Half Yearly Report
29 Mars 2010 - 8:00AM
UK Regulatory
TIDMCOE
RNS Number : 3020J
Coe Group PLC
29 March 2010
COE Group plc
("COE", the "Company" or the "Group")
Unaudited results for the six months ended 31 December 2009
COE, the AIM-quoted developer and supplier of advanced video surveillance
systems, announces unaudited results for the 6 months ended 31 December 2009 (H1
2010).
Financial Highlights
· Revenue down 37% to GBP1,175k (H1 2009: GBP1,856k) due to the phasing of
the order book. As noted in the 2009 annual report the order book growth
previously achieved is scheduled to flow through to revenue in the second half
of this year (H2 2010)
· Increase in gross margin to 62% (H1 2009: 56%)
· Operating expenses up 17% to GBP1,152k (H1 2009: GBP981k excluding
exceptional re-organisation costs) due to phasing. Overheads for the full year
expected to be in line with the prior year
· Operating loss of GBP426k (H1 2009: GBP78k) as a result of the second
half weighting of shipments
Operational Highlights
· Continued enhancement of product range with the addition of I-Command
video management software and X-Stream multi-channel codec
· Strong pipeline growth in Asia in particular in the transport sector,
where we are bidding a number of sizeable opportunities, as we look to replicate
the Seoul Metro contract win across the region
· On plan roll out of the Seoul Metro contract, which has a revenue value
in excess GBP1m, and deliveries for which are scheduled to be complete by the
end of H2 2010
· Recruitment to support our expansion into India and the Middle East where
we seek to build on the contract success achieved in the Far East
Ian Jefferson, Chief Executive, commented:
"These interim results are a reflection on the timing of shipments which this
year, as previously reported, are weighted heavily towards the second half. Our
business development activity continues to progress well particularly in Asia
where we are bidding on an increasing number of larger opportunities.
Therefore, despite the short term economic uncertainty we remain confident that
our strategy will deliver future growth"
About COE:
COE Group Plc develops and supplies integrated IP video surveillance (CCTV)
systems for some of the most complex high profile sites worldwide. COE products
and systems allow users to achieve faultless and cost-effective video
surveillance in safety critical operations and rugged environments year after
year, by delivering very high quality video, high reliability and extensive
third party integration. COE provides both IP and hybrid IP/analogue solutions
so that customers have the option of leveraging existing installations.
The Company has over 10,000 installations worldwide across three main sectors -
traffic & transport, heavy industrial and urban surveillance. References
include the London Congestion Charge network, underground and high-speed rail
systems worldwide, including the UK, Singapore, France, Spain, Germany, Hong
Kong and Delhi; airports across Germany, Hong Kong and SE Asia, and road systems
worldwide. City-centre systems include over 35 UK towns and cities, while
industrial complexes include the South Parrs gas field in the Middle East.
COE works closely with selected systems integrators, helping them to deliver the
most competitive overall solutions for end-users. The Company provides support
through the entire lifecycle including design, supply, on-site test,
commissioning and long-term maintenance.
Please visit www.coe.co.uk
CHAIRMAN'S STATEMENT
Operational report
As noted in the Company's 2009 Annual Report, the revenue for this financial
year is heavily weighted towards the second half. These interim results are a
reflection of this weighting and are in line with our expectations.
Trading conditions have remained very tough throughout the period with
significant down turns experienced particularly in the UK. However, our
business development activities are yielding good results and our pipeline of
opportunities and partner base is increasing, especially throughout Asia.
This pipeline growth in Asia is biased towards the transport sector, where we
are bidding a number of sizeable opportunities, as we seek to replicate the
Seoul Metro contract win across the region. The Seoul Metro contract, the
revenue value for which is worth over GBP1m, is scheduled for delivery in the
second half of this year and is currently rolling out according to plan.
We have recruited to support our expansion into the Middle East and India and
are working on a number of projects which we hope will give rise to significant
orders in due course.
During the period we have continued to expand our product range. COE provides
complete analogue, IP or hybrid video surveillance solutions for camera systems
of any size. The introduction of the X-Stream multi-channel codec further
enhances our IP/hybrid offering by providing up to four channels of analogue
video encoding with analytics functions for use on both wired and wireless IP
Ethernet networks.
All COE products are rugged and our systems are designed with high levels of
redundancy ensuring optimal performance in harsh, safety critical environments.
