TIDMCMG
RNS Number : 0345E
Croma Group PLC
31 March 2011
Results for the six months to 31 December 2010
Croma Group PLC ("Croma", "the group", or "the company") the AIM
listed asset protection specialist, announces its interim results
for the six months to 31 December 2010.
Highlights
-- Revenues grow strongly at GBP4.28m (2009 - GBP2.26m), an
increase of 90%
-- Gross profits up 15% to GBP798k (2009: GBP691k)
-- Continuing tight cost and financial expense control
-- Net profit increases to GBP36,839 (2009: GBP10,969)
-- Strong cash generation from operations at over GBP145,000
(2009: GBP491,470)
-- Sale post period end of the avionics subsidiary raising over
GBP1m in stages plus further potential from earn-out
arrangements
-- New contract wins in the biometric field and strategic
association with CSS Group and Hitachi for the implementation of
finger vein technology
Chairman's Statement
I am pleased to be able to report the financial results for the
six months to 31 December 2010 which demonstrate considerable
growth in revenues for the first half despite the continuing effect
on our business of government reductions in public spending.
During the six months Group turnover grew 90% to GBP4.28m (2009:
GBP2.26m), the result of major new contract wins in the Vigilant
subsidiary coming though into turnover. Gross margins fell somewhat
from over 30% (2009) to just under 19% as the new business bedded
in.
Despite this, gross profit grew a healthy 15% to GBP798k from
GBP691k (2009) and the Group continued to maintain tight control of
administrative costs and financial expenses, resulting in
continuing growth in profit before tax for the half year to
GBP36,839 from GBP10,969 in 2009. Cash conversion remained positive
with net cash generated from operations over GBP145,000 (2009:
GBP491,470).
In line with the policy of the Board expressed in the last full
year accounts, we have today completed the sale of the Group's
avionics subsidiary for over GBP1m payable in stages, including
potential earn-out payments. The half year accounts and comparables
have been adjusted to reflect this sale in accordance with standard
accounting practice.
The group is now concentrating its activities in the security
industry covering many aspects from man-guarding to biometric
access controls. The three new contract wins in the biometrics
area, announced last week, covering the installation and upgrading
of biometric identification systems in HM Prisons together with the
appointment of the Group, in association with CSS Group, to
distribute Hitachi H1 Finger Vein Scanners in the UK and the US, is
a healthy and welcome breakthrough in that industry.
The prospects for the Group are therefore very encouraging and I
hope to be able to report further significant progress in the
second half of the year to 30(th) June 2011. I would like to thank
the Directors and staff of the Group for their continued efforts to
deliver impressive results in a tough economic climate.
Nicholas Hewson
Non-executive Chairman
31 March 2011
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
6 Months ended 6 Months ended
31 December 31 December Year ended
2010 2009 30 June
Unaudited and Unaudited 2010
unreviewed and unreviewed Note 1
GBP GBP GBP
Revenue 1 4,286,176 2,260,508 5,165,765
Cost of Sales ( 3,488,600) (1,569,531) (3,670,386)
__________ __________ __________
Gross profit 797,576 690,977 1,495,379
Administrative expenses ( 680,551) (554,562) (1,342,048)
__________ __________ __________
Profit from operations 117,025 136,415 153,331
Financial expense (80,186) (125,446) (158,995)
__________ _________ _________
Profit/(loss) before tax 36,839 10,969 (5,664)
Profit/(loss) and total
comprehensive income
from continuing
operations 36,839 10,969 (5,664)
Profit and total
comprehensive income
from discontinued
operations 9,101 197,824 95,891
_________ _________ _________
Profit and total
comprehensive income
for the period
attributable to owners
of the parent 45,940 208,793 90,227
========= ========= =========
Earnings per share for
profit attributable to
the ordinary equity
holders of the parent
during the period
Earnings per share -
basic
Earnings per share - 3 0.02p 0.01p 0.00p
continuing operations
Earnings per share - 3 0.00p 0.10p 0.05p
discontinued
operations
Earnings per share - 3 0.02p 0.11p 0.05p
total
Earnings per share -
dilutive
Earnings per share - 3 0.02p 0.01p 0.0p
continuing operations
Earnings per share - 3 0.00p 0.09p 0.04p
discontinued
operations
Earnings per share - 3 0.02p 0.10p 0.04p
total
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2010
31 December 31 December
2010 2009 30 June
Unaudited Unaudited and 2010
and unreviewed unreviewed Note 1
GBP GBP GBP
Assets
Non-current assets
Goodwill 2,148,650 2,148,650 2,148,650
Property, plant and
equipment 203,315 162,919 233,863
_________ __________ _________
2,351,965 2,311,569 2,382,513
_________ __________ _________
Current assets
Inventories - 244,408 189,385
