RCG benefits from hightened security fears, beats profit forecasts
Hong -Kong-based biometric specialist says growing security concerns helped its bottom line — and will continue to do so for a long while yet
Hong Kong-based biometrics specialist RCG benefited from heightened security concerns to post forecast-beating profits in the first half of 2007. Revenues grew by 71 percent to £38.7 million, compared to £22.6 million in the first half of 2007. Software sales rose 130 percent, while higher-margin hardware sales increased 61 percent. Gross profit margin during the period rose to 49 percent, compared to 40 percent in the first half of 2006. Pre-tax profits surged to £12.1 million from £6.3 million.
The group, which has a market capitalisation of £246 million, saidthe combined factors of government attempts to counter terrorism and the increased security fears of individuals should ensure that the security industry remains a high-growth market. RCG is confident its technological innovation and its program of geographical expansion will provide strong revenue growth in the second half of 2007 and beyond. The share price reacted positively to the results, even though the group indicated last month that first-half results would be significantly ahead of market expectations, although it fell back to close unchanged at 104p.
