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No wonder the share price of PSG Solutions plc (LSE:PGS) skyrocketed over 20% this morning. The company reported astounding results for the year ending 31 March 2012, including turnover that was more than triple year-on-year. Operating profit increased by a factor of seven, and pre-tax profit was more than six times the previous year. Plus, the pre-tax profit increase included over £4.1 million in one-off impairment charges! Let’s examine performance by Division.
Specialist Electronics
The Security Research arm made the greatest contribution, bringing in £11.6 million in operating profit against £1.5 million in the previous year. Turnover for the unit increased 764% from £4.1 million to £31.3 million. A £50 million contract awarded by the Ministry of Defence during the year accounted for some of the outstanding results. The Specialist Electronics division has become such a leading component of PSG, that the board will be recommending that the company change its name from PSG Solutions to Security Research Group plc at the upcoming August 7 AGM – a strong indication of the future direction of the company. Audiotel, the other arm of Specialist Electronics, was awarded its first MOD contract in support of the contract with Security Research.
Property Information Services
The original core business of PSG returned to a profit position, contributing £744,000 of operating profit, up from a dismal (£210,000) year-on-year, even though sales were down to £4.6 million from last year’s £5.1 million. The company attributes this performance to having taken the correct steps to adjust to the housing crisis and “the substantially lower volume of house sales.”
Moore & Buckle Packaging Solutions
M & B recorded modest, but steady results over the previous year, with £1.414 million in revenue versus £1.458 million. Operating profit was down from £301,730 last year to £272,725. Chairman Jonathan Mervis said, “Although M & B’s percentage contribution to Group profits this year is less significant, the Group appreciates the outstanding reliability of its management and staff which emanates from an unstinting ethos of professionalism and commitment.
Overall Highlights
- Total revenue for the group was £37.3 million compared to £10.7 million last year.
- Total pre-tax profit for the year was £12.1 million compared to £1.1 million year-on-year.
- EPS was 19.76p versus 3.80p last year.
- Net cash and cash equivalents at 31 March was £17.3 million, up significantly from £3.2 million.
- Net assets increased from £16.4 million to £19.2 million.
Company Spotlight
PSG Solutions operates in England and Wales through a franchise network of 65 offices as the largest provider of home property services relative to property searches conducted on behalf of buyers of residential and commercial properties. The company has three business units aside from the core business. PSG Energy conducts energy performance, air conditioning, and asbestos inspections. Audiotel offers high-tech security, surveillance and countermeasure services, primarily to government and law enforcement agencies. Moore & Buckle provides custom, flexible package design and production for the food and pharmaceutical sectors where packaging security is a primary concern.
