(REDT.L) Red24 PLC Buy/Sell

Simon Richards, Chairman, commented:

We are pleased with the growth in the business in the first half year and with the previously announced extension to our contract with AIG. The growth in the revenue stream for the red24 segment augurs well for the medium term prospects for the business notwithstanding the adverse exchange rate movements that have held back the growth in profitability this half year. We are particularly pleased to declare a maiden dividend to shareholders and aim to make this a regular part of shareholder returns.

Enquiries:

Red24 plc
Simon Richards, Chairman Tel: 0203 291 2424

Mal Worsley-Tonks, Director Threadneedle Communications
Josh Royston Tel: 0207 653 9850

Graham Herring Seymour Pierce Mark Percy, Corporate Finance Tel: 0207 107 8000 John Grant, Corporate Broking

red24 is a provider of a range of security risk management services, offering preventative and reactive advice to help individuals and organisations to avoid and manage security risks to themselves, their families and their organisations. The products are distributed through leading international financial service companies.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present our half year report showing continued profitability and further strengthening of our balance sheet. I am particularly pleased to report that a maiden dividend of 0.15p per share will be paid on 18 January 2010 to those shareholders on the register at 18 December 2009.

Financial Overview

Overall revenue has increased by 16% to £1,866,000 from £1,608,000 and the profit before tax has increased to £231,000 from £198,000. As a result shareholders funds have increased by £161,000.

Cash flow has continued to be positive and we repaid early £125,000 of Loan notes during the half year. The interest saving will benefit the periods ahead. Our aim is to repay all external debt by the end of the financial year whilst maintaining an adequate reserve of working capital.

red24TM

red24 is a global security service providing preventative and reactive advice to help individuals and businesses avoid and manage personal risks to themselves, their staff and their families.

Revenues for the red24 business segment grew by some 30% in the half year and segment profit rose to £426,000 from £378,000. Profit growth has been held back both by the fact that two thirds of the additional revenue has been at lower margin than budgeted and by the impact of the strength of the rand against both sterling and the dollar which has tended to increase the costs of our Crisis Risk Management Centre (CRM) in Cape Town with no offsetting growth in the value of our foreign currency revenues. In the first half of this year the average rate was R12.8:£1 compared with R15.0:£1 last year a movement that has increased our South African administration costs by15%.

Our key distribution channels remain HSBC and AIG Travel Assist. HSBC continue to provide red24 services as part of its Premier and Plus banking offerings and this half year have added red24 to the First Directory account offered by its First Direct subsidiary. In September we were delighted to announce a five year extension to our contract with AIG Travel Assist to offer its customers in America and Asia red24 on an exclusive basis. We believe that much of our success with HSBC is down to training its relationship managers in the product so they can explain it with confidence to their customers and this helps ensure we are a valued part of the overall offering. We believe a similar approach will assist AIG and so have taken on a security specialist, based in New York, to develop the business in that market. A similar position will be created in Asia in due course.

We have had some success in broadening our offering to corporate customers who are generally adding red24 to their staff intranet. This gives opportunities for the sale of other security services and our consulting business has had a strong half year. A recent example of this is the addition of HRG Rennies as a client. We will be advising HRG Rennies staff on their travel to South Africa for the 2010 World Cup. With our local knowledge and experience in advising international corporations, red24 is ideally placed to provide the most detailed security advice to any business likely to travel to South Africa for the tournament.

We continue to advise insurance underwriters on aspects of their special risk business, particularly product contamination. This market appears to be very fluid at the moment and we have recruited additional staff in order to offer a fuller range of special risk advice. We believe that this will bring in additional business in the short and medium term, which will help fuel the next phase of our growth.

Training

Training revenues have fallen 19% in the half year and profit has fallen to £44,000 from £51,000. In part this is because a course normally held in May was brought forward to March and so fell outside the half year but, in any event, trading conditions were difficult in the half year. Overseas work continues to grow and prospects for the second half appear encouraging so that the year as a whole should turn out to be more profitable than last year.

Outlook and risks

Clearly the economic environment remains unsettled and further turmoil in the months ahead cannot be excluded. Nonetheless the business has continued to perform steadily and the Board considers that the appraisal of key risks and uncertainties contained in the full year report remains valid.

