TIDMPEG
RNS Number : 3411Z
Petards Group PLC
14 March 2017
14 March 2017
PETARDS GROUP PLC
FINAL RESULTS FOR THE YEARED 31 DECEMBER 2016
Petards Group plc ("Petards"), the AIM quoted developer of
advanced security and surveillance systems, reports its audited
results for the year ended 31 December 2016.
Key points:
-- Financial
o Results for 2016
-- Revenues up 17% to GBP15.3 million (2015: GBP13.1
million)
-- Gross margin up to 36.3% from 35.2% in 2015
-- EBITDA increased 28% to GBP1,621,000 (2015: GBP1,266,000)
-- Operating profit increased 17% to GBP1,095,000 (2015:
GBP935,000 profit)
-- Profit after tax GBP910,000 (2015: GBP765,000 profit)
o Finance
-- Generated GBP1 million of operating cash inflows (2015:
GBP1.2 million)
-- Cash at 31 December 2016 GBP2.3 million (31 Dec 2015: GBP2.5
million) and no bank debt
-- Basic EPS increased 18% to 2.59p earnings per share (2015:
2.19p)
-- Diluted EPS increased 15% to 1.86p earnings per share (2015:
1.62p per share)
-- Operational
o Closing order book GBP20 million (2015: GBP16 million)
o Order book grew by GBP8 million in the second half of 2016
with orders received from Siemens Mobility, Bombardier
Transportation, Greater Western Rail, Hitachi Rail Europe and the
MOD
o Exports increased by 57% to GBP5.3 million and comprise over
one third of Group revenues
o Acquisition of QRO Solutions successfully completed in April
2016 for net cash consideration of GBP239,000 contributing
GBP78,000 to EBITDA before acquisition expenses
o Investment made in
-- Development of eyeTrain range particularly focus on software
features
-- Expansion of the Group's software development personnel and
facilities
-- Outlook
o Current order book includes GBP12 million scheduled for
delivery in 2017
Raschid Abdullah, Chairman of Petards, commented:
"In light of the strength of the Group's order book containing
orders of GBP12 million expected to be shipped and taken to revenue
during 2017, and on-going discussions with both new and existing
customers for further exciting projects, the board remains
confident about the future prospects of the Group for 2017."
Contacts
Petards Group plc www.petards.com
Raschid Abdullah, Chairman Mb: 07768 905004
WH Ireland Limited, Nomad www.whirelandcb.com
and Joint Broker
Mike Coe, Ed Allsopp Tel: 0117 945 3470
Hybridan LLP, Joint Broker www.hybridan.com
Claire Louise Noyce Tel: 020 3764 2341
Chairman's statement
I am very pleased to report to you that the Group has made good
progress during 2016 and achieved many of the operational
improvements set out in my last annual statement.
Petards produced another creditable performance for the year
ended 31 December 2016 with the Group trading strongly, the order
book growing following the receipt of several significant new
contracts, the acquisition of QRO Solutions ("QRO") being
completed, and additional core investment made to strengthen our
software operational capabilities and eyeTrain range of
products.
With revenues up to GBP15.3 million and gross margins up
slightly to 36%, the Group recorded pre-tax profits of GBP925,000
against GBP762,000 for the previous year representing a 21%
increase. Revenues from continuing operations increased by 8%
reflecting additional deliveries of eyeTrain products and up
overall by 17% including a maiden contribution from QRO. Basic
earnings per share improved by 18% to 2.6p with fully diluted
earnings per share increasing to 1.9p against 1.6p in 2015.
The trend of the changing revenue mix towards the Group's
eyeTrain products reported in 2015 continued and these now comprise
around 60% of Group revenues. This strong performance coupled with
reduced levels of revenue from our defence products means that for
the first time the Group's largest customer was from the rail
industry rather than the defence sector.
The cash-generative nature of the business continued with the
Group delivering an operating cash inflow of GBP1 million for the
year. This was ploughed back into the business with significant
investments being made in growing the Group's software
capabilities, people and dedicated testing facilities, in addition
to the acquisition of QRO. Consequently, cash balances at 31
December 2016 remained healthy at GBP2.3 million albeit marginally
lower than the closing balance of GBP2.5 million at 31 December
2015.
