Financial headlines
· Revenue £37.6 million (2017: £54.3 million)
· Underlying operating loss1 £2.0 million (2017: underlying operating profit1 £4.7 million)
· Operating loss £5.8 million (2017: operating profit £0.5 million)
· Adjusted gross profit2 £9.7 million (2017: £18.0 million)
· Adjusted gross margin2 25.7% (2017: 33.1%)
· Exceptional costs totalling £3.7 million and a share-based payments charge of £0.1 million (2017: exceptional costs of £3.8 million; share-based payments charge of £0.4 million)
· Underlying loss before tax3 £2.1 million (2017: underlying profit before tax3 £4.7 million)
· Loss before tax £5.9 million (2017: profit before tax £0.5 million)
· Basic and diluted EPS (9.8p) (2017: 1.1p)
· Maintained capitalised development costs and software investment at £3.7 million (2017: £3.6 million)
· Net debt at 31 December 2018 £4.4 million (2017: net cash £3.3 million). Since the year end, the Group and HSBC have agreed to move from a revolving credit facility to a more efficient invoice discounting and overdraft facility
· Announcement today of placing and open offer to raise £6.0 million to accelerate recovery
· Since the year end, the Group implemented a reorganisation and restructuring programme which will yield annualised savings of approximately £0.4 million, as well as further ongoing cost-saving initiatives to ensure a more efficient and effective use of resources
1 Underlying operating loss in 2018 of £2.0 million is before exceptional charges of £3.7 million and a share-based payments charge of £0.1 million (2017: underlying operating profit of £4.7 million before an exceptional charge for the BRK settlement of £3.8 million and a share-based payments charge of £0.4 million).
2 Adjusted gross profit is stated before the BRK distribution fee of £0.9 million (2017: £2.9 million) and before the exceptional charge for the stock and disposal provision of £1.1 million (2017: exceptional charge for the BRK settlement of £3.8 million). Adjusted gross margin is adjusted gross profit as a percentage of revenue.
3 Underlying loss before tax in 2018 of £2.1 million is before exceptional charges of £3.7 million and a share-based payments charge of £0.1 million (2017: underlying profit before tax of £4.7 million before an exceptional charge for the BRK settlement of £3.8 million and a share-based payments charge of £0.4 million).
Operational headlines
· On track to be an independent technology-led business with connected propositions that complement and drive core product sales, including change of name to FireAngel Safety Technology Group plc to more closely align the corporate and brand structures
· End of operational relationship with the Group's previous manufacturing and distribution partner removes the historic obligation to pay an annual distribution fee of £2.9 million (£0.9 million in 2018)
· Action taken in the Group's distribution channels to move from a traditional distributor model to more value-added reseller partnerships
· New FireAngel ranges, manufactured through our two new manufacturing partners, have been well-received by both new and existing customers
· Signed strategically significant partner agreement with Mears to supply the Group's integrated connected home management system to Mears' clients, and becoming Mears' preferred fire safety product provider
· Appointed as exclusive supplier of smoke and heat alarms to St Leger Homes
· Scottish legislation which came into effect since the year end demanding greater safety standards has led to significant and ongoing contract wins in the supply of FireAngel interconnected smoke, heat and CO alarms to a number of Scottish housing associations
Commenting on the results, Neil Smith, Group Chief Executive of FireAngel, said:
“Whilst 2018 was a very challenging year for the Group, we have made good progress in delivering our strategy to become a technology-led business with connected propositions that complement and drive core product sales. Recent announcements detailing a number of contract wins demonstrate the growing strength of our connected proposition and the progress being made within key markets. Legislative change, the heightened awareness of connected products and our new ranges, combined with a series of self-help initiatives, mean we are now very well placed to return the business to strong medium to longer-term growth and profitability. To accelerate this recovery, we have taken steps to restructure our banking facilities to better meet our needs and announced today a placing and open offer to raise £6.0 million.”