(ERU) Eruma

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(RNS) 2009-09-29 07:02 Eruma plc - Interim Results
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RNS Number : 8013Z Eruma plc 29 September 2009 Eruma plc / Index: AIM / Ticker: ERU / Sector: Support Services 29th September 2009 Eruma plc ('Eruma' or 'the Company') Unaudited Interim Accounts for the period ended 30 June 2009 Eruma plc, the AIM traded specialist provider of counter terrorism, intruder prevention products and intelligent emergency lighting is pleased to announce its interim results for the six month period to 30th June 2009. Highlights `· Revenue increased by 53% from £366k in the first six months of 2008 to` £561k for the equivalent period this year `· Gross profit increased by 44% from £151k in the first 6 months of 2008 to` £218k for the equivalent period this year · Distribution expenses were reduced by 4% and administrative expenses by 17% compared with the first 6 months of last year, despite the significantly higher turnover `· The loss before tax was reduced by 23% against the same period last year` CHAIRMAN'S STATEMENT Review and Outlook The hard work and investment we made in 2008 has begun to reap rewards in 2009 with much improved performance across all key measures of the business. We are pleased to report increases in both orders and revenue and a reduction in costs for the period with a growing and strong pipeline of new business already identified. By the end of August 2009 we had already exceeded our total 2008 revenue. We secured another landmark order in May for our counter terrorism solution which is now nearing completion of its installation. Due to the nature of such projects, the potential security implications and our ongoing obligations to our clients', details of our counter terrorism installations must remain confidential and so we are unable to provide specific details on individual clients. However, repeated testing has shown that our product delivers an unrivalled level of protection against bomb blasts and will be critical to the success of any facility in which it is installed being able to minimise casualties and continue its function in the aftermath of an attack. We are earning ourselves a reputation for quality, reliability and consistency of execution in what is a specialised community of contractors servicing this market. The partnership announced with Pentagon Protection plc in June 2009, has proved to be successful, already delivering revenue to the company. The partnership has enabled us to revisit past opportunities. We are now offering a new solution comprising our intruder prevention blinds and Pentagon protective film to deliver the right balance of protection in line with budget requirements. Trading update post period We are continuing to secure benefits from efficiency gains and cost reductions wherever we can without compromising the future scalability of the business. We have put in place a mixture of funding solutions, including convertible loan notes and the placing of new ordinary shares that have delivered a strengthened balance sheet which in turn will enable us to secure trade and invoice finance. These measures are designed to ensure we will have sufficient working capital to take us through to a becoming a sustainable, operationally profitable business in 2010 and to take advantage of large scale opportunities open to the business without putting us under undue operational and financial pressure. In July we secured a significant contract award at Ealing Hospital for our intelligent emergency lighting. This is the first phase of a multi-phase project that will be completed in 2010. This order, coupled with the intruder prevention and counter terrorism orders has demonstrated that our products offer unique benefits to distinct markets. Each has generated significant interest both within the UK and on an international stage which we are developing during the second half of 2009 and early 2010. In August our new anti ram-raid gate solution was launched to market and we expect to see significant interest and take up in this unique product offering. The first deployment has been successfully made at City Link. As Ken Semple, the company's Security Compliance General Manager says; "At City Link, the UK's premium express delivery company, we are always looking for cost effective and easy to use successful security products. This anti ram-raid gate not only protects against ram-raids but also burglary via shutter doors. It is highly effective and its simple design means that it can be deployed in a safe and easy manner within seconds and by just one person. I commend this product to anybody who needs to protect a shutter door." We have successfully completed our sales reorganisation making our whole portfolio of products available to a larger and