RNS Number : 9349K
SectorGuard PLC
31 December 2008
SECTORGUARD plc
SectorGuard Plc, the AIM listed total security solutions group, announces its interim results for the 6 month period ended 30th
September 2008
Highlights:
* Turnover of �15.3 million (6 months ended 30.09.07: �9.1 million*)
* Gross profit of �2.7 million (6 months ended 30.09.07: �1.2 million*)
* EBITDA of �645,000 (6 months ended 30.09.07: loss �73,000*)
* Integration of Manguard complete
* Cost savings of �275,000 achieved in period
* Established market presence as a top 20 provider in the security sector.
* Refreshed senior Management team progress compliance with best practice
* restated numbers (see Chairman's statement)
Chairman's statement
Following on from my appointment as Chairman of SectorGuard from 6 November 2008 we hereby announce the results for the 6 month period
ended 30 September 2008, representing the final period under the previous senior management team.
This period has concentrated on the full integration of ManGuard, acquired on 14 March 2008, into a single entity. This integration has
now been completed. Alongside this integration into our Operational Support Centre at Waltham Cross the business has also continued the
integration of the diverse elements of the Electro Technical Division. We are seeing the operational benefits of the transition to a field
base operative model concentrating on the provision of value to our customers, which has been further enhanced by the concentration of all
back office functions into the Operational Support Centre. The team at Electro Technical Division has also been refreshed with the
introduction of a senior manager from the industry with specific responsibility for the Division's continuing integration and development
reporting directly to the Board. We are confident that this process will achieve the necessary benefits by March 2009.
Mr Marks who was previously Chairman and Chief Executive of the Company has now been replaced by myself as Chairman; Mark Higgins as
Chief Executive and Charlie Cleverly as Managing Director. We have also taken on an interim Finance Director until a permanent appointment
is made. The Company are also actively seeking another suitably experienced independent Non executive Director.
Under my direction there has been a significant amount of work undertaken by the senior management team, supported by the interim
Finance Director and external advisers, to validate the Company's position from the previous accounting period. In order to do this and to
ensure the position from October 2006 to March 2008 is accurately reflected to provide us with a reliable starting position for these
interim results, the results for the previous period have been restated. The restating of the previous periods we believe provides us with a
clear understanding of the historic position of the business and enables us to set out a structure and vision for the forthcoming period
that is both sustainable and effective.
Operations
The operational performance during the period has seen a new operational management team put in place, to support the increased
business, also to achieve a more field based customer centric model. The back office systems integration has been fully concluded with a
stable and experienced team in place, supporting the field based operatives. The transition of the business to a more field based model we
believe will deliver a better and more efficient quality of service to our customers.
Corporate and Social Responsibility
We continue to invest heavily in the ongoing training of our personnel ensuring that our selection criteria for new staff is rigorous.
Our continued commitment to the highest standards will see the successful addition of further British Standards by March 2009.
Previously the company has not complied with fiduciary codes and one of the refreshed management team's priorities is to fulfil all
compliance obligations by March 2009.
Financial
The turnover for the 6 month period to 30th September 2008 was �15.3 million (6 months ended 30 September 2007: �9.1 million*),
generating a gross profit of �2.7 million (6 months ended 30 September 2007: �1.2 million*). The gross margin for the period at 17.4% is a
fair reflection of tightening market conditions (6 months ended 30 September 2007: 13.0%*).
* the adjustments to restate the comparative financials can be seen in note 5.
Current trading and future outlook
The reorganisation has driven significant cost savings from the combination of the business units, resulting in the extraction of
unnecessary costs at no loss to the efficiency and quality of the business.
Since the period end the management have been reassessing and refining SectorGuard's business model. The Board believe that this model
will provide the foundations from which the Company can continue to deliver its strategy.
On behalf of the Board of Directors I would like to express our gratitude for the hard work of our staff throughout 2008 and their
support to the new management team.
