Financial highlights
· Group revenue of £17.7m (H1 2017: £26.0m)
· Adjusted operating loss* of £1.8m (H1 2017: operating profit* of £1.5m)
· Gross margin** decreased by 6.5% to 25.2% (H1 2017: 31.7%**)
· Basic loss per share of 3.2p (H1 2017: EPS of 2.8p per share)
· Cash of £3.4m and no debt (30 June 2017: cash of £10.0m and no debt)
· The warranty provision at 30 June 2018 was £1.5m (30 June 2017: £3.9m; 31 December 2017 £2.2m)
· Inventory reduced to £11.0m (30 June 2017: £13.2m)
· £1.4m investment in new product development (H1 2017: £1.4m)
Operational highlights
· On track against the Company's strategic plan – to be an independent technology-led business with connected propositions that complement and drive core product sales that underpin long term revenues
· The new FireAngel ranges, manufactured through our two new manufacturing partners, have been well received by both existing and new customers
· Full scale production at Flex is expected in Q4 2018, driving greater cost effectiveness in 2019 and beyond
Post-period end highlights
· Strong pipeline of opportunities in core product sales alongside the Company's proprietary connected solutions, FireAngel Connect
· Continued traction with leading retailers in the UK and overseas for expanded range of FireAngel home safety products
· Signed strategically significant partner agreement with Mears, supplying the Company'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, housing services provider to over 22,000 properties in partnership with Doncaster Council
Graham Whitworth, Executive Chairman of FireAngel Safety Technology Group plc, commented:
“We started our transformation to an independent, technology-led business two and a half years ago and, through the talents and determination of the team, I am delighted with the progress made as we continue on track to deliver our strategic milestones.
“Our team continues to work with our manufacturing partner to optimise production volumes at the Flex facility in Poland and we firmly believe the improved economies of scale, shorter time to market combined with operational and supply chain efficiencies will further grow the Group's presence in core markets, alongside expanding into new ones.
“The Board believes that the Group's ongoing expansion as a leading provider of integrated safety solutions will continue to support medium to long term growth.
“Whilst innovations such as FireAngel Predict™ and FireAngel Connect will undoubtedly provide upside in the future, and will complement and drive incremental core product sales, the Company remains keenly focused on its core product range and markets which underpin our near term revenues.”
Outlook
While the business has faced a challenging first half, the Board has remained focused on executing the transformative changes around production, processes, technology and people that underpin the Group's medium and longer term growth plans. As a result, the Board firmly believes that the business is now in a much stronger position.
The recent contracts secured by the UK Trade team with Mears and St Leger Homes demonstrate the size and potential of this market. The connected homes proposition is an area where the Company is, in our view, uniquely positioned to capitalise not just in the UK, but also within other existing and potential new markets in which we are actively building a strong sales pipeline.
The Board remains focused on positioning FireAngel as the leading provider of home safety technology and solutions and is confident in the medium to long term prospects for the business. We look forward to updating shareholders on the progress being made.
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Graham Whitworth Executive Chairman 24 September 2018
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