TIDMQDG
RNS Number : 1162L
Quadnetics Group PLC
27 July 2011
For Immediate Release 27 July 2011
Quadnetics Group plc
Interim results for the six months ended 31 May 2011
Quadnetics Group plc, a leader in advanced video surveillance
technology and security networks, reports its unaudited interim
results for the six months ended 31 May 2011.
Highlights
-- Revenue GBP34.0 million (2010: GBP32.9 million)
-- Underlying profit* GBP1.8 million (2010: GBP2.2
million)
-- Profit before tax GBP1.7 million (2010: GBP1.3 million)
-- Diluted underlying EPS 8.4p (2010: 10.7p)
-- Basic EPS 8.0p (2010: 6.5p)
-- Strong cash generation: net cash at 31 May GBP6.0
million (30 November 2010: GBP3.3 million; 31 May
2010: GBP4.8 million)
-- Interim dividend maintained at 2.5p per share
-- Healthy order book of GBP26.1 million (2010 : GBP27.7
million)
-- Significant contract wins in banking, prisons, critical
national infrastructure and oil & gas
-- New product launches secured significant first orders
for VeeCam, COEX3000 camera and T800 mobile recorder
-- Acquisition of German leader in transport surveillance
market post period end
Commenting on the results, John Shepherd, Chief Executive,
said:
"It is pleasing that our results are ahead of the Board's
expectations, which puts us in a good position to meet our targets
for the full year.
"We have maintained the promised increased pace of innovation
and, as a result, three new products: the VeeCam(TM) ultra-rugged
personal digital video recorder for police and armed forces; the
COEX3000 explosion-rated camera family for oil and gas applications
and the T800 8-channel rugged mobile video recorder for transport
operators have all secured important contract wins. It is also good
to report that an increasing proportion of our revenue is being
generated by our award-winning Synergy(TM) command and control
software.
"In line with our stated strategy of expanding our geographical
reach in our chosen market niches, we have successfully concluded a
deal to acquire a leading German competitor in the integrated
transport and surveillance market, which will also give us the
platform to expand our entire system solution portfolio into the
European market.
"We have been able to maintain our order book at a high level
due to the specialist nature of our end markets and the technical
superiority of our systems-led integrated product offering, which
underpins our continuing confidence for the rest of 2011 and
beyond."
*that is profit before tax, exceptional reorganisation costs and
share-based payments charge.
For further information, please contact:
Quadnetics Group plc Tel: +44 (0) 1527 850080
John Shepherd, Chief Executive www.quadnetics.com
email: john.shepherd@quadnetics.com
Arbuthnot Securities Limited Tel: +44 (0) 20 7012 2000
Tom Griffiths
Media enquiries:
Buchanan Communications Limited Tel: +44 (0) 207 466 5000
Isabel Podda / Tim Anderson
email: isabelp@buchanan.uk.com
Chairman's Statement
Introduction
Quadnetics' results for the six months to 31 May 2011 were ahead
of the Board's expectations and represent a solid performance
against a market background that remained subdued in some areas,
though relatively strong in others. The Group has demonstrated
tangible benefits from the restructuring undertaken over the past
two years, and continues to make good progress towards its
financial and strategic goals.
Results
Group revenue for the first half year was GBP34.0 million,
compared with GBP32.9 million in the corresponding period of 2010.
Consolidated underlying profit (that is, profit before tax,
exceptional reorganisation costs and share-based payments) was
GBP1.8 million (2010: GBP2.2 million). There were no exceptional
reorganisation costs (2010: GBP0.8 million). After charging
share-based payments of GBP92,000 (2010: GBP66,000), the Group
produced a profit before tax for the first half of GBP1.7 million
(2010: GBP1.3 million). Fully-diluted underlying earnings per share
were 8.4 pence (2010: 10.7 pence).
Although underlying profits for the half year were lower than in
the comparable period in 2010, the decline included the negative
impact of two elements: a net difference on foreign exchange of
GBP(0.3) million on the Group's loan to its US subsidiary, and
GBP(0.4) million from additional research and development charged
to profit and loss.