These investments flow on from those made in the latter half of
2015 which were approved by the Board last year in order to place
the business in a stronger market position with the integration of
improved technologies. A key part of this strategy covered the
expansion of our product range and enhancing the performance of our
systems in order to support our existing business relationships and
provide growth in our customer base.
In the second half of 2016 the forward order book grew
substantially following receipt of a number of larger contracts
totalling over GBP13 million that were predominantly for eyeTrain
systems. Orders from Bombardier Transportation were followed by
awards from Great Western Railway, Hitachi Rail Europe, Siemens
Mobility and the MOD in the final quarter of the year. Consequently
the Group entered 2017 with an order book of GBP20 million being
23% up on the prior year, of which broadly GBP12 million is
expected to be taken to revenue during 2017.
Following the orders referred to above, around 75% of the
closing order book related to eyeTrain. These include projects that
once completed will result in a substantial increase in software
driven functionality of eyeTrain systems that will provide
significant benefits to train operating companies. With increasing
passenger numbers and capacity constraints, operators are
continually looking for opportunities to increase both capacity and
operating efficiency. We are hopeful this additional eyeTrain
functionality will prove to be another differentiator for Petards
in that market.
The acquisition of QRO in April for a net cash consideration of
GBP239,000, complements the Group's existing presence in the
Emergency Services sector which it serves through its ProVida brand
and is now able to support a broader offering to the police and
security market. This includes 'end-to-end' fixed site, mobile,
re-deployable and hand-held ANPR solutions utilising QRO's
longstanding integration expertise and back office management
software skills. QRO made a maiden contribution to Group EBITDA of
GBP78,000 for the period and the board anticipates that this
contribution will grow steadily as it develops its markets and
products with the support of the Group.
The profitable and cash-generative trading record of the past
three years, a good balance sheet and healthy order book provides a
good foundation on which to continue to develop the Group both
organically and by acquisition. The board continues to evaluate
potential acquisitions which could serve to expand the business and
enhance value for shareholders.
The year was particularly demanding for all of our employees
with substantial new business being won, the expansion of our
facilities and the increase and integration of new staff into our
Gateshead operation. I also welcome the addition of all employees
at QRO to the Group and look forward to working with them.
The Group's performance during the year is the result and
achievement of all our employees and I would therefore like to
express my sincere thanks on behalf of the board and all
stakeholders for their excellent contribution during 2016. Their
effort and commitment is much appreciated and is a key determinant
for the future success of the Group.
In light of the strength of the Group's order book containing
orders of GBP12 million expected to be shipped and taken to revenue
during 2017, and on-going discussions with both new and existing
customers for further exciting projects, the board remains
confident about the future prospects of the Group for 2017.
Raschid Abdullah
Chairman
14 March 2017
Business review
Following the QRO acquisition the Group's operations continue to
be focused upon the development, supply and maintenance of
technologies used in advanced security, surveillance and ruggedized
electronic applications, the main markets for which are:
-- Rail Transport - software driven video and other sensing
systems for on-train applications sold under the eyeTrain brand to
global train builders, integrators and rail operators;
-- Emergency Services - in-car speed enforcement and end-to-end
Automatic Number Plate Recognition ("ANPR") systems sold under the
ProVida and QRO brands to UK and overseas law enforcement agencies;
and
-- Defence - electronic countermeasure protection systems,
mobile radio systems and related engineering services sold
predominantly to the UK Ministry of Defence ("MOD").
The Group continued to make further progress during 2016,
increasing revenues, margins and profitability while significantly
growing its order book by securing a variety of orders from its
blue-chip and international customer base.
Operating review
While the Group's Defence and Emergency Services products made
important contributions to revenues and profits during 2016, the
success of the year was the continued growth in revenues for its
eyeTrain systems which increased significantly. This increase was
achieved across a number of projects amongst which were Thameslink,
South West Trains and Turkey for the train builder Siemens Mobility
("Siemens"). Deliveries on the Thameslink project, which is the
largest rail order secured by the Group to date, reached their peak
during 2016 and are scheduled to be completed by the end of
2017.