Trade and other receivables 1,565,276 1,527,397 2,271,121
Cash and cash equivalents 100,509 114,703 187,248
__________ _________ _________
Total current assets 1,665,785 1,886,508 2,647,754
Discontinued operation 970,319 - -
__________ _________ _________
Total assets 4,988,069 4,198,077 5,030,267
============ =========== ==========
Liabilities
Non-current liabilities
Convertible loan notes (400,128) (1,346,802) (379,856)
Provisions ( 28,900) (15,000) (28,900)
Trade and other payables (32,162) - (32,162)
Deferred tax - (2,828) (1,373)
__________ _________ _________
Total non current
liabilities (461,190) (1,364,630) (442,291)
Current liabilities
Convertible loan notes (965,068) - (965,068)
Trade and other payables (710,438) (606,123) (764,021)
Accruals and deferred income (170,288) (222,342) (413,853)
Bank overdrafts and loans (622,348) (173,724) (632,342)
__________ _________ ________
Total current liabilities (2,468,142) (1,002,189) (2,775,284)
Discontinued operation (200,105)
__________ _________ _________
Total liabilities (3,129,437) (2,366,819) (3,217,575)
============ =========== ==========
Net assets 1,858,632 1,831,258 1,812,692
============ =========== ==========
Issued capital and reserves
attributable to owners of
the parent
Share capital 189,338 185,338 189,338
Share premium reserve 247,123 151,123 247,123
Other reserves 188,081 438,730 188,081
Profit and loss reserve 1,234,090 1,056,067 1,188,150
__________ _________ _________
1,858,632 1,831,258 1,812,692
============ =========== ===========
This interim financial information was approved by the Board of
Directors on 31st March 2011
G M McGill
Director
CROMA GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
6 Months ended 6 Months ended
31 December 31 December Year ended
2010 2009 30 June
Unaudited Unaudited 2010
and unreviewed and unreviewed Note 1
GBP GBP GBP
Cash flows from operating
activities
Profit for the period 45,940 208,793 90,227
Adjustments for:
Depreciation of property,
plant and equipment 58,101 21,028 75,516
Onerous lease provision - - 13,900
Loss on sale of property,
plant and equipment - - 6,706
Share based payment expense - 29,077 -
Financial expense 80,186 127,130 201,666
__________ __________ __________
Cashflows from operating
activities before changes
in working capital and
provisions 184,227 386,028 388,015
(Increase)/Decrease in
inventories 1,002 37,627 92,650
(Increase)/Decrease in trade
and other receivables 58,958 193,261 (550,503)
(Decrease)/Increase in trade
and other payables (98,416) (125,446) 217,803
__________ __________ __________
Cash generated from
operations 145,771 491,470 147,965
Interest paid (59,914) (119,448) (158,995)
Income taxes paid - - -
__________ __________ __________
Net cash flows used in
operating activities 85,857 372,022 (11,030)
Investing activities
Purchase of property, plant
and equipment (46,994) (3,294) (139,432)
Proceeds on disposal of
property, plant and
equipment - - 4,000
__________ __________ __________
Net cash used in investing
activities (46,994) (3,294) (135,432)
Cash flows from financing
activities
Repayment of borrowings - (150,000) (150,000)
Issue of ordinary shares - 130,000 259,077
__________ __________ __________
Net cash from financing
activities - (20,000) 109,077
__________ __________ __________
Net (decrease)/increase in
cash and cash equivalents 38,863 348,728 (37,385)
__________ __________ __________
Cash and cash equivalents at
beginning of period (445,094) (407,709) (407,709)
__________ __________ __________
Cash and cash equivalents at
end of period (406,231) (58,981) (445,094)
========== ========== ==========
NOTES TO THE INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
1. Accounting policies
Basis of preparation
The financial information in the half yearly report has been
prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The principal
accounting policies used in preparing the half yearly report are
those the group expects to apply in its financial statements for
the year ended 30 June 2011. The principal accounting policies in
this half yearly report are unchanged from those applied in the
2010 financial statements. The financial information for the six
months ended 31 December 2010 and the six months ended 31 December
2009 is unaudited and unreviewed. The comparative financial
information for the full year ended 30 June 2010 was derived from
audited statutory financial statements and was originally published
in compliance with IAS 1. It has been restated here to be in
compliance with IAS 1 (Revised). This effects presentation only. A
copy of these statutory financial statements has been delivered to
the Registrar of Companies. The auditors' report on these accounts
was unqualified, but did include a reference to matters to which
the auditors drew attention by way of emphasis without qualifying
their report. The auditors' report did not contain a statement
under sections 498(2) and 498(3) of the Companies Act 2006.
