TIDMMAN
RNS Number : 8326A
Manroy PLC
08 February 2011
8 February 2011
Manroy Plc
Financial Results for year ended 30 September 2010
Manroy Plc ("Manroy" or the "Company") is pleased to announce
its financial results for the year ended 30 September 2010, as well
as the results of Manroy Systems Limited, which was acquired by the
Company on 22 December 2010 (the "Acquisition"), for the same
period.
Manroy Systems Limited, and subsequent to the completion of the
Acquisition, Manroy Plc, is the UK's leading manufacturer of
machine guns together with associated supply and support services
through maintenance and spares provision to the UK MoD and certain
foreign governments approved by the UK government.
Attached is the preliminary announcement of results of Manroy
Plc (formerly known as Hurlingham Plc) which covers the year ended
30 September 2010 immediately prior to the acquisition of Manroy
Systems Limited, together with a pro-forma statement of net assets
of the enlarged group as at 30 September 2010 and the Chief
Executive's Statement of Manroy Systems Limited covering the
results of that company for the same period.
Highlights
-- Completion of acquisition of Manroy Systems Limited for
GBP3.1 million
-- Successful placing to raise gross proceeds of GBP6.0
million
-- Admission of enlarged share capital to trading on AIM
-- Manroy Systems Limited reported pre-tax profits for the year
ended 30 September 2010 of GBP2.8 million (ahead of warranted
pre-tax profit of GBP2.5 million at the time of the acquisition in
December 2010)
-- Pro-forma net assets of GBP8.3 million after the acquisition,
in line with expectations at time of Admission to AIM
-- Progressive dividend policy adopted
Andrew Blurton, Chairman of Manroy Plc, said:
"We are very pleased to have completed the acquisition of Manroy
Systems since the year end and to be able to work with their team
in delivering an increasing range of high quality products,
together with excellent value for shareholders. We welcome Glyn
Bottomley as the new Chief Executive of the Company, Paul Carter as
the new Finance Director as well as the other employees of Manroy
Systems. The enlarged group has a good future with its ability of
generating long term sustainable income streams from its core
business, as well as a clear ability to grow organically and
through acquisition. Against this background I view the future for
the Company with confidence."
Further Information
Manroy Plc Tel: 07957 818 347
Glyn Bottomley, Chief Executive Tel: 07885 557 264
Paul Carter, Finance Director
Arbuthnot Securities Limited Tel: 020 7012 2000
Tom Griffiths
Ed Groome
Tavistock Communications Tel: 020 7920 3150
Baron Phillips
Matt Ridsdale
Chairman's Statement
Over the past year, shareholders will be aware that we have been
seeking an appropriate acquisition for the Company that would
provide long term sustainable growth prospects and enable the
Company's shares to be re-admitted to trading on AIM. I am pleased
to confirm that we have successfully identified the acquisition,
namely Manroy Systems Limited, finalised the transaction and the
Company's shares were re-admitted to trading on AIM on 22 December
2010.
The work that led to this acquisition, and which led to
Hurlingham's subsequent change of name to Manroy Plc, was the prime
focus of the Board during the year ended 30 September 2010.
The AIM Admission Document published by the Company that
Shareholders received in December 2010, provided considerable
detail on Manroy Systems together with the terms of its GBP3.1m
acquisition. Manroy is the UK's leading manufacturer of machine
guns, principally the Heavy Machine Gun, together with associated
supply and support services through maintenance and spares
provision. Its principal customers are the UK Ministry of Defence
and certain overseas governments.
As part of this acquisition, the Company also raised gross
proceeds of GBP6.0 million through a placing of new ordinary shares
with existing and new investors at 75p per new ordinary share.
Shareholders approved these proposals and the acquisition at a
General Meeting of the Company held on 20 December 2010.
I am also pleased to report that Manroy Systems produced a
pre-tax profit for the year ended 30 September 2010 of GBP2.8
million, against a warranted pre-tax profit at the time of the
acquisition of GBP2.5 million, thus re-confirming the strong
earnings produced by this business.
Shareholders will appreciate that during the period under review
the Company's principal financial asset was its GBP1.4 million cash
deposit which was held on UK interest bearing accounts. Prevailing
interest rates for the financial year were significantly lower than
in previous years, which meant that income generated from these
deposits was insufficient to cover the Company's operating costs.
