JOURNEO PLC

Earnings Release • Apr 2, 2015

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RNS Number : 2397J

21st Century Technology PLC

02 April 2015

21st Century Technology Plc

("21st Century" or "the Group")

Final results for the year ended 31 December 2014

21st Century Technology plc (AIM:C21), the specialist service provider of CCTV and monitoring systems to the fleet and network operators in the bus and rail industries, announces its results for the full year ended 31 December 2014.

Financial highlights

●	Cash position improved significantly to £2.7m (2013: £1.3m)
●	Underlying loss before tax of £0.1 m (2013: underlying loss £0.2m)
●	The basic loss per share is 0.41p (2013: loss per share 0.26p)
●	Cost base reduced in Q1 2014 by c.20% following significant reorganisation

Operational highlights

●	Significant success in framework agreement renewals, £5.45m in last three months of 2014
○	Two years with Arriva Bus UK
○	Three years with Arriva Bus AB Sweden
○	Four years with Keolis Sweden
●	Successful adoption of our new forward facing CCTV system for a major UK train operating company
●	Continued roll-out of our new driver behaviour system into Keolis France Eight depots, over 1,100 systems supplied
●	Helped our London customers achieve industry-leading uptime of 98% across Transport for London monitored systems

Russ Singleton, Chief Executive Officer, said: "We have made good progress addressing and overcoming many of the challenges that the Group faced at the beginning of the year.  I am most proud of our operational highlights: the 100% renewal success rate, completing the first major contract with a train operating company, the roll-out for Keolis in France and the great system reliability achieved across Transport for London. All this against a backdrop of a difficult start to the year with a significant reorganisation, the rethinking of our product and services offering and subsequent change in strategy. We now have a far more secure platform on which to plan, execute and deliver long-term growth. 

We have created a strong pipeline of new business opportunities, particularly in the Rail division, where we are leveraging our know-how to offer leading-edge solutions to a larger potential customer base.  There remain, however, some risks to the Group, not least an over-reliance on a small number of large customers.  Our strategy to broaden and extend our offering through in-house development and through acquisition will also provide additional technical capabilities and allow us access to new markets within the transport sector."

Enquiries

21st Century Technology plc	Russ Singleton/Glenn Robinson	Tel: 0844 871 7990
finnCap Limited
Nominated adviser	Julian Blunt/Scott Mathieson	Tel: 0207 220 0500
Corporate broking	Malar Velaigam
Media enquiries
Communications Portfolio	Helen Carpanini/Ariane Comstive	Tel: 0207 536 2007/ 07785 922354

Notes to editors

21st Century Technology plc's (AIM:C21) principal activities are the provision of CCTV and monitoring systems to the fleet and network operators in the bus and rail industries. The Group's business model is in transition, from providing individual solutions for the supply and installation of CCTV, telematics and monitoring systems, towards highly integrated on-board technologies with connected and web-based back office software management applications.

The Group is currently the preferred supplier of mobile CCTV to two of the UK's largest bus operators, Arriva UK Bus and First Group UK Bus. It also provides installation, maintenance and support services to Keolis and Arriva in Stockholm, Sweden, and is deploying a novel passenger comfort-oriented driver behaviour system to Keolis throughout France.

In the rail sector, 21st Century has also recently gained new customers, including GB Rail Freight and one of the UK's leading train operating companies.

These strengthening client relationships demonstrate the growing adoption of 21st Century's systems in the bus and rail markets, supporting the Group's multi-modal approach to servicing fleet customers throughout the UK and into Continental Europe.

The Group was admitted to trading on AIM in 2005. 

Chairman's statement

The last year has been a period of considerable change. At the end of 2013 we welcomed Russ Singleton and Glenn Robinson onto the Board as CEO and CFO respectively. Following a number of internal and external challenges the new leadership team implemented the immediate measures necessary to stabilise the business. This was followed by a new strategy to return 21st Century to sustainable long-term growth organically and through targeted acquisitions. It has been encouraging to secure the contract renewals and continuing implementation of the new strategy remains the Board's primary focus.

In light of a number of difficulties facing the Company at the start of the year the management has made good progress. The Board is fully supportive of the approach that is being taken by the Executive team and believes that it offers the best solution to take advantage of the opportunities available.

During the year the Executive Directors followed up on their share purchases in 2013 with further acquisitions of shares demonstrating their commitment to the Group. It was similarly pleasing to note the continuing support of shareholders to the changes that have been made and to the Executive share programme that was approved at the general meeting in December.

