SECURITY RESEARCH GROUP PLC: Interim Results

Security Research Group plc 
           ("Security Research Group" or the "Company") 


            Interim Results for the six months ended 30 March 2013

Security Research Group comprises Specialist Electronics, consisting of
Audiotel International Limited (`Audiotel') and its subsidiary Security
Research Limited, Property Information Services Businesses ('PSG') and Moore &
Buckle (Flexible Packaging) Limited (`M&B').

Following completion in December 2012 of the £50 million order for Improvised
Explosive Device (`IED') detectors from the Ministry of Defence (`MoD'),
Specialist Electronics is now focussed on improving its existing range of
products and on developing a range of completely new innovative products aimed
at the commercial market.

PSG is a major provider of both commercial and residential property searches
and Energy Performance Certificates to the conveyancing marketplace in England
and Wales. PSG trades both through its expanded wholly owned operation based in
Yorkshire and its national network of PSG Brand Franchisees across England and
Wales.

M&B provides specialist, bespoke, flexible packaging solutions.

highlights

  * Group profit before taxation £219,000 (2012: £8,587,000).
      * Specialist Electronics operating profit £7,000 (2012: £8,609,000).
      * Property Information Services operating profit £368,000 (2012: £62,000).
      * M&B's operating profit £123,000 (2012: £146,000).
    For further information please visit www.srgroupplc.com



Enquiries:

Security Research Group plc                                                    
Jonathan Mervis , Chairman              020 7881 0800                          
John Warwick, Finance Director                                                 


                                                                           
W H Ireland Limited                                                            
Chris Fielding/ James Bavister          020 7220 1650                           
chairman's statement
for the six months ended 30 September 2013 
Specialist Electronics 
The fall in Group Profit before taxation from £8,587,000 to £219,000 reflects
the completion of the £50 million MoD contract and the sea change in global
markets for IED Detection equipment, which was responsible for a large
proportion of the profits last year. Withdrawal of the great majority of ISAF
forces from operational theatre in Afghanistan, as well as a change in
strategic tactics, has curtailed the prospects for further orders for the
foreseeable future. 
Shareholders have, however, already benefitted through share buy backs
totalling over £15 million as a result of the MoD contract. 
The Annual Report highlighted our goal of developing new products based on
proprietary applications of our technology for the global market place and a
commensurate upgrade of the Specialist Electronics profile. There has been
positive work in progress on all fronts. 
Guard Products 
The high profile and risk of danger and damage to government agencies,
corporations and a range of their advisers to the consequences flowing from
eavesdropping, bugging and covert videoing has become of increasing concern. 
To reduce the risk of exposure to these threats and to raise the protective bar
even further than previously achieved Audiotel has upgraded its Guard Products
and is planning a major re-launch early in the new year. Operating in real time
on a 24/7 basis Meeting Guard displays unequivocally on a screen, either as an
alert or alarm, evidence of eavesdropping, bugging or the operation of covert
video. The meeting participants are, therefore, made aware immediately of
possible breaches of security. 
The Enhanced Superbroom 
The Enhanced Superbroom is the latest lightweight Non-Linear Junction Detector
(NLJD). Its variable power enables it, in the first instance, to identify the
general area of the threat and then to follow up by identifying the threat with
pin point accuracy. Since its launch five months ago in July 2013 Enhanced
Superbrooms have been sold to customers in Italy, Portugal, Finland, Saudi
Arabia, South Africa, Singapore and Taiwan as well as to The Foreign and
Commonwealth Office. 
The result of a £1 million MoD tender for this product is expected before the
calendar year end. 
The Archway 
The Archway detects a wide range of information storing devices, including SIM
cards, USB memory sticks, hidden cameras and listening and recording devices.
It also detects mobile phones. There is interest from an important Chinese
customer and from a major global manufacturer of electronic consumer products. 
PSG 
The outlook for PSG has improved substantially. The operating profit for the
period was £368,000 (2012: £62,000). 
PSG is benefitting from, and will continue to benefit from, a variety of
factors including:- 
* Rising house sale transactions. 


