Strategic review and trading update
20 December 2007
Petards, the AIM listed developer of advanced surveillance systems, announces an update on its strategic review and trading.|
In the Interim Statement at the end of September the board indicated that it was appraising opportunities to partner or combine with other businesses to create synergies and critical mass and was also considering the financing requirements to enable it to reach its full potential while remaining independent. In November the board announced that it had appointed ICON Corporate Finance Limited to act as corporate finance advisors to the Company and provide assistance in the further development and implementation of the board's strategy.
The board has now concluded its review and decided that the potential of the Company will best be realised by focusing its resources on a more limited range of technologies and markets. Accordingly it is currently in exclusive discussions with a third party that the board hopes will shortly lead to the disposal of its UK Government and Commercial software business which includes the software products UVMS™, Advantage and COBYT. The cash proceeds from the disposal will be used to reduce the group's bank indebtedness and to invest in the remaining parts of the business.
The board continues to evaluate other means of maximising shareholder value and will continue to update shareholders as appropriate.
Since the beginning of October the Company has received orders exceeding £7m, including the contract from First Great Western for Petards eyeTrain™ on-board digital CCTV surveillance systems incorporating Petards Automatic Passenger Counting (APC) system worth over £1m and two contracts from the Ministry of Defence for the supply of electronic warfare defence systems worth over £2m that have been previously announced. The Company has recently received an order from a casino operator in the USA for the installation of its UVMS video management systems worth $1.1m and further orders for APC systems and the supply of electronic warfare defence systems totalling £1.5m.
The level of these orders represents a booked: billed ratio of over 1.7 in the last quarter but, in view of the timing of their receipt, most will not be delivered until 2008. Sales for the full year to 31st December 2007 are expected to be slightly lower than market expectations, which, with unchanged margins, will result in a higher operating loss than previously expected, although this would be more than compensated for by the expected profit to be reported on the sale of the UK Government and Commercial software business.
The Company has consulted its bankers throughout the strategic review and is confident of their continued support for the business and the strategy that the board is following.
After a difficult six months the Company will emerge stronger in the New Year with a more substantial order book than twelve months ago. The board hopes to report to shareholders on further progress shortly.
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