JOURNEO PLC

Earnings Release • Apr 2, 2013

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RNS Number : 2220B

21st Century Technology PLC

02 April 2013

21st Century Technology plc

("21st Century", "the company" or "the group")

Preliminary results for the year ended 31 December 2012

Solid cash position and strong pipeline for continued international growth

21st Century, the supplier and installation service provider of public transport CCTV and vehicle monitoring systems, today announces its preliminary results for the year ended 31 December 2012.  

Financial highlights

·      Profit before tax from continuing operations up 24% at £1.8m (2011: £1.5m)

·      Earnings per share up 14% to 1.45p (2011: 1.27p)

·      Distribution of £3.3m (3.5p per share) by way of return of capital made in July 2012

·      Year end cash at £1.7m (2011: £2.8m)

Operational highlights

·      Contract worth £3.3m awarded by Arriva in Scandinavia

·      Contract worth £1m awarded by CrossCountry Trains in the UK

·      Arriva UK Bus Preferred Supplier Contract extended

·      Global footprint significantly enhanced, with EcoManager now deployed in eight countries

Strong start to 2013

·      Cash at bank currently standing at £2.75m

·      Maiden dividend of 0.7 pence per share to be proposed at forthcoming AGM

Commenting on the results, Jan G Holmstrom, Chairman of 21st Century, said:

"21st Century has demonstrated strong sales in CCTV and EcoManger despite a weak economic background.  The company has a growing pipeline which is second half weighted. 

I am pleased to report our continued and growing expansion into Europe with the company now active in eight countries.   We have high quality products, established and strong partnerships, backed by a sound and liquid balance sheet.   The board remain confident that the footprint of the company can be strengthened and expanded during 2013.

The proposed dividend reinforces the board's confidence to return value to our shareholders and its focus on growth and cash generation in 2013 and beyond. Looking forward, the board have adopted a progressive dividend policy and will seek to distribute at least a third of its pre-tax profit, where our anticipated cash generation and investment requirements so allow."   

A copy of this preliminary results announcement is available on the company's website: www.21stplc.com

Enquiries:

21 Century Technology plc	Wilson Jennings	Tel: 0203 651 9172
www.21stplc.com	CEO
finnCap Limited		Tel: 0207 220 0500
Nominated Adviser	Matt Goode/Henrik Persson
Corporate Broking	Tom Jenkins/Simon Starr
MHP Communications	Barnaby Fry/Vicky Watkins	Tel: 020 3128 8100

Notes to editors:

21st Century Technology plc (AIM: C21), a leading supplier of public transport CCTV and other monitoring systems in the UK and Scandinavia, was admitted to trading on AIM, a market operated by the London Stock Exchange, in 2005.

21st Century is the preferred supplier of on-board CCTV systems for Arriva UK Bus, the Go-Ahead Group in the UK, FirstGroup UK Bus and Keolis in Stockholm.  

The company has pioneered the use of Wi-Fi with on-board CCTV systems.  Transport for London commissioned the company to undertake a trial of 'LiveView' - a system which transmits live CCTV pictures from on board the bus to a public transport and police control centre.  21st Century was also the first company to successfully launch Automatic Video Downloads and a bus CCTV monitoring system (HeartbeatTM) which allow the CCTV manager to remotely download CCTV footage from the bus to his computer and check that all the CCTV systems fitted to his buses are fully operational, without leaving his desk.  

The company's passenger counting systems utilise active infrared sensors at every exit/entry point or overhead cameras linked to the ticket machine to enable bus operators to analyse specific bus route ticket sales and passenger numbers.

21st Century's EcoManagerTM product has made a significant contribution to sales since its launch in July 2008. The EcoManager black-box system is aimed at reducing fuel and maintenance costs, reducing emissions and improving safety for bus operators by monitoring individual driving styles. Following a successful trial, in April 2009, Arriva UK committed to install the device on all their new buses and to retrofit a large proportion of their existing fleet. In November 2009 Arriva North West and Merseytravel won the industry recognised Alexander Dennis Award for Innovation following their installation of the EcoManager system which yielded fuel savings of up to 12%, associated CO2 emission reductions and a 62% reduction in accidents. This was followed in 2010 with a driver safety award for EcoManager presented by the road safety charity, Brake and in 2011, Arriva Wirral was presented with the Environmental Award by Wirral Investment Network in recognition of the environmental benefits achieved by the company as a result of the installation of EcoManager to its fleet of buses.  For further information go to www.getecomanager.com.

