RNS Number:9731I
Bell Group PLC
20 March 2003
20th March 2003
BELL GROUP PLC
Full Year Results to 31 December 2002
Bell Group plc, the leading international supplier of high tech security and
associated management information systems, announces preliminary results for the
year ended 31 December 2002.
OPERATIONAL OVERVIEW
* Continued strong performance in core UK retail banking business
* Strong growth in profitability
* Business wins in new market sectors
* Bell ID returns to profitability and secures major customers in key
sectors and territories
* Partner and reseller portfolio continues to develop successfully
FINANCIAL OVERVIEW
#m 2002 2001 increase
Restated
Turnover 63.6 57.2 11%
International turnover 14.6 12.3 19%
Operating profit before goodwill amortisation 5.9 4.5 31%
Operating profit 3.9 2.5 56%
PBT before goodwill amortisation and disposal loss 5.2 3.7 41%
Profit before tax 3.0 1.6 87%
EPS - fully diluted and before goodwill amortisation 6.24p 5.02p 24%
EPS - basic 2.58p 1.25p 106%
Net debt 2.2 6.3 (65%)
Commenting on the results, Bob Speirs, Chairman, said:
"2002 was a year in which we saw excellent performance in our core business
areas. We have continued to develop both in the UK and internationally, with
further expansion in Europe and through our partner, Diebold, Inc., in the
Americas. In 2003, we should continue to build on our achievements in 2002. We
have already announced the acquisition of the businesses of Maas Systems.
Despite difficult economic conditions in global markets, we are confident of our
future."
Pat Curran, the Chief Executive, added:
"Our performance this year has seen us consolidate the gains achieved in 2001.
Relationships with our longstanding, core customers remained strong, and
contract wins in new sectors demonstrated our growing success in non-retail
banking markets. This was supplemented by important new business, successful
implementation of strategically important projects and a significant turnaround
in financial performance from our Bell ID smart card technology company. The
Group's overall performance in 2002 has served to increase our optimism for the
current year."
Enquiries:
Bell Group Edwin Strang, Finance Director 020 8553 5932
Financial Dynamics Rob Gurner 020 7269 7221
Chief Executive's Review
Operational Summary
Introduction
2002 was a year in which we saw an excellent performance within our core retail
banking business which, in association with the completion of our 2001
re-structuring programme, underpinned the achievement of satisfactory Full Year
results. This base allowed us to continue to address other opportunities that
emerged from our strategy to spread the Group's operations and bring growth by
broadening our market appeal.
The main achievements included:
* Diversifying demand for our core security competencies beyond retail
banking into areas such as retailing, distribution, manufacturing, transport,
leisure, criminal justice and property development
* Growing Bell ID's ANDiS(c) smart card solution business with a number
of key customers
* Developing partner relationships and value added reseller channels for
Pacom(c), ANDiS(c) and our security technology expertise
* Continuing to improve internal efficiencies, primarily in relation to
productivity and forward planning
* A post year-end acquisition to expand our European access control
presence
UK - Mainland Europe - Middle East
A consistent performance across our UK and Ireland banking customer base was
underpinned by returns from scheduled security system service work at branches
and other bank premises and supplemented by a number of major programmes of
technology systems upgrades in intruder alarms, CCTV and access control.
Non-banking UK installations of note included our second London Docklands
multi-storey, new building (announced in 2001) and digital CCTV systems for the
Port of Belfast, Consignia sites and the London Eye. Shopping malls, high street
retail premises, commercial property developments, leisure chains, a local
government property portfolio and a major prison were also added to our
non-banking portfolio. In June we announced a UK sales relationship with
Securicor, which has already delivered business from a major global distributor,
together with a number of smaller contracts.
We won, and are project managing, a significant contract to integrate our
ANDiS(c) card management and Pacom(c) access control at the King Fahd University
of Petroleum & Minerals in Saudi Arabia.
Bell Managed Information Technologies, which exploits our Pacom(c) monitoring
capability directly on behalf of customers, is increasingly proving to be a
valuable attraction to our non-banking market. Bell Fire's consistent
performance also saw it add multi-site retail business customers during the
year.
Our strategy to increase turnover in the rest of Europe has continued to be
successful. We were pleased to announce in August a Pacom(c) contract for the
headquarters of the Central Bank of Malta.