While the financial information included in this half yearly
report is consistent with the recognition and measurement
principles of adopted IFRS, it does not comply with the
requirements of IAS34 Interim Financial Reporting.
Going concern
The Group's activities are funded by a combination of long term
equity capital, convertible loan notes, and short term invoice
discounting and bank overdraft facilities. The day to day
operations are funded by cash generated from trading and primarily
invoice discounting facilities.
In considering the ability of the Group to meet its obligations
as they fall due, the directors have considered the following
matters: the expected trading and cash requirements of the group
and the potential cash outflows associated with the convertible
loan notes whose 5 year maturity schedule commences in June
2011.
From a trading perspective, whilst there are inevitable
pressures from the current general economic climate, the Board
remains positive about the retention and outlook of its main
trading operations. The full year effect of recent contract wins
have been factored into the Board's profit and cash flow
projections, as have reasonably possible changes from the current
economic climate. These projections suggest that the Group will
meet its obligations as they fall due with the use of existing
uncommitted invoice discounting facilities, notwithstanding the
additional funds required for refinancing or repaying the
convertible loan notes discussed below. As the invoice discounting
and overdraft facilities fall due for review in the coming year,
based on the informal discussions the Board has had with these
finance providers, they have an expectation that these facilities
will continue to be available to the Group for the foreseeable
future.
In consideration of the potential cash outflows associated with
the convertible loan notes, the holders of the loan notes have the
option to either convert their debt into equity in the Group or
repayment in cash on the due dates. Given the current share price
the Directors consider it is unlikely that the debt will be
converted into shares. The redemption profile is as follows:
-- GBP800,000 on 20 June 2011
-- GBP200,000 on 30 June 2011
-- GBP120,000 on 20 December 2012
-- GBP200,000 on 29 January 2013
-- GBP100,000 on 28 February 2013
The Group's cash flow from operations are not expected to be
sufficient to finance the redemptions on the due dates and
accordingly either new funding facilities will need to be put in
place to finance the redemptions, the redemption dates deferred or
funds generated from other sources. The Directors have obtained
indications of intent from various parties who may be willing to
provide such finance as may be required to fund the loan note
redemptions due for June 2011, but these indications have not been
formalised as contractual offers to provide such funds.
The Board maintain a close working relationship with the holders
of these loans and expect to discuss maturity options with the loan
note holders in the near future and have obtained indications of a
willingness to enter into such negotiations from the note holders.
The Board note that if the RDDS Avionics subsidiary is disposed of,
it is likely sufficient cash will be raised to meet the June 2011
maturity payments. However, no sale has yet been agreed.
The Directors are confident that adequate funds will be raised
to fund the redemption or redemption dates deferred; however, there
can be no guarantee that these funds will be raised or redemption
dates deferred.
The interim financial statements do not reflect the adjustments
that would be necessary were the trading performance of the Group
to deteriorate and/or the funding available from invoice
discounting and the overdraft was not available. Furthermore, the
reliance by the Group to raise additional funding to finance the
loan note redemption or to successfully negotiate the redemption
date of its loan notes indicates the existence of a material
uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. The interim financial
statements do not include the adjustments that would result if the
Group was unable to continue as a going concern.
Discontinued operation
A disposal group is classified as held for sale if its carrying
value will be recovered principally through a sale transaction
rather than through continuing use, and as such is available for
immediate sale in its present condition and its sale is highly
probable.