strengthened sales force, which are now focused on geographical sales territories managed across three regions within the UK. This increases our capability to develop client relationships more effectively and deepen the level of account penetration. Our international business development continues with some notable opportunities developing for our counter terrorism solutions across many of the trouble hotspots in the world. Our access to a wider network of sales agents through our partnership with Pentagon is opening new doors and raising our profile on critical projects across the globe. The emphasis is currently on counter terrorism, although a number of new infrastructure projects and property developments are providing a fertile ground for our energy saving intelligent emergency lighting products as well. We have successfully qualified our products to be eligible for Carbon Trust funding schemes such as Salix in the public sector and other schemes for the SME markets. We are now in a position to offer clients access to interest free funds to enable them to invest in our solutions sooner and realise the benefits they afford in protection and energy reduction. We are pleased to announce that at the end of August 2009, we had already exceeded the total revenue for 2008. This excellent performance coupled with the broadened portfolio of products and growing pipeline offers great potential for the remainder of the year that we intend to capitalise on. Our emphasis is on excellence in execution across our core processes such as marketing, sales, manufacturing and installation. We have strong financial and business management policies and systems in place that deliver actionable intelligence that allows us to drive the business forward in a timely manner. Your board is confident that its strategy of organic growth and expansion through partnerships together with a broadened product portfolio will enable it to successfully take an increasingly larger share of its key markets at an attractive level of profitability that will deliver the returns to shareholders from their investment. David Alexander `Chairman 28th September 2009` ERUMA PLC Consolidated Statement of Comprehensive Income for the six months ended 30th June 2009 `Six months to 30 Six months to 30 Year ended 31` `June 2009 Unaudited June 2008 Unaudited December 2008` `Audited` `£'000s £'000s £'000s` `Turnover 561 366 658` `Cost of Sales (343) (215) (441)` `Gross Profit/ (Loss) 218 151 217` `Distribution expenses (321) (334) (891)` `Administrative expenses (414) (498) (806)` `Operating Loss (517) (681) (1,480)` `Investment revenues - 5 11` `Finance costs (7) - (6)` `Loss before tax (524) (676) (1,475)` `Income tax charges - - 29` `Loss for the period from (524) (676) (1,446)` continuing operations attributable to shareholders Loss per share From continuing operations: `Basic and diluted (0.43p) (0.59p) (1.19p)` The group's turnover and operating loss arise from continuing operations. There were no recognised gains or losses other than those recognised in the income statement above. ERUMA PLC Consolidated Statement of Financial Position as at 30 June 2009 `30 June 2009 30 June 2008 31 December 2008` `Unaudited Unaudited Audited` `£'000s £'000s £'000s` Assets Non-current assets `Property, Plant & Equipment 71 49 77` `Goodwill 1,472 1,472 1,472` `Other intangibles 593 357 595` `2,136 1,878 2,144` Current assets `Inventories 153 121 211` `Trade and other receivables 128 443 197` `Cash and cash equivalents 55 620 49` `336 1,184 457` `Total assets 2,472 3,062 2,601` Equity and liabilities Capital and reserves `Share capital 1,287 1,287 1,287` `Share premium 3,707 3,707 3,707` `Retained earnings (4,058) (2,765) (3,534)` `Total equity 936 2,229 1,460` Non current liabilities `Other loans 750 329 329` 750 329 329 Current liabilities `Trade and other payables 786 472 812` `Bank overdraft - 32 -` 786 504 812 `Total liabilities 1,536 833 1,141` `Total equity and liabilities 2,472 3,062 2,601` ERUMA PLC Consolidated Statement of Cash Flows for the six months ended 30th June 2009 `Six months to 30 Six months to 30 Year ended 31` `June 2009 Unaudited June 2008 Unaudited December 2008` `Audited` `Note £'000 £'000 £'000` `Net cash utilised by operating 4 (406) (787) (1,050)` activities Investing activities `Interest received - 5 11` `Interest paid (7) - (6)` `Purchases of plant and (1) (5) (42)` equipment `Purchase of patents and (1) (51)` trademark `Capitalisation of product - (97) (285)` development cost `Net cash from investing (9) (97) (373)` activities Cash flows from financing activities `Proceeds on issue of shares - 1,102 1,102` `Issue of Convertible Loan 315 - -` Notes `Loans from Directors 106 - -` `Net cash from financing 421 1,102 1,102` activities `Net cash inflow/(outflow) 6 218 (321)` `Cash and cash equivalents at 49 370 