Zeta Compliance Group Plc

May 16, 2011 02:00 ET

Final Results Announcement

Final Results
RNS Number:
16th May 2011
                                                Zeta Compliance Group plc
                                                  PLUS-Quoted Code: ZCG

                                               Final Results Announcement
Zeta Compliance Group plc ("Zeta" or the "Company") announces its final results for the year
ended 31 January 2011
*  Increased revenue 28.0% to £2,983,523
*  Increased EBITDA by 37.3% to £653,209 (excl. new initiatives)
*  Increased Net Assets to £1,060,391 (2010: £824,225)
*  Acquisition of the Fire Strategy Company and instigation of a Carbon Reduction service
*  Potential opportunity to win a contract with a large US corporation for use of ZetaSafe outside of hygiene
*  Development of ZetaSafe 2.0, ready for release late in 2011
*  Recruitment of Operations Director, David Downer
Zeta Chairman, John Caines, commented:
"2010-11  was  a  year  of  achieving growth and profitability.  The  impressive  growth  and
profitability  of  the services business has been achieved by the continuing  excellence  and
dedication of its staff and executives at all levels. I can only be both hugely impressed and
grateful for the unstinting efforts of staff and management across Zeta Compliance Group  plc
and I am pleased to put my appreciation on record."
For further information contact:
Zeta Compliance Group plc
Rob Nicoll - Director
Tel: 01869 326000
Hybridan LLP, Corporate Adviser                          Tel: +44 (0)20 7947 4350
Claire Noyce                                             claire.noyce@hybridan.com
Chairman's Report
2010-11  was  a year of achieving growth and profitability whilst also taking  key  steps  to
enhance  its future potential in accordance with the strategy summarized in my report  of  12
months ago.
Revenue  for  the  year  was  £2,983,523 (2010: £2,324,247) an increase  of  28.0%.  Of  this
increase, £153,228 came from a subsidiary, the Fire Strategy Company Limited ("FSC") acquired
in  May  2010,  and  a further £35,531 from the start up of a business unit  offering  Carbon
Reduction services ("Carbon").
Excluding  FSC  which  incurred  a  Loss of £122,718, and Carbon  which  lost  £123,560,  the
Company's  EBITDA of £653,209 (2010: £475,650) was 37.3% ahead of the previous  year.  EBITDA
including FSC and Carbon was £406,931.
Profit  before tax was £271,851 (2010: £302,506), whilst profit after tax was £242,423 (2010:
£236,123). After tax diluted earnings per share was 2.74p (2010: 2.94p).
The  Company  again  invested significantly in the resources for growth  within  a  coherent
strategy. Capital expenditure was led by the FSC acquisition which incurred a cash outlay of
£220,000  including  associated expenses. Additional working capital for  FSC  and  our  USA
associate,  Zeta  LLC,  was provided. The launch phase of 'Carbon',  office  relocation  and
gearing up of executive capacity incurred expenditure immediately charged to the Profit  and
Loss  Account. Cash at 31st January 2011 was £66,623 (2010: £310,859).  Other than  possible
payments  to  the  vendors of FSC in 2012 and 2013 (which are subject  to  self  liquidating
performance criteria), the Company's total indebtedness stood at £39,000 (2010: £32,491).
Net Assets rose from £824,225 at 31st January 2010 to £1,060,391 at 31st January 2011.
I  am  particularly  pleased to announce the implementation of a longstanding  intention  to
reward our shareholders, some of whom invested at a very early stage of our business, by the
announcement  of  the  Company's maiden dividend of 0.5p per share to  be  paid  subject  to
ratification at this year's AGM. An objective of the Company is to make regular  returns  to
shareholders  provided that neither liquidity nor the capacity to invest in  the  future  is
practically impaired.
Noteworthy developments during the year included:
* Excluding the new activities of Fire and Carbon, our Services business produced an EBITDA of £659,031 up 32.3%
  on 2010 (£497,914) on turnover up 19.6% at £2,364,647 (2010: £1,977,056) The impressive growth and profitability of this
  'engine room' of the Company has been achieved by the continuing excellence and dedication of its staff and executives
  at all levels. Clearly the business and its stakeholders warrant continuing investment to sustain this impressive
  performance and high customer service levels. Accordingly an experienced Operations Director was recruited late in the
  financial year and took up his position at the start of 2011-12. The directors believe that David Downer's appointment
  will not only bring even higher standards to bear on operations but also releases other key directors to concentrate
  fully on Sales and Product Development.
* Consistent with the view that many clients prefer to build a relationship with as few service providers as
  possible, key steps towards providing a 'whole compliance' service (within the built environment) were undertaken with
  the acquisition of FSC and instigation of a Carbon Reduction service. In both cases, we have as expected needed to incur
  operating losses to bring the new offerings into line with Zeta's standards, but as the year closed, there was clear
  evidence that clients are beginning to buy these services and there is good reason to expect that those early operating
  losses will be turned into profits before too long.
* Over recent years, the innovative nature of the Company's underpinning software systems, ZetaSafe, has been
  demonstrated by several examples of large organisations enquiring about its use for applications outside of hygiene
  compliance, for which it was originally designed. Our associate company in the USA responded to such an opportunity
  which could generate over US$1 million from a large corporation with laboratories around the world. This client is now
  completing the pilot stage for a system to provide statistical quality control for its bought in consumable equipment to
  yield considerable cost savings as well as provide added quality assurance.
* During the year, the principal drive of our Development team was Zetasafe 2.0, which is now substantively
  complete and ready for launch later in 2011. The scope has been widened to reflect the drive towards 'whole compliance'
  in scope and is written to standards that facilitate a convincing 'Cloud Computing' or 'SaaS' (Software as a Service)
  offering  in line with a strongly emerging trend in corporate Information Technology in our target markets.
* We never forget that the purpose of our work is the protection of people using the buildings whose hygiene and
  safety we help to ensure. During the past year Zeta has supported more than 200 customers. Our regular satisfaction
  surveys show that our services are held in high regard, a picture underscored by the fact that the great majority of our
  major clients from five and more years ago continue to use our products and services.
* Supporting the Directors' aim of incentivising, motivating and retaining key staff, an Employee Benefit Trust
  was created during the year to acquire an appropriate number of shares from existing shareholders, thereby minimising
  the dilutive effect of vesting options under our Employee Share Option scheme.
Once  again, I can only be both hugely impressed and grateful for the unstinting efforts  of
staff  and  management  across  Zeta Compliance Group  plc  and  I  am  pleased  to  put  my
appreciation on record.
John Caines
For the Year Ended 31 January 2011
                                                                              2011                             2010
                                                                                 £                                £
Revenue                                                                  2,983,523                        2,324,247
Cost of sales                                                           (1,221,570)                        (816,811)
                                                                        -----------                      ------------
GROSS PROFIT                                                             1,761,953                        1,507,436
Other operating income                                                           -                               54
Administrative expenses - normal                                        (1,499,841)                      (1,159,826)
Administrative expenses - exceptional                                       10,062                                -