On 26 February 2003, we announced access control expansion in Europe via the
acquisition of the Dutch and UK operations of Maas Systems, from Maas
International Europe BV. This operation, renamed Bell Systems BV, based in The
Netherlands, provides us with additional 'blue chip' customers in The
Netherlands, UK and France as well as new territories: Austria, Belgium,
Germany, Italy and Spain. This acquisition is expected to enhance earnings in
2003.
Bell ID - Smart Card Management
Bell ID's improved performance has been a key achievement for the Group in 2002.
Effective sales and marketing, directly to end-users and through partners,
coupled with growing recognition of the strength of the product suite, has
transformed this business. Losses and net cash investment in 2001 have been
turned into profit and positive cash flow.
During the year Bell ID made several key business breakthroughs in a number of
territories. These projects are providing us with important reference sites in
key burgeoning markets for smart card management including national ID (Macau
SAR), banking (DSV in Germany), financial/customer loyalty services (KT
Corporation in South Korea) and the major project at King Fahd University of
Petroleum and Minerals in Saudi Arabia, integrating with Pacom(c) for access
control.
The Americas - Asia Pacific
Having appointed Diebold, Inc as our new banking reseller in the USA in
September 2001, the major part of the year for Pacom Systems (NA) Inc was
focused on the establishment of continuing support to existing customers. In
October a major success of this programme was a contract for Pacom(c) technology
at an additional 500 bank branches. A number of new sector and regionally
focused resellers were recruited during the year.
Pacom Systems made two major technology launches in 2002. Pacom Witness, a
combined on-site controller for digital CCTV, security alarm and access control
management, is an important new tool in advancing our ability to win Pacom(c)
business outside of the banking sector. With powerful new access control
enhancements, Version 3 of GMS, the Pacom(c) central, integrated monitoring and
management software, was released at year end.
Bell Technology Services Pty Ltd (BTS), in Australia, has focused on major
commercial centres in the states of Victoria and New South Wales. This resulted
in BTS breaking through to extend Pacom(c)'s application beyond the Australian
banking sector with: the refurbishment of a luxury residential apartment tower
adjacent to Sydney Harbour, the refurbishment of Sydney's Hilton Hotel, and a
hospital complex. BTS also completed in mid-year a major Pacom(c) installation
contract (announced in the 2001 Annual Report) for ANZ Bank branch upgrades in
New Zealand.
Our Hong Kong business devoted most of its resources to ongoing trials and other
installation and support work for the headquarters and branch sites of its key
global banking customer. This effort was rewarded near year-end with the
securing of a major, new multi-site implementation phase for Pacom(c), along
with a treasury site project.
Outlook
The Group's overall performance in 2002 has served to increase our optimism for
the current year. The activities of Bell ID, our strengthened access control
presence in Europe (following the Maas acquisition) and our increasing market
penetration via our global partners will broaden our international and diverse
market appeal.
Financial Summary
Sales revenues increased by 11.2% (#6.4m) to #63.6m in the year ended 31
December 2002. Acquisitions contributed #0.1m, discontinued operations
contributed #0.6m (2001: #1.1m) and continuing operations (excluding
acquisitions) grew by 11.9% (#6.7m) to #62.8m.
UK and Irish sales revenues represented 78% of turnover at #49.0m (2001:
#44.9m). Performance was particularly strong in Bell Security Limited's
Corporate Security Division, Bell Security (Scotland) Limited and Bell Security
(Ireland) Limited. Sales in Northern Ireland increased by 47% from #1.7m to
#2.5m in 2002.
Sales in the rest of Europe grew by 23% to #8.1m (2001: #6.6m) and sales in the
rest of the world increased by 14% to #6.5m. Within this, sales in America
recovered from #1.4m to #2.4m as Diebold became established as our new value
added reseller in the Americas. This also contributed to Group-wide
software-related sales which increased by #2.6m (79%) to #5.9m.
Maintenance revenues increased to #13.7m (being 21.5% of 2002 turnover) - an
increase of #1.8m on 2001 maintenance revenues.
Gross profit increased to #25.6m (2001: #22.6m), reflecting continued strong
gross margins of 40% (2001: 40%).
Administrative expenses excluding amortisation of goodwill increased from #18.1m
to #19.7m including additional operating expenses from acquisitions, the first
full year of our sales and support operations in the USA, together with
investment in software development in Australia and the Netherlands. The
increase also includes the costs of reorganisation in France and Australia of
approximately #0.2m.