Excluding those items, the overall trading performance of our
businesses was slightly ahead of the same period last year. In
broad terms, the Group's performance in the first half of 2010/11
was characterised by project delays in the defence area and a
difficult UK retail market for our managed services activities,
more than offset by strong performances from Synectics' Industrial
Systems and Network Systems divisions.
The closing order book at 31 May 2011 was GBP26.1 million (31
May 2010: GBP27.7 million).
Cash generation in the first half of this financial year was
healthy, reflecting good control of operating capital across the
Group. At 31 May 2011, Quadnetics had consolidated net cash
balances of GBP6.0 million (31 May 2010: GBP4.8 million).
Dividend
The Board has declared an unchanged interim dividend of 2.5
pence per share, payable on 23 September 2011 to shareholders on
the register as at 26 August 2011.
Operating Review
Integration & Managed Services
Revenue GBP17.6 million (2010: GBP17.6 million)
Operating Profit GBP0.8 million (2010: GBP0.8 million)
Operating Margin 4.4% (2010: 4.5%)
Quadnetics' IMS division is one of the leading UK providers of
design, integration, turnkey supply, monitoring and management of
large-scale electronic security systems. Its main markets are in
critical infrastructure, public space and multi-site systems. Its
capabilities include a nationwide network of service engineers, UK
government security-cleared personnel and facilities, and an
in-house 24-hour monitoring centre and help desk. The IMS division
supplies proprietary products and technology from other Quadnetics
divisions as well as from third parties.
The strategy of the division is to steadily improve its
operating margin and revenue base through increased concentration
on its specialised critical infrastructure customer sector, better
exploitation of marketing synergies with other divisions and
greater use of the in-house technology they provide.
The UK security integration activities did a commendable job in
growing revenue and profits despite difficult markets in the
government sector. Significant new business was won and delivered
in the prisons and financial services areas, where the division has
a strong market presence.
Important contract wins in the period included investment
banking security system upgrades totalling GBP0.8 million,
prison system upgrades totalling GBP0.8 million, and a large
nuclear power station system.
The primary customers for the division's managed services
activities are UK multi-site retailers where, in a difficult retail
environment, new business has been slower to achieve than planned.
Nonetheless, some significant new multi-year contracts were won.
Efforts to expand the business into managed security services in
wider commercial and government areas, where we can demonstrate
real cost savings to clients, have gained momentum.
Important recent wins in the managed services area included
several three-year, and one five-year, retail security management
contracts totalling GBP4.4 million.
Overall, the IMS division looks well positioned to achieve a
result for the year in line with its plan.
Synectics Network Systems
Revenue GBP7.6 million (2010: GBP6.9 million)
Operating Profit GBP1.9 million (2010: GBP1.4 million)
Operating Margin 24.7% (2010: 20.1%)
Synectics Network Systems provides specialist video-based
electronic surveillance systems and technology globally to end
customers with large scale high security requirements, particularly
for critical infrastructure protection. It is co-located with the
Group Technology Centre, which provides R&D, products and
systems expertise to each of the other divisions.
Revenue grew by 10% compared with the first half of 2010 which,
together with reduced overheads and greater software sales content,
produced a 35% increase in operating profit for the division. The
other primary factors responsible were a return to profit in the
division's Middle East operations, and a strong result for the US
gaming surveillance operations.
Synectics Networks in the UK secured an important command and
control software solution contract valued at over GBP0.4
million.
In the US gaming sector, contracts worth more than $9 million
were won with existing and significant new end-customers. We
believe Synectics has made solid recent gains in market share in
this area, as a result of continued improvements in its product
suite and technical solutions, adapted very specifically for the
gaming market.
The SNS division is expecting a further good performance in the
second half.
Synectics Mobile Systems
Revenue GBP5.1 million (2010: GBP6.1 million)
Operating Profit GBP0.1 million (2010: GBP0.8 million)
Operating margin 1.3% (2010: 12.6%)
Synectics Mobile Systems provides specialist ruggedised
surveillance systems and products for bus, haulage, rail and
defence customers.
