22/09/10
Eruma - Interim Reports and Accounts for period ended 30 June 2010
Chairman's Statement
Unaudited half-yearly report for the period ended 30 June 2010
Eruma plc, the AIM traded specialist provider of counter terrorism, bomb blast protection, intruder prevention and intelligent lighting solutions, is pleased to announce its half-yearly report for the six month period to 30 June 2010.
Highlights
• Orders increased by 83% to £908,000 from £495,000 compared to the equivalent period in 2009 and were only just short of the total revenue of the Company for the year to 31 December 2009;
• Revenue was 12%, (£68,000) and Gross Profit 24% (£53,000) lower for the period due to the larger scale of orders and the longer delivery times of bigger contracts;
• Distribution expenses reduced by 24% and administrative expenses were 10% lower compared to the equivalent period in 2009, and
• The loss before tax was reduced by 10% compared to the equivalent period in 2009.
Review and Outlook
The Company made significant changes and improvements to the business in 2009 and I am pleased to report those decisions have begun to deliver improved performance with conversion of significant opportunities within our sales pipeline into orders during the first half of 2010 an increase of more than 80% over the same period last year Concurrently with these sales the Company has continued to increase the size and scale of its sales pipeline particularly within its international markets around bomb blast protection solutions and our domestic intelligent lighting solutions. Intruder prevention, including anti-ram raid gates, continue to sell with repeat orders for existing clients being a major feature of the pipeline as the offerings are now well established.
Notably the Company has had a number of firsts in 2010:
• First international bomb blast protection solutions sold in the Middle East;
• First mainland Northern Europe combined blast and intruder protection solution sold, and
• First major end to end solution sale within the Company’s intelligent lighting division being awarded a contract for £379,000 to upgrade and replace lighting across Bristol Airport which will deliver significant carbon reductions and energy saving year on year.
Revenue has been slightly lower due the nature and scale of the contracts that the Company has been winning which has meant that the time to build and fulfil orders coupled with the nature of the contractual terms offered has meant the time from order to revenue recognition has been longer than the historical revenue profile.
The Company maintains its programme of continual improvement within its operations through streamlining of internal administration and management procedures. The Board is pleased with the results and progress which is evidenced by the reduction in distribution and administration expenses and overall bottom line performance.
Trading update post period
The increased order volume crystallised the Company’s requirement for additional working capital. To accelerate the business growth and aid in fulfilment of contracts awarded, the Company successfully undertook a restructuring of its share capital and a placing of new shares from both existing and new investors.
The continued support of staff, directors and existing investors is much appreciated and a vote of thanks to all is extended by me on behalf of the Board.
The Board believe that the actions described above position the Company well to continue the good performance from the first half of 2010 through into the full year. The Board recognises that on-going working capital funding will be required to support the larger scale and more complex contracts the Company is now bidding for, both internationally and domestically. The Company will continue to seek to use a mixture of funding solutions depending on the working capital facilities available from external sources.
Your Board is confident that its strategy of driving sales growth and expansion into international markets, larger scale contracts and increasing the volume of repeat orders from existing clients will deliver the sustainable operating model that will deliver a return on investment to our shareholders.
New Finance Director Appointed
The Company has also announced today that David Tilman will be appointed as Finance Director with effect from 1 October 2010.
David has extensive experience of the core sectors in which the Company operates and has handled complex transactions including acquisitions and mergers along with driving improvements in operational profitability.
The Board believe David is a welcome addition to the team and will ensure the Company’s core systems and controls will scale with planned growth.
David Alexander
Chairman
22 September 2010
For further information please visit www.erumaplc.com or contact:-
David Alexander Eruma plc Tel: +44 (0)20 7566 2610
Wayne Money Eruma plc Tel: +44 (0)20 7566 2610
Liam Murray Cairn Financial Advisers LLP Tel: +44 (0)20 7148 7903
Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7236 1177
Elisabeth Cowell St Brides Media & Finance Ltd Tel: +44 (0)20 7236 1177
To download the Interim Report and Accounts in full click here