      * All franchisees having signed up to a new agreement for five years with an
    option to renew.
      * Continued investment in IT, creating a national user friendly platform to
    process and deliver an expanding range of products resulting in increases
    in income with only minimal increases in costs.
      * Investment in marketing of new products and regular CPD seminars for
    solicitors.
      * Development of ways of using the unique national network to deliver
    services, other than property related services, to solicitor customers.


PSG Energy continues to have high quality expertise and provides excellent
service in this sector. 
M&B 
M&B's operating profit of £123,000 (2012: £146,000) was marginally down from
the first half of the previous financial year. 
Outlook 
Specialist Electronics is progressing with its plans for gaining wide
commercial acceptance for its latest products. These counter the theft of
information through the eavesdropping of confidential discussions and inhibit
the smuggling of memory devices loaded with classified information. 
PSG, for the first time since 2007, stands to benefit from an upward trend in
residential housing sales leading to an increased income with only a minimal
increase in costs. 
Jonathan Mervis
Chairman
4 December 2013 
consolidated income statement
for the six months ended 30 September 2013 


                                           Six months   Six months        Year
                                                ended        ended       ended
                                         30 September 30 September    31 March
                                                 2013         2012        2013
                                                                              
                                            Unaudited    Unaudited     Audited
                                                                              


                                             £000         £000        
£000 
                                                                          
Revenue                                         4,799       25,781      29,364 
                                                                          
Cost of sales                                 (2,295)     (10,342)    (14,046) 
                                                                          
Gross profit                                    2,504       15,439      15,318 
                                                                          
Administrative expenses                       (2,294)      (6,900)     (8,715) 
                                                                          
Operating profit before exceptional               210        8,539       6,603
items                                                                          
                                                                          
Exceptional administrative expenses                 -            -     (1,704) 
                                                                          
Operating profit                                  210        8,539       4,899 
                                                                          
Finance costs                                       -            -        (11) 
                                                                          
Finance income                                      9           48          90 
                                                                          
Profit on ordinary activities before              219        8,587       4,978
taxation                                                                       
                                                                          
Income tax credit/(expense)                        25      (2,010)     (1,295) 
                                                                          
Profit on ordinary activities after               244        6,577       3,683
taxation                                                                       
                                                                          
Basic earnings per share                        1.26p       27.06p      15.89p 
                                                                          
Diluted earnings per share                      1.25p       26.56p      15.74p 
The consolidated income statement has been prepared on the basis that all
operations are continuing operations. 
consolidated statement of comprehensive income
for the six months ended 30 September 2013 
The profit on ordinary activities after taxation represents the Group's total
comprehensive income for the period. 
consolidated statement of changes in equity
for the six months ended 30 September 2013 


                                 Share     Share     Capital  Retained    Total
                               Capital   Premium  Redemption  Earnings         
                                                     Reserve                   
                                                                               


                              £000      £000        £000      £000     
£000 
                                                                           
At 1 April 2012                  5,148       438         626    12,955   19,167 
                                                                           
Purchase of ordinary share           -         -           -   (4,184)  (4,184)
capital for treasury                                                           
(including costs of £47,000)                                                    
                                                                           
Cancellation of own shares       (368)         -         368         -        - 
                                                                           
Total comprehensive income for       -         -           -     6,577    6,577
the period                                                                      
                                                                           
At 30 September 2012             4,780       438         994    15,348   21,560 
                                                                           
Issue of new ordinary shares        76       114           -         -      190
on exercise of options                                                          
                                                                           
Purchase of ordinary share           -         -           -  (11,008) (11,008)
capital for treasury                                                           
(including costs of £80,000)                                                    
                                                                           
Cancellation of own shares       (971)         -         971         -        - 
                                                                           
Total comprehensive income for       -         -           -   (2,894)  (2,894)
the period                                                                      
                                                                           
At 31 March 2013                 3,885       552       1,965     1,446    7,848 
                                                                           
Total comprehensive income for       -         -           -       244      244
the period                                                                      
                                                                           
At 30 September 2013             3,885       552       1,965     1,690    8,092 


                                                                               


consolidated statement of financial position
for the six months ended 30 September 2013
                                        30 September  30 September     31 March
                                                2013          2012         2013
                                                                               