In addition, as foreshadowed in the Admission Document, the
acquisition costs of GBP130 000 on the purchase of Manroy Systems
were written off in the year ended 30 September 2010, which
resulted in a pre-tax loss of GBP274,000 for the year.
As referred to above, the acquisition of Manroy Systems was
completed at the end of the first quarter of the current financial
year ending 30 September 2011 and accordingly our results for this
financial year will include a nine month contribution from Manroy
Systems Limited.
The Board is not recommending a dividend for the year ended 30
September 2010 but, as shareholders will have seen from the
Admission Document, the Directors intend to recommend the payment
of a final dividend for the year ending 30 September 2011 at the
time of publication of the financial statements for that year.
As I stated in the Admission Document, I believe the enlarged
Manroy Plc group has a good future with its ability of generating
long term sustainable income streams from its core business, as
well as a clear ability to grow through acquisition. We have
already announced the signing of two significant contracts since
our float in December 2010, one with the MoD and the other with a
Middle Eastern government, and we would anticipate making further
such announcements over the course of the current year. Against
this background I view the future for the Company with
confidence.
Andrew Blurton
Chairman
8 February 2011
Statement of Comprehensive Income
Year ended Year ended
30 September 30 September
Notes 2010 2009
GBP'000 GBP'000
Costs on acquisition of Manroy
Systems Limited (130) -
Administrative expenses (153) (84)
Loss from operating activities (283) (84)
Finance income 9 50
Loss before taxation (274) (34)
Taxation 2 - (3)
Loss for the year (274) (37)
Loss per share (basic and diluted) 4 (9.4p) (1.3p)
Statement of Financial Position
30 September 30 September
Notes 2010 2009
GBP'000 GBP'000
Non-current assets
Investments 5 - 19
Current assets
Trade and other receivables 6 480 2
Cash and cash equivalents 1,423 1,801
1,903 1,803
Total assets 1,903 1,822
Current liabilities
Trade and other payables 7 (419) (57)
Tax payable - (7)
(419) (64)
Total liabilities (419) (64)
Net assets 1,484 1,758
Equity
Share capital 8 2,179 2,179
Share premium account 331 331
Retained earnings (1,026) (752)
Total equity attributable to
Shareholders
of the Company 1,484 1,758
Statement of Changes in Equity
Attributable to equity holders in the
Company
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
Balance at 1
October 2008 2,179 331 (715) 1,795
Income for the
year
Loss for the year - - (37) (37)
Total negative
income for the
year - - (37) (37)
Transactions with
owners recorded
directly in
equity - - - -
Share capital and
reserves
at 30 September
2009 2,179 331 (752) 1,758
Balance at 1
October 2009 2,179 331 (752) 1,758
Income for the
year
Loss for the year - - (274) (274)
Total negative
income for the
year - - (274) (274)
Transactions with
owners recorded
directly in
equity - - - -
Share capital and
reserves
at 30 September
2010 2,179 331 (1,026) 1,484
Notes to the Financial Statements
1. ACCOUNTING POLICIES
Basis of preparation
The Company was incorporated and registered in England and Wales
on 12 December 1989 under the 1985 Companies Act as a company
limited by shares. The financial statements of Manroy Plc (formerly
called Hurlingham Plc) have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS as adopted by the EU"), IFRIC interpretations
and the Companies Act 2006 applicable to companies reported under
IFRS. The financial statements have been prepared under the
historical cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in this
Report. The accounting policies set out below include the policies
the Company has adopted in prior periods and to the extent that
they are only relevant to consolidated financial statements, are
the policies that the Company would adopt if it acquires subsidiary
companies in the future.
These financial statements are presented in UK Sterling, which
is the Company's functional currency. All financial information has
been rounded to the nearest thousand pounds.
Acquisition of subsidiaries
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that are currently exercisable or
convertible are taken into account.
Where necessary, accounting policies of subsidiaries are changed
on acquisition to align them with the policies adopted by the
Company. Intra-group balances and transactions and any unrealised
income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
Financial instruments
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, loans and borrowings and
trade and other payables. Non-derivative financial instruments are
recognised initially at fair value. Subsequent to initial
recognition, non-derivative financial instruments are measured at
amortised cost using the effective interest method, less any
impairment losses.
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Company's cash management are included as a
component of cash and cash equivalents for the purpose only of the
statement of cash flows.