370` start of period `Cash and cash equivalents at end of 55 588 49` period Consolidated Statement of changes in equity for the six months ended 30th June 2009 `Six months to 30 Six months to 30 Year ended 31` `June 2009 Unaudited June 2008 Unaudited December 2008` `Audited` `£'000s £'000s £'000s` `At beginning of period 1,460 1,805 1,805` `Deficit for the period (524) (676) (1,446)` `- 1,101 1,101` Issue of share capital `At end of period 937 2,230 1,460` Notes to the Interim Report `1. Significant Accounting Policies` These accounts have been prepared in accordance with International Financial Reporting Standards and on the historical cost basis, using generally recognised accounting principles. Consistent with those used in the annual report and accounts for the year ended 31 December 2008. This interim report for the six months to 30 June 2009, which complies with IAS 34, was approved by the Board on 28th September 2009. Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2008, as described in those annual financial statements. The following new standards and amendments to standards are mandatory for the rst time for the nancial year beginning 1 January 2009: IAS 1 (REVISED), 'PRESENTATION OF NANCIAL STATEMENTS'. THE REVISED STANDARD PROHIBITS THE PRESENTATION OF ITEMS OF INCOME AND EXPENSES (THAT IS 'NON-OWNER CHANGES IN EQUITY') IN THE STATEMENT OF CHANGES IN EQUITY, REQUIRING 'NON-OWNER CHANGES IN EQUITY' TO BE PRESENTED SEPARATELY FROM OWNER CHANGES IN EQUITY. ALL 'NON-OWNER CHANGES IN EQUITY' ARE REQUIRED TO BE SHOWN IN A PERFORMANCE STATEMENT. Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). The group has elected to present one statement, a statement of comprehensive income. The interim nancial statements have been prepared under the revised disclosure requirements. IFRS 8, 'OPERATING SEGMENTS'. IFRS 8 REPLACES IAS 14, 'SEGMENT REPORTING'. IT REQUIRES A 'MANAGEMENT APPROACH' UNDER WHICH SEGMENT INFORMATION IS PRESENTED ON THE SAME BASIS AS THAT USED FOR INTERNAL REPORTING PURPOSES. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identied as the steering committee that makes strategic decisions. Goodwill is allocated by management to groups of cash-generating units on a segment level. IFRS 2 (AMENDMENT), 'SHARE-BASED PAYMENT' (EFFECTIVE FROM 1 JANUARY 2009). THE AMENDMENT TO THE STANDARD IS STILL SUBJECT TO ENDORSEMENT BY THE EU. IT DEALS WITH VESTING CONDITIONS AND CANCELLATIONS. IT CLARIES THAT VESTING CONDITIONS ARE SERVICE CONDITIONS AND PERFORMANCE CONDITIONS ONLY. OTHER FEATURES OF A SHARE-BASED PAYMENT ARE NOT VESTING CONDITIONS. THESE FEATURES WOULD NEED TO BE INCLUDED IN THE GRANT DATE FAIR VALUE FOR TRANSACTIONS WITH EMPLOYEES AND OTHERS PROVIDING SIMILAR SERVICES; THEY WOULD NOT IMPACT THE NUMBER OF AWARDS EXPECTED TO VEST OR VALUATION THERE OF SUBSEQUENT TO GRANT DATE. ALL CANCELLATIONS, WHETHER BY THE ENTITY OR BY OTHER PARTIES, SHOULD RECEIVE THE SAME ACCOUNTING TREATMENT. THE GROUP AND COMPANY WILL APPLY IFRS 2 (AMENDMENT) FROM 1 JANUARY 2009, SUBJECT TO ENDORSEMENT BY THE EU. IT IS NOT EXPECTED TO HAVE A MATERIAL IMPACT ON THE GROUP OR COMPANY'S NANCIAL STATEMENTS. The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2009 and have not been adopted early: IFRS 3 (REVISED), 'BUSINESS COMBINATIONS' AND CONSEQUENTIAL AMENDMENTS TO IAS 27, 'CONSOLIDATED AND SEPARATE NANCIAL STATEMENTS', IAS 28, 'INVESTMENTS IN ASSOCIATES' AND IAS 31, 'INTERESTS IN JOINT VENTURES', EFFECTIVE PROSPECTIVELY TO BUSINESS COMBINATIONS FOR WHICH THE ACQUISITION DATE IS ON OR AFTER THE BEGINNING OF THE RST ANNUAL REPORTING PERIOD BEGINNING ON OR AFTER 1 JULY 2009. MANAGEMENT IS ASSESSING THE IMPACT OF THE NEW REQUIREMENTS REGARDING ACQUISITION ACCOUNTING, CONSOLIDATION AND ASSOCIATES ON THE GROUP. THE GROUP DOES NOT HAVE ANY JOINT VENTURES. The revised standard continues to apply the acquisition method to business combinations, with some signicant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classied as debt subsequently re-measured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the minority interest in the acquiree either at fair value or at the minority interest's proportionate share of the acquiree's net assets. All acquisition-related costs should be expensed. The group will apply IFRS 3 (revised) to all business combinations from 1 January 2010. IFRIC 17, 'DISTRIBUTIONS OF NON-CASH ASSETS TO OWNERS', EFFECTIVE FOR ANNUAL PERIODS BEGINNING ON OR AFTER 1 JULY 2009. THIS IS NOT CURRENTLY APPLICABLE TO THE GROUP, AS IT HAS NOT MADE ANY NON-CASH DISTRIBUTIONS. IFRIC 18, 'TRANSFERS OF ASSETS FROM CUSTOMERS', EFFECTIVE FOR TRANSFERS OF ASSETS RECEIVED ON OR AFTER 1 JULY 2009. THIS IS NOT RELEVANT TO THE GROUP, AS IT HAS NOT RECEIVED ANY ASSETS FROM CUSTOMERS. The following new standards, amendments to standards and interpretations are mandatory for the rst time for the nancial year beginning 1 January 2009, but are not currently relevant for the group: IAS 23 (AMENDMENT), 'BORROWING COSTS'. IAS 32 (AMENDMENT), 'FINANCIAL INSTRUMENTS: PRESENTATION'. IFRIC 13, 'CUSTOMER LOYALTY PROGRAMMES'. IFRIC 15, 'AGREEMENTS FOR THE CONSTRUCTION O F REAL ESTATE'. IFRIC 16, 'HEDGES OF A NET INVESTMENT IN A FOREIGN OPERATION'. IAS 39 (AMENDMENT), 'FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT'. 