TIDMSRG
Security Research Group plc
Interim Results for the six months ended 30 September 2014
Security Research Group plc (`the Group') comprises Specialist Electronics,
consisting of Audiotel International Limited (`Audiotel') and its subsidiary
Security Research Limited, Property Information Services Businesses ('PSG') and
Moore & Buckle (Flexible Packaging) Limited (`M&B').
Specialist Electronics is focused on improving its existing range of products
and on developing a range of completely new innovative products aimed at the
commercial market.
PSG is a major provider of both commercial and residential property searches
and Energy Performance Certificates to the conveyancing marketplace in England
and Wales. PSG trades both through its expanded wholly owned operation based in
Yorkshire and its national network of PSG Brand Franchisees across England and
Wales.
M&B provides specialist, bespoke, flexible packaging solutions.
highlights
* Group profit before taxation GBP798,000 (2013: GBP219,000).
* Specialist Electronics operating profit GBP274,000 (2013: GBP7,000).
* Property Information Services operating profit GBP598,000 (2013: GBP368,000).
* M&B's operating profit GBP169,000 (2013: GBP123,000).
Enquiries:
Security Research Group plc 0207 881 0800
Jonathan Mervis, Chairman
John Warwick, Finance Director
WH Ireland Limited 0207 220 1666
Chris Fielding / James Bavister
Chairman's statement
Specialist Electronics
The operating profit for the period was GBP274,000 (2013: GBP7,000). The trading
figures remain substantially lower than for the recent periods which benefited
from the one off GBP50 million Ministry of Defence contract which concluded in
December 2012.
Audiotel continues to focus on the improvement of its existing product range
along with the development of new innovative products primarily aimed at the
commercial market.
Notable sales during the period included:-
* For the Australian homeland security services, a GBP268,000 sale of
SuperBroom handheld detectors.
* For the Egyptian government, a GBP120,000 sale of Archway systems which are
suitable for detecting a wide range of active and inert electronics
including mobile phones, USB memory sticks, electronic detonators and
covert surveillance devices.
* Sales to Dubai, Japan and Columbia of around GBP200,000, in total, for
miscellaneous equipment.
New products now at the prototype stage include:-
* A `personal surveillance scanner' designed to provide real-time security
against wireless surveillance intrusion.
* A handheld electronics detector which can be used, together with an
Archway, for body searches.
* A handheld scanner aimed at the mobile phone detection marketplace, which
can detect concealed `screened electronic devices' currently undetectable
by traditional equipment.
Following a review of specialist electronics activities we intend to increase
our resource in both the sales and technical departments so enhancing our
expertise in the development and marketing of mobile device apps which can be
linked to our product ranges.
PSG
The outlook for PSG has improved substantially. The operating profit for the
period was GBP598,000 (2013: GBP368,000).
The improvement at PSG can be attributed to:-
* Increased volume of house sale transactions.
* Regular proactive, comparative reviews of each individual franchisee's
performance measured against that of peers which have a similar total of
dwellings within their franchises.
* Monitoring of enforceable performance targets.
* The continued success of the enhanced national online platform which has
enabled a more effective delivery of products and services.
Plans are under consideration to extend the PSG brand to deliver a wider range
of different legal services to PSG's loyal and long standing client base of
2000 solicitors.
M&B
M&B's operating profit of GBP169,000 (2013: GBP123,000) improved by 37% compared
with the first half of the previous financial year.
Outlook
The Directors are confident that with improving performance in each of its
divisions the outlook for the Group is decidedly positive.
Jonathan Mervis
Chairman
5 November 2014
consolidated income statement
for the six months ended 30 September 2014
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Revenue 4,996 4,799 9,061
Cost of sales (2,195) (2,295) (4,102)
Gross profit 2,801 2,504 4,959
Administrative expenses (2,124) (2,294) (4,414)
Operating profit before exceptional 677 210 545
items
Exceptional administrative credits 113 - 1,177
Operating profit 790 210 1,722
Finance income 8 9 17
Profit on ordinary activities before 798 219 1,739
taxation
Income tax (expense)/credit (158) 25 (210)
Profit on ordinary activities after 640 244 1,529
taxation
Basic earnings per share 3.31p 1.26p 7.89p
Diluted earnings per share 3.31p 1.25p 7.86p
The consolidated income statement has been prepared on the basis that all
operations are continuing operations.
consolidated statement of comprehensive income
for the six months ended 30 September 2014
The profit on ordinary activities after taxation represents the Group's total
comprehensive income for the period.