Trading results

Group results for year ended 31 December 2014 show a small underlying loss before tax of £0.1m (2013: underlying loss £0.2m). The effect of share-based payments and reorganisation costs increases the loss to £0.4m after tax (2013: £0.2m). The basic loss per share is 0.41p (2013: loss per share 0.26p).

	2014 £m	2013 £m
Revenue	9.0	10.8
Gross profit	3.3	4.1
Gross profit percentage	36%	38%
Underlying administrative expenses	(3.4)	(4.3)
Underlying loss	(0.1)	(0.2)
Share-based payments	(0.1)	(0.0)
Reorganisation costs	(0.2)	(0.0)
Total administrative expenses	(3.7)	(4.3)
Operation loss before taxation	(0.4)	(0.2)
Taxation	(0.0)	(0.0)
Loss after taxation	(0.4)	(0.2)
Pence		Pence
Basic loss per share	(0.41)	(0.26)

People

I would like to thank all our staff past and present for their commitment to the business. The last year has been a time of significant adjustment, but I am extremely pleased by the energy and determination of everyone at 21st Century to help turn the Company back towards sustainable growth.

Outlook

The Company is in a far stronger position than it was a year ago. We have a new leadership team which is well integrated into the business and a new strategy that is being executed and there are some important new initiatives underway in both bus and rail that we believe have real growth potential.

However, we remain mindful that 21st Century is currently reliant on a small number of very large fleet operator customers and, although the Company secured all contracts as renewals came up, one large UK operator prefers to extend an existing contract rather than establish a new, long-term framework agreement. This is a situation that the management is fully attuned to and is making every effort to resolve.

As I reported at the half year, I remain cautiously optimistic about our future as we are generating new opportunities and look to convert business leads into firm orders at the same time as seeking acquisitions that will both broaden the customer base and extend the Company's technical capabilities. With an improved offering and adjusted cost base I look forward to reporting on a year of further progress in 2015.

Mark W Elliott

Non-executive Chairman

1 April 2015

Consolidated statement of comprehensive income

for the year ended 31 December 2014

Notes		2014 £'000	2013 £'000
Revenue	2	9,027	10,826
Cost of sales		(5,741)	(6,756)
Gross profit	2	3,286	4,070
Underlying administrative expenses		(3,415)	(4,264)
Underlying loss		(129)	(194)
Share-based payments		(129)	(29)
Reorganisation costs		(160)	-
Total administrative expenses		(3,704)	(4,293)
Operating loss		(418)	(223)
Finance income		1	5
Loss before taxation from continuing operations		(417)	(218)
Taxation		34	(26)
Loss for the year being total comprehensive income attributable to owners of the parent		(383)	(244)
Loss per share	3
Basic		(0.41p)	(0.26p)
Diluted		(0.41p)	(0.26p)

Consolidated statement of changes in equity

for the year ended 31 December 2014

Share capital		Share premium	Retained earnings	Total equity shareholders' funds
£'000		£'000	£'000	£'000
Balance at 1 January 2013	6,061	8	1,929	7,998
(Loss) and total comprehensive income for the year	-	-	(244)	(244)
Share-based payments	-	-	29	29
Dividends paid (note 5)	-	-	(653)	(653)
Balance at 31 December 2013	6,061	8	1,061	7,130
(Loss) and total comprehensive income for the year	-	-	(383)	(383)
Share based payments	-	-	129	129
Balance at 31 December 2014	6,061	8	807	6,876

Consolidated statement of financial position

at 31 December 2014

2014 £'000				2013 £'000
Assets
Non-current assets
Goodwill	4,318			4,318
Other intangible assets	-			-
Property, plant and equipment	155			202
Deferred tax asset	73			44
4,546				4,564
Current assets
Inventories	851			1,723
Trade and other receivables	1,320			2,061
Current tax asset	28			116
Cash and cash equivalents	2,661			1,343
4,860				5,243
Total assets	9,406			9,807
Liabilities
Current liabilities
Trade and other payables	(1,418)			(1,610)
Current tax liabilities	-			(8)
Provisions	(351)			(433)
(1,769)				(2,051)
Net current assets	3,091			3,192
Non-current liabilities
Provisions	(761)			(626)
Total liabilities	(2,530)			(2,677)
Net assets	6,876			7,130
2014 £'000			2013 £'000
Shareholders' equity
Share capital		6,061	6,061
Share premium account		8	8
Retained earnings		807	1,061
Total equity		6,876	7,130

Consolidated statement of cash flows

for the year ended 31 December 2014

Notes		2014 £'000	2013 £'000
Net cash flows from operating activities	4	1,377	602