Our core UK businesses contributed strongly to a 31% increase in operating
profit before amortisation of goodwill to #5.9m (2001: #4.5m). After interest,
the profit before amortisation of goodwill and loss on disposal of subsidiaries
was #5.2m (2001: #3.7m).
Profit before tax nearly doubled from #1.6m to #3.0m in 2002. Basic earnings per
share increased from 1.25p to 2.58p and fully diluted earnings per share
increased from 1.23p to 2.51p. Basic earnings per share before amortisation of
goodwill increased from 5.09p to 6.41p and fully diluted earnings per share
before amortisation of goodwill increased from 5.02p to 6.24p.
Interest
Capital repayments of #2.7m on the bank loan decreased the outstanding
principal, and consequently reduced the interest burden in the year to #0.7m
(#0.9m in 2001). Interest payable is covered over 8.1 times by operating profit
before amortisation of goodwill (2001: 4.9 times).
Taxation
The tax on profit for the year was #1.7m (2001: Restated #1.0m), at an
underlying rate of 33.5% (2001: Restated 28.2%) on profit before tax and
amortisation of goodwill. Taxation has been restated to reflect the
implementation of the accounting standard FRS 19.
Dividend policy
The Directors do not recommend the payment of a final dividend.
Cash flow
The strong net inflow from operations of #8.7m, was partially absorbed by
capital repayments of #2.7m and tax payments of #2.8m. Net interest (#0.6m),
tangible fixed asset expenditure (#0.6m) and #0.7m expenditure on intangibles
and acquisitions of #0.2m absorbed further cash. The increase in cash at bank
from #3.0m to #4.4m reflects very effective management of cash and working
capital.
Net debt decreased from #6.3 to #2.2m. The balance of the recently restructured
bank facilities of #6.5m is allocated between Creditors under one year (#1.6m)
and over one year (#4.9m).
Net assets
Net assets and shareholders' funds increased from #21.1m (restated) to #23.0m.
Edwin Strang
March 2003
Bell Group plc
Unaudited Consolidated Profit and Loss Account
for the year ended 31 December 2002
2002 2001
Restated
#'000 #'000
Turnover 63,581 57,202
Cost of sales (37,942) (34,565)
_______ ________
Gross profit 25,639 22,637
Administrative expenses (21,762) (20,098)
Operating profit/(loss)
- Operating profit before amortisation of goodwill 5,906 4,550
- Amortisation of goodwill (2,029) (2,011)
Operating profit 3,877 2,539
Loss on disposal of subsidiaries (184) -
Interest receivable 47 45
Interest payable and similar charges (726) (935)
_______ ________
Profit on ordinary activities before taxation 3,014 1,649
Tax on profit on ordinary activities (1,689) (1,033)
_______ ________
Profit on ordinary activities after taxation 1,325 616
Equity minority interest 40 40
_______ ________
Profit for the financial year 1,365 656
Dividends - -
_______ ________
Retained profit for the financial year 1,365 656
_______ ________
Earnings per ordinary share
- Basic 2.58p 1.25p
- Diluted 2.51p 1.23p
Earnings per ordinary share before goodwill amortisation
- Basic 6.41p 5.09p
- Diluted 6.24p 5.02p
Bell Group plc
Unaudited Statement of Group total recognised gains and losses for the year
ended 31 December 2002
2002 2001
Restated
#'000 #'000
Profit attributable to shareholders 1,365 656
Exchange adjustments 227 (197)
_______ ________
Total recognised gains for the year 1,592 459
Prior year adjustment (note 1) 111 -
_______ ________
Total gains recognised since last report 1,703 459
_______ ________
Bell Group plc
Unaudited Consolidated Balance Sheet
at 31 December 2002
2002 2001
Restated
#'000 #'000
Fixed assets
Intangible assets 21,665 23,192
Tangible assets 1,472 1,538
_______ ________
23,137 24,730
_______ ________
Current assets
Stocks 4,299 4,078
Debtors 13,538 13,206
Cash at bank and in hand 4,385 2,959
_______ ________
22,222 20,243
Creditors: amounts falling due within one year (17,167) (17,162)
_______ ________
Net current assets 5,055 3,081
_______ ________
Total assets less current liabilities 28,192 27,811
Creditors: amounts falling due after more than one year (5,029) (6,612)
Provisions for liabilities and charges (146) (74)
_______ ________
Net assets 23,017 21,125
====== ======
Capital and reserves
Called up share capital 2,664 2,620
Share premium account 11,822 11,526
Capital reserve 11 11
Profit and loss account 8,560 6,968
_______ ________
Total equity shareholders' funds 23,057 21,125