The Board continues to be encouraged by the solid progress of the business and hope that shareholders are too. It is a sign of further progress that we feel able to declare a maiden dividend.

Simon Richards

Chairman

4 November 2009

UNAUDITED CONSOLIDATED INCOME STATEMENT

6 months ended 6 months ended 12 months ended
30 September 2009 30 September 2008 31 March 2009
£'000 £'000 £'000

REVENUE 1,866 1,608 3,321
Cost of sales (336) (373) (727)
GROSS PROFIT 1,530 1,235 2,594
Administration expense (1,283) (1,014) (2,010)

Net finance expense (16) (23) (47)

Income tax expense (40) (27) (121)

Profit per share

Basic & fully diluted 0.43p 0.39p 0.95p

UNAUDITED CONSOLIDATED BALANCE SHEET

30 September 30 September 31 March

£'000 £'000 £'000

Intangible assets 276 262 279
Property, plant and equipment 49 66 61
Deferred tax asset 106 228 138
Trade and other receivables - - 11

Trade and other receivables 691 489 415
Cash and cash equivalents 474 380 626
1,165 869 1,041
TOTAL ASSETS 1,596 1,425 1,530

Called up share capital 444 3,356 444
Share premium account - 748 -
Other reserves 46 47 46
Retained earnings 168 (3,938) (23)
Translation reserve 32 67 62

Trade and other payables 741 715 703
Borrowings 146 393 270
887 1,108 973

Borrowings 19 37 28

SHAREHOLDER'S EQUITY AND LIABILITIES
1,596 1,425 1,530

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

£'000
Share capital Share premium Other Retained earnings Translation reserve Total
reserve
Balance at 1 April 2009 444 - 46 (23) 62 529
Profit for the period - - - 191 - 191

Exchange translation differences on foreign operations

Total recognized income and
expense - - - 191 (30) 161

Balance at 30 September 2009

£'000
Share capital Share premium Other Retained earnings Translation reserve Total
reserve
Balance at 1 April 2008 3,356 748 47 (4,109) 97 139
Profit for the period - - - 171 - 171

Exchange translation differences on foreign operations

Total recognized income and
expense - - - 171 (30) 141

Balance at 30 September 2008
3,356 748 47 (3,938) 67 280
£'000
Share capital Share premium Other reserve Retained earnings Translation reserve Total
Balance at 1 April 2008 3,356 748 47 (4,109) 97 139
Profit for the period - - - 416 - 416

Exchange translation differences on foreign operations

Total recognized income and
expense - - - 416 (35) 381

Proceeds of issue of shares
and warrants 10 11 - - - 21
Cancellation of shares (2,922) (759) 3,670 (11)
Share based payments - - (1) - - (1)

Balance at 31 March 2009

UNAUDITED CONSOLIDATED CASH FLOW

6 months ended 6 months ended 12 months ended
30 September 2009 30 September 2008 31 March
£'000 £'000 2009
£'000

Operating activities
Profit before tax 231 198 537

Adjustments for:
Investment income (2) (4) (7)
Finance costs 18 27 54
Depreciation & amortisation 20 14 34

charges
Share based payments - - (1)
Exchange gains (30) (56) (36)
(Increase)/decrease in (263) 115 178

receivables
(Decrease)/increase in (23) 43 (31)

payables Net cash inflow/(outflow) from
operating activities (49) 337 728

Investing activities
Interest received 2 3 7
Purchase of intangibles - - (19)

Purchase of property, plant &
equipment (5) (6) (13)

Net cash outflow from
investing activities (3) (3) (25)

Financing activities
Interest paid (18) (27) (62)
Repayment of finance leases (3) (4) (3)
Issue of ordinary share - - 22

capital
Cost of share cancellation - - (11)
Repayment of bank loans (5) (5) (10)
Repayment of loan notes (125) - (125)

Net cash outflow from
financing activities (151) (36) (189)

Net change in cash and cash
equivalents (203) 298 514

Cash and cash equivalents at
beginning of period/year 626 82 82

Effect of foreign exchange
rate changes 51 - 30

Cash and cash equivalents at
end of period/year 474 380 626

Notes to the unaudited financial information:

1. Accounting policies

Basis of preparation

This report was approved by the directors on 4 November 2009.