Interest bearing bank loans and overdrafts are initially
recorded at fair value. The net amount of any premium or discount
over the nominal value, less issue costs, is amortised over the
life of the instrument via the effective interest method over its
life and charged or credited to interest payable in the statement
of comprehensive income.
Ordinary share capital is classified as equity. Incremental
costs directly attributable to the issue of Ordinary shares and
share options are recognised as a deduction from equity, net of any
tax effects.
Revenue recognition
Revenue is measured at the fair value of consideration received
or receivable.
Interest income is accrued on a time basis by reference to the
principle outstanding and at the effective interest rate
applicable.
Segment reporting
Where different businesses are in operation, segmental
information is presented. The primary format is based on the
Company's management and internal reporting structure. Segment
results, assets and liabilities include items directly attributable
to a segment as well as those that can be allocated on a reasonable
basis. Inter-segment pricing is determined on an arm's length
basis. Unallocated items comprise mainly central loans and
borrowings, related expenses and corporate assets.
Due to the sale of the Company's previous subsidiaries during
the year ended 30 September 2008, no segmental reporting has been
necessary in respect of the results set out in these financial
statements but will be included in future years as a result of the
acquisition of Manroy Systems Limited referred to in the Chairman's
Statement.
Dividends
Dividends that have been approved by shareholders at previous
Annual General Meetings are included within liabilities. Dividends
proposed at the balance sheet date that are subject to approval by
shareholders at the annual general meeting are not included as a
liability in the current period's financial statements.
Finance income and expense
Finance income comprises interest received or receivable on
funds invested. Interest income is recognised in the statement of
comprehensive income as it accrues, using the effective interest
method. Dividend income is recognised in the statement of
comprehensive income on the date the Company's entity's right to
receive the income is established.
Finance expenses comprise interest paid or payable and finance
charges on finance leases that are recognised in the statement of
comprehensive income. Interest incurred on loans specific to
properties in the course of development is capitalised during the
development phase but ceases to be capitalised once the development
is completed and ready for occupation. Where such interest is
allowable in computing the taxation liabilities of the Company,
this is used to reduce the tax charge in the statement of
comprehensive income.
Share option schemes
For equity-settled share-based payment transactions, the Company
measures their value in accordance with IFRS 2, with the
corresponding increase in equity, by reference to the fair value of
equity instruments granted. The fair value of equity instruments is
measured at the date of grant using the trinomial method. The
expense is apportioned over the vesting period of the financial
instrument and is based on the numbers which are expected to vest
and the fair value of the financial instruments at the date of
grant. If equity instruments vest immediately the full expense is
recognised immediately.
Investments
Fixed asset investments are stated at cost less provision for
any impairment in value.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the Income Statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised directly in equity.
Current tax is based on taxable profit for the period and any
adjustment to tax payable in respect of previous periods. Taxable
profit differs from net profit as reported in the Income Statement
because it excludes items of income and expense that are taxable in
other years and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is the tax that is expected to be payable or
recoverable on differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit, and is
accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. The
carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
2. TAXATION
2010 2009
GBP'000 GBP'000
Current tax
UK Corporation Tax - -
Adjustment in respect of prior periods - (3)
Taxation charge in Income Statement - (3)
The taxation has been reduced from the amount that would arise
from
applying the prevailing corporation tax rate to the
(loss)/profit
before taxation in the Income Statement, as follows:-
UK corporation tax credit at 21% on the loss
before taxation
in Income Statement 57 7
Expenditure permanently disallowed for taxation
purposes
and unrelieved tax losses (14) (2)
Tax losses carried forward to subsequent periods (43) (5)
Corporation tax charge for the year - -
Adjustment in respect of prior periods - (3)
Taxation charge in Income Statement - (3)
At 30 September 2010 the Company had unutilised tax losses
carried forward, potentially available for use in subsequent
periods, of approximately GBP225,000 (2009: GBP28,000).
3. DIVIDEND
The Board does not recommend the payment of a dividend for the
year ended 30 September 2010.
4. LOSS PER ORDINARY SHARE
The calculation of the loss per share of 9.4p (2009: loss of
1.3p) is based on the loss attributable to Ordinary shareholders
for the year ended 30 September 2010 of GBP274,000 (2009: loss
GBP37,000) and on the weighted average number of Ordinary Shares in
issue during both years of 2,905,606.
