RNS Number:7516N
SectorGuard PLC
20 June 2005
SECTORGUARD PLC
("SectorGuard" or "the Company")
Interim Results for the six months ended 31 March 2005
Highlights
*Operating profit before amortisation up 12.4% to #523,602 on turnover of
#7,857,225 up, 11.1%
*Net assets up 21.4% to #5,362,185.
*Three acquisitions completed in the six months.
*Significant business developed in the Midlands.
*Expansion into the electronic security sector.
Chairman's Statement
In the six month period under review we have continued to expand the business,
consolidating our position as a leading provider of security solutions in the
United Kingdom. Our progress has been reflected in our results for the six
months ended 31 March 2005, which show turnover up 11.1% to #7,857,225 (2004:
#7,071,631), gross profit up 10.6% to #1,357,272 (2004: #1,227,235) and
operating profit before amortisation up 12.4% to #523,602 (2004: #465,888).
We have maintained our strategy of consolidating businesses within the security
sector and during the first half of the year we completed three acquisitions. On
2 December we acquired the manned guarding contracts of Nationwide (GB) Limited,
a business based in Grantham. This was followed on 13 December by the
acquisition of the manned guarding contracts of Choice Security Services
Limited, based in Stourbridge. These two Midlands based acquisitions have
enhanced our client base in that region and have provided us with a solid
platform to build the geographic spread of our business.
We also completed the acquisition of SectorAlarm Limited, a company specialising
in the installation and maintenance of electronic security systems, ranging from
fire and intruder alarm systems to CCTV and access control systems. This
acquisition enables us to design total security solution packages for each of
our clients. These combine the best qualities of both traditional personnel
based solutions, such as static guarding and mobile patrols, with applications
such as electronic perimeter defence, electronic detection and remote monitoring
to provide cost effective and robust protection.
We believe that by offering this wider range of services we are better able to
both tailor our security solution to the client's risk profile as well as match
the solution to their budgetary requirements.
One of the major challenges faced by manned guarding businesses over the next 12
months is the introduction of licensing for security guards under the Private
Security Industry Act 2001. The legislation aims to raise standards of
professionalism and skills within the private security industry and to promote
and spread best practice. Once introduced, the industry will be regulated by the
Security Industry Authority (SIA).
By 20 March 2006 all security officers are required to hold an SIA licence. The
process to obtain the licence includes enhanced levels of training with third
party assessment and certification of this training. We have invested
significant resources into all aspects of licensing. By the end of May more than
50% of our work force had completed the required training and we anticipate that
this figure will exceed 90% by the end of September.
In addition to issuing licences the SIA is introducing an accreditation scheme
for security companies to be known as the "Approved Contractors Scheme". Whilst
the criteria for this scheme have not yet been confirmed, we are taking an
active role in its development and are confident that we will meet the required
standard to achieve accreditation.
The investment in licensing and obtaining Approved Contractor status will
inevitably impact on costs in the current year, however, we believe these will
be recoverable in the medium term. There will be a number of businesses that
will either be unable or unwilling to comply with the new legislative
requirements. We believe that our financial stability, operational strengths and
continued investment in our staff and systems will leave us in a position to
benefit from an increased market share following the departure of these
businesses.
Since 1 April we have been awarded several new contracts. These include
contracts with the Guys Campus and Maugham Library for King's College London,
Wolverhampton City Council and Dudley Metropolitan Borough Council. These gains
are significant as they highlight our growing presence in the education sector
as well as an initial return on our investment in the Midlands. We are also in
negotiation with a number of potential acquisition targets both in the manned
guarding and electronic security sectors.
We believe that by continuing our acquisition programme supported by our organic
growth we will become a leading supplier of total security solutions in the
United Kingdom and I hope to report further progress in our year-end statement.
David Marks
Chairman
20 June 2005
SectorGuard plc Group Consolidated Profit and Loss Account
for the six months ended 31 March 2005
Six months Six months Year ended
ended ended
31 March 2005 31 March 2004 30 September 2004
(Unaudited) (Unaudited) (Audited)
# # #
--------------------- ---------- ---------- ----------
Turnover 7,857,225 7,071,631 14,048,604
Cost of sales (6,499,953) (5,844,396) (11,317,173)
--------------------- ---------- ---------- ----------
Gross profit 1,357,272 1,227,235 2,731,431
Administrative expenses
before goodwill,
amortisation and
impairment (833,670) (761,347) (1,536,328)
--------------------- ---------- ---------- ----------
Operating profit before
goodwill, amortisation and
impairment 523,602 465,888 1,195,103
Goodwill amortisation and
impairment (133,700) (102,033) (212,256)
--------------------- ---------- ---------- ----------
Operating profit 389,902 363,855 982,847
Interest receivable and
similar income 69 504 4,949
Interest payable and
similar charges (56,323) (57,600) (102,439)
--------------------- ---------- ---------- ----------
Profit on ordinary
activities before taxation 333,648 306,759 885,357
Tax on profit on ordinary
activities (101,848) (92,028) (284,055)
--------------------- ---------- ---------- ----------
Retained profit for the