consolidated statement of changes in equity
for the six months ended 30 September 2014
Share Share Capital Retained Total
Capital Premium Redemption Earnings
Reserve
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2013 3,885 552 1,965 1,446 7,848
Total comprehensive income for - - - 244 244
the period
At 30 September 2013 3,885 552 1,965 1,690 8,092
Cancellation of own shares (19) - 19 - -
Receipt in relation to share - - - 79 79
cancellation
Total comprehensive income for - - - 1,285 1,285
the period
At 31 March 2014 3,866 552 1,984 3,054 9,456
Total comprehensive income for - - - 640 640
the period
At 30 September 2014 3,866 552 1,984 3,694 10,096
30 September 30 September 31 March
2014 2013 2014
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Goodwill 3,273 3,273 3,273
Other intangible assets 462 597 536
Property, plant and equipment 405 365 440
Deferred tax asset 186 282 221
4,326 4,517 4,470
Current assets
Inventories 1,292 1,262 1,527
Trade and other receivables 2,779 2,502 2,966
Current tax asset 269 289 269
Cash and cash equivalents 3,605 2,849 3,473
7,945 6,902 8,235
Current liabilities
Trade and other payables (1,963) (3,272) (2,865)
Current tax liability (212) (55) (384)
(2,175) (3,327) (3,249)
Net current assets 5,770 3,575 4,986
Net assets 10,096 8,092 9,456
Represented by:
Capital and reserves attributable to
equity holders
Called up share capital 3,866 3,885 3,866
Share premium account 552 552 552
Capital redemption reserve 1,984 1,965 1,984
Retained earnings 3,694 1,690 3,054
Total equity 10,096 8,092 9,456
consolidated statement of financial position
at 30 September 2014
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit before taxation 798 219 1,739
Adjustments for:
Depreciation of property, plant and 56 57 110
equipment
Amortisation of other intangible assets 214 256 494
Profit on disposal of property, plant (3) (16) (46)
and equipment
Interest receivable (8) (9) (17)
Decrease/(increase) in receivables 187 219 (245)
Decrease/(increase) in inventories 235 (73) (338)
Decrease in payables (902) (2,394) (2,801)
Cash generated from/(used in) operations 577 (1,741) (1,104)
Income tax paid (295) (597) (422)
Net cash generated from/(used in) 282 (2,338) (1,526)
operating activities
Cash flows from investing activities
Purchase of property, plant and (26) (19) (176)
equipment
Expenditure on other intangible assets (140) (225) (403)
Proceeds from sale of property, plant 8 24 84
and equipment
Interest received 8 9 17
Net cash used in investing activities (150) (211) (478)
Cash flows from financing activities
Received in relation to share - - 79
cancellation
Net cash generated from financing - - 79
activities
Net increase/(decrease) in cash and cash 132 (2,549) (1,925)
equivalents
Cash and cash equivalents at beginning 3,473 5,398 5,398
of period
Cash and cash equivalents at end of 3,605 2,849 3,473
period
consolidated statement of cash flows
for the six months ended 30 September 2014
notes to the interim financial statements
for the six months ended 30 September 2014
1. general information
The interim financial statements for the six months ended 30 September 2014
were authorised for issue in accordance with a resolution of the Board of
Directors on 4 November 2014.
The Company is a public limited company incorporated in the United Kingdom. The
address of its registered office is 133 Ebury Street, London SW1W 9QU.
The Company's ordinary shares are admitted to trading on the AIM market of the
London Stock Exchange.
The financial information for the six months ended 30 September 2014 set out in
this interim report is unaudited and does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The comparative
figures for the year ended 31 March 2014 are extracted from the statutory
financial statements which have been filed with the Registrar of Companies. The
auditors' report on those financial statements was unqualified and did not
contain statements under section 498(2) or (3) of the Companies Act 2006.
2. basis of preparation
The interim financial statements have been prepared under the historical cost
convention and in accordance with applicable International Financial Reporting
Standards (IFRSs), International Accounting Standards (IAS) and International
Financial Reporting Interpretations Committee (IFRIC) interpretations adopted
for use by the European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRSs. The information within these
interim financial statements has been prepared in accordance with IAS 34
`Interim Financial Reporting' as adopted by the European Union.
3. accounting policies
The principal accounting policies used in preparing the interim financial
statements and those the group expects to apply in its financial statements for
the year ending 31 March 2015 are unchanged from those disclosed in the
statutory financial statements for the year ended 31 March 2014.
4. segmental analysis
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Revenue - operating segment
Specialist electronics 1,656 1,440 2,761
Property information services 2,560 2,606 4,692
Packaging solutions 780 753 1,608
4,996 4,799 9,061
Revenue - geographical area
United Kingdom 4,347 4,608 8,280
Asia and Middle East 96 156 552
Europe 67 20 163
Other 486 15 66
4,996 4,799 9,061
Operating profit/(loss)
Specialist electronics 274 7 26
Property information services 598 368 845
Packaging solutions 169 123 313
Head office (364) (288) (639)
Exceptional items 113 - 1,177
790 210 1,722
Net operating assets
Specialist electronics 1,241 83 995
Property information services 3,263 3,316 2,989
Packaging solutions 1,965 1,933 1,994
Head office 22 (89) 5
6,491 5,243 5,983
Interest bearing assets 3,605 2,849 3,473
10,096 8,092 9,456
5. exceptional administrative credits
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Legal settlement with local 113 - 1,177
authority
6. earnings per share
Basic earnings per share calculations have been arrived at by reference to the
following profit and weighted average number of shares in issue during the
period. The actual number of shares in issue at 30 September 2014 was
19,328,900.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
Profit after tax GBP640,000 GBP244,000 GBP1,529,000
Weighted average number of shares in 19,328,900 19,426,324 19,380,415
issue
Basic earnings per share 3.31p 1.26p 7.89p
Weighted average number of shares in 19,355,824 19,552,285 19,449,684
issue adjusted to take account of
shares under option
Diluted earnings per share 3.31p 1.25p 7.86p
END
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