Chairman's statement

Trading results

I am pleased to report that the group results for the year show an increase in profit after tax from continuing operations of 15% to £1.3m (2011: £1.2m).   The basic earnings per share from continuing operations has increased to 1.45p (2011: 1.27p).

Continuing operations	2012 £m	2011 £m
Revenue	14.0	14.0
Gross profit	7.5	7.8
Gross profit percentage	54%	56%
Net operating expenses	(5.7)	(6.3)
Profit before taxation	1.8	1.5
Taxation	(0.5)	(0.3)
Profit after taxation	1.3	1.2
	Pence	Pence
Basic earnings per share	1.45	1.27

21st Century Technology plc is a leading supplier of CCTV and other monitoring systems to the public transport market.  The group currently has three platform technologies: the supply, installation and maintenance of mobile (on vehicle) and fixed (on premises) CCTV, EcoManager driver monitoring and passenger counting systems. 

In the UK we are the preferred supplier of mobile CCTV to three of the largest bus operators - Arriva UK Bus, the Go-Ahead Group and First Group UK Bus.  In June 2012 we were delighted to announce that Arriva UK Bus extended their preferred supplier contract with us for a further two years, underpinning our position as the leading supplier of on vehicle CCTV.

We were also pleased to announce in May 2012 the award of a £1m contract by CrossCountry Trains to supply forward facing cameras to monitor trackside, signalling and level crossing incidents (e.g. accidents, trespass, theft and vandalism).

Our investment in overseas sales staff to support our expansion outside of the UK has paid off with the award of a £3.3m contract in March 2012 to supply on board CCTV and passenger counting within a multi-modal (bus, train and tram) transport system operated by Arriva in Scandinavia. 

Sales of our fuel saving product, EcoManager, continue to be value enhancing for the group, with deployment in eight countries.  Expansion overseas has seen additional sales in Germany, Poland and the Netherlands which now represents a significant part of group revenues.  New customers during the year include Keolis in France, Deutsche Bahn in Germany and Rotala in the UK.

Return of capital and proposed dividends

Following receipt of the proceeds from the disposal of the group's freehold property in January 2012 a distribution of approximately £3.3m in cash, representing 3.5 pence per share, was made to shareholders in July 2012 by way of a return of capital.

In view of the group's healthy cash generation and assuming profitability is maintained, it is the intention of the board to propose a dividend at the forthcoming AGM of £652,678 representing 0.7 pence per share. This will be the company's first dividend and it is our intention going forward to distribute a least one third of the preceding year's pre-tax profit to shareholders where our anticipated cash generation and investment requirements allows us to do so.

Board changes

Wilson Jennings took over as Chief Executive following the resignation of Nick Grimond on 28 September 2012.  Wilson had been the group's Finance Director for over 12 years and Mark Elliott (formerly non-executive director) became Interim CFO in January 2013.

The Board remains committed to ensuring the team are supported through value enhancing appointments. We are currently looking to make a senior appointment within the group to broaden our international reach.

Strategy for the current year

The company continues to seek new sales in overseas markets, and we currently anticipate that growth in this area will arise in the second half of the year.  We are also looking to underpin our business in the UK by retaining our leading position in the on bus CCTV market and winning new train CCTV customers on the back of our success in this market in 2012.

In addition, we are keen to develop strategic partnerships to secure intellectual property rights in the technology which we install for our customers and will be looking at potential acquisitions in the medium term.

Current trading and outlook

We are currently trading in line with management expectations and we have significant pipeline business to underpin management forecasts for the full year.  Following cash collections since the year end, our balance at the bank is currently at £2.75m which has given us the confidence to propose the company's maiden dividend at the forthcoming AGM.