                                           Unaudited     Unaudited      Audited
                                                                               


                                            £000          £000         
£000 
                                                                           
Non-current assets                                                              
                                                                           
Goodwill                                       3,273         4,977        3,273 
                                                                           
Other intangible assets                          597           668          628 
                                                                           
Property, plant and equipment                    365           743          411 
                                                                           
Deferred tax asset                               282           125          312 


                                                                               
                                               4,517         6,513        4,624


                                                                           
Current assets                                                                  
                                                                           
Inventories                                    1,262         1,655        1,189 
                                                                           
Trade and other receivables                    2,502         4,413        2,721 
                                                                           
Current tax asset                                289             -            - 
                                                                           
Cash and cash equivalents                      2,849        17,822        5,398 


                                                                               
                                               6,902        23,890        9,308


                                                                           
Current liabilities                                                             
                                                                           
Trade and other payables                     (3,272)       (6,681)      (5,666) 
                                                                           
Current tax liability                           (55)       (2,162)        (418) 


                                                                               
                                             (3,327)       (8,843)      (6,084)


                                                                           
Net current assets                             3,575        15,047        3,224 
                                                                           
Net assets                                     8,092        21,560        7,848 
                                                                           
Represented by:                                                                 
                                                                           
Capital and reserves attributable to                                           
equity holders                                                                  
                                                                           
Called up share capital                        3,885         4,780        3,885 
                                                                           
Share premium account                            552           438          552 
                                                                           
Capital redemption reserve                     1,965           994        1,965 
                                                                           
Retained earnings                              1,690        15,348        1,446 
                                                                           
Total equity                                   8,092        21,560        7,848 
consolidated statement of cash flows
for the six months ended 30 September 2013 


                                           Six months   Six months        Year
                                                ended        ended       ended
                                         30 September 30 September    31 March
                                                 2013         2012        2013
                                                                              
                                            Unaudited    Unaudited     Audited
                                                                              


                                             £000         £000        
£000 
                                                                          
Cash flows from operating activities                                           
                                                                          
Profit before taxation                            219        8,587       4,978 
                                                                          
Adjustments for:                                                               
                                                                          
Depreciation of property, plant and                57        1,037       1,418
equipment                                                                      
                                                                          
Amortisation of goodwill                            -            -       1,704 
                                                                          
Amortisation of other intangible assets           256          278         533 
                                                                          
Profit on disposal of tangible assets            (16)          (2)         (7) 
                                                                          
Interest expense                                    -            -          11 
                                                                          
Interest receivable                               (9)         (49)        (90) 
                                                                          
Decrease in receivables                           219        2,810       4,501 
                                                                          
(Increase)/decrease in inventories               (73)        (342)         124 
                                                                          
Decrease in payables                          (2,394)      (4,490)     (5,505) 
                                                                          
Cash (used in)/generated from operations      (1,741)        7,829       7,667 
                                                                          
Interest paid                                       -            -        (11) 
                                                                          
Income tax paid                                 (597)      (2,685)     (3,902) 
                                                                          
Net cash (used in)/generated from             (2,338)        5,144       3,754
operating activities                                                           
                                                                          
Cash flows from investing activities                                           
                                                                          
Purchase of tangible assets                      (19)        (203)       (288) 
                                                                          
Purchase of other intangible assets             (225)        (258)       (472) 
                                                                          
Proceeds from sale of tangible assets              24            6          47 
                                                                          
Interest received                                   9           49          90 
                                                                          
Net cash used in investing activities           (211)        (406)       (623) 
                                                                          
Cash flows from financing activities                                           
                                                                          
Issue of share capital                              -            -         190 
                                                                          
Purchase of own shares                              -      (4,184)    (15,191) 
                                                                          
Net cash used in financing activities               -      (4,184)    (15,001) 
                                                                          
Net (decrease)/increase in cash and cash      (2,549)          554    (11,870)
equivalents                                                                    
                                                                          
Cash and cash equivalents at beginning          5,398       17,268      17,268
of period                                                                      
                                                                          