Stephen Thomas
Chairman
31 December 2008
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 31 March 2008
Six months ended Six months ended 18 months to
30 September 2008 30 September 2007 31 March
2008
(unaudited) (unaudited and (restated) *
restated) *
Note � � �
REVENUE 15,289,794 9,059,895 26,094,494
Cost of sales (12,631,207) (7,885,344) (21,371,791)
GROSS PROFIT 2,658,587 1,174,551 4,722,703
Operating expenses (2,261,791) (1,393,794) (4,526,787)
OPERATING PROFIT / (LOSS) 396,796 (219,243) 195,916
Finance income - 3,886 6,012
Finance costs (267,590) (95,709) (271,703)
PROFIT / (LOSS) BEFORE TAX 129,206 (311,066) (69,775)
Tax (expense) / credit (27,133) 91,332 20,933
PROFIT/(LOSS) FOR THE PERIOD 102,073 (219,734) (48,842)
Profit / (Loss) per share for 3
profit attributable to the
equity holders of the Group
during the period (pence)
Basic 0.03 (0.07) (0.02)
Diluted 0.03 (0.07) (0.02)
* Following a review of the financial statements for the 18-month period ended 31 March 2008, certain balances as at and for the period
ended 30 September 2007 and 31 March 2008 have been restated. The adjustments restating the comparative financials are provided in note 5.
CONSOLIDATED BALANCE SHEET AT 30 SEPTEMBER 2008
Six months ended Six months ended 18 months ended
30 September 2008 30 September 2007 31 March 2008
(unaudited) (unaudited and restated) * (restated) *
� � �
NON-CURRENT ASSETS
Intangible assets 17,317,701 8,338,774 17,458,440
Property, plant and equipment 494,440 795,561 679,706
Deferred tax recoverable 36,999 26,767 36,999
17,849,140 9,161,102 18,175,145
CURRENT ASSETS
Inventories 272,635 193,797 151,941
Trade and other receivables 7,208,923 4,202,375 7,208,500
Current tax recoverable 66,493 - 119,890
Cash and cash equivalents 173,881 58,233 79,768
7,722,932 4,454,405 7,560,099
TOTAL ASSETS 25,572,072 13,615,507 25,735,244
CURRENT LIABILITIES
Trade and other payables 4,393,064 2,088,861 6,563,951
Current tax liabilities - 103,960 26,264
Loans and overdrafts 3,756,555 941,440 1,984,119
Obligations under finance 47,841 189,379 90,243
leases
Provisions 1,456,311 20,000 180,000
9,653,771 3,343,640 8,844,577
NON-CURRENT LIABILITIES
Loans and overdrafts 2,768,000 1,000,000 3,152,000
Deferred tax liabilities 804,029 - 804,029
Obligations under finance 30,703 26,254 57,110
leases
Provisions 1,334,995 - 2,799,027
4,937,727 1,026,254 6,812,166
TOTAL LIABILITIES 14,591,498 4,369,894 15,656,743
EQUITY
Share capital 1,979,254 1,579,254 1,779,254
Share premium account 5,387,277 4,789,933 4,787,277
Share-based payment reserve 156,920 118,298 156,920
Merger reserve 1,274,000 474,000 1,274,000
Own shares in employee trust (292,963) (271,338) (292,963)
Retained earnings 2,476,086 2,555,466 2,374,013
TOTAL EQUITY 10,980,574 9,245,613 10,078,501
TOTAL LIABILITIES AND EQUITY 25,572,072 13,615,507 25,735,244
Consolidated Statement of Changes in Equity
For the period ended 30 September 2008
Share capital Share premium Share-based payment Merger reserve Own shares in Retained
earnings Total
account reserve employee trust
� � � � �
� �
At 1 October 2006 1,547,726 4,756,463 67,054 332,732 (201,438)
2,759,255 9,261,792
Loss after tax - - - - -
(48,842) (48,842)
Shares issued 231,528 39,119 - 941,268 -
- 1,211,915
Costs associated with share - (8,305) - - -
- (8,305)
options
Share-based payment - - 89,866 - -
- 89,866
Shares acquired - - - - (91,532)
- (91,532)
Dividends paid - - - - -
(336,400) (336,400)
------------ ------------ ------------ ------------ ------------
------------ ------------
At 1 April 2008 1,779,254 4,787,277 156,920 1,274,000 (292,963)
2,374,013 10,078,501