                                                                        -----------                      ------------
OPERATING PROFIT                                                           272,174                          347,664
Profit / (Loss) from associate undertakings                                    562                          (21,883)
Finance costs                                                                 (885)                         (23,275)
                                                                        -----------                      ------------
PROFIT BEFORE INCOME TAX                                                   271,851                          302,506
Income tax                                                                 (29,428)                         (66,383)
                                                                        -----------                      ------------
PROFIT FOR THE YEAR                                                        242,423                          236,123
                                                                        -----------                      ------------
                                                                        -----------                      ------------  
Profit attributable to:
Owners of the parent                                                       242,423                          236,123
                                                                        -----------                      ------------
                                                                        -----------                      ------------    
Earnings per share expressed
in pence per share:
Basic                                                                         2.81                             3.01
Diluted                                                                       2.74                             2.94
                                                                        -----------                      ------------
                                                                        -----------                      ------------  
                                                                                           31 January
                                                                              2011                             2010
                                                                                 £                                £
Goodwill                                                                   473,961                           37,172
Intangible assets                                                          367,450                          307,266
Property, plant and equipment                                               64,960                           37,823
Interest in associates                                                       9,687                            9,125
Trade and other receivables                                                 55,382                           21,714
                                                                        -----------                      ------------
                                                                           971,440                          413,100
                                                                        -----------                      ------------  
Trade and other receivables                                                969,373                          739,485
Cash and cash equivalents                                                   66,723                          310,859
                                                                        -----------                      ------------
                                                                         1,036,096                        1,050,344
                                                                        -----------                      ------------  
Trade and other payables                                                   699,901                          533,756
Financial liabilities - borrowings
Interest bearing loans and borrowings                                       14,753                           32,491
Tax payable                                                                 32,531                           64,221
                                                                        -----------                      ------------
                                                                           747,185                          630,468
                                                                        -----------                      ------------  
NET CURRENT ASSETS                                                         288,911                          419,876
                                                                        -----------                      ------------
Other payable                                                              164,767                                -
Other loans                                                                 25,201                                -
Deferred tax                                                                 9,992                            8,751
                                                                        -----------                      ------------
                                                                           199,960                            8,751
                                                                        -----------                      ------------  
NET ASSETS                                                               1,060,391                          824,225
                                                                        -----------                      ------------
                                                                        -----------                      ------------  
Called up share capital                                                     87,732                           86,932
Share premium                                                              512,185                          482,985
Share based payment reserve                                                 13,660                            9,917
Retained earnings                                                          486,814                          244,391
Other reserves                                                             (40,000)                               -
                                                                        -----------                      ------------
TOTAL EQUITY                                                             1,060,391                          824,225
                                                                        -----------                      ------------
                                                                        -----------                      ------------
1.      ACCOUNTS
The  above financial information does not amount to full accounts within the meaning of S240  of
the Companies Act 1985. It has, however, been extracted from the statutory accounts for the year
ended  31  January 2011, which include an unqualified auditor's report and will be delivered  to
the  Registrar of Companies. These accounts were approved by the Board of Directors  on  11  May
2011 and were signed on its behalf by Rob Nicoll, Director.

The Directors of Zeta are responsible for the contents of this announcement.
Contact Details:
Zeta Compliance Group plc
Rob Nicoll - Director
Tel: 01869 326000
Hybridan LLP, Corporate Adviser                               Tel: +44 (0)20 7947 4350
Claire Noyce                                                  claire.noyce@hybridan.com
About Zeta:
Zeta  provides products, services and technologies that enable organisations with large  estates
systematically  meet their Environmental, Health and Safety obligations. Zeta carries  out  Risk
Assessment and Monitoring services in respect of fire and water risk management and air hygiene.
Zeta  also  has  a  Carbon  and Energy division providing technical  and  strategic  consultancy
services  to  clients  addressing increasing regulatory obligations  such  as  Air  Conditioning
Inspections,  Energy Performance Certificates and a full range of Energy Management  Consultancy
Services  (CRC).  Zeta's  Technology  division has  developed  a  complete  web-based  statutory
compliance system (ZetaSafe®).


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