In addition to Siemens, other significant projects included
those for Bombardier Transportation ("Bombardier"), Great Western
Railway ("GWR") and Hitachi Rail Europe ("Hitachi").
Over recent years the Group's strategy of moving its primary
focus in the rail industry towards being a supplier to major new
train builders, rather than to the train retro-fit and
refurbishment market, has borne fruit. While this segment of the
market has a longer sales and order execution cycle, the result has
been a larger order book which greatly enhances the forward
visibility of revenues. This enables the Group to plan and invest
more effectively and with greater certainty and the investments
made in 2016 in product, people and facilities have been made
against that backdrop.
In the second half of 2016 the Group secured a number of major
projects from existing rail customers. These comprised a good mix
of extensions to existing orders, new projects for classes of train
for which eyeTrain was already specified, new train designs onto
which eyeTrain is to be integrated for the first time, and finally
projects involving the design, development and supply of new
eyeTrain applications. The latter two of these four categories of
order are particularly encouraging as they represent the growth
opportunities of the future.
The number of major train builders across the world is
relatively small and Petards already lists a good number of these
amongst its customers. Nevertheless, the Group is keen to expand
its customer base and efforts to do so will continue in 2017. There
are presently a number of significant sales opportunities being
worked upon, including with new customers, that we anticipate will
result in orders being placed with Petards over the coming
year.
Orders and revenues for Petards' defence related products and
services are driven both by the operational activities of the UK's
armed forces and by periodic upgrades to equipment. Revenues for
these products and services comprise a core of business in respect
of on-going support supplemented by orders for large projects.
While these large projects may arise from either urgent operational
requirements ("UORs") or the on-going development of the MOD's
capabilities, in times such as these when the UK's armed forces are
not deployed on active combat, orders for Petards' products
relating to UORs reduce accordingly. Therefore as expected 2016 saw
a reduction in the level of business in this area and we presently
anticipate a similar situation in 2017.
During the year the GBP4.5 million contract to modify electronic
countermeasures equipment fitted to aircraft within the MOD's
fleet, that had been on-going since mid-2014, was successfully
completed to schedule and budget, albeit that its contribution to
revenues was, as expected, some GBP2.25 million lower than in 2015.
Petards also secured a GBP0.8 million contract from the MOD for the
supply of radio equipment and support services, which was delivered
in the first half of the year. Towards the end of the year the MOD
also renewed for a further three years the Group's contract to
support ALE 47 and M147 threat adaptive countermeasures dispensing
systems which are fitted to Lynx, Puma, Chinook, Merlin, and C130J
aircraft. The core element of the contract is worth in excess of
GBP1.6 million over the three year term. However the Group expects
the value to be significantly higher than this reflecting
additional engineering, repair, refurbishment and manufacturing
activities likely to be provided within the frame of the contract.
The MOD also has the option to extend the contract for a further
two years until 31 December 2021.
As previously reported, revenues for our ProVida products in
2015 benefitted from a large spares order from an export customer.
While 2016 revenues were lower than 2015, increased order activity
from other customers meant that, excluding the impact of the above
spares order, they were ahead of those achieved in 2015.
Petards has operated within the speed enforcement and ANPR
markets for many years and the board has always considered this to
be an interesting sector with scope for the Group to expand its
presence. Therefore it was pleasing to go some way in achieving
this through the acquisition of QRO in April. While QRO's
contribution during the year was relatively modest, it was in line
with the board's expectations and was net of some costs instigated
by QRO's management to better position the business for the
future.
QRO was established over 15 years ago providing end-to-end ANPR
security and speed enforcement solutions to UK police forces and to
integrators serving the police and security markets. As well as
enhancing the Group's product and service offering to those
markets, a feature of QRO's business that did not previously exist
in Petards' portfolio is its strong service-based operation
generating recurring revenues through customer support
contracts.
Closing 2016 with an order book of GBP20 million that was up 23%
on the previous year, the Group has good visibility of earnings for
2017. GBP12 million of that order book is scheduled for delivery in
2017 and its composition is a demonstration of the progress made by
the Group in its move from reliance upon orders that are one-off in
their nature to those arising from the its products being specified
on new build projects.