The exercise price of the share options was more than the
average share price for the year. Therefore no adjustment to
earnings is necessary in respect of shares under option, which
would otherwise result in diluted earnings per share being
different from the basic earnings per share. The shares under
option may in the future dilute earnings per share, in which case
the effect would be reported as diluted earnings per share.
5. INVESTMENTS
2010 2009
GBP'000 GBP'000
Costs incurred in previous year on proposed
transaction completed by the Company after
year end - 19
The adoption of IFRS 3 (revised) required costs incurred in prior
periods by the Company and carried forward as Investments totalling
GBP19,000, and other costs incurred during the year totalling GBP121,000,
to be written off to the Statement of Comprehensive Income during
the year;
6. TRADE AND OTHER RECEIVABLES
2010 2009
GBP'000 GBP'000
Prepayments and accrued income 480 2
480 2
7. TRADE AND OTHER PAYABLES
2010 2009
GBP'000 GBP'000
Other payables 2 6
Other taxes and social security - 1
Accruals and deferred income 417 50
419 57
8. SHARE CAPITAL
2010 2009
GBP'000 GBP'000
Allotted, called-up and fully paid
2,905,606 Ordinary Shares of 75p each at 30
September 2,179 2,179
Ordinary Shares under option
In previous years, options have been granted to subscribe for a
total of 236,560 Ordinary Shares of the Company at an exercise
price of 95p per share. No options were granted or exercised during
the year. The options are exercisable at various dates until April
2015.
On 3 December 2010 the Company adopted the Enterprise Management
Incentive Scheme and granted an Award under this scheme over
100,000 Ordinary Shares at an exercise price of 75p per share. The
Award can be exercised between 3 December 2013 and 3 December
2020.
Capital reconstruction
Subsequent to the year end, and in accordance with the proposals
set out in the Admission Document, each Ordinary Share in issue on
20 December 2010, was sub-divided into one ordinary share of 5
pence and one deferred share of 70 pence, each having the rights
and restrictions set out in the Articles of Association of the
Company. The Deferred Shares were purchased and cancelled on 30
December 2010 in accordance with the approval granted by
Shareholders at the General Meeting held on 20 December 2010.
Trading on AIM market of London Stock Exchange
On 22 and 23 December 2010, the Company's ordinary shares were
admitted to trading on AIM following completion of the proposals
set out in the Company's AIM Admission Document dated 3 December
2010. In accordance with these proposals, 10,081,632 ordinary
shares were issued, increasing the issued share capital of the
Company on 23 December 2010 and at the date of approval of these
financial statements to 12,987,238 ordinary shares.
9. FINANCIAL STATEMENTS
The financial information set out in these Financial Statements
in relation to the Company includes information for the year ended
30 September 2010, with comparative information for the year ended
30 September 2009. Statutory financial statements for the year
ended 30 September 2009 have been delivered to the Registrar of
Companies. The auditors have reported on those financial
statements; their reports were unqualified and did not contain
statements under Section 498 of the Companies Act 2006.
This Report will be sent to shareholders during February 2011
and an electronic copy is available on the Company's website at
www.manroy.com. The audited financial statements of Manroy Plc
(formerly called Hurlingham Plc) for the year ended 30 September
2009 and further copies of this report are available from the
Company's registered office of 6 Lakeside Business Park, Swan Lane,
Sandhurst, Berkshire GU47 9DN.
POST BALANCE SHEET EVENTS (UNAUDITED)
The contents of this post balance sheet event note do not form
part of the notes to the financial statements.
In accordance with the proposals contained in the Admission
Document issued by the Company dated 3 December 2010, which were
approved by Shareholders at a General Meeting held on 20 December
2010, the Company acquired Manroy Systems Limited for GBP3.1
million, raised a net amount of GBP5.2 million by means of a
Placing and subsequent issue of 10,081 632 new ordinary shares, and
changed its name to Manroy Plc. These transactions were completed
on 23 December 2010.
The following unaudited pro forma statement of net assets of the
Enlarged Group has been prepared for illustrative purposes only to
show the effect of the Placing and the Acquisition, as if they had
occurred on the year end of both companies, namely 30 September
2010. Due to the nature of pro forma information, this information
addresses a hypothetical situation and does not therefore represent
the actual financial position or results of the Enlarged Group. The
unaudited pro forma statement of net assets set out below is based
on the audited statement of financial position of Manroy Plc
(formerly called Hurlingham Plc) at 30 September 2010 and the
audited consolidated statement of financial position of Manroy
Systems Limited at 30 September 2010, after making adjustments on
the basis described in the notes below.
