Interim Results
30 June 2003 - 6:00PM
UK Regulatory
RNS Number:9228M
Ringprop PLC
30 June 2003
For Immediate Release 30 June 2003
RINGPROP PLC
Interim Results for the six months ended 31 March 2003
RingProp plc, the UK based company formed to exploit the potential of a
revolutionary marine propeller technology, announces interim results for the six
months ended 31 March 2003, its first results since its successful admission to
AIM in November last year
Highlights
Successfully completed placing at 130p per share and admission to AIM in
November 2002, raising #3.052m
Decision to manufacture in aluminium
Landmark US Supreme Court Ruling on personal injury claims
Offices established at the Haslar Marine Technology Park
Interim results show net loss before tax of #359,000 (no commercial sales during
period)
Cash balances at half-year of #2.416m
Changes to board team
For Further Information:
RingProp Plc:
Johnny Townsend, Executive Chairman
020 7585 0924
Binns & Co Public Relations:
Paul Vann
Emmie Peryer
020 7786 9600
Flotation
The successful flotation on 22 November 2002 raised #3,052,000 (before
expenses); post flotation the company was able to issue a further 116,225 new
shares at prices of between 147p and 151p per share for a total consideration of
#174,250 under the section 89 authority taken out at the time of flotation. This
authority can be utilised in the future should the board consider it to be in
the interests of the company.
Manufacturing
While the directors believe that manufacturing the RingProp using an injection
moulding process in modern composite materials remains a viable proposition, our
research with die casting companies has identified the opportunity to
manufacture in aluminium. Despite a short delay which means that there will be
no revenues in the current financial year, this move to aluminium should
accelerate acceptance in the marketplace worldwide and lead to a faster build-up
of sales volumes. The directors expect to be able to make an announcement
shortly.
Aluminium open-bladed propellers currently hold 82% of the world's market while
composites only account for 3-4%. The directors believe that launching the
propeller range in aluminium will allow RingProp to set competitive prices while
maintaining the targeted profit margins.
Progress to date
RingProp moved into premises in the Haslar Marine Technology Park during
December 2002. The offices are leased from QinetiQ (formerly part of the Defence
Evaluation and Research Agency), which has on-site some of the test and research
facilities which RingProp has already been using.
The testing of the first two propellers designed for manufacture has now been
completed at the QinetiQ cavitation tunnel at Haslar. The testing was carried
out under the direction of Carl Morley, a graduate naval architect from the
Australian Maritime College and a former student of Dr. Martin Renilson (the
non-executive director of the company). He has now accepted the position of head
of Research and Development on a full-time basis. He is responsible for the
hydrodynamic design, testing and development of RingProp's propellers and is
working to ensure that the first range of propellers is available commercially
for the summer of 2004.
RingProp has established R&D premises in Melbourne, Australia and will commence
testing the initial propellers on a variety of engine and hull designs during
July in a newly designed test instrumentation system.
Landmark US Supreme Court Ruling
In the Company's prospectus, reference was made to the safety features of the
RingProp compared to open bladed propellers. The directors believed at that time
that the issue of marine safety would become increasingly important.
Within three weeks of flotation, an important landmark judgment was handed down
from the Supreme Court of the United States concerning a public liability action
against a conventional propeller manufacturer (Sprietsma vs. Mercury Marine)
which could pave the way for a large number of further law suits. The
implications for public liability and increased insurance premiums could be
significant. The directors believe that, together with the obvious inherent
safety advantages of the RingProp and its performance characteristics, this
development will aid market penetration.
Financial
The results for the accounting period up to the 31st March 2003 show a net loss
of #359,000 and cash balances of #2,416,000 after flotation costs of #423,000.
No interim dividend is declared.
Our auditors, BDO Stoy Hayward, have provided an independent review of the
interim accounts and notes.
Governance
Immediately post flotation the board appointed Nick Kuenssberg to chair the
remuneration committee with Denis Mulhall and Dr. Martin Renilson as members.
Similarly Denis Mulhall chairs the audit committee with Nick Kuenssberg and Dr.
Martin Renilson also members. All three are independent non-executive directors
in line with best corporate governance practice.
Board changes
Now that the company is properly established, it is an appropriate time for me
to step back from the role of executive chairman to become part-time
non-executive chairman. This will be effective from 1 July.
Martin Jackson, our part-time finance director, has found that his other
activities have developed to the extent that he is unable to commit sufficient
time for the company's needs, and will resign on 30 June. He will be succeeded
by Giselle Sweet-Escott, an experienced financial executive, who becomes Finance
Director with effect from 1 July.
Prospects
The company looks to the future with confidence. The decision to market the
"RingProp" in aluminium should accelerate its acceptance in the market place and
lead to a faster build-up of sales volume. We intend to establish the "RingProp"
product and brand as an important new concept in the significant international
market place for propellers for outboard motors. Major work remains to be done
but we believe that we have the team to build RingProp plc into a successful and
profitable organization with first sales being achieved in summer 2004.