The SMS division suffered in the first half from a combination
of a slowdown in the UK new bus market and continued lengthening of
procurement cycles in defence, which have been exacerbated by the
ongoing disruptions in various Middle Eastern territories. We
expect this situation to improve, though timing is obviously
uncertain. We are currently finalising the development of our Chili
man-portable RF detection systems, with formal launch scheduled for
the DSEi exhibition in September.
The acquisition of Persides was completed in the period, with
all staff and facilities now moved to our Tewkesbury facility. We
achieved the first significant volume order for the VeeCam(TM)
product from a major defence contractor for supply to a European
army. There is considerable market interest in using the VeeCam(TM)
to stream live and recorded video via military secure radio
networks. Several significant contract bids are currently underway
but it is at the moment unclear whether these will come to fruition
in time to contribute to results this financial year.
In the transport sector, there were clear signs of an
improvement in the UK bus market towards the end of the period,
particularly in the new build segment, and a stronger performance
is expected in the second half.
Synectics Industrial Systems
Revenue GBP4.3 million (2010: GBP3.2 million)
Operating Profit GBP0.8 million (2010: GBP0.4 million)
Operating Margin 17.8% (2010: 11.3%)
Synectics Industrial Systems designs, manufactures and supplies
turnkey surveillance systems for extreme or hazardous environments.
Applications mainly include offshore and onshore oil & gas
facilities, ships and industrial process control.
SIS enjoyed an excellent six months, producing by some way a
record result. In major part the increased revenue was due to
deliveries under SIS' contract, won late last year, for complete
surveillance systems for the first phase of the Gorgon natural gas
project in Australia. This contract illustrates the success of SIS'
strategy of expanding the scope of supply of its hazardous area
surveillance systems to include much wider proprietary technical
content, including Synectics' Synergy command and control software.
We won a further GBP0.8 million worth of systems orders from
Alcatel Lucent and our first major order, valued at GBP0.3 million,
for our new camera systems from Page Europa.
With a buoyant underlying global market in oil and gas and with
its new COEX3000 camera station now fully on stream, SIS is looking
forward to further good performance in the second half and
continuing this trend into next financial year.
Research and Development
Group expenditure on technology development during the six month
period totalled GBP0.9 million (2010: GBP0.6 million). Of this,
GBP0.2 million was capitalised (2010: GBP0.3 million), and the
remainder expensed to the profit and loss account. The majority of
the increase relates to the acquisition of Persides, our joint
development partner in the defence electronic surveillance area.
Significant sales of the Chili and VeeCam products emerging from
this development are expected by early next financial year.
Other developments currently underway include the COEX2000
marine-rated camera housing, and new product generations within
Synectics' established suite of software and systems.
Outlook
In an important recent development, we announced on 18 July that
Quadnetics has agreed to acquire Indanet AG, a leading German
competitor in the transport surveillance market. Indanet is a
fast-growing, technology-led company that has built enviable
relationships with the major government rail and integrated
transport customers in Germany, which research suggests will be one
of the largest markets in the world for mobile transport
surveillance over the next few years. The management of Indanet
have an aggressive plan for growth, both in Germany and in other
markets in northern and eastern Europe, through accelerated
investment in its software and systems products and in sales and
marketing. Indanet's skills, technology and market focus are highly
complementary to those of Synectics, and we expect the acquisition
to bring significant benefits in bolstering growth in Quadnetics'
core market areas, in line with our stated strategy.
To support Indanet's growth, Quadnetics plans to invest EUR1.5
million over the first 12 months from completion, much of which
will be accounted for as an expense in our consolidated income
statements. While the timing of new sales resulting from this
investment expenditure is inherently difficult to predict, it is
likely that the net impact of the acquisition of Indanet on
Quadnetics' results will be negative for the remainder of our
current financial year and for at least the first half of 2011/12.
We expect a significant positive contribution from 2012/13
onwards.
Trading in our current businesses collectively continues to make
good progress. Quadnetics' stated financial objectives include
achieving, within a reasonable time frame and given normal economic
conditions, a consolidated underlying operating profit margin in
the range of 8-10%. The Group's results for the first half, our
expectations for the full year and the acquisition of Indanet are
all consistent with the trend towards achieving that target.