Manroy Plc Manroy Systems
Proforma
September September Enlarged
2010 2010 Adjustments Group
Note 1 Note 2 Notes 3,4,5
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets - 6,538 (937) 5,601
Deferred tax asset - 62 - 62
Property, plant &
equipment - 107 - 107
- 6,707 (937) 5,770
Current assets
Inventories - 1,118 - 1,118
Trade and other
receivables 480 4,154 - 4,634
Cash and cash
equivalents 1,423 1,242 (1,021) 1,644
1,903 6,514 (1,021) 7,396
Total assets 1,903 13,221 (1,958) 13,166
Current liabilities
Loans and borrowings - (732) - (732)
Trade and other
payables (419) (4,169) 1,500 (3,088)
(419) (4,901) 1,500 (3,820)
Non-current
liabilities
Loans and borrowings - (1,093) - (1,093)
Other payables - (3,229) 3,221 (8)
- (4,322) 3,221 (1,101)
Total liabilities (419) (9,223) 4,721 (4,921)
Net assets 1,484 3,998 2,763 8,245
Notes
1. The net assets of Manroy Plc (formerly called Hurlingham Plc)
have been extracted from the audited financial statements of the
Company for the year ended 30 September 2010 set out on pages 16 to
28 of this document
2. The net assets of Manroy Systems Limited have been extracted
from the audited financial statements of Manroy Systems Limited for
the year ended 30 September 2010
3. The adjustments relating to the Placing refer to the issue by
the Company of 8,000,000 Placing Shares at the Placing Price of 75p
per share referred to in the Admission Document. This raised gross
proceeds of GBP6.0 million, amounting to net proceeds of
approximately GBP5.2 million after costs relating to the
Acquisition and the issue of the New Ordinary Shares estimated at
the time of Admission at approximately GBP0.8 million. The net
funds raised in the Placing of GBP5.2 million have been reflected
in the pro forma statement of net assets by a reduction of loans
and borrowings of approximately GBP4.8 million relating to the
repayment of Manroy Systems Limited's shareholders' loan and
deferred consideration included in current liabilities and
non-current liabilities. The Placing Shares and the Consideration
Shares increased the issued share capital of the Company from
2,905,606 Ordinary Shares to 12,987,238 Ordinary Shares.
4. Intangible fixed assets have been adjusted to reflect an
estimate of the goodwill which arises as a result of the
acquisition of Manroy Systems Limited by the Company as illustrated
below:
GBP'000
Fair value of the consideration
2,081,632 ordinary shares in the Company 1,561
Cash 1,500
3,061
Less net assets of Manroy Systems Limited
at 30 September 2010 (3,998)
(937)
Goodwill in Manroy Systems Limited at
30 September 2010 6,538
Pro forma goodwill of Enlarged Group 5,601
5. Under the terms of the Acquisition Agreement, prior
shareholders' loans of GBP2.0 million plus cumulative interest
accrued at the date of repayment of GBP231,749 and deferred
consideration of GBP2.5 million plus accrued interest at the date
of repayment of GBP37,739, totalling GBP4,769,488, were repaid by
Manroy Systems Limited at Completion on 23 December 2010.
6. Save for the adjustments for the net proceeds of the Placing,
the Acquisition and the repayment of debt described above, no
adjustment has been made to reflect any trading or other
transactions undertaken by the Company or Manroy Systems Limited
since 30 September 2010.
Chief Executive's Statement of Manroy Systems Limited (acquired
by Manroy Plc on 23 December 2010)
2010 has been a busy and profitable year for Manroy Systems.
Financial information
Financial information on Manroy Systems is set out in the
consolidated financial statements. Selected financial information
from the consolidated results of Manroy Systems has been summarised
as below:
9 months ended
Selected Consolidated Financial Year ended 30th 30th September
Items September 2010 2009
GBP'000 GBP'000
Income
Revenues 12,308 7,120
Gross profit 4,063 2,254
33% 31%
Profit from operations 3,104 1,565
Profit before tax 2,804 1,303
Profit for the year 2,018 972
================ ================
16% 14%
Cashflow
Net cash flow from operating
activities 1,117 983
Cash out flow from investing
activities (7) (15)
Cash out flow from financing
activities (706) (482)
Net increase in cash 404 486
================ ================
Balance Sheet
Non-current assets 6,645 6,701
Current assets 6,576 4,343
---------------- ----------------
Total assets 13,221 11,044
---------------- ----------------
Current liabilities (4,901) (2,872)
Non-current liabilities (4,322) (6,192)
Total liabilities (9,223) (9,064)
Net assets 3,998 1,980
================ ================
The Manroy Systems board uses a range of financial and
non-financial performance indicators, reported on a periodic basis,
to monitor the Group's performance over time.