Johnny Townsend
Chairman
Tel: 020 7585 0924
RINGPROP PLC - CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 31 March 2003
2003
#'000
Operating expenses (269)
Amortisation of intangible assets (116)
----
LOSS BEFORE INTEREST & TAX (385)
Interest earned 26
----
LOSS BEFORE TAX (359)
Taxation (6) -
----
LOSS FOR THE PERIOD (359)
====
There are no other recognised gains or losses
RINGPROP PLC - CONSOLIDATED BALANCE SHEET
31 March 2003
At 31 March 2003
#'000 #'000
FIXED ASSETS (2)
Intangible assets (3) 4,522
Tangible assets 26
----
4,548
----
CURRENT ASSETS
Debtors 55
Cash at bank and in hand and short term deposits 2,416
----
2,471
CREDITORS: amounts falling due within one year (51)
----
NET CURRENT ASSETS 2,420
----
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: amounts falling due after more than one year -
----
6,968
======
CAPITAL AND RESERVES
Called up share capital (4) 594
Share premium account (5) 6,733
Profit and loss account (5) (359)
----
6,968
====
RINGPROP PLC - CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2003
2003
#'000
Net cash outflow from operating activities (7) (279)
----
Returns on investments and servicing of finance
Interest received 26
----
Capital Expenditure and financial investment
Payments to acquire tangible fixed assets (28)
Payments to acquire intangible assets (132)
Acquisitions and disposals
Cash acquired with subsidiary 26
----
Net cash outflow before financing (387)
----
Financing
Issue of share capital 3,226
Financing costs (423)
----
Cash inflow from financing 2,803
----
Increase in cash 2,416
=====
RINGPROP PLC - NOTES TO THE INTERIM RESULTS
For the six months ended 31 March 2003
1. Basis of preparation
The interim results have been prepared in accordance with applicable accounting
standards and under the historical cost convention. The interim results, which
were approved by the Directors on 27 June 2003, are unaudited but have been
reviewed in accordance with Auditing Practices Board Bulletin "Review of Interim
Financial Information" by the auditors. The interim results do not constitute
statutory financial statements within the meaning of section 240 of the
Companies Act 1985.
2. Accounting Policies
Intangible assets
Intangible assets consists of purchased goodwill. This has been capitalised on
the balance sheet and is being written off through the profit and loss account
over a term of 20 years.
Depreciation
Depreciation is provided on all tangible fixed assets, at rates calculated to
write off the cost, less estimated realisable value, of each asset evenly over
its expected useful life, as follows:
Plant & Equipment - over 3-10 years
Motor Vehicles - over 3 years
3. Intangible Assets
Goodwill
#'000
Cost
At 1 October 2002 -
Additions 4,638
-----
At 31st March 2003 4,638
Amortisation
At 1 October 2002 -
Provision for half year (116)
-----
At 31st March 2003 (116)
Net Book Value
-----
At 31st March 2003 4,522
=====
RINGPROP PLC - NOTES TO THE INTERIM RESULTS
For the six months ended 31 March 2003
4. Share Capital
At 31 March 2003
Allotted Allotted,
Authorised Called up Called up
No. & fully paid Authorised & fully paid
No. #'000 #'000
Ordinary Shares - 200,000,000 5,943,250 20,000,000 594,325
10p each
__________ ________ _________ _______
On 21st October 2002, RingProp plc issued 650,000 shares of 10p each, at a
premium of 120p, for the main purpose of acquiring the entire issued share
capital of RingProp Trading Limited.
A total of 2,347,550 shares were issued under the placing and admission on 22nd
November 2002.
A total of 2,829,475 shares were issued on 22nd November 2002 as consideration
under the various agreements relating to the acquisition of the Ringprop
technology as described in the prospectus dated 30 October 2002.
A further 116,225 shares have been issued in the period from 19th November 2002
to 31 March 2003 in accordance with section 80 of the Companies Act 1985 (as
amended by the Companies Act 1989).
5. Reserves
Share Premium Profit & loss
Account Account
#'000 #'000
At flotation 7,156 -
Share issue costs (423) -
Loss for half year - (359)
---- ----
At 31st March 2003 6,733 (359)
===== =====
6. Taxation
As the company has not yet achieved a cumulative profit, there is no tax
charge for the period.
RINGPROP PLC - NOTES TO THE INTERIM RESULTS
For the six months ended 31 March 2003
7. Notes to the statement of cash flows
(a) Reconciliation of operating profit to net cash outflow from operating
activities
2003
#'000
Operating loss (269)
Depreciation of tangible fixed assets 2
Increase in working capital (12)
----
Net cash outflow from operating activities (279)
=====
(b) Reconciliation of cash movements to net funds
2003
#'000
Increase in cash in the period 2,416
Net funds at beginning of year -
----
Net funds at end of the period 2,416
====
(c) Analysis of changes in net At 31
funds
At 1 October Cash March
2002 Flow 2003
#'000 #'000 #'000
Cash in bank and in hand - 2,416 2,416
----- ---- ----
RINGPROP PLC - NOTES TO THE INTERIM RESULTS
For the six months ended 31 March 2003
8. Related Party Transactions
In addition to the remuneration for his services, a payment of #95,000 was made
to the Executive Chairman in recognition of his efforts in connection with
securing finance for the AIM flotation of the company, as detailed on page 10 of
the prospectus.
RingProp Pacific Pty Ltd. (RPPL), which is controlled by Don Hoult's wife,
received #50,000 and expenses in recognition of consultancy and work put into
the RingProp venture, as detailed on page 41 of the prospectus.
RINGPROP PLC - INDEPENDENT REVIEW REPORT TO RINGPROP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2003 on pages 5 to 10. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority which require that the accounting policies
and presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom by auditors
of fully listed companies. A review consists principally of making enquiries of
RingProp PLC's management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope that an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003.
BDO Stoy Hayward
Chartered Accountants
Southampton
Date: 30 June 2003
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