of goodwill - (2,229)
---------- --------
Loss before income tax expense (1,927) (5,241)
Corporation taxes 172 141
---------- --------
Loss after income tax expense
(continuing activities) (1,755) (5,100)
---------- --------
2018 2017
GBP'000 GBP'000
Assets
Total assets for reportable
segments 7,829 8,823
PLC 59 998
Goodwill on consolidation 2,735 2,735
---------- --------
Group's assets 10,623 12,556
---------- --------
Liabilities
Total liabilities for reportable
segments 3,270 3,521
PLC 429 235
---------- --------
Group's liabilities 3,699 3,756
---------- --------
Reportable Reportable
segment Group segment Group
totals PLC totals totals PLC totals
2018 2018 2018 2017 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Other material items
Capital expenditure 1,942 2 1,944 1,452 66 1,518
Disposals non-current
assets 1,525 - 1,525 48 - 48
Depreciation and amortisation 859 25 884 1,258 20 1,278
Impairment of development
costs 698 - 698 1,341 - 1,341
Impairment of goodwill - - - - 2,229 2,229
Geographical information:
External revenue Non-current assets
by location of customers by location of
assets
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
UK 12,084 13,008 5,109 6,243
Netherlands 456 357 - -
Sweden 198 6 - -
Belgium 547 362 - -
Austria 174 163 - -
Ireland 146 73 - -
Other Europe 291 205 - -
USA 1,689 1,340 3 11
Middle East 340 359 - -
Other countries 127 163 - -
------------------ ------- --------- ---------
16,052 16,036 5,112 6,254
------------------ ------- --------- ---------
Revenue from one customer in the asset protection division
totalled GBP2,005,000 (2017: GBP3,508,000). There are no other
customers that account for more than 10% of Group revenue.
4.(Loss)/earnings per
share Continuing Discontinued Total
2018 2017 2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Numerator
Earnings used in basic
and diluted EPS (1,755) (5,100) (113) (136) (1,868) (5,236)
--------- --------- --------- --------- --------- ---------
No. No.
Denominator
Weighted average number of shares used in
basic EPS - continuing operations 468,732,316 468,732,316
Weighted average number of dilutive share
options - 2,733,509
------------ ------------
Weighted average number of shares for dilutive
EPS 468,732,316 471,465,825
------------ ------------
The basic earnings per share before exceptional items has also
been presented since, in the opinion of the directors, this
provides shareholders with a more appropriate measure of earnings
derived from the Group's businesses. It can be reconciled to basic
earnings per share as follows:
2018 2017
pence pence
Basic loss per share from continuing operations
- basic and diluted (0.38) (1.08)
Impairment provision of goodwill - 0.47
Impairment provision of development costs 0.15 0.29
Exceptional redundancy costs 0.03 0.06
-------------- -------
Loss per share from continuing operations before
exceptional items (0.20) (0.26)
-------------- -------
2018 2017
GBP'000 GBP'000
Reconciliation of earnings
Loss from continuing operations used for calculation
of basic and diluted earnings per share (1,755) (5,100)
Impairment provision of development costs 698 1,341
Impairment provision of goodwill - 2,229
Exceptional redundancy costs 140 285
-------------- -------
Loss from continuing operations before exceptional
items (917) (1,245)
-------------- -------
5. Dividends
The Directors are not proposing a final dividend (2017: nil
pence) totaling GBPNil (2017: GBPNil)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EASEDEEPPFFF
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