David Coghlan
27 July 2011
Condensed Consolidated Income Statement
For the 6 months ended 31 May 2011
Unaudited Unaudited
Unaudited proforma 18 proforma
6 months information months information
ended 6 months ended 30 12 months
31 May ended 31 Nov ended 30
Notes 2011 May 2010 2010 Nov 2010
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 3 33,990 32,887 91,124 61,280
Cost of sales (23,629) (22,320) (62,276) (41,545)
--------------------------- ------ ---------- ------------ --------- ------------
Gross profit 10,361 10,567 28,848 19,735
Operating expenses (8,665) (9,271) (27,703) (18,402)
Profit from operations
---------- ------------ --------- ------------
Excluding exceptional
reorganisation costs
and share-based
payments 3 1,788 2,160 2,714 2,552
Exceptional
reorganisation costs - (798) (1,320) (1,050)
Share-based payments
charge (92) (66) (249) (169)
---------- ------------ --------- ------------
Total profit from
operations 1,696 1,296 1,145 1,333
Finance income 160 133 441 295
Finance costs (159) (137) (415) (272)
Share of results of joint
venture - 4 - 4
--------------------------- ------ ---------- ------------ --------- ------------
Profit before tax
---------- ------------ --------- ------------
Excluding exceptional
reorganisation costs
and share-based
payments 1,789 2,160 2,740 2,579
Exceptional
reorganisation costs - (798) (1,320) (1,050)
Share-based payments
charge (92) (66) (249) (169)
---------- ------------ --------- ------------
Total profit before tax 1,697 1,296 1,171 1,360
Income tax expense 4 (458) (287) (311) (366)
--------------------------- ------ ---------- ------------ --------- ------------
Profit for the period
attributable to equity
holders of the parent 1,239 1,009 860 994
--------------------------- ------ ---------- ------------ --------- ------------
Basic earnings per 8.0p 6.5p 5.5p 6.4p
Ordinary share
--------------------------- ------ ---------- ------------ --------- ------------
Diluted earnings per 7.8p 6.5p 5.5p 6.4p
Ordinary share
--------------------------- ------ ---------- ------------ --------- ------------
Condensed Consolidated Statement of Comprehensive Income
For the 6 months ended 31 May 2011
Unaudited
proforma
Unaudited information
6 months 6 months 18 months
ended ended ended
31 May 31 May 30 Nov
2011 2010 2010
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ------------- ----------
Profit for the period 1,239 1,009 860
Exchange differences on translation
of foreign operations (34) 84 13
Actuarial gains/(losses) - - 104
Effect of not recognising the pension
scheme surplus - - (104)
--------------------------------------- ---------- ------------- ----------
Total comprehensive income for the
period attributable to equity holders
of the parent 1,205 1,093 873
--------------------------------------- ---------- ------------- ----------
Condensed Consolidated Statement of Financial Position
31 May 2011
Unaudited
proforma
Unaudited information
31 May 31 May 30 Nov
2011 2010 2010
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ------------- ---------
Non-current assets
Property, plant and equipment 1,525 1,635 1,503
Intangible assets 17,324 17,407 17,292
Deferred tax asset 147 394 176
18,996 19,436 18,971
--------------------------------------- ---------- ------------- ---------
Current assets
Inventories 5,430 5,913 5,897
Trade and other receivables 21,382 22,579 22,511
Cash and cash equivalents 5,955 4,811 3,349
--------------------------------------- ---------- ------------- ---------
32,767 33,303 31,757
Total assets 51,763 52,739 50,728
--------------------------------------- ---------- ------------- ---------
Current liabilities
Trade and other payables (18,749) (19,792) (18,256)
Tax liabilities (604) - (535)
Current provisions - (707) (112)
--------------------------------------- ---------- ------------- ---------
(19,353) (20,499) (18,903)
--------------------------------------- ---------- ------------- ---------
Non-current liabilities
Non-current provisions (25) (75) (25)
--------------------------------------- ---------- ------------- ---------
(25) (75) (25)
--------------------------------------- ---------- ------------- ---------
Total liabilities (19,378) (20,574) (18,928)
--------------------------------------- ---------- ------------- ---------
Net assets 32,385 32,165 31,800
--------------------------------------- ---------- ------------- ---------
Equity attributable to equity holders
of parent company
Called up share capital 3,514 3,514 3,514
Share premium account 15,719 15,719 15,719