Profit after tax - - - - -
102,073 102,073
Shares issued 200,000 600,000 - - -
- 800,000
Dividends paid - - - - -
- -
------------ ------------ ------------ ------------ ------------
------------ ------------
At 30 September 2008 1,979,254 5,387,277 156,920 1,274,000 (292,963)
2,476,086
10,980,574
======= ======= ======= ======= =======
======= =======
NOTES TO THE INTERIM STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008
Six months ended Six months ended 18 months ended
30 September 2008 30 September 2007 31 March 2008 30 Year ended
September 2006
(unaudited) (unaudited and (restated)
restated)
� � �
OPERATING ACTIVITIES
Cash flow from operations (1,794,456) (54,559) 1,750,384 541,835
(Note 4)
Taxation paid - (267,763) (266,828) (323,962)
------------- ------------- ------------- -------------
NET CASH (OUTFLOW )/INFLOW (1,794,456) (322,322) 1,483,556 217,873
FROM OPERATING ACTIVITIES
------------- ------------- ------------- -------------
INVESTING ACTIVITIES
Acquisition of businesses - (441,143) (1,167,283) (539,065)
Acquisition of subsidiaries (12,872) - (3,586,029) -
net of cash acquired
Payments to acquire tangible (30,322) (182,186) (269,560) (342,627)
fixed assets
Proceeds from disposal of 127,357 - 17,969 2,095
tangible fixed assets
------------- ------------- ------------- -------------
NET CASH INFLOW/(OUTFLOW) FROM 84163 (623,329) (5,004,903) (879,597)
INVESTING
------------- ------------- ------------- -------------
FINANCING ACTIVITIES
Interest received - 3,886 6,012 12,143
Interest paid (251,590) (85,664) (262,096) (147,734)
Interest element of finance (9,607) (10,045) (9,607) (5,134)
leases
Equity dividends paid - - (336,400) (305,125)
Issue of equity share capital 800,000 2,066 42,095 191,819
Purchase of own equity shares - (30,000) (91,525) (144,038)
Repayment of loans (400,000) 244,149 (2,732,253) (471,316)
New bank loans - - 5,600,000 1,000,000
New finance leases - 138,062 -
Repayment of capital element (68,809) (36,332) (143,389) (44,286)
of finance leases
------------- ------------- ------------- -------------
NET CASH INFLOW FROM FINANCING 69,994 226,122 2,072,837 86,329
ACTIVITIES
------------- ------------- ------------- -------------
DECREASE IN CASH AND CASH (1,640,299) (719,529) (1,448,510) (575,395)
EQUIVALENTS
Cash and bank overdrafts at (1,174,375) 734,574 274,135 849,530
beginning of period
------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT (2,814,674) 15,075 (1,174,375) 274,135
END OF PERIOD
======= ======= ======= ======
Cash and cash equivalents at
end of period comprise:
Cash and cash equivalents 173,881 15,075 79,768 303,045
Bank working capital facility (2,988,555) - (1,254,143) (28,910)
------------- ------------- ------------- -------------
(2,814,674) 15,075 (1,174,375) 274,135
======= ======= ======= ======
1. General information and accounting policies
This interim report for the period ended 30 September 2008 and the comparative information for the periods ended 30 September 2007 and
31 March 2008 do not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for
the eighteen-month period ended 31 March 2008 has been delivered to the Register of Companies. The auditors' report on those accounts was
not qualified and did not contain statements made under s237(2) or s237(3) of the Companies Act 1985. The financial information for the
six-month periods ended 30 September 2008 and 30 September 2007 are un-audited. However, the prior year periods have been adjusted for
financial irregularities as identified after the audited statutory accounts for the eighteen-month period ended 31 March 2008 were approved.