Cash and cash equivalents at end of             2,849       17,822       5,398
period                                                                         
notes to the interim financial statements
for the six months ended 30 September 2013 
1. general information 
The interim financial statements for the six months ended 30 September 2013
were authorised for issue in accordance with a resolution of the Board of
Directors on 3 December 2013. 
The Company is a public limited company incorporated in the United Kingdom. The
address of its registered office is 133 Ebury Street, London SW1W 9QU. 
The Company's ordinary shares are admitted to trading on the AIM market of the
London Stock Exchange. 
The financial information for the six months ended 30 September 2013 set out in
this interim report is unaudited and does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The comparative
figures for the year ended 31 March 2013 are extracted from the statutory
financial statements which have been filed with the Registrar of Companies. The
auditors' report on those financial statements was unqualified and did not
contain statements under section 498(2) or (3) of the Companies Act 2006. 
2. basis of preparation 
The interim financial statements have been prepared under the historical cost
convention and in accordance with applicable International Financial Reporting
Standards (IFRSs), International Accounting Standards (IAS) and International
Financial Reporting Interpretations Committee (IFRIC) interpretations adopted
for use by the European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRSs. The information within these
interim financial statements has been prepared in accordance with IAS 34
"Interim Financial Reporting" as adopted by the European Union. 
3. accounting policies 
The principal accounting policies used in preparing the interim financial
statements and those the group expects to apply in its financial statements for
the year ending 31 March 2014 are unchanged from those disclosed in the
statutory financial statements for the year ended 31 March 2013. 
4. segmental analysis 


                                    Six months       Six months            Year
                                         ended            ended           ended
                                  30 September     30 September        31 March
                                          2013             2012            2013
                                                                               
                                     Unaudited        Unaudited         Audited
                                                                               


                                      £000             £000            
£000 
                                                                           
Revenue - operating segment                                                     
                                                                           
Specialist electronics                   1,440           22,801          23,566 
                                                                           
Property information services            2,606            2,190           4,234 
                                                                           
Packaging solutions                        753              790           1,564 


                                                                               
                                         4,799           25,781          29,364


                                                                           
Revenue - geographical area                                                     
                                                                           
United Kingdom                           4,608           25,579          28,833 
                                                                           
Asia and Middle East                       156               53             227 
                                                                           
Europe                                      20              115             242 
                                                                           
Other                                       15               34              62 
                                                                            


                                         4,799           25,781          29,364

4. segmental analysis (continued)
                                    Six months       Six months            Year
                                         ended            ended           ended
                                  30 September     30 September        31 March
                                          2013             2012            2013
                                                                               
                                     Unaudited        Unaudited         Audited
                                                                               


                                      £000             £000            
£000 
                                                                           
Operating profit/(loss)                                                         
                                                                           
Specialist electronics                       7            8,609           6,765 
                                                                           
Property information services              368               62             152 
                                                                           
Packaging solutions                        123              146             302 
                                                                           
Head office                              (288)            (278)           (616) 
                                                                           
Exceptional items                            -                -         (1,704) 
                                                                            
                                       210            8,539           4,899 
Net operating assets                                                            
                                                                           
Specialist electronics                     83          (2,773)          (1,512) 
                                                                           
Property information services           3,316            4,420            2,935 
                                                                           
Packaging solutions                     1,934            2,236            1,964 
                                                                           
Head office                              (89)            (145)            (937) 


                                                                               
                                        5,244            3,738            2,450


                                                                           
Interest bearing assets                 2,849           17,822            5,398 
                                                                            


                                        8,093           21,560            7,848

5. earnings per share

Basic earnings per share calculations have been arrived at by reference to the
following profit and weighted average number of shares in issue during the
period. The actual number of shares in issue at 30 September 2013 was
19,426,324.
                                          Six months    Six months         Year
                                               ended         ended        ended
                                        30 September  30 September     31 March
                                                2013          2012         2013


                                                                           
Profit after tax                            £244,000    £6,577,000   
£3,683,000 
                                                                           
Weighted average number of shares in      19,426,324    24,303,836   23,173,628
issue                                                                           
                                                                           
Basic earnings per share                       1.26p        27.06p       15.89p 
                                                                           
Weighted average number of shares in      19,552,285    24,767,869   23,401,480
issue adjusted to take account of                                              
shares under option                                                             
                                                                           
Diluted earnings per share                     1.25p        26.56p       15.74p 
                                                                            
END 
-0- Dec/04/2013 07:00 GMT
 
 
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