Cash flow from investing activities
Purchases of property, plant and equipment	(44)	(111)
Purchases of intangible fixed assets	-	(209)
Net cash flows from investing activities	(44)	(320)

Cash flow from financing activities
Dividend paid	5	-	(653)
Net cash flows from financing activities		-	(653)

Net increase/(decrease) in cash and cash equivalents	1,333	(371)

Cash and cash equivalents at beginning of year	1,343	1,714
Effect of foreign exchange rate changes	(15)	-

Cash and cash equivalents at end of year	2,661	1,343

Notes to the preliminary results announcement for the year ended 31 December 2014

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 2014 or 31 December 2013.  The financial information for the years ended 31 December 2014 and 31 December 2013 is derived from the statutory accounts for those periods which include audit reports which are unqualified, do not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and do 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 2013 have been delivered to the Registrar of Companies.  The statutory accounts for the year ended 31 December 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Going concern

The Group's business activities together with factors likely to affect its future development, performance and position are set out in the Strategic Report within the statutory financial statements and in the Chairman's Statement. In the course of the Directors' going concern review particular consideration was given to the Group's principal risks and uncertainties, including the prospect of losing one or more of the Group's key customers together with associated cost mitigation actions. On the basis of this review the Directors conclude that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and for at least twelve months from the date of the report. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements.

2. Segmental reporting

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.

The Directors consider the Group to have only one segment in terms of products and services being the supply and installation of CCTV, black-box and other monitoring systems for use on public transport vehicles both in the UK and overseas.

As the Board of Directors reviews revenue, gross profit and operating (loss)/profit on the same basis as set out in the consolidated statement of comprehensive income, no further reconciliation is considered to be necessary.

Geographical segments
Revenue 2014 £'000		Gross profit 2014 £'000	Revenue 2013 £'000	Gross profit 2013 £'000
UK	6,859	2,193	8,785	2,870
International
- Scandinavia	1,402		1,530
- Other EU	766		511
Total International	2,168	1,093	2,041	1,200
Grand total	9,027	3,286	10,826	4,070

Major customers

In the year the Group had three customers that each accounted for over 10% of the revenue at 42%, 23% and 14%. In the prior year there were two customers that each accounted for over 10% of the revenue at 54% and 24%.

Assets and liabilities by location
2014 £'000		2013 £'000
Assets
UK	9,355	9,748
International	51	53
Total assets	9,406	9,807
Liabilities
UK	(2,489)	(2,620)
International	(41)	(57)
Total liabilities	(2,530)	(2,677)

All non-current assets are located in the United Kingdom.

3.  Loss per ordinary 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. 

	2014		2013
Earnings £'000	Per share amount Pence	Earnings £'000	Per share amount Pence
Basic EPS
Losses attributable to ordinary shareholders	(383)	(0.41)	(244)	(0.26)
Diluted EPS
Losses	(383)	(0.41)	(244)	(0.26)

The dilutive effect of share options has not been disclosed within the consolidated statement of comprehensive income for earnings per share as the effect is anti-dilutive (i.e. decrease loss per share).

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

2014 '000		2013 '000
Basic weighted average number of shares	93,240	93,240
Dilutive potential ordinary shares	-	648
Diluted weighted average number of shares	93,240	93,888

4. Reconciliation of operating loss to net cash inflow from operating activities

2014 £'000		2013 £'000
Loss for the year	(383)	(244)
Adjustments for:
- Finance income	(1)	(5)
- Income tax credit	(5)	(4)
- Deferred tax (credit)/charge	(29)	30
- Depreciation of property, plant and equipment	91	96
- Amortisation of intangible fixed assets	-	101
- Impairment of intangible fixed assets	-	229
- Share-based payment expense	129	29
- Foreign exchange rate	15	-
- Increase in provisions	53	402
Operating cash flows before movement in working capital	(130)	634
Decrease in inventories	872	283
Decrease in receivables	741	825
Decrease in payables	(192)	(760)
Cash inflow from operations	1,291	982
Income taxes received/(paid)	85	(385)
Interest received	1	5
Net cash inflow from operating activities	1,377	602

5. Dividends

The following dividends were paid by the Company during the year:

	2014		2013
Pence per share	£'000	Pence per share	£'000
Final dividend paid in respect of prior year	-	-	0.7	653

6. Availability of audited accounts:

Copies of the 2014 audited accounts will be made available following the announcement of the date of our AGM. They will also be available on the Company's new website (www.21stplc.com) for the purposes of AIM Rule 26 and will be posted to shareholders in due course.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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