period 231,800 214,731 601,302
--------------------- ---------- ---------- ----------
Equity dividends Nil Nil (102,878)
--------------------- ---------- ---------- ----------
Retained profit for the
financial year 231,800 214,731 498,424
--------------------- ---------- ---------- ----------
Earnings per ordinary share
Basic 0.11p 0.11p 0.30p
Diluted 0.11p 0.10p 0.29p
Basic (based on
pre-amortisation and
impairment earnings
figure) 0.15p 0.14p 0.38p
Diluted (based on
pre-amortisation and
impairment earnings
figure) 0.16p 0.14p 0.37p
SectorGuard plc Group Consolidated Balance Sheet
as at 31 March 2005
Unaudited Unaudited Audited
as at as at as at
31 March 2005 31 March 2004 30 September 2004
# # #
Fixed assets
Intangible assets 5,674,612 3,663,662 3,743,955
Listed investment 57,500 Nil Nil
Tangible assets 259,703 299,479 259,839
---------------------- --------- --------- ---------
5,991,815 3,963,141 4,003,794
---------------------- --------- --------- ---------
Current assets
Debtors 3,854,822 2,961,464 3,592,230
Cash at bank and in hand 207,882 146,192 258,230
---------------------- --------- --------- ---------
4,062,704 3,107,656 3,850,460
Creditors: amounts falling
due within one year (3,612,971) (1,811,558) (2,707,143)
---------------------- --------- --------- ---------
Net current assets 449,733 1,296,098 1,143,317
Total assets less current
liabilities 6,441,548 5,259,239 5,147,111
---------------------- --------- --------- ---------
Creditors: amounts falling
due after more than one
year (348,885) (711,299) (395,346)
Provisions for liabilities
and charges (730,478) (131,308) (60,000)
---------------------- --------- --------- ---------
Net assets 5,362,185 4,416,632 4,691,765
---------------------- --------- --------- ---------
Capital and reserves
Called up share capital 1,094,890 1,028,777 1,028,777
Share premium account 2,462,844 2,098,897 2,090,337
Profit and loss account 1,804,451 1,288,958 1,572,651
---------------------- --------- --------- ---------
Shareholders' funds 5,362,185 4,416,632 4,691,765
---------------------- --------- --------- ---------
SectorGuard plc Group Consolidated Cashflow
as at 31 March 2005
Unaudited Unaudited
as at as at
31 March 2005 31 March 2004
# #
Net cash inflow from operating activities 1,108,814 69,328
----------- -----------
Returns on investment and servicing of finance
Interest paid (56,323) 57,600
----------- -----------
Taxation
Tax paid Nil Nil
Capital expenditure
Payments to acquire investments (57,500) Nil
Payments to acquire intangible fixed assets (213,896) (80,000)
Payments to acquire tangible fixed assets (42,732) (56,606)
Decrease in provision for liabilities and
charges (187,500) (316,547)
----------- -----------
(501,628) (453,153)
----------- -----------
Acquisitions & disposals
Purchase of subsidiary undertaking (270,801) Nil
Net cash acquired with subsidiary 25,806 Nil
----------- -----------
(244,995) Nil
----------- -----------
Equity dividends paid (102,878) Nil
----------- -----------
Net cash inflow/(Outflow) before financing 202,990 (326,225)
----------- -----------
Financing
Issue of ordinary share capital 257,597 154,950
Loans repaid (395,765) (271,015)
Finance lease repayments (40,771) (28,070)
Bank working capital facility (74,399) (219,316)
----------- -----------
(253,338) (363,451)
----------- -----------
Net cash outflow for the period (50,348) (689,676)
=========== ===========
Notes
1. Financial Information
The interim results for the six months ended 31 March 2005 and six months ended
31 March 2004 are unaudited and do not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985. They have been drawn up using
accounting policies and principles consistent with those applied in the
preparation of the audited accounts for the year ended 30 September 2004. The
comparative information contained in the report for the year ended 30 September
2004 does not constitute the statutory accounts for that financial period. Those
accounts have been reported on by the Company's auditors, Nexia Audit Limited,
and delivered to the Registrar of Companies.
The report of the auditors was unqualified.
2. Segmental Analysis
Activity Turnover Pre-tax Profit before tax Net
profit and goodwill assets
# # # #
------------------ -------- -------- ----------- -------
For the six months ended at 31 March 2005
Manned
Guarding 7,744,784 312,365 487,641 5,349,039
Electronic
Security
Services 112,441 30,013 38,725 259,468
----------------- -------- -------- ----------- --------
7,857,225 342,378 526,366 5,608,507
Net funds (246,322)
----------------- -------- -------- ----------- --------
Total 5,362,185
----------------- -------- -------- ----------- --------
3. Taxation
The tax charge for the period is based on the anticipated effective tax rate for
the year to 30 September 2005.
4. Earnings per share
The earnings per share is based upon a profit of #231,800 (2004: #214,731) and
the weighted average number of shares ranking for dividend during the period of
206,707,963 (2004: 202,312,143).
The fully diluted earnings per share is based upon the profit as disclosed above
and the weighted average number of shares ranking for dividend during the period
of 211,508,105 (2004: 207,127,788) adjusted for the effects of all dilutive
potential shares.
The earnings per share based on earnings before amortisation and impairment of
#327,409 (2004: #286,154) reflecting the weighted average number of shares
ranking for dividend during the year of 206,707,963 (2004: 202,312,143) is 0.16p
(2004: 0.14p).
The fully diluted earnings per share is based upon the profit as disclosed above
and the weighted average number of shares ranking for dividend during the year
of 211,508,105 (2003: 207,127,788) adjusted for the effects of all dilutive
potential shares.
5. Interim Report
Copies of this interim report are being sent to all shareholders and will be
available to the public from the Company's Head Office, Gainsborough House,
Sheering Lower Road, Sawbridgeworth, Herts, CM21 9RG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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