The resultant changes are set out in note 5 of this interim report.
The annual financial statements of SectorGuard plc are prepared in accordance with IFRSs as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting', as adopted by the European Union.
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as were
applied in the group's latest annual audited financial statements.
2. Segmental information
Primary reporting format - business segments
The group is organised into two main business segments: security personnel and electronic security systems. The group operates
exclusively in the UK and therefore no geographical analysis is presented.
The segment results for the six-month period ended 30 September 2008 were as follows:
Security personnel Electronic Total
security systems
� � �
Revenue 14,230,910 1,058,884 15,289,794
------------- ------------ -----------
Operating Profit 391,501 5,295 396,796
======= ======= =======
The segment results for the six-month period ended 30 September 2007 were as follows:
Security personnel Electronic Total
security systems
� � �
Revenue 7,611,225 1,448,670 9,059,895
------------- ------------ -----------
Operating Loss (104,281) (114,962) (219,243)
======= ======= =======
The segment results for the 18-month period ended 31 March 2008 were as follows:
Security personnel Electronic Total
security systems
� � �
Revenue 22,140,440 3,954,054 26,094,494
------------- ------------ -----------
Operating Profit 173,918 21,998 195,916
======= ======= =======
3. Earnings per share
The basic earnings per ordinary share is calculated by dividing profit for the period by the weighted average number of ordinary shares
outstanding during the period.
The diluted earnings per ordinary share is calculated by dividing profit for the period by the weighted average number of shares
outstanding during the period after adjusting both figures for the effect of dilutive potential ordinary shares.
Six months ended Six months 18 months to
30 September 2008 ended 31 March
30 September 2007 2008
No No No
Weighted average number of
ordinary
shares for the purpose of 381,183,393 309,544,917 309,650,945
basic EPS
Effect of dilutive potential
ordinary
shares: share options 598,436 635,541 598,436
--------------- --------------- ---------------
Weighted average number of
ordinary
shares for the purpose of 381,781,829 310,180,458 310,249,381
diluted EPS
========= ========= =========
BASIC EPS
Loss after taxation (�) 102,073 (219,734) (48,842)
Earnings per share (pence) 3 (7) (2)
DILUTED EPS
Loss after taxation (�) 102,073 (219,734) (48,842)
Earnings per share (pence) 3 (7) (2)
4. Cash flow statement
Reconciliation of operating profit to net cash inflow from operating activities
Six months to Six months to 18 months to
30 September 2008 30 September 2007 31 March 2008
� � �
Operating profit/(loss) for 396,796 (219,243) 195,916
the period
Depreciation of property, 94,477 129,135 367,101
plant and equipment
Amortisation of intangible 153,611 17,071 40,081
assets
Movement in share-based - 31,400 89,866
payment reserve
(Profit) on disposal of (5,621) - (9,973)
property, plant and equipment
(Increase)/ decrease in (121,694) 76,222 12,312
inventories
(Increase) in receivables (423) (362,198) (26,558)
(Decrease)/increase in trade (2,123,881) 273,054 901,639
and other payables
(Decrease)/increase in (187,721) - 180,000
provisions
--------------- --------------- ---------------
Cash generated by operations (1,794,456) (54,559) 1,750,384
Corporation Tax paid - (267,763) (266,828)
--------------- --------------- ---------------
(1,794,456) (322,322) 1,483,556
========= ========= =========
5 Adjustments to restate comparative financial information
The company identified misstatements in previous financial periods and these are set out in the tables below for the six months ended 30
September 2007 and the eighteen-month period ended 31 March 2008.