2. Taxation
Taxation has been provided for at 28% (2009: 28%) although no
taxation has been charged due to the availability of tax losses
brought forward.
3. Earnings per share
The earnings per share is based on the profit/(loss) for the
period and the weighted average number of ordinary shares in issue
and ranking for dividend.
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Unaudited
and unreviewed and unreviewed and unreviewed
GBP GBP GBP
Profit/(loss)
from
continuing
operations 36,839 10,969 (5,664)
Profit from
discontinued
operations 9,101 197,824 95,891
------------------ ------------------ ------------------
Profit for the
period 45,940 208,793 90,227
========== ========== ==========
Weighted
average
number of
shares 189,337,815 185,337,815 189,337,815
========== ========== ==========
Earnings per
share -
basic
Earnings per 0.02p 0.01p 0.00p
share -
continuing
operations
========== ========== ==========
Earnings per 0.00p 0.10p 0.05p
share -
discontinued
operations
========== ========== ==========
Earnings per 0.02p 0.11p 0.05p
share -
total
========== ========== ==========
Earnings per
share -
dilutive
Earnings per 0.02p 0.01p 0.00p
share -
continuing
operations
========== ========== ==========
Earnings per 0.00p 0.09p 0.04p
share -
discontinued
operations
========== ========== ==========
Earnings per 0.02p 0.10p 0.04p
share -
total
========== ========== ==========
4. Cash and cash equivalents
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Unaudited
and unreviewed and unreviewed and unreviewed
GBP GBP GBP
Cash at bank and in
hand 172,022 114,743 187,248
========== ========== ==========
Invoice discounting (578,218) (173,724) (570,411)
========== ========== ==========
Bank overdraft (35) - (61,931)
========== ========== ==========
Total (406,231) (58,981) (445,094)
========== ========== ==========
5. Income statement - discontinued activity
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Unaudited
and unreviewed and unreviewed and unreviewed
GBP GBP GBP
Revenue 875,731 1,146,914 1,991,095
Cost of Sales ( 359,193) (451,916) (1,178,187)
__________ __________ __________
Gross profit 516,538 694,998 812,908
Administrative expenses (507,436) (497,174) (717,017)
__________ __________ __________
Profit from operations 9,102 197,824 95,891
__________ _________ _________
Profit/(loss) before
tax 9,102 197,824 95,891
_________ _________ _________
Profit and total
comprehensive income
for the period 9,102 197,824 95,891
========= ========= =========
6. Cash flow statement - discontinued activity
6 Months ended 6 Months ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Unaudited
and unreviewed and unreviewed and unreviewed
GBP GBP GBP
Cash flows from
operating activities
Profit for the period 9,102 197,824 95,831
Adjustments for:
Depreciation of
property, plant and
equipment 10,443 10,842 20,482
__________ __________ __________
Cash flows from
operating activities
before changes in
working capital and
provisions 19,545 208,666 116,313
(Increase)/Decrease in
inventories 1,002 12,150 64,998
(Increase)/Decrease in
trade and other
receivables 43,907 145,925 51,922
(Decrease)/Increase in
trade and other
payables (30,955) (83,633) (65,493)
__________ __________ __________
Cash generated from
operations 33,499 283,108 167,740
__________ __________ __________
Net cash flows used in
operating activities 33,499 283,108 167,740
Investing activities
Purchases of property,
plant and equipment (6,611) - (6,825)
__________ __________ __________
Net cash used in
investing activities (6,611) - (6,825)
__________ __________ __________
Net (decrease)/increase
in cash and cash
equivalents 26,888 283,108 160,915
__________ __________ __________
Cash and cash
equivalents at
beginning of period 88,721 (72,164) (72,164)
__________ __________ __________
Cash and cash
equivalents at end of
period 115,609 210,944 88,751
========== ========== ==========
7. Financial information
The Board of Directors approved the interim report on 30th March
2011. The financial information in respect of the six months to 31
December 2010 has neither been audited nor reviewed pursuant to
guidance issued by the Auditing Practices Board. A copy of this
report can be obtained from our registered office at Emerald House,
East Street, Epsom, Surrey, KT17 1HS or is available on our website
at www.cromagroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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