Financial review
Operating performance
Revenues for the year increased by 17% to GBP15.3 million over
the same period in 2015 (2015: GBP13.1 million) with exports
comprising over a third of the total, up 57% to GBP5.3 million
(2015: GBP3.4 million). Much of the increase in exports related to
shipments to Siemens in Germany. Total revenues included GBP1.2
million from QRO relating to the 8 1/2 month period following its
acquisition by the Group. Revenues excluding QRO were up 8%, with
increased revenues from rail products more than offsetting lower
defence product revenues following the completion of the electronic
countermeasures equipment modification contract for the MOD.
Gross margins in the second half of 2016 showed a slight
improvement over those achieved in both the first half and for 2015
as a whole. Margins for 2016 increased to 36.3% (2015: 35.2%) as a
result of both a better performance from continuing operations and
from the effect of the QRO acquisition.
Earnings before interest, tax, depreciation, amortisation,
acquisition costs and share based payment charges ("EBITDA")
increased to GBP1,621,000, an increase over 2015 of 28% (2015:
GBP1,266,000). Operating profits increased by 17% to GBP1,095,000
(2015: GBP935,000).
Underlying administrative expenses, before the effects of both
the overheads relating to QRO and charges for depreciation and
amortisation of development costs, increased 6% to GBP3.5 million
(2015: GBP3.3 million). After taking those items into account,
reported administrative expenses totalled GBP4.5 million (2015:
GBP3.7 million). Net financial expenses remained similar to those
of the prior year at GBP170,000 (2015: GBP173,000).
Due to the availability of unrecognised brought forward tax
losses and research and development tax credits, the Group incurred
only a small tax charge of GBP15,000 (2015: GBP3,000 tax credit).
Profit after tax increased by 19% to GBP910,000 (2015: GBP765,000)
giving rise to a similar increase in basic earnings per share to
2.59p (2015: 2.19p). Fully diluted earnings per share increased 15%
to 1.86p (2015: 1.62p).
These retained profits resulted in a further bolstering of the
balance sheet with total equity at 31 December 2016 increasing to
GBP4.2 million (31 December 2015: GBP3.2 million).
Acquisition
QRO was acquired on 13 April 2016 for a cash consideration of
GBP1,115,000 although the net cash consideration was only
GBP239,000 as the assets acquired include cash balances of
GBP876,000. Post-acquisition QRO contributed revenues of GBP1.2
million, an EBITDA before acquisition costs of GBP78,000 and an
operating profit GBP41,000 (after charging depreciation and
amortisation for acquired customer and technology related
intangibles).
Research and development
Following a year of relatively light investment, in 2016 the
Group increased its investment in product development. This
investment totalled GBP785,000 (2015: GBP283,000) of which
GBP645,000 was capitalised (2015: GBP66,000). The capitalised costs
relate to the Group's eyeTrain products. It remains that the Group
is committed to developing its products and services to maintain
and grow its market position and service its customers.
Cash and cash flow
The Group's financial position remains robust and at 31 December
2016 it held cash of GBP2.3 million, no bank debt and had
convertible loan notes maturing in September 2018 of GBP1.5 million
(2015: GBP2.5 million cash, no bank debt and loan notes of GBP1.5
million).
Cash flows from operating activities were GBP998,000 (2015:
GBP1,174,000) reflecting the strong operating performance in the
year and net cash receipts of GBP210,000 in connection with
research and development tax credits, offset by an increase in
working capital of GBP643,000.
