Eruma Plc : Final Accounts 2011 and Notice of AGM

Eruma plc, the AIM traded specialist provider of counter terrorism, intruder prevention products and intelligent lighting, announces it has posted its annual accounts to shareholders and is pleased to present its audited final results for the year ended 31 December 2011.  Furthermore, the Company gives notice of its Annual General Meeting ('AGM').

Highlights

• Both divisions, Security Blinds and Illuminex, performing well with repeat orders from solid customer base
• Security Blinds gaining recognition as a leading anti-terror product - contracts won with government agencies and financial institutions
• Excellent progress made in developing Eruma's client base across new international markets - increased presence in Yemen and South Korea
• Bolstered financials with a 101% increase in revenue to £2,424,023 (2010: £1,206,000) and 152% increase in gross profit to £1,179,282 (2010: 468,000)
• Strong order book of contracts to be delivered in excess of £800,000 and a strong pipeline of opportunity in both operating divisions in the UK and internationally

Chairman's Report

Eruma plc, as a specialist solutions provider of counter terrorism, intruder prevention and intelligent lighting solutions and energy saving products, has the ability to save lives, reduce risk, prevent disruption and loss, and dramatically reduce energy consumption, and consequently the ongoing operating costs, of any organisation in the world.  We have successfully demonstrated that this represents a compelling proposition to any organisation seeking innovative ways to improve their businesses performance and protect their assets.

During 2011 we focussed on entering our core products into new international markets and securing large value orders and significant contracts. This was very successful and we now see our products becoming specified from the start of a design process or forming part of a standard set of options in major projects. This has led to repeat business and an increasing volume of referrals.

In comparison to 2010, in 2011 we achieved the following excellent results:-

• a 101% increase in revenue from £1,206,000 to £2,424,023
• a 152% increase in gross profit from £468,000 to £1,179,282
• a 10% improvement in gross profit percentage from 39% to 49%
• a 37% reduction in distribution and administration expenses as a proportion of revenues
• a 57% reduction in our loss before tax from £713,000 to £306,199
• a 74% reduction in loss per share (basic and fully diluted)
• Net assets of the Group as at 31 December 2011 amounted to £1,160,938 (2010 - £1,297,581)
•   Whilst we did not achieve operational profitability for the full year, we were operationally profitable in the second half of the year and all of our key indicators show positive trends for the business.

2011 was a challenging year for many organisations.  Eruma continually faced challenges, like many others, in securing the working capital needed from the UK banking industry and we had no choice but make use of international sources of trade finance and working capital.  Whilst this is expensive and has impacted our profitability, it has enabled us to deliver our revenue targets and generate cash for the business and continue our growth.

Our sales and delivery teams performed exceptionally and the Board expresses its thanks and praise for the dedication, commitment and focus on quality and delivery throughout the year.

Security Blinds

Our operating division trading as Security Blinds manufactures physical systems that provide protection from multiple threats ranging from burglary, ram raids through to blasts from terrorist attacks and other forms of explosions.

Our continued focus on international business and large contracts has delivered the results we wished for with significant wins across a number of sectors and territories. These include a £1.1 million order with a foreign government agency and a £400,000 order with a UK financial institution.  By the very nature of the counter terrorism market, there is little we can actually say about our clients but what we can confirm is that they are increasing and placing repeat orders for our solutions.

Illuminex

Our operating division, trading as Illuminex, manufactures intelligent and general lighting solutions that reduce costs through saving energy and concurrently reducing the carbon footprint of the organisations using them.

The level of saving we can offer clients and our total solutions approach, coupled with our focus on larger contracts and framework agreements, means we are achieving higher values against fewer orders, on a repeat basis. This has increased our operational efficiency and enabled our product teams to innovate around the breadth of lighting solutions we can offer to solve clients' problems.

Illuminex continues to deliver revenue and margin to the business.  Over the period we won contracts with a range of public sector facilities including NHS, schools and police as well as a significant contract with a leading hotel group. Particularly useful are our return on investment calculation tools that assess clients' energy consumption before and after deployment of our products and solutions which enable us to demonstrate a strong business case quickly and effectively.

Fundraising

During the period the Company focused on securing working capital primarily in the form of trade finance arrangements.  As previously stated we had to venture outside of the UK to secure funding due to the poor situation within UK banks which seemed paralysed in terms of supporting British businesses in their quest for growth.

We have also converted some trade debts and other liabilities into equity in the Company.  We have been delighted by the support from a number of our suppliers as this demonstrates belief and commitment to the Company. The total shares issued were 1,486,599 at a price of 10p per share.

The Board

The Board continues to be focused on the primary objectives of growth in sales, improvement in margins and delivering a sustainable operational profitability for the business.  Each Director has contributed to the successful transformation of the business in 2011 and as Chairman I would like to thank them personally.  As part of the strategy to drive growth we reviewed our warrants and incentive scheme in December 2011 and issued new warrants to Directors and staff within the business.  We believe this new level of incentive will further improve the overall performance of the business.

Outlook

2011 was about accelerating growth, improving operational performance and establishing a pattern of working practices in our business development and operational delivery teams that can support higher value contracts anywhere in the world.  We invested extensively in 2011, developing our internal channels to market, which has led to a distribution and sales agent agreement in South Korea with Mixpole in 2012.  We continue to evaluate other potential sales partners and we have a number of other opportunities in development across the Middle East.

We started the year with a strong order book of contracts to be delivered in excess of £800,000 and a strong pipeline of opportunity in both operating divisions in the UK and internationally.  We have already successfully won a number of major contracts in the first quarter of this year in excess of £600,000.

We will continue to evaluate the most effective options for ensuring we have sufficient working capital to support the growth of the business.

David E Alexander

Non-Executive Chairman

Notice of AGM

The Company has posted a notice of the AGM to shareholders and the AGM will be held at 9.00am on Thursday 24 April 2012 at the Company's offices at Underwood House, Shepherdess Walk Buildings, Underwood Street, London N1 7LG.

Eruma plc Full Year Results

The Full Year Annual Results are available on our website; www.erumaplc.com.