Merger reserve 9,565 9,565 9,565
Other reserves (3,486) (3,486) (3,486)
Currency translation reserve 83 178 117
Retained earnings 6,990 6,675 6,371
--------------------------------------- ---------- ------------- ---------
Total equity 32,385 32,165 31,800
--------------------------------------- ---------- ------------- ---------
Condensed Consolidated Statement of Changes in Equity
For the 6 months ended 31 May 2011
Called
up Share Currency
share premium Merger Other translation Retained
capital account reserve reserves reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1
December
2009 3,514 15,719 9,565 (3,486) 94 5,897 31,303
Profit after
tax for the
year - - - - - 1,009 1,009
Dividends
paid - - - - - (297) (297)
Credit in
relation to
share-based
payments - - - - - 66 66
Currency
translation
adjustment - - - - 84 - 84
------- ------- ------- -------- ----------- -------- -------
At 31 May
2010 3,514 15,719 9,565 (3,486) 178 6,675 32,165
Profit after
tax for the
period - - - - - (15) (15)
Dividends
paid - - - - - (392) (392)
Credit in
relation to
share-based
payments - - - - - 103 103
Currency
translation
adjustment - - - - (61) - (61)
------- ------- ------- -------- ----------- -------- -------
At 30 Nov
2010 3,514 15,719 9,565 (3,486) 117 6,371 31,800
Profit after
tax for the
period - - - - - 1,239 1,239
Dividends
paid - - - - - (712) (712)
Credit in
relation to
share-based
payments - - - - - 92 92
Currency
translation
adjustment - - - - (34) - (34)
At 31 May
2011 3,514 15,719 9,565 (3,486) 83 6,990 32,385
------- ------- ------- -------- ----------- -------- -------
Condensed Consolidated Cash Flow Statement
For the 6 months ended 31 May 2011
Unaudited Unaudited
proforma proforma
Unaudited6 information information
months 6 months 18 months 12 months
ended ended ended ended
31 May 31 May 30 Nov 30 Nov
2011 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ----------- ------------- ---------- -------------
Cash flows from
operating activities
Profit for the period 1,239 1,009 860 994
Income tax expense 458 287 311 366
Finance income (160) (133) (441) (295)
Finance costs 159 137 415 272
Depreciation and
amortisation charge 621 648 1,846 1,215
Loss on disposal of
non-current assets - 1 2 5
Share-based payments
charge 92 66 249 169
----------------------- ----------- ------------- ---------- -------------
Operating cash flows
before movement in
working capital 2,409 2,015 3,242 2,726
Decrease/(increase) in
inventories 462 (449) (535) (473)
Decrease/(increase) in
receivables 1,072 (1,671) 55 (1,791)
Increase/(decrease) in
payables and
provisions 514 3,087 (4,407) 1,185
----------------------- ----------- ------------- ---------- -------------
Cash generated from
operations 4,457 2,982 (1,645) 1,647
Interest received 2 2 52 33
Tax (paid)/received (352) (43) (38) 722
----------------------- ----------- ------------- ---------- -------------
Net cash from/(used
in) operating
activities 4,107 2,941 (1,631) 2,402
----------------------- ----------- ------------- ---------- -------------
Cash flows from
investing activities
Purchase of property,
plant and equipment (245) (120) (493) (244)
Sale of property,
plant and equipment - (3) 29 26
Capitalised
development costs (254) (291) (891) (699)
Purchased software (40) (81) (210) (75)
Deferred consideration
on acquisition made in
2005 - - (79) -
Acquisition in period (230) - - -
----------------------- ----------- ------------- ---------- -------------
Net cash used in
investing activities (769) (495) (1,644) (992)
----------------------- ----------- ------------- ---------- -------------
Cash flows from
financing activities
Interest paid (3) (5) (21) (10)
Dividends paid (712) (1,088) (1,480) (1,480)
----------------------- ----------- ------------- ---------- -------------
Net cash used in
financing activities (715) (1,093) (1,501) (1,490)
----------------------- ----------- ------------- ---------- -------------
Effect of exchange
rate changes on cash
and cash equivalents (17) 50 14 21
Net
increase/(decrease)
in cash and cash
equivalents 2,606 1,403 (4,762) (59)
Cash and cash
equivalents at the
beginning of the
period 3,349 3,408 8,111 3,408
----------------------- ----------- ------------- ---------- -------------
Cash and cash
equivalents at the
end of the period 5,955 4,811 3,349 3,349
----------------------- ----------- ------------- ---------- -------------
Notes
1. General information
These consolidated interim financial statements were approved by
the Board of Directors on 27 July 2011.