2. Segmental Analysis The Group's primary reporting format is by business segment and the secondary is by geographical location. The business segment and principal activities consist of security blinds and emergency lighting as shown below: 6 Months to 30 June 2009 `Security Blinds Emergency Lighting Total` `£'000 £'000 £'000` Revenue Operating loss before `amortization of acquisition (357) (157) (514)` related intangibles and share based payment charges `Amortisation of acquisition (3) - (3)` related intangibles `Operating loss (360) (157) (517)` `Net finance income (7)` `Loss before taxation (524)` Segment Assets `Property, plant and equipment 10 61 71` `Intangible assets 1,218 847 2,065` `Current assets 222 114 336` `1,450 1,022 2,472` 6 Months to 30 June 2008 `Security Blinds Emergency Lighting Total` `£'000 £'000 £'000` `Revenue 359 7 366` Operating loss before `amortization of acquisition (476) (204) (680)` related intangibles and share based payment charges `Amortisation of acquisition (1) - (1)` related intangibles `Operating loss (477) (204) (681)` `Net finance income 5` `Loss before taxation (676)` Segment Assets `Property, plant and equipment 4 45 49` `Intangible assets 1,001 828 1,829` `Current assets 1,118 66 1,184` `2,123 939 3,062` 12 Months to 31 December 2008 `Security Blinds Emergency Lighting Total` `£'000 £'000 £'000` `Revenue 631 27 658` Operating loss before `amortization of acquisition (1,011) (467) (1,478)` related intangibles and share based payment charges `Amortisation of acquisition (2) - (2)` related intangibles `Operating loss (1,013) (467) (1,480)` `Net finance income 5` `Loss before taxation (1,475)` Segment Assets `Property, plant and equipment 12 65 77` `Intangible assets 1,219 848 2,067` `Current assets 315 142 457` `1,546 1,055 2,601` The geographical segment consists of United Kingdom only. `6 Months to 6 Months to 12 Months to` `30 June 2009 30 June 2008 31 December 2008` `United Kingdom United Kingdom United Kingdom` `Total Total Total` `£'000 £'000 £'000 £'000 £'000 £'000` `Revenue 561 561 366 366 658 658` `Total Assets 2,472 2,472 3,062 3,062 2,601 2,601` `Capital Expenditure 1 1 5 5 42 42` `* * ** * ** ` `3. Loss per Share` `Six months to Six months to Year ended 31` `30 June 2009 30 June 2008 December 2008` Earnings per ordinary shares `Basic and diluted (0.43p) (0.59p) (1.19p)` The loss per ordinary share is based on the group's loss for the period of £523,000 (30 June 2008 - £676,000; 31 December 2008 - £1,480,000) and a basic and diluted weighted average number of shares in issue of 121,478,517 (30 June 2008 - 115,283,037 ;31 December 2008 - 121,478,517). 4. Reconciliation of operating loss to net cash outflow from operating activities. `Six months to 30 Six months to 30 Year ended 31` `June 2009 Unaudited June 2008 Unaudited December 2008` `Audited` `£'000s £'000s £'000s` `Loss for the period (517) (681) (1,480)` Adjustments for : 29 `Depreciation of property, plant and 7 2 10` equipment `Amortisation of intangibles 3 1 2` `Operating cash flow before (507) (678) (1,439)` movement in working capital `(Increase)/ decrease in 58 (46) (137)` inventories `(Increase)/decrease in 69 (113) 138` receivables `Increase/(decrease) in (26) 50 388` payables `Net cash outflow from operating activities (406) (787) (1,050)` `5. Called up Share Capital` `The issued share capital as at 31 December 2008,` `per the audited accounts was 121,478,517` `Ordinary Shares of 1p each. No shares were` `issued during the six months ended 30June 2009.` `6. The unaudited results for period ended 30 June` `2009 do not constitute statutory accounts within` `the meaning of Section 435 of the Companies Act` `2006. The comparative figures for the year 31` `December 2008 are extracted from the statutory` `financial statements which have been filed with` `the Registrar of Companies and which contain an` `unqualified audit report and did not contain` `statements under Section 237(2) or (3) of the` `Companies Act 1985.` `7. Copies of this interim statement are available` `from the Company at its registered office at` `Underwood House, Shepherdess Walk Buildings,` `Underwood Street, London, N1 7LG. The interim` `statement will also be available on the company` `websitewww.erumaplc.com.` This information is provided by RNS The company news service from the London Stock Exchange END IR ILFSRASITFIA**
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