Opsec Security Group Final Results RNS Number : 5748J Opsec Security s3-us-west-2. 2013-09-16¢  OpSec

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  • 7/18/13 Opsec Security Group | Final Results | FE InvestEgate

    www.investegate.co.uk/ArticlePrint.aspx?id=201307180700065748J 1/16

    Opsec  Security  Group Final  Results RNS Number : 5748J

    Opsec Security Group PLC

    18 July 2013

                           18th  July  2013  

    OPSEC  SECURITY  GROUP  PLC ("OpSec",  "the  Company"  or  "the  Group")

      Preliminary  Announcement  of  Results  for  the  Year  Ended  31st  March  2013

      OpSec  Security  Group  plc,  the  supplier  of  anti-­counterfeiting  technologies,  services  and

    programmes  announces  its  results  for  the  year  ended  31st  March  2013.

      Highlights

    2013 2012 Revenue £51.7m £38.3m Operating  Loss £(2.5)m £(0.6)m Adjusted  Operating  Profit* £3.7m £2.3m Loss  Per  Share (2.3)p (3.4)p Adjusted  Basic  Earnings  Per  Share* 5.8p 2.0p  

    *   Adjusted   for   the   charges   for   intangible   amortisation   and   impairment,   exceptional   charges   and   share   based

    payments  (notes  2b  and  8)

     

    •          Results  benefitted  from  the  acquisitions  of  Delta  Labelling  and  the  holographics business  of  JDSU;;

    •           Group   revenue   increased   by   35%   to   £51.7   million:   6%   growth   ignoring   the impact  of  acquisitions;;

    •          Group  adjusted  operating  profit  up  by  58%  to  £3.7  million;; •          Cash  inflow  from  operating  activities  of  £8.4  million  (2012:  £1.5  million);; •          Closing  cash  balance  of  £6.0  million  (2012:  £4.9  million).

     

    David  Mahony,  Chairman,  said:   "The  year   to  31st  March   2013  was   an   active   year   for   the  Group   and   its  management

    team.     The   Board   believes   that   the   recent   acquisitions   and   the   continued   internal

    investments   have   positioned   the   Company   for   a   period   of   sustained   growth   and

    profitability."

     

    For  further  information,  please  contact:   OpSec  Security  Group  plc                                                                                                                                                     Mark  Turnage,  Chief  Executive  (mturnage@opsecsecurity.com)                                                                +1 720  394  2803 Mike  Angus,  Finance  Director  (mangus@opsecsecurity.com)

     

     

    Shore  Capital                                                                                                                                                                                                                          020 7408  4090 Stephane  Auton/Patrick  Castle

  • 7/18/13 Opsec Security Group | Final Results | FE InvestEgate

    www.investegate.co.uk/ArticlePrint.aspx?id=201307180700065748J 2/16

             18th  July  2013

     

    OPSEC  SECURITY  GROUP  PLC

    ("OpSec",  "the  Company"  or  "the  Group")

     

    Preliminary  Announcement  of  Results  for  the  Year  Ended  31st  March  2013

     

    Chairman's  Statement

        Introduction

      The   results   for   the   year   to   31st   March   2013   were   impacted   significantly   by   the acquisitions  of  Delta   Labelling  and   the  holographic   security   business  of   JDS  Uniphase Corporation   ("JDSUH").     Annual  Group   turnover   grew   by   35%   and   adjusted   operating profit  grew  by  58%  to  £3.7  million.           Brand  Protection,   the   largest  of   the  market   facing  groups,  achieved  a  15%   increase   in revenue  with   the   impact  of   the  acquisitions  offsetting  a  4%  reduction   in  organic  sales.   This   reduction   reflects   the   difficult   economic   conditions   rather   than   the   loss   of   any significant  customers.     Government  Protection  revenue   increased  by  34%  (32%  excluding  acquisitions)  due  to the  cyclical  element  inherent  in  the  on-­going  supply  of  currency  thread  to  a  major  Asian currency  customer  and  higher  sales  to  a  European  government.             Transaction   Cards   revenue   of   £5.7   million   was   generated   from   our   newly   acquired business,  JDSUH.     Exceptional  Items