Jan G Holmstrom

Chairman

28 March 2013

Consolidated statement of comprehensive income for the year ended 31 December 2012	Notes	2012 £'000	2011 £'000
Continuing operations
Revenue	2	14,026	14,006
Cost of sales		(6,497)	(6,214)
Gross profit		7,529	7,792
Administrative expenses		(5,709)	(6,296)
Operating profit		1,820	1,496
Finance income/(costs)		14	(15)
Profit before taxation		1,834	1,481
Taxation		(486)	(311)
Profit for the year from continuing operations		1,348	1,170
Discontinued operations
Profit for the year from discontinued operations		-	36
Profit for the year being total comprehensive income attributable to owners of the parent		1,348	1,206
Earnings per share	3
From continuing operations
Basic		1.45p	1.27p
Diluted		1.45p	1.26p
From continuing and discontinued operations
Basic		1.45p	1.31p
Diluted		1.45p	1.30p

Consolidated statement of changes in equity

For the year ended 31 December 2012

	Share capital	Share Premium	Special  reserve	Other reserve	Retained Earnings	Total equity share-holders' funds
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2011	9,223	3,387	1,206	43	(5,261)	8,598
Cancellation of share premium	-	(3,387)	-	-	3,387	-
Transfer to distributable reserves	-	-	(1,206)	(43)	1,249	-
Total comprehensive income for the year	-	-	-	-	1,206	1,206
Balance at 31 December 2011	9,223	-	-	-	581	9,804
Issue of new 10p Ordinary Shares	101	8	-	-	-	109
Cancellation of share capital	(3,263)	-	-	-	-	(3,263)
Total comprehensive income for the year	-	-	-	-	1,348	1,348
Balance at 31 December 2012	6,061	8	-	-	1,929	7,998

At the Annual General Meeting held on 1 June 2011 a special resolution was passed to transfer the remaining £3,387,000 standing on the credit of the company's share premium account to distributable reserves.  Following the AGM an application to the High Court was made and this completed on 23 June 2011.

The Special Reserve was created on 29 June 2006 pursuant to an undertaking for the protection of the company's creditors at that time which the company gave to the Court in connection with the reduction of its share premium account.  None of the company's creditors as at 29 June 2006 remain outstanding and consequently the Special Reserve has been transferred to distributable reserves.

The Other Reserve represented share capital to be issued as contingent consideration relating to an acquisition in 1996.  The directors consider that this contingent consideration will never have to be paid and so the Other Reserve has also been transferred to distributable reserves.

The new 10p Ordinary Shares were issued following the exercise of 1,011,150 employee share options during the period.

Following approval by shareholders at the Annual General Meeting held on 30 May 2012 and the subsequent confirmation of the High Court on 27 June 2012, a return of capital of £3,263,387 in cash, representing 3.5p per Ordinary Share was paid to shareholders in early July 2012.  This reduction in the share capital of the company became effective on 27 June 2012 and the nominal value of the Ordinary Shares was reduced from 10p to 6.5p per share at that date.

Consolidated statement of financial position at 31 December 2012	Notes	2012 £'000	2011 £'000
Assets
Non-current assets
Goodwill		4,318	4,318
Other intangible assets		121	161
Property, plant and equipment		187	87
Deferred tax asset		74	120
		4,700	4,686
Current assets
Inventories		2,006	1,989
Trade and other receivables		2,886	1,407
Cash and cash equivalents		1,714	2,822
		6,606 -	6,218 2,292
Assets classified as held for sale	4
6,606	8,510
Total assets		11,306	13,196
Liabilities
Current liabilities
Trade and other payables		(2,370)	(2,445)
Current tax liabilities		(281)	(370)
Provisions		(237)	(352)
		(2,888)	(3,167)
Net current assets		3,718	5,343
Non-current liabilities
Provisions		(420)	(225)
Total liabilities		(3,308)	(3,392)
Net assets		7,998	9,804
Shareholders' equity
Share capital		6,061	9,223
Share premium account		8	-
Retained earnings		1,929	581
Total equity		7,998	9,804

Consolidated statement of cash flows

for the year ended 31 December 2012

	Notes	2012	2011
		£'000	£'000
Net cash flows from operating activities	5	(2)	1,811

Cash flow from investing activities
Disposal of freehold property	4	2,292	-
Purchases of property, plant and equipment		(154)	(93)
Purchases of intangible fixed assets		(90)	(42)
Net cash flows from investing activities		2,048	(135)

Cash flow from financing activities
New share issue		109	-
Decrease in share capital following capital reduction		(3,263)	-
Net cash flows from financing activities		(3,154)	-

Net (decrease)/increase in cash and cash equivalents		(1,108)	1,676

Cash and cash equivalents at beginning of year		2,822	1,146

Cash and cash equivalents at end of year		1,714	2,822

Notes to the preliminary results announcement for the year ended 31 December 2012

1.  Basis of preparation

While the financial information included in this preliminary results announcement has been computed in accordance with EU endorsed International Financial Reporting Standards (IFRSs) on a basis consistent with that adopted in the previous year, this announcement does not in itself contain sufficient information to comply with IFRSs. 