Increased turnover and market share
As mentioned in the introduction to these accounts part of our
strategy is to increase our market share in the export market
through an increased customer and product base. For the year ended
September 2010 the business reached record sales of GBP12.3 million
(GBP7.1 million: 2009), this income continued to represent a high
proportion of UK MOD (93%) although a small reduction from 2009
(95%). There was also encouragement in the export market with
Europe and South America showing small signs of increase (Note
4).
Maintaining gross profit margins at 33%
Gross margins increased from 31% (2009) in the year to 33%
(2010). The business is constantly reviewing cost effectiveness in
prices and methodology. This on-going interrogation will continue
as a standard course of business.
Maintaining net profit margins at 16%
Net profit margins also increased from 14% (2009) to 16% (2010).
Naturally an element of this will feed through from the
improvements in gross margin. However, the business is cost
vigilant with the board of directors of Manroy Systems receiving
timely monthly reviews and forecasts.
Liquidity
Maintaining a high and reliable level of working capital is
fundamental to the growth of the business. As Manroy Systems moves
into the export market there will be an element of performance
bonds and risk with this market requiring good cash flow
management.
Compliance
Maintaining compliance in licensing, control of firearms and the
management of business representatives is a non-financial
performance indicator, however, failure in compliance would be a
significant impairment of our financial position and ability to
trade.
While the defence sector has not been immune to the impact of
the global recession, we are confident that demand for products
will remain strong and will continue to grow. In May 2010, Manroy
Systems received orders from the UK MOD for weapons systems and
spare parts worth approximately GBP11.0 million, of which
approximately GBP6.2 million were delivered by 30 September 2010,
GBP4.0 million are forecast to be delivered in the year to 30
September 2011 and GBP0.8 million are forecast to be delivered in
2012.
The recent strategic defence and security review by the UK
Government is considered unlikely to have any negative impact on
Manroy Systems. Whilst the UK Government has introduced spending
cuts in the defence sector of approximately 8 per cent, it is clear
that these cuts are less extensive than was originally thought. It
is expected that major cost items such as aeroplanes, vessels,
artillery and tanks will be most affected and, while there is no
detail available yet on small and mid level procurement, we are
confident that the review will not impact Manroy Systems.
Strategy for growth
Manroy Systems' growth to date has been achieved on a limited
capital base and has been financed by internally generated cash
flow and bank borrowings.
Manroy Systems' primary growth strategy will be through
identification of key growth areas that Manroy Systems could expand
into, through either partnering or by acquisition. This strategy
has led to several options and targets, including expanding its
product range into areas such as pistols, bolt action rifles for
military and sporting applications, smaller calibre automatic
weapons, ammunition for its products and establishing a bespoke
logistical support business which would be responsible for all
post-sales activities, including training and spare parts
requirements.
In addition, we will expand Manroy Systems' relationship with
the UK MOD by engaging with other areas within the MOD's weapons
project teams. This planned activity is expected to include
increasing our product range, accessing research and development
funding, training and establishing long term spare parts supply
contracts. As part of this strategy, Manroy Systems expects to
tender for the MOD's pistol replacement programme in 2011, as well
as its assault rifle replacement programme. Manroy Systems intends
to use its standing as a key UK-based weapons manufacturer to
licence products from long standing suppliers to Manroy Systems,
for production in the UK by Manroy Systems in its further supplies
to the MOD.
Admission to AIM
Manroy Systems and Hurlingham Plc completed a reverse take-over
in December 2010. This resulted in the share capital of the
enlarged group being admitted to the Alternative Investment Market
(AIM). The full details of this transaction can be reviewed in the
admission document available on our website www.manroy.com.
The admission of Manroy's shares to the AIM market has given the
business a strong foundation from which to implement the Manroy
Systems board's strategy for growth while also reducing debt levels
in the business.
An exciting chapter in the history of Manroy Systems.
Glyn Bottomley
Chief Executive Officer
This information is provided by RNS
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