During the year the Group recorded revenues of £857,970 compared with £788,718 for the year ended 31 December 2017. The operating loss for the year ended 31 December 2018 was £1,081,879 (year ended 31 December 2017: £2,148,774). Administrative expenses amounted to £1,415,446 (year ended 31 December 2017 restated: £2,209,385), see table and the bullet points below for details in relation to the reduction in administrative expenses. The loss after tax for the year was £1,122,834 (year ended 31 December 2017: £1,897,479). The loss per share (after consolidation of the share capital) was 0.35 pence (2017: loss per share after consolidation of share capital of 1.82 pence).
● The total revenue figure £857,970 for December 2018 relates to Geocurve, no revenues were generated by GyroMetric during 2018. In 2017 £638,203 was generated by Geocurve and the remaining £150,515 by the closed operations. Geocurve secured a £1.1m contract at the beginning of 2018 to survey the Thames. A significant investment of manpower was required to get the Thames project running successfully and efficiently; in Q3 2018 Geocurve was able to take on new projects alongside the Thames project. Approximately 80% of the initial phase of the Thames contract was invoiced in the year ended 31 December 2018
● Consolidated net assets at 31 December 2018 amounted to £668,683 (31 December 2017: £636,315).
● Cash balances at the year-end amounted to £109,381 (2017: £502,998).
● During the year the Company raised £744,230 net of costs through the issue of new shares.
● Operational salaries incurred in Geocurve amounting to £374,446 have been reclassified from administrative expenses to cost of sales in 2018. A comparative adjustment of £359,194 for 2017 has also been made for consistency. The reclassification took place as a result of a reconsideration of what constituted direct costs by the new management.
● Significant administrative cost reductions were achieved in comparison with 2017, both by reducing costs in the continuing operations as well as by closing the training and US businesses:
|2018(£)||2017 (restated) (£)||Reduction (£)||Reduction (%)|
|Audit and accountancy fees||52,067||187,620||(135,553)||72%|
|Plc costs (broker, Nomad, PR & Marketing)||146,949||220,339||(73,390)||33%|
|Costs of operations closed in 2018||164,826||587,326|
|Depreciation & Impairments||394,204||435,050|
|Total Administrative Expenses(as per statement of comprehensive income)||1,393,791||2,209,385|
● The reduction in audit and accountancy fees is due to a new financial planning and control system implemented during the period.
● Depreciation increased to £151,670 (2017: £61,772) as a result of additional depreciation following the acquisition of the Pegasus II equipment by Geocurve at the beginning of March 2018.
● Impairments of £267,266 relates to the release of goodwill arising from the acquisition of Geocurve in 2015 and GyroMetric in 2018 on a straight-line basis over 5 years.
● Geocurve became the first company in the UK, and one of only a few companies in Europe, to acquire a Pegasus II multi-sensor surveying system which has world leading surveying capabilities and opens up many business opportunities. The system, with an acquisition value of £0.5m, was acquired on 19 February 2018 from Academy Leasing Ltd.
● 67% of the Pegasus II equipment finance was paid during the year ended December 2018 with the remaining finance to be paid before the end of 2019. The prompt payment of finance is again part of the initiative to drive down costs.
● On 30 April 2018, Remote Monitored Systems granted a total of 100,000,000 options (5,000,000 after consolidation of share capital) to subscribe for ordinary shares in the Company (“Options”) to certain employees. The Options can be exercised in whole or in part, subject to meeting revenue and profit based vesting conditions, at any time up to the fifth anniversary of grant at a price of 0.06p per option (1.2p after consolidation of share capital), subject to the overriding condition that no Option may be exercised unless the quoted price of the Company’s ordinary shares is at least 2.0p.
● In April 2018, the Group announced the acquisition of 36.9% of the enlarged share capital of GyroMetric for a cash consideration of £250,000. In August 2018, the Group announced a further investment of £273,600 (funded by issuing new share capital) in GyroMetric increasing the shareholding from 36.9% to 57.8% and thus gained control of the entity. The investment in GyroMetric provides the Group’s shareholders with a stake in a new and unique technology with promising prospects. The Group’s investment in GyroMetric will continue to be developed through close operational support and involvement. GyroMetric will be an important component of growth and shareholder value in the months and years ahead.
Following the year end, the Group raised £350,000 to support the growth of the Group’s core areas of business, to provide working capital, and to leave the Company free of debt apart from the remaining payments for the Pegasus equipment. A total of 53,846,154 ordinary shares of 0.2p nominal value each were placed with investors at 0.65p per share.
The Group continues to make progress across all elements of its business.
Geocurve, having experienced a slower than expected start to 2019, has prioritised profitability over growth. Cost saving measures have been implemented with the intention of becoming self-financing in 2019, albeit with revenues expected to be lower than those in 2018.
GyroMetric, which will be conducting trials for two major wind turbine manufacturers in 2H 2019, has recently signed a contract for a technical cooperation with a major UK supplier to the energy and petrochemical industries and as a result of the recent successful recruitment of a Technical Sales Director, a number of promising opportunities in new sectors, where lead times are typically shorter, are already being pursued.
The Board is determined to deliver value to shareholders and continues to examine opportunities to grow both organically and through acquisition of complementary businesses and technologies which can enhance growth in shareholder value.
The Annual Report and Accounts for the year ended 31 December 2018 (“Annual Report”) will be sent to shareholders today and will also be available on the website at www.remotemonitoredsystems.com.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be held at the offices of Peterhouse Capital Limited, New Liverpool House, 15 Eldon Street, London, EC2M 7LD on 29 July 2019 at 10.30am.
The Notice of AGM and Forms of Proxy are being dispatched to shareholders today and are will also be available on the website at www.remotemonitoredsystems.com.
On behalf of the Board, I would like to thank our business partners, customers, employees and valued shareholders for their continued support.