2. Basis of preparation
These consolidated interim financial statements of the Group are
for the 6 months ended 31 May 2011.
The comparative figures for the 18 months ended 30 November 2010
are not the Group's statutory accounts for that financial year.
Those statutory accounts have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The report of
the auditors was (i) unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain
a statement under Section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's annual financial statements as at 30 November 2010.
The condensed consolidated interim financial statements for the
six months to 31 May 2010 and 12 months to 30 November 2010 have
not been audited or reviewed by auditors pursuant to the Auditing
Practices Board guidance on Review of Interim Financial
Information. The condensed consolidated interim financial
statements for the six months to 31 May 2011 have been prepared on
the basis of the accounting policies expected to be adopted for the
year ending 30 November 2011. These are anticipated to be
consistent with those set out in the Group's latest annual
financial statements for the 18 months ended 30 November 2010.
These accounting policies are drawn up in accordance with adopted
International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
Significant accounting policies
AIM-listed companies are not required to comply with IAS 34
'Interim Financial Reporting' and accordingly the Company has taken
advantage of this exemption.
3. Segmental analysis
The analysis below sets out the Group's revenue and underlying
operating profit (operating profit before exceptional
reorganisation costs and share-based payments charge) derived from
the Group's four business segments.
Unaudited Unaudited Unaudited
6 months 6 months 18 months 12 months
ended ended ended ended
31 May 31 May 30 Nov 30 Nov
2011 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
Integration & Managed
Services 17,636 17,625 49,439 32,039
Network Systems 7,555 6,883 17,625 12,719
Mobile Systems 5,095 6,081 17,080 11,890
Industrial Systems 4,316 3,236 9,639 6,286
Intra-group sales (612) (938) (2,659) (1,654)
----------------------------- ---------- ---------- ---------- -----------
33,990 32,887 91,124 61,280
----------------------------- ---------- ---------- ---------- -----------
Underlying operating profit
Integration & Managed
Services 771 790 2,125 1,333
Network Systems 1,866 1,384 2,220 1,949
Mobile Systems 68 764 1,319 1,198
Industrial Systems 770 367 1,252 747
Research & Development costs (669) (298) (1,341) (656)
Central costs (1,018) (847) (2,861) (2,019)
----------------------------- ---------- ---------- ---------- -----------
1,788 2,160 2,714 2,552
----------------------------- ---------- ---------- ---------- -----------
4. Tax charge
The tax charge for the period is based on the estimated rate of
corporation tax that is likely to be effective for the year to 30
November 2011.
5. Dividends
An interim dividend of 2.5p per share, totalling approximately
GBP439,000 will be paid on 23 September 2011 to shareholders on the
register as at 26 August 2011.