Osman Abdullah
Chief Executive
Consolidated Income Statement
for year ended 31 December 2016
Note 2016 2015
GBP000 GBP000
Revenue
Continuing 14,062 13,072
Acquisitions 1,249 -
Total 2 15,311 13,072
Cost of sales (9,748) (8,473)
Gross profit 5,563 4,599
Administrative expenses (4,468) (3,664)
EBITDA
Earnings before financial
income and expense, tax, depreciation,
amortisation, acquisition
costs and share based payments 1,621 1,266
Amortisation of intangibles (335) (267)
Depreciation (107) (58)
Exceptional Item: Acquisition
costs (57) -
Share based payment charges (27) (6)
Operating profit
Continuing 1,111 935
Acquisitions 41 -
Exceptional acquisition costs (57) -
Operating profit 1,095 935
Financial income 3 4 3
Financial expenses 3 (174) (176)
Profit before tax 925 762
Income tax 4 (15) 3
Profit for the year attributable
to equity shareholders of
the parent 910 765
Earnings per share (pence) 8
Basic 2.59 2.19
Diluted 1.86 1.62
Consolidated Statement of Comprehensive Income
for year ended 31 December 2016
2016 2015
GBP000 GBP000
Profit for the year 910 765
Other comprehensive
income
Items that may be reclassified
to profit:
Currency translation on foreign - -
currency net investments
Total comprehensive
income for the year 910 765
Statement of Changes in Equity
for year ended 31 December 2016
Currency
Share Share Merger Equity Special Retained translation Total
capital premium reserve reserve reserve earnings differences equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2015 6,651 25,192 1,075 204 - (30,510) (211) 2,401
Profit for
the year - - - - - 765 - 765
Total comprehensive
income - - - - - 765 - 765
Equity-settled
share based
payments - - - - - 6 - 6
Conversion
of
convertible
loan notes 1 14 - (1) - - - 14
Capital reduction (6,303) (25,192) (1,075) - 8 32,562 - -
At 31 December
2015 349 14 - 203 8 2,823 (211) 3,186
At 1 January
2016 349 14 - 203 8 2,823 (211) 3,186
Profit for
the year - - - - - 910 - 910
Total comprehensive
income - - - - - 910 - 910
Equity-settled
share based
payments - - - - - 27 - 27
Arising on
payment of
non-consenting
creditors - - - - (8) 8 - -
Conversion
of
convertible
loan notes 8 54 - (3) - - - 59
At 31 December
2016 357 68 - 200 - 3,768 (211) 4,182
Consolidated Balance Sheet
at 31 December 2016
Note 2016 2015
GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 456 247
Goodwill 707 401
Other intangible assets 1,285 902
Deferred tax assets 364 429
2,812 1,979
Current assets
Inventories 1,953 2,168
Trade and other receivables 2,398 1,861
Cash and cash equivalents 2,322 2,478
6,673 6,507
Total assets 9,485 8,486
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 7 357 349
Share premium 68 14
Equity reserve 200 203
Special reserve - 8
Currency translation reserve (211) (211)
Retained earnings 3,768 2,823
Total equity 4,182 3,186
Non-current liabilities
Interest-bearing loans and
borrowings 5 1,540 1,543
1,540 1,543
Current liabilities
Interest-bearing loans and
borrowings 7
Other trade and other payables 3,756 3,757
3,763 3,757
Total liabilities 5,303 5,300
Total equity and liabilities 9,485 8,486
Consolidated Statement of Cash Flows
for year ended 31 December 2016
Note 2016 2015
GBP000 GBP000
Cash flows from operating
activities
Profit for the year 910 765
Adjustments for:
Depreciation 107 58
Amortisation of intangible
assets 335 267
Financial income 3 (4) (3)
Financial expense 3 174 176
Equity settled share-based
payment expenses 27 6
Income tax charge/(credit) 15 (3)
Operating cash flows before
movement in working capital 1,564 1,266
Change in trade and other
receivables (224) 1,138
Change in inventories 241 (729)
Change in trade and other
payables (660) (195)
Cash generated from operations 921 1,480
Interest received 4 3
Interest paid (137) (146)
Tax received/(paid) 210 (163)
Net cash from operating activities 998 1,174
Cash flows from investing
activities
Acquisition of property,
plant and equipment (266) (118)
Capitalised development expenditure (645) (66)
Acquisition of subsidiary 6 (239) -
Cash deposits held in escrow - 54
Net cash outflow from investing
activities (1,150) (130)
Cash flows from financing
activities
Finance lease repayments (4) -
Net cash outflow from financing
activities (4) -
Net (decrease)/increase in
cash and cash equivalents
in the year (156) 1,044
Cash and cash equivalents
at 1 January 2,478 1,434
Cash and cash equivalents
at 31 December 2,322 2,478
1 Basis of preparation and status of financial information
The financial information set out in this statement has been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards as
adopted by the EU ("adopted IFRSs"), IFRIC interpretations and the
Companies Act 2006 applicable to companies reporting under IFRS. It
does not include all the information required for full annual
accounts.