Also, the products are modular in nature providing our partners with a high
degree of flexibility in system design and integration with third party
products. These features, and the ability to offer customers a cost effective,
tailored transition path from analogue to digital via an intermediary hybrid
solution provides COE with a competitive advantage as our markets transition
from analogue to digital.
Financial report
Revenue of GBP1,175k (H1 2009: GBP1,856k) was 37% down compared to the prior
period due to the delivery timeline of the order book. As noted in the 2009
annual report the order book growth previously achieved is expected to flow
through to revenue in the second half of this year (H2 2010).
Gross margin increased to 62% (H1 2009: 56%), however, this is not expected to
continue in the second half as the delivery of the larger orders commences.
Operating expenses were up 17% to GBP1,152k (H1 2009: GBP981k excluding
exceptional re-organisation costs) due to phasing. Overheads for the full year
are expected to be in line with the prior year.
Operating loss of GBP426k (H1 2009: GBP78k) generated due to the second half
phasing of shipments noted above. The Board believes that the full year result
will be in line with its previous expectations.
Conclusion and outlook
The business development activity is progressing well and our pipeline of
opportunities is growing. The Board remains confident that despite the short
term economic uncertainty our strategy will deliver future growth and that
further progress will be made during the second half of FY10 as the Company
completes deliveries for Seoul Metro and continues to capitalise on its partner
development and recruitment programme.
Dr Alison Fielding
Chairman
29 March 2009
COE Group Plc
Ian Jefferson, Chief Executive Officer
0113 230 8800
Zeus Capital Ltd
Nick Cowles
0161 831 1512
Consolidated statement of comprehensive income (unaudited)
For the six months ended 31 December 2009
+--------------------------+------+----------+----------+---------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 30 |
| | | 31 | 31 | June |
| | | December | December | 2009 |
| | | 2009 | 2008 | |
+--------------------------+------+----------+----------+---------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------+----------+----------+---------+
| Revenue | | 1,175 | 1,856 | 3,828 |
+--------------------------+------+----------+----------+---------+
| Cost of sales | | (449) | (814) | (1,619) |
+--------------------------+------+----------+----------+---------+
| Gross profit | | 726 | 1,042 | 2,209 |
+--------------------------+------+----------+----------+---------+
| Net operating expenses | | (1,152) | (1,120) | (2,344) |
+--------------------------+------+----------+----------+---------+
| Operating loss | | (426) | (78) | (135) |
+--------------------------+------+----------+----------+---------+
| | | | | |
+--------------------------+------+----------+----------+---------+
| Operating loss analysed | | | | |
| as: | | | | |
+--------------------------+------+----------+----------+---------+
| Operating (loss)/profit | | | | |
| before exceptional items | | (426) | 61 | 71 |
+--------------------------+------+----------+----------+---------+
| Exceptional costs | | - | (139) | (206) |
+--------------------------+------+----------+----------+---------+
| Operating loss | | (426) | (78) | (135) |
+--------------------------+------+----------+----------+---------+
| | | | | |
+--------------------------+------+----------+----------+---------+
| Financial income | | - | - | 7 |
+--------------------------+------+----------+----------+---------+
| Financial expense | | (18) | (39) | (29) |
+--------------------------+------+----------+----------+---------+
| Loss before tax | | (444) | (117) | (157) |
+--------------------------+------+----------+----------+---------+
| Income tax credit | | - | 4 | 170 |
+--------------------------+------+----------+----------+---------+
| (Loss)/profit for the | | (444) | (113) | 13 |
| period | | | | |
+--------------------------+------+----------+----------+---------+
| | | | | |
+--------------------------+------+----------+----------+---------+
| Basic loss per share | 2 | (1.2p) | (0.5p) | 0.0p |
+--------------------------+------+----------+----------+---------+
| Diluted loss per share | 2 | (1.2p) | (0.5p) | 0.0p |
+--------------------------+------+----------+----------+---------+
Consolidated statement of changes in equity (unaudited)
For the six months ended 31 December 2009
+----------------------------+-+----------+----------+---------+
| | | 6 | 6 | 12 |
| | | months | months | months |
| | | ended | ended | ended |
| | | 31 | 31 | 30 |
| | | December | December | June |
| | | 2009 | 2008 | 2009 |
+----------------------------+-+----------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-+----------+----------+---------+
| Total equity at start of | | 1,162 | - | - |
| period | | | | |
+----------------------------+-+----------+----------+---------+
| (Loss)/profit for period | | (444) | (113) | 13 |
+----------------------------+-+----------+----------+---------+
| Shares issued | | - | 1,167 | 1,167 |