The financial information contained in this preliminary announcement does not constitute statutory accounts for the year ended 31 December 2012 or 31 December 2011.  The financial information for the years ended 31 December 2012 and 31 December 2011 is derived from the statutory accounts for those periods which include audit reports which are unqualified and do not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.  The statutory accounts for the year ended 31 December 2011 have been delivered to the Registrar of Companies.  The statutory accounts for the year ended 31 December 2012 will be delivered to the Registrar of Companies following the company's Annual General Meeting

2.  Segmental reporting

Geographical Segments
Revenue by location of customer: Continuing operations	2012 £'000	2011 £'000
UK	9,227	7,373
International
Scandinavia	4,270	6,477
Netherlands	336	-
Czech Republic	62	60
Spain	53	53
Germany	34	-
Italy	30	32
Poland	12	-
Other EU	2	11
Total International	4,799	6,633
Grand total	14,026	14,006

3. Earnings per share

Basic earnings per share ("EPS") is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

For diluted earnings, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. 

	2012		2011
	Earnings £'000	Per share amount Pence	Earnings £'000	Per share amount Pence
From continuing and discontinued operations
Basic EPS
Earnings attributable to ordinary shareholders	1,348	1.45	1,206	1.31
Diluted EPS
Earnings	1,348	1.45	1,206	1.30
From continuing operations
Basic EPS
Earnings attributable to ordinary shareholders	1,348	1.45	1,206	1.31
Adjustment to exclude the profit from discontinued operations	-	-	(36)	(0.04)
Earnings from continuing operations	1,348	1.45	1,170	1.27
Diluted EPS
Earnings from continuing operations (as above)	1,348	1.45	1,170	1.26

Details of the weighted average number of ordinary shares used as the denominator in calculating the earnings per ordinary share is given below:

	2012 '000	2011 '000
Basic weighted average number of shares	92,870	92,229
Dilutive potential ordinary shares	412	276
Diluted weighted average number of shares	93,282	92,505

4.  Assets classified as held for sale

Assets held for sale, which were previously classified under property, plant and equipment in non-current assets are as follows:

2012 movements	Freehold land and buildings £'000
Balance brought forward at 1 January 2012	2,292
Disposal	(2,292)
Balance carried forward at 31 December 2012	-

2011 movements	Freehold land and buildings £'000
Balance brought forward at 1 January 2011	2,592
Amounts written off	(300)
Balance carried forward at 31 December 2011	2,292

On 28 December 2011 the companyexchanged contracts for the sale of the group's former head office premises in Mitcham, Surrey for cash consideration of £2,350,000.   The completion of the sale took place in January 2012 and the net amount realised after costs was £2,292,000.

At 31 December 2011 the net book value of the land and buildings was written down to the net amount realised on the property sale and consequently £300,000 was written off the carrying value of the property.

5. Reconciliation of operating profit to net cash inflow from operating activities

	2012 £'000	2011 £'000
Profit for the year	1,348	1,206
Adjustments for:
Finance (income)/costs	(14)	15
Income tax expense	440	271
Deferred tax charge/(credit)	46	(322)
Depreciation of property, plant and equipment	54	95
Amortisation of intangible fixed assets	130	64
Write down of property, plant and equipment	-	26
Write down of asset held for sale	-	300
Increase in provisions	80	270
Operating cash flows before movement in working capital	2,084	1,925
Increase in inventories	(17)	(931)
(Increase)/decrease in receivables	(1,479)	433
Increase in payables	176	17
(Decrease)/increase in deferred income	(251)	565
Cash inflow from operations	513	2,009
Income taxes paid	(529)	(188)
Interest received/(paid)	14	(10)
Net cash (outflow)/inflow from operating activities	(2)	1,811

This information is provided by RNS

The company news service from the London Stock Exchange

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