The financial information does not constitute the Company's
statutory accounts for the years ended 31 December 2016 or 31
December 2015 but is derived from those accounts. Statutory
accounts for 2015 have been delivered to the registrar of
companies, and those for 2016 will be delivered in due course. The
auditor has reported on those accounts; his reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying his report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
2 Segmental information
The analysis by geographic segment below is presented in
accordance with IFRS 8 on the basis of those segments whose
operating results are regularly reviewed by the Board of Directors
(the Chief Operating Decision Maker as defined by IFRS 8) to make
strategic decisions, to monitor performance and to allocate
resources.
The Board of Directors regularly reviews the Group's performance
and balance sheet position for its entire operations as a whole.
The Board receives financial information, assesses performance and
makes resource allocation decisions for its UK based business as a
whole and therefore the directors consider the Group to have only
one segment in terms of products and services, being the
development, supply and maintenance of technologies used in
advanced security, surveillance and ruggedised electronic
applications.
As the Board receives revenue, EBITDA and operating profit on
the same basis as set out in the Consolidated Income Statement no
further reconciliation is considered to be necessary.
Revenue by geographical destination can be analysed as
follows:
2016 2015
GBP000 GBP000
United Kingdom 9,990 9,684
Continental Europe 4,929 2,552
Rest of World 392 836
______ ______
Rest of World 15,311 13,072
______ ______
Included in the above amounts are revenues of GBP8,178,000
(2015: GBP8,192,000) in respect of construction contracts. The
balance comprises revenue from sales of goods and services.
3 Financial income and expense
2016 2015
GBP000 GBP000
Recognised in profit or loss
Interest on bank deposits 4 3
Financial income 4 3
GBP000 GBP000
Interest expense on financial liabilities
at amortised cost 159 151
Net foreign exchange loss 15 25
Financial expenses 174 176
4 Taxation
Recognised in the income statement
2016 2015
GBP000 GBP000 GBP000 GBP000
Current tax (credit)/expense
Adjustments in respect
of prior years (41) 10
Total current tax (41) 10
Deferred tax expense/(credit)
Origination and reversal
of temporary differences 17 (1)
Recognition of previously
unrecognised tax losses (51) (43)
Utilisation of recognised
tax losses 192 170
Adjustment in respect
of prior years (102) (179)
Tax rate change - 40
Total deferred tax 56 (13)
Total tax charge/(credit)
in income statement 15 (3)
Reconciliation of effective tax rate
2016 2015
GBP000 GBP000
Profit before tax 925 762
Tax using the UK corporation tax
rate of 20% (2015: 20.25%) 185 154
Non-deductible expenses 54 44
Fixed asset differences 2 2
Utilisation of tax losses (26) (25)
Effect of tax losses generated in
year not provided for in deferred
tax - 15
Recognition of previously unrecognised
tax losses (38) (21)
Change in unrecognised temporary
differences (2) (43)
Adjustments in respect of prior
years (143) (169)
Effect of rate change (17) 40
Total tax charge/(credit) 15 (3)
5 Interest-bearing loans and borrowings
This note provides information about the contractual terms of
the Group's non-current interest-bearing loans and borrowings,
which are measured at amortised cost.
2016 2015
GBP000 GBP000
Non-current liabilities
Convertible loan
notes 1,521 1,543
Finance lease liabilities 19 -
1,540 1,543
The convertible loan notes of GBP1 each, carry a fixed interest
rate of 7% per annum and are convertible into ordinary shares of 1p
each at any time prior to maturity. The conversion price is 8p as
compared to the market price at 31 December 2016 of 27.38p.
Interest is paid quarterly and the loan notes mature on 10
September 2018.