     

    A   number   of   major   exceptional   items   impacted   the   year;;   these   included   the   costs relating  to  the  acquisition  of  the  holographic  security  business  of  JDSUH,  reorganisation costs,   inventory   impairments   and   adjustments   made   to   the   contingent   consideration provisions   for  both  Delta  Labelling   ("Delta")  and  JDSUH.    Full  details  of  all   these   items are  provided  below.   Acquisitions

      Delta   is   an   established   supplier   of   brand   protection   labels   based   in   the  UK   and  Hong Kong.     During   the   year   the   business   has   been   integrated   into   the   OpSec  Group   and cross   selling   opportunities   have   been   identified   that   will   enable   us   to   exploit   the complementary   product   ranges   of  OpSec's   brand  protection   activities   and  Delta's   own range.     The   results   for  Delta  were   impacted   by   the   administration   of   a   key   customer, Republic,  late  in  the  financial  year.    This  administration  also  contributed  to  an  impairment charge  against  the  Delta  intangible  asset  and  a  reduction  in  the  provision  for  contingent consideration  payable  to  the  vendors  of  the  Delta  business.   The  acquisition  of  Delta  was  financed  by  a  placing  in  April  2012  of  17.3m  shares  at  45p per  share  with  a  number  of  our  major  shareholders  participating.  

    The   Group   completed   the   acquisition   of   JDSUH   on   12th   October   2012   for   an   initial consideration   of   $11.5  million.   Further   consideration   of   up   to   $4  million   could   become payable  depending  on  the  extent  to  which  certain  performance  conditions  are  achieved during  the  12  month  period  following  completion  of  the  acquisition.  The  consideration  for the  acquisition  was  satisfied  from  the  Company's  existing  cash  resources  and  additional bank  facilities  with  JP  Morgan  Chase.   Since   the   acquisition   the   JDSUH   business   has   performed   ahead   of   expectations   and consequently   an   additional   provision   has   been  made   for   contingent   consideration   not anticipated  at  the  time  of  the  acquisition.

    Outlook

      A  programme  to  strengthen  the  sales  and  marketing  activities  of  the  Group  was  initiated a   year   ago   and   has   led   to   an   increase   in   the   number   of   leads   and   new   contract opportunities.      The  Board  are  confident  that  the  benefits  of  this  investment  will  be  seen in   the   current   year.   Further   investments   relating   to   the   integration   of   the   recent

  • 7/18/13 Opsec Security Group | Final Results | FE InvestEgate

    www.investegate.co.uk/ArticlePrint.aspx?id=201307180700065748J 3/16

    acquisitions  and  enhancements  to  the  Group's  production  and  technology  base  continue to  be  undertaken.     The   year   to   31st   March   2013   was   an   active   year   for   the  Group   and   its  management team.     The   Board   believes   that   the   recent   acquisitions   and   the   continued   internal investments   have   positioned   the   Company   for   a   period   of   sustained   growth   and profitability.           DA  Mahony Chairman 18th  July  2013  

    BUSINESS  REVIEW Chief  Executive's  Review   Introduction   OpSec   is   an   international   company   whose   mission   is   to   provide   solutions   to   its customers   to   combat   counterfeiting   and   the   related   problems   of   diversion,   grey marketing,   online   brand   abuse   and   fraud.     OpSec's   customers   include   numerous governments  and  many  of  the  world's  largest  corporations.   OpSec  has  traditionally  supplied  technologies  and  solutions  into  two  core  markets:  Brand Protection   and  Government   Protection.   In   addition,   OpSec   owns   50%   of   3dcd   LLC,   a joint   venture   which   licenses   technologies   for   the   protection   of   optical   disks   (CDs   and DVDs).     During   the   year   a   third   market,   Transaction   Cards,   was   added   via   the acquisition  of  the  holographic  security  business  of  JDS  Uniphase  Corporation  ("JDSUH").   OpSec's   customers   are   served   from