+----------------------------+-+----------+----------+---------+
| Share based payments | | 25 | 25 | (18) |
+----------------------------+-+----------+----------+---------+
| Total equity at end of | | 743 | 1,079 | 1,162 |
| period | | | | |
+----------------------------+-+----------+----------+---------+
Consolidated balance sheet (unaudited)
As at 31 December 2009
+--------------------------+----+----------+----------+---------+
| | | 31 | 31 | 30 |
| | | December | December | June |
| | | 2009 | 2008 | 2009 |
+--------------------------+----+----------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+----+----------+----------+---------+
| Non-current assets | | | | |
+--------------------------+----+----------+----------+---------+
| Property, plant and | | 31 | 52 | 41 |
| equipment | | | | |
+--------------------------+----+----------+----------+---------+
| Intangible assets | | 416 | 340 | 416 |
+--------------------------+----+----------+----------+---------+
| | | 447 | 392 | 457 |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Current assets | | | | |
+--------------------------+----+----------+----------+---------+
| Inventories | | 214 | 155 | 225 |
+--------------------------+----+----------+----------+---------+
| Trade and other | | 818 | 1,036 | 1,547 |
| receivables | | | | |
+--------------------------+----+----------+----------+---------+
| Cash and cash | | 330 | 592 | 358 |
| equivalents | | | | |
+--------------------------+----+----------+----------+---------+
| | | 1,362 | 1,783 | 2,130 |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Total assets | | 1,809 | 2,175 | 2,587 |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Current liabilities | | | | |
+--------------------------+----+----------+----------+---------+
| Trade and other payables | | (686) | (817) | (954) |
+--------------------------+----+----------+----------+---------+
| Loans and other | | (353) | (204) | (444) |
| borrowings | | | | |
+--------------------------+----+----------+----------+---------+
| | | (1,039) | (1,021) | (1,398) |
+--------------------------+----+----------+----------+---------+
| Non current liabilities | | | | |
+--------------------------+----+----------+----------+---------+
| Provisions | | (27) | (75) | (27) |
+--------------------------+----+----------+----------+---------+
| | | (27) | (75) | (27) |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Total liabilities | | (1,066) | (1,096) | (1,425) |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Net assets | | 743 | 1,079 | 1,162 |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Shareholders' equity | | | | |
+--------------------------+----+----------+----------+---------+
| Called-up share capital | | 1,455 | 1,455 | 1,455 |
+--------------------------+----+----------+----------+---------+
| Share premium account | | 4,653 | 4,653 | 4,653 |
+--------------------------+----+----------+----------+---------+
| Retained earnings | | (5,365) | (5,029) | (4,946) |
+--------------------------+----+----------+----------+---------+
| Total shareholders' | | 743 | 1,079 | 1,162 |
| equity | | | | |
+--------------------------+----+----------+----------+---------+
Consolidated cash flow statement (unaudited)
For the six months ended 31 December 2009
+--------------------------+----+----------+----------+---------+
| | | 6 | 6 | 12 |
| | | months | months | months |
| | | ended | ended | ended |
| | | 31 | 31 | 30 |
| | | December | December | June |
| | | 2009 | 2008 | 2009 |
+--------------------------+----+----------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+----+----------+----------+---------+
| Cash flow from operating | | | | |
| activities | | | | |
+--------------------------+----+----------+----------+---------+
| Operating loss | | (426) | (78) | (135) |
+--------------------------+----+----------+----------+---------+
| Depreciation | | 15 | 20 | 38 |
+--------------------------+----+----------+----------+---------+
| Amortisation of | | 244 | 170 | 340 |
| intangible assets | | | | |
+--------------------------+----+----------+----------+---------+
| Expenditure on | | (244) | (170) | (416) |
| intangible assets | | | | |
+--------------------------+----+----------+----------+---------+
| Decrease in inventories | | 11 | 81 | 11 |
+--------------------------+----+----------+----------+---------+
| Decrease/(increase) in | | 631 | (6) | (335) |
| trade and other | | | | |
| receivables | | | | |
+--------------------------+----+----------+----------+---------+
| Decrease in trade and | | (268) | (826) | (703) |
| other payables | | | | |
+--------------------------+----+----------+----------+---------+
| Decrease in provisions | | - | (41) | (89) |
+--------------------------+----+----------+----------+---------+
| Interest paid | | (18) | (39) | (29) |
+--------------------------+----+----------+----------+---------+
| Share based payment | | 25 | 25 | (18) |
| charge | | | | |
+--------------------------+----+----------+----------+---------+
| Taxation received | | 98 | 64 | 62 |
+--------------------------+----+----------+----------+---------+
| Net cash flow from | | 68 | (800) | (1,274) |