At 31 December 2016 the nominal value of the outstanding loan
notes was GBP1,579,909 (2015: GBP1,641,711).
6 Acquisition
On 13 April 2016, the Group acquired the entire issued share
capital of QRO Solutions Limited ("QRO"). QRO provides 'end-to-end'
ANPR, security and speed enforcement solutions to UK police forces
and to integrators serving the police and security markets. Its
systems integration expertise enables it to offer fixed site,
mobile, re-deployable and hand-held ANPR systems which can be
integrated into its own back office management suite of software;
Check-IT ANPR, Check-IT CSGS, Check-IT Handheld and Multimedia
Vault. It comes to the Group with a strong service based operation,
well established in its field, profitable, cash generative with
recurring revenues and complements Petards' existing Emergency
Services ProVida brand.
Internal cash resources funded the purchase consideration of
GBP1,115,000. At the time of acquisition, QRO's balance sheet
included net cash balances of GBP876,000. No contingent
consideration was payable resulting in a net cash consideration for
the acquisition of GBP239,000.
In the period to 31 December 2016, QRO contributed revenue of
GBP1,249,000 and operating profit of GBP41,000 to the Group's
results.
The acquisition had the following effect on the Group's assets
and liabilities at the acquisition date:
Pre-acquisition Fair Recognised
carrying value value on
amount adjustments acquisition
GBP'000 GBP'000 GBP'000
Net assets acquired
Intangible assets
Technology assets - 41 41
Customer order book - 32 32
Property, plant &
equipment 50 - 50
Inventories 26 - 26
Trade and other receivables 333 - 333
Hire purchase contract
obligations (30) - (30)
Trade and other payables (537) (4) (541)
Income tax
(payable)/receivable (20) 51 31
Deferred tax (9) - (9)
______ ______ ______
Net identified assets
and liabilities (187) 120 (67)
______ ______ ______
Goodwill on acquisition 306
______
Total cash consideration 239
______
Cash flow
Consideration paid
in cash 1,115
Cash acquired (876)
______
Net cash flow 239
______
Pre-acquisition carrying amounts were determined based on
applicable IFRSs, immediately prior to the acquisition. The values
of assets and liabilities recognised on acquisition are the
estimated fair values. The goodwill arising on acquisition can be
attributed to a multitude of assets that cannot be readily
separately identified for the purposes of fair value
accounting.
The Group incurred acquisition related costs of GBP57,000 that
are included within administrative expenses.
7 Share capital
At 31 At 31
December December
2016 2015
No. No.
Number of shares in issue
- allotted, called up and
fully paid
Ordinary shares of 1p each 35,707,101 34,934,579
GBP000 GBP000
Value of shares in issue - allotted,
called up and fully paid
Ordinary shares of 1p each 357 349
The Company's issued share capital comprises 35,707,101 ordinary
shares of 1p each all of which have equal voting rights.
During the year the Company issued 772,522 ordinary 1p shares
following conversion of GBP61,802 convertible loan notes at a
conversion price of 8p each.
8 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
for the year attributable to the shareholders by the weighted
average number of shares in issue in the year.
2016 2015
GBP000 GBP000
Earnings
Profit for the year 910 765
'000 '000
Number of shares
Weighted average
number of ordinary
shares 35,199 34,858
Basic earnings per
share (pence) 2.59 2.19
Diluted earnings per share
Diluted earnings per share assumes conversion of all potentially
dilutive ordinary shares, which arise from both convertible loan
notes and share options, and is calculated by dividing the adjusted
profit for the year attributable to the shareholders by the assumed
weighted average number of shares in issue. The adjusted profit for
the year comprises the profit for the year attributable to the
shareholders after adding back the interest on convertible loan
notes of GBP150,000 for 2016 (2015: GBP150,000).
2016 2015
GBP000 GBP000
Adjusted earnings
Profit for the year 1,060 915
'000 '000
Number of shares
Weighted average
number of ordinary
shares 56,881 56,268
Diluted earnings
per share (pence) 1.86 1.62
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JJMBTMBABTMR
(END) Dow Jones Newswires
March 14, 2017 03:01 ET (07:01 GMT)
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