6. Earnings per share
Earnings per Ordinary share are as follows:
Unaudited Unaudited Unaudited
6 months 6 months 18 months 12 months
ended ended ended ended
31 May 31 May 30 Nov 30 Nov
2011 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000
Basic earnings 1,239 1,009 860 994
Exceptional reorganisation
costs - 798 1,320 1,050
Impact of exceptional
reorganisation costs on tax
charge for the year - (193) (370) (292)
Share-based payments charge 92 66 249 169
Impact of share-based
payments charge on tax
charge for the period - (18) - 23
----------
Underlying earnings 1,331 1,662 2,059 1,944
----------------------------- ---------- ---------- ---------- -----------
Basic earnings - diluted 1,239 1,009 860 994
----------------------------- ---------- ---------- ---------- -----------
Underlying earnings -
diluted 1,331 1,662 2,059 1,944
----------------------------- ---------- ---------- ---------- -----------
'000 '000 '000 '000
----------------------------- ---------- ---------- ---------- -----------
Weighted average number
of Ordinary shares - basic
calculation 15,529 15,529 15,529 15,529
Dilutive potential Ordinary
shares arising from
share options 310 1 83 85
----------------------------- ---------- ---------- ---------- -----------
Weighted average number of
Ordinary shares - diluted
calculation 15,839 15,530 15,612 15,614
----------------------------- ---------- ---------- ---------- -----------
Unaudited Unaudited Unaudited
6 months 6 months 18 months 12 months
ended ended ended ended
31 May 31 May 30 Nov 30 Nov
2011 2010 2010 2010
p p p p
Basic earnings 8.0 6.5 5.5 6.4
Exceptional reorganisation
costs - 5.2 8.5 6.8
Impact of exceptional
reorganisation costs on tax
charge for the year - (1.2) (2.3) (1.9)
Share-based payments charge 0.6 0.4 1.6 1.1
Impact of share-based
payments charge on tax
charge for the period - (0.2) - 0.1
----------
Underlying earnings 8.6 10.7 13.3 12.5
----------------------------- ---------- ---------- ---------- -----------
Basic earnings - diluted 7.8 6.5 5.5 6.4
----------------------------- ---------- ---------- ---------- -----------
Underlying earnings -
diluted 8.4 10.7 13.2 12.5
----------------------------- ---------- ---------- ---------- -----------
'000 '000 '000 '000
----------------------------- ---------- ---------- ---------- -----------
Weighted average number
of Ordinary shares - basic
calculation 15,529 15,529 15,529 15,529
Dilutive potential Ordinary
shares arising from
share options 310 1 83 85
----------------------------- ---------- ---------- ---------- -----------
Weighted average number of
Ordinary shares - diluted
calculation 15,839 15,530 15,612 15,614
----------------------------- ---------- ---------- ---------- -----------
7. Acquisition
On 22 December 2010 Synectic Systems Group Limited ("SSGL")
acquired the entire issued share capital of Persides Technology
Limited ("PTL") for a total consideration of GBP230,000 in cash and
the trade and assets of PTL were hived up to SSGL at fair
value.
PTL specialises in advanced battlefield electronic monitoring
systems (EMS) and ruggedized hand-held digital video systems
(VEEcamO) for use in extreme environments, and was a technology
partner to the Group's defence business, playing an important role
in the development of Synectics' latest generation radio frequency
detection system, Chili.
The consideration paid of GBP230,000 compared with the estimated
fair value of net assets acquired of GBP49,000 resulted in a
provisional value for goodwill of GBP181,000.
8. Post Balance Sheet Event
On 15 July 2011 Quadnetics Group plc ("Quadnetics") agreed to
acquire 100% of the issued share capital of Indanet AG ("Indanet"),
a leading German provider of integrated surveillance and security
management systems to the transport industry, for a maximum total
consideration of EUR10 million. Consideration of EUR2 million in
cash was paid on completion for an initial tranche of shares
equivalent to 51% of Indanet's issued share capital. Further
consideration of between EUR1 million and EUR8 million for the
remaining 49% of Indanet will be payable in three tranches between
2013 and 2015, dependent on Indanet's profits for the period from
completion to 31 May 2015.
Due to the proximity of the acquisition to the period end the
fair value exercise has not yet been completed.
9. Copies of this statement will be sent to shareholders and
will be available on the Group's website (www.quadnetics.com) and
from Quadnetics Group plc, Haydon House, 5 Alcester Road, Studley,
Warwickshire B80 7AN.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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