| operating activities | | | | |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Cash flows from | | | | |
| investing activities | | | | |
+--------------------------+----+----------+----------+---------+
| Purchase of property, | | (5) | - | (7) |
| plant and equipment | | | | |
+--------------------------+----+----------+----------+---------+
| Interest received | | - | - | 7 |
+--------------------------+----+----------+----------+---------+
| Net cash flow from | | (5) | - | - |
| financing activities | | | | |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Cash flows from | | | | |
| financing activities | | | | |
+--------------------------+----+----------+----------+---------+
| Proceeds from share | | - | 1,167 | 1,167 |
| issue | | | | |
+--------------------------+----+----------+----------+---------+
| Net cash flow from | | - | 1,167 | 1,167 |
| financing activities | | | | |
+--------------------------+----+----------+----------+---------+
| | | | | |
+--------------------------+----+----------+----------+---------+
| Increase/(decrease) in | | | | |
| cash and cash | | 63 | 367 | (107) |
| equivalents | | | | |
+--------------------------+----+----------+----------+---------+
| Cash and cash | | | | |
| equivalents at the | | (86) | 21 | 21 |
| beginning of the period | | | | |
+--------------------------+----+----------+----------+---------+
| Cash and cash | | | | |
| equivalents at the end | | (23) | 388 | (86) |
| of the period | | | | |
+--------------------------+----+----------+----------+---------+
Notes to the unaudited interim financial statements
1. Accounting policies and general information
COE Group Plc is a public limited company incorporated and domiciled in England
and Wales. The Company's ordinary shares are traded on AIM.
The interim financial report does not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory accounts for the
year ended 30 June 2009 were approved by the Board on 11 December 2009 and
delivered to the Registrar of Companies. The report of the auditors,
PricewaterhouseCoopers LLP, on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The Board has chosen not to subject the interim financial report to an
independent review or audit.
The interim financial report has been prepared under the historical cost
convention and in accordance with the Group's accounting policies which are
consistent with those followed in preparation of the annual report for the year
ended 30 June 2009 and disclosed therein. This report however, does not comply
with IAS34.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 July 2009.
IFRS 8 'Operating Segments' - This standard requires disclosure of information
about the Group's operating segments and replaces the requirement to determine
primary (business) and secondary (geographical) reporting segments of the Group.
Adoption of this Standard did not have any effect on the financial position or
performance of the Group. The Group determined that the operating segments were
the same as the business segments previously identified under IAS14 Segmental
Reporting.
IAS 1 'Revised Presentation of Financial Statements' - The
revised Standard separates owner and non-owner changes in equity. The statement
of changes in equity includes only details of transactions with owners, with
non-owner changes in equity presented as a single line. In addition, the
Standard introduces the statement of comprehensive income; it presents all items
of recognized income and expense, either in one single statement, or in two
linked statements. The Group has elected to present one statement.
A copy of this statement is available on the Company website www.coe.co.uk.
2. Earnings per share
Basic earnings per share is calculated as the (loss)/profit for the period
divided by the weighted average number of shares outstanding. For diluted
earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potentially dilutive ordinary shares.
Under IAS 33 'Earnings per share' any potentially dilutive ordinary shares are
deemed anti-dilutive in the event that a loss has been incurred. Consequently
the basic and adjusted loss per ordinary share for the six-month period ended 31
December 2009 and the six-month period ended 31 December 2008 are unaffected by
dilution.
+-----------------------------+----------+--------------+--------------+------------+
| | | 6 | 6 | 12 |
| | | months | months | months |
| | | ended | ended | ended |
| | | 31 | 31 | 30 |
| | | December | December | June |
| | | 2009 | 2008 | 2009 |
+-----------------------------+----------+--------------+--------------+------------+
| Basic (loss)/profit | | (GBP444,000) | (GBP113,000) | GBP13,000 |
| attributable to | | | | |
| shareholders | | | | |
+-----------------------------+----------+--------------+--------------+------------+
| Weighted average number of | | 36,744,400 | 22,374,899 | 30,626,805 |
| shares | | | | |
+-----------------------------+----------+--------------+--------------+------------+
| Basic and diluted loss per | | (1.2p) | (0.5p) | 0.0p |
| share | | | | |
+-----------------------------+----------+--------------+--------------+------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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