5(a) BALANCE SHEET Previously reported Sales Cost of investment & Re-stated Interims
in 2nd Interim & accruals provisions
Report 2007
Six-months ended
30 September 2007
(unaudited) (unaudited)
� � � �
Non-current assets
Intangible assets 8,338,774 8,338,774
Property, plant and equipment 795,561 795,561
Deferred tax recoverable 26,767 26,767
--------------- --------------- --------------- ---------------
9,161,102 0 0 9,161,102
--------------- --------------- --------------- ---------------
Current assets
Inventories 263,797 (70,000) 193,797
Trade and other receivables 4,651,705 (449,330) 4,202,375
Cash and cash equivalents 58,233 58,233
--------------- --------------- --------------- ---------------
4,973,735 (449,330) (70,000) 4,454,405
--------------- --------------- --------------- ---------------
Total assets 14,134,837 (449,330) (70,000) 13,615,507
========= ========= ========= =========
Current liabilities
Trade and other payables 2,071,938 16,923 2,088,861
Current tax liabilities 264,835 (160,875) 103,960
Loans and overdrafts 941,440 941,440
Obligations under finance 189,379 189,379
leases
Provisions 20,000 20,000
--------------- --------------- --------------- ---------------
3,487,592 (160,875) 16,923 3,343,640
--------------- --------------- --------------- ---------------
Non-current liabilities
Loans and overdrafts 1,000,000 1,000,000
Obligations under finance 26,254 26,254
leases
--------------- ---------------
1,026,254 1,026,254
--------------- --------------- --------------- ---------------
Total liabilities 4,513,846 (160,875) 16,923 4,369,894
--------------- --------------- --------------- ---------------
Equity
Share capital 1,579,254 1,579,254
Share premium account 4,789,933 4,789,933
Share-based payment reserve 118,298 118,298
Other reserves 202,662 202,662
Retained earnings 2,930,844 (288,455) (86,923) 2,555,466
--------------- --------------- --------------- ---------------
Total equity 9,620,991 (288,455) (86,923) 9,245,613
--------------- --------------- --------------- ---------------
Total liabilities and equity 14,134,837 (449,330) (70,000) 13,615,507
5(b) BALANCE SHEET Previously reported Sales Cost of investment & Re-stated Annual
in Annual Report & accruals provisions Accounts 2008
2008
18-months ended
31 March 2008
(audited) (unaudited)
� � � �
Non-current assets
Intangible assets 18,130,802 (750,000) 77,638 17,458,440
Property, plant and equipment 679,706 679,706
Deferred tax recoverable 36,999 36,999
--------------- --------------- --------------- ---------------
18,847,507 (750,000) 77,638 18,175,145
--------------- --------------- --------------- ---------------
Current assets
Inventories 221,941 (70,000) 151,941
Trade and other receivables 7,208,500 7,208,500
Current tax recoverable 119,890 119,890
Cash and cash equivalents 79,768 79,768
--------------- --------------- --------------- ---------------
7,630,099 0 (70,000) 7,560,099
--------------- --------------- --------------- ---------------
Total assets 26,477,606 (750,000) 7,638 25,735,244
========= ========= ========= =========
Current liabilities
Trade and other payables 6,447,109 116,842 6,563,951
Current tax liabilities 362,937 (336,673) 26,264
Loans and overdrafts 1,962,386 21,733 1,984,119
Obligations under finance 90,243 90,243
leases
Provisions 0 180,000 180,000
--------------- --------------- --------------- ---------------
8,862,675 (314,940) 296,842 8,844,577
--------------- --------------- --------------- ---------------
Non-current liabilities
Loans and overdrafts 3,152.000 3,152.000
Deferred tax liabilities 804,029 804,029
Obligations under finance 57,110 57,110
leases
Provisions 2,799,027 2,799,027
--------------- ---------------
6,812,166 6,812,166
--------------- --------------- --------------- ---------------