From 1 April 2007, the Group has adopted International Financial Reporting Standards ("IFRS") and the International Financial Report Interpretations Committee ("IFRIC") interpretations in the preparation of its consolidated financial statements.

The accounting policies applied in this unaudited interim financial information are those that the Group expects to apply in the annual financial statements for the year ended 31 March 2010, which will be prepared in accordance with IFRS, and those parts of the Companies Act 2006 that remain applicable to companies reporting under IFRS.

The financial information for the six months ended 30 September 2009 is unaudited and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2009 have been filed with the Registrar of Companies and contain a report from the auditors that is unqualified. The results for the year ended 31 March 2009 disclosed in this report are an abridged version of the company's audited financial statements. It does not constitute the Financial Statements for that period. Copies of the statutory accounts may be obtained from the Company or Seymour Pierce Limited.

Principal accounting policies of the Group

This financial information has been prepared on the basis of the recognition and measurement requirements of IFRSs in issue that either are endorsed by the EU and effective (or available for early adoption) at 30 September 2009 or are expected to be effective (or available for early adoption) at 31 March 2010. Based on these adopted and unadopted IFRSs, the directors have made assumptions about the accounting policies expected to be applied when the annual IFRS financial statements are prepared for the year ending 31 March 2010.

The adopted IFRSs that will be effective (or available for early adoption) in the annual financial statements for the year ending 31 March 2010 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for the annual period will be determined finally only when the annual financial statements are prepared for the year ending 31 March 2010.

2. Earnings per share

The earnings per share for the six months ended 30 September 2009 have been calculated based on the profit on ordinary activities after taxation divided by the weighted average number of shares in issue during the period.

3. Share capital

On 31 March 2009 the Court of Sessions gave approval to the Cancellation of deferred shares on the same terms as those approved by shareholders on 5 August 2008.

Notes to the unaudited financial information:

4. Segmental Information

For management purposes the group is currently organized in to two divisions - red24 and Training. These divisions are the basis on which the group reports its primary segment information.
6 months ended 6 months ended 12 months ended
30 September 2009 30 September 2008 31 March 2009
£'000 £'000 £'000
Business type (unaudited) (unaudited)

Revenue
Red24 1,498 1,153 2,412
Training 368 455 909
1,866 1,608 3,321

Segment result
Red24 426 378 807
Training 44 51 42

Unallocated head office costs

Operating profit 247 221 584

Segment assets
Red24 1,153 712 1,103
Training 277 313 157
1,430 1,025 1,260

Unallocated head office assets

Deferred tax assets 106 228 138
Total assets 1,596 1,425 1,530

Segment liabilities
Red24 458 276 438
Training 240 311 130

Unallocated head office
liabilities 43 128 135
Borrowings 165 430 298
Total liabilities 906 1,145 1,001

The group's operations are located in the United Kingdom and in the Republic of South Africa. The following table provides an analysis of the group's sales by location of customer, irrespective of the origin of the services, and a geographical analysis of the location of segment assets and liabilities.

6 months ended 6 months ended 12 months ended
30 September 2009 30 September 2008 31 March 2009
£'000 £'000 £'000
Geographical analysis (unaudited) (unaudited)

Revenue
United Kingdom 1,315 1,153 2,365
South Africa 14 24 31
Europe 3 51 224
Rest of the World 534 380 701
1,866 1,608 3,321

Segment assets
United Kingdom 997 481 794
South Africa 539 772 604
1,536 1,253 1,398
Shared corporate assets 60 172 132
Total assets 1,596 1,425 1,530

Segment liabilities
United Kingdom 494 361 373
South Africa 204 226 195

Shared corporate liabilities

Borrowings 165 430 298
Total liabilities 906 1,145 1,001
5. Copies of this half yearly financial report are available on the Company's website
www.red24.com and printed copies will be available for at least one month from the
Company's administrative offices at The Coach House, Bill Hill Park, Wokingham,
Berkshire RG40 5QT.

This information is provided by RNS The company news service from the London Stock Exchange

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