Equity minority interests (40) -
_______ ________
Capital employed 23,017 21,125
====== ======
Bell Group plc
Unaudited Consolidated Cash Flow Statement
for the year ended at 31 December 2002
2002 2001
#'000 #'000
Net cash inflow from operating activities 8,682 5,815
Returns on investments and servicing of finance
Interest received 47 45
Interest paid (605) (845)
Interest paid on finance leases (10) (11)
Loan expenses (40) (186)
Net cash outflow from returns on investments and servicing of
finance (608) (997)
Taxation
UK corporation tax paid (2,690) (71)
Tax paid attributable to overseas operations (69) (179)
(2,759) (250)
Capital expenditure and financial investment
Expenditure on intangible assets (742) (828)
Purchase of tangible fixed assets (563) (482)
Sale of tangible fixed assets 24 42
Net cash outflow relating to capital expenditure (1,281) (1,268)
Acquisitions and disposals
Purchase of subsidiary undertakings (224) (198)
Net cash / (overdraft) acquired with subsidiary undertakings 5 (33)
Disposal of subsidiary undertakings 31 -
Net cash disposed of with subsidiary undertakings (18) -
Net cash outflow from acquisitions and disposals (206) (231)
Net cash inflow before financing 3,828 3,069
Financing
Issue of shares 340 7
Repayment of bank loan (2,682) (2,696)
Repayment of principal under finance leases (52) (77)
Issue of shares to minority interests - 40
Net cash outflow from financing (2,394) (2,726)
Increase in net cash 1,434 343
Bell Group plc
Notes to the unaudited Preliminary Announcement
for the year ended 31 December 2002
1. The preliminary results have been prepared under the historical cost
convention and are in accordance with the Group's accounting policies as set out
in the financial statements for the year ended 31 December 2001, subject to the
change in accounting policy to adopt FRS 19 - Deferred Taxation. This change has
resulted in a reduction to the tax charge reported for 2001 of #71,000 and an
increase in opening reserves for 2001 of #40,000. The adoption of FRS 19 has not
had a material effect on the results for 2002.
The financial information contained in this Preliminary Announcement does not
constitute accounts as defined by Section 240 of the Companies Act 1985.
The financial information for the twelve months to 31 December 2001 is derived
from the statutory accounts which have been delivered to the Registrar of
Companies and on which the auditors gave an unqualified opinion, as amended by
the adoption of FRS 19 as detailed above.
2. Tax charge: UK #1,277,000 (2001: restated #1,203,000). Overseas
tax: #412,000 (2001: #(170,000)).
3. No interim or final dividend is proposed (2001: Nil).
4. Reconciliation of operating profit to net cash inflow from operating
activities
Continuing operations #'000 #'000
Operating profit 3,877 2,539
Amortisation of goodwill 2,029 2,011
Amortisation of other intangibles 555 412
Depreciation of tangible fixed assets 566 606
Loss on disposal of tangible fixed assets 8 37
Increase in stocks and work in progress (217) (800)
Decrease in trade debtors 636 441
Increase in prepayments, other debtors and accrued income (684) (990)
Increase in trade creditors 581 274
Increase / (decrease) in other taxation and social security 157 (152)
Increase in accruals and deferred income and other creditors 1,174 1,437
Net cash inflow from operating activities 8,682 5,815
Bell Group plc
Notes to the unaudited Results Statement
for the year ended 31 December 2002
5. Reconciliation of movement in net debt
Other Exchange
At 1 Jan Cash Non-cash rate At 31 Dec
2002 flow changes movement 2002
#'000 #'000 #'000 #'000 #'000
Cash at bank and in hand 2,959 1,440 - (14) 4,385
Bank overdraft less than one year (28) (6) - - (34)
2,931 1,434 - (14) 4,351
Bank loans less than one year (2,607) 2,722 (1,706) - (1,591)
Bank loans more than one year (6,571) - 1,643 - (4,928)
Finance leases less than one year (48) 39 (6) - (15)
Finance leases more than one year (41) 13 15 - (13)
Total (6,336) 4,208 (54) (14) (2,196)
Other non-cash changes include the amortisation of issue costs relating to debt
and the reclassification of bank loan repayments now falling due within one year
and the disposal of finance leases.
6. For further information on Bell Group plc please visit the company
website: www.bellgroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
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