Total liabilities 15,674,841 (314,940) 296,842 15,675,135
--------------- --------------- ---------------
5(b) BALANCE SHEET continued Previously reported Sales Cost of investment & Re-stated Annual
in Annual Report & accruals provisions Accounts 2008
2008
18-months ended
31 March 2008
(audited) (unaudited)
� � � �
Share premium account 4,787,277 4,787,277
Share-based payment reserve 156,920 156,920
Merger reserve 1,274,000 1,274,000
Own shares in employee share (292,963) (292,963)
trust
Retained earnings 3,098,277 (435,060) (289,204) 2,374,013
--------------- --------------- --------------- ---------------
Total equity 10,802,765 (435,060) (289,204) 10,078,501
--------------- --------------- --------------- ---------------
Total liabilities and equity 26,477,606 (750,000) 7,638 25,735,244
========= ========= ========= =========
(c) Adjustments to restate the comparative financials for the six-months ended 30 September 2007
INCOME STATEMENT Previously reported Sales Cost of investment & Re-stated Interims
in 2nd Interim & accruals provisions
Report 2007
Six-months ended
30 September 2007
(unaudited) (unaudited)
� � � �
Revenue 9,249,895 (190,000) 9,059,895
Cost of sales (7,556,014) (329,330) (7,885,344)
--------------- --------------- --------------- ---------------
Gross profit 1,693,881 (190,000) (329,330) 1,174,551
Operating expenses (1,376,871) (16,923) (1,393,794)
--------------- --------------- --------------- ---------------
Operating profit 317,010 (190,000) (346,253) (219,243)
Finance income 3,886 3,886
Finance costs (95,709) (95,709)
--------------- --------------- --------------- ---------------
Profit before tax 225,187 (190,000) (346,253) (311,066)
Tax expense (69,543) 160,875 91,332
--------------- --------------- --------------- ---------------
Profit for the period 155,644 (29,125) (346,253) (219,734)
========= ========= ========= =========
5 (d) Adjustments to restate the comparative financials for the 18-months ended 31 March 2008
INCOME STATEMENT Previously reported Sales Cost of investment & Provision for Re-stated Interims
in 2nd Interim & accruals provisions Integration costs
Report 2007
Six-months ended
30 September 2007
(unaudited) (unaudited)
� � � � �
Revenue 26,844,494 (750,000) 26,094,494
Cost of sales (21,301,791) (70,000) (21,371,791)
--------------- --------------- --------------- --------------- ---------------
Gross profit 5,542,703 (750,000) (70,000) 4,722,703
Operating expenses (4,304,352) (42,435) (180,000) (4,526,787)
--------------- --------------- --------------- --------------- ---------------
Operating profit 1,238,351 (750,000) (112,435) (180,000) 195,916
Finance income 6,012 6,012
Finance costs (253,201) (18,502) (271,703)
--------------- --------------- --------------- --------------- ---------------
Profit before tax 991,162 (768,502) (112,435) (180,000) (69,775)
Tax expense (315,740) 336,673 20,933
--------------- --------------- --------------- --------------- ---------------
Profit for the period 675,422 (431,829) (112,435) (180,000) (48,842)
========= ========= ========= ========= =========
6. 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:
Hanover House, Queensgate, Britannia Road, Waltham Cross, Hertfordshire EN8 7TF.
The Report will also be will be despatched to shareholders shortly and will be available to be viewed on the SectorGuard website,
www.SectorGuard.plc.uk.
* ENDS * *
For further information visit www.SectorGuard.plc.uk or contact:
Mark Higgins SectorGuard Plc Tel: 01992 701972
Jonathan Wright Seymour Pierce Limited Tel: 020 7107 8000
Nick Elwes College Hill Tel: 020 7457 2020
This information is provided by RNS
The company news service from the London Stock Exchange
END
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