RNS Number:1813O
Innovision Research&Technology PLC
5 December 2001
Innovision Research & Technology plc
Interim results for the half year ended 30 September 2001
Innovision Research and Technology, the electronics technology solutions
provider, announces its Interim results for the half year ended 30 September
2001.
Highlights
Financial
* Turnover of #548k (2000: #1,095k) as anticipated.
* Operating loss of #1,374k (2000:#129k profit) better than
anticipated.
* Cash balance at 30 September 2001: #8.8m (2000: #1.1m)
Operational
* Strengthening of commercial and engineering teams.
* Datalabel
- Two teaming agreements signed with market leading companies - one
being ITW Inc., the $18.7bn., US Fortune 200 Company.
- Evaluation licence signed with Xerox Corporation.
* Other Non-Toy
- Full exploitation licence signed with ES Originals Inc., a major US
shoe distributor.
* Toy
- Licences signed with six new customers
- Interest from customers remains strong, but large project cancelled
at advanced stage will affect second half revenues.
* Strong cost and cash control will alleviate impact of cancelled toy
project.
* Ten new patents have been applied for reflecting doubled R & D
expenditure of #392,000.
Barton Clarke, Chairman said:
"We have continued to focus on diversifying our customer base and technology
portfolio, especially within RFID. Much progress has been made and we have
built an excellent team which we are confident will enable Innovision Research
& Technology to convert our many opportunities into sound future business."
5 December 2001
ENQUIRIES:
Innovision Research & Technology plc
Mike Wroe, Finance Director Tel: 0118 936 6311
College Hill Tel: 020 7457 2020
Matthew Smallwood
Innovision Research & Technology plc
Interim results for the half year ended 30 September 2001
Chairman's Statement
In its first six months as a plc, Innovision Research & Technology has
continued to focus on delivering the strategy set out at the time of
flotation, building a strong Radio Frequency Identification (RFID) business
and diversifying its customer base and technology portfolio.
The six months ended 30 September 2001 represents the first stage in our
investment for future growth, with the benefit of the work done this year
expected to be reflected in future revenues. As anticipated, turnover, at #
548k (2000: #1,095k), declined compared with the same period last year. First
half turnover last year included an unusually large toy royalty payment and
completion of a significant toy development programme. Both these events would
normally occur in the second half and therefore the year on year figures are
not directly comparable.
The planned strengthening of our commercial and engineering teams has been the
major reason for the increased overhead costs during the period, and we are
delighted to have added so many excellent new people to the team. However,
strong cost and cash control remain a priority within the business with both
costs and cash better than budget for the period. This resulted in a lower
than expected operating loss of #(1,374)k (2000: #129k profit) and cash
holdings at 30 September 2001 of #8.8m (2000: #1.1m). The cost and cash
savings against budget are expected to continue for the remainder of the year,
alleviating the impact of lower toy revenues.
Progress within our Datalabel business is encouraging and I am pleased to
announce the signing of two teaming agreements. These agreements, with
market-leading companies, give Innovision Research & Technology access to two
potentially large markets for RFID. One of these, the agreement with ITW Inc.,
a $18.7bn. mkt. cap., Fortune 200 company, offers a range of opportunities
within the security seals and logistics markets. In addition we have achieved
preferred supplier status on a significant new project for a large European
consumer products group, signed a new evaluation licence with the Xerox
Corporation, and secured a route into the US visitor attractions industry.
These successes reflect only part of the increased activity within Datalabel
and although recent events and economic conditions provide new challenges, we
remain confident that further significant opportunities will be translated
into new business over the coming year. Finally, the recent signing of a full
exploitation licence with ES Originals Inc., a major U.S. shoe distributor, is
a further step in developing our non-toy customer base, and one on which we
plan to build.
The diversification of our toy customer base has resulted in our signing
licences with six new customers, four in Europe and two in the United States.
Interest from existing customers remains strong and the number of product
opportunities within toys is at record levels. It is, therefore, particularly
disappointing to have to announce that one of our major toy customers has
cancelled a significant toy project at a very advanced stage. This project was
expected to be a major toy revenue contributor this year and will be
impossible to replace given the seasonality of the business. This unexpected
development only serves to renew our determination to diversify the company's
revenue stream in favour of more predictable sources of revenues outside the
toy arena.
Research & development expenditure increased to #392k (2000:#178k) in the
period and ten new patents have been applied for since April 2001. The
development of new RFID tags continues apace, with strong customer feedback
enabling the research team, to continue to focus their efforts on commercial
opportunities. Developing the relationship with QinetiQ (formerly DERA) has
been the focus of our technology partnership team and this has already
resulted in one new product being licensed and a number of possible new
product areas being progressed.
In summary, I am pleased with the progress made since flotation and despite
the recent setback in toys, I remain confident that the excellent team at
Innovision Research & Technology will convert the significant opportunities
available into sound future business.
Barton Clarke
Chairman
4 December 2001
Independent Review Report
We have been instructed by the company to review the financial information set
out on pages 3 to 7 and 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 therein, is the
responsibility of, and has been approved by the directors.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 issued by the Auditing Practices Board. A review consists principally of
making enquiries of 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 than an audit performed in
accordance with 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 30 September 2001.
BAKER TILLY
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST
4 December 2001
PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2001
Notes 6 months ended 6 months ended 12 months
30 September 30 September ended 31
March
2001 2000 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
TURNOVER 2 548 1,095 2,338
Cost of sales (82) (153) (156)
Gross profit 466 942 2,182
Administrative expenses (1,840) (813) (1,910)
OPERATING (LOSS) / PROFIT (1,374) 129 272
Interest receivable 231 53 83
(LOSS) / PROFIT ON ORDINARY (1,143) 182 355
ACTIVITIES BEFORE TAXATION
Taxation 3 20 (31) (40)
(LOSS) / PROFIT ON ORDINARY (1,123) 151 315
ACTIVITIES AFTER TAXATION
(LOSS) / EARNINGS PER SHARE Pence per Pence per Pence per
share share share
Basic and diluted 4 (2.86) 0.51 1.06
The operating loss for the period arises from the company's continuing
operations.
No separate Statement of Total Recognised Gains and Losses has been presented
as all such gains and losses have been dealt with in the Profit and Loss
Account.
BALANCE SHEET
30 September 2001
Notes As at 30 As at 30 As at
September 2001 September 2000 31 March 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
FIXED ASSETS
Tangible assets 552 138 173
CURRENT ASSETS
Debtors 826 832 891
Cash at bank and in hand 5 8,800 1,071 864
9,626 1,903 1,755
CREDITORS: Amounts falling due (571) (711) (440)
within one year
NET CURRENT ASSETS 9,055 1,192 1,315
TOTAL ASSETS LESS CURRENT 9,607 1,330 1,488
LIABILITIES
PROVISIONS FOR LIABILITIES & - (8) (2)
CHARGES
NET ASSETS 9,607 1,322 1,486
CAPITAL AND RESERVES
Called up share capital 6 396 31 296
Share premium 9,834 954 689
Profit and loss account (623) 337 501
SHAREHOLDERS' FUNDS 7 9,607 1,322 1,486
CASH FLOW STATEMENT
for the six months ended 30 September 2001
6 months 6 months 12 months
ended 30 ended 30 ended 31
September September March
2001 2000 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
Operating (loss) / profit (1,374) 129 272
Depreciation 69 27 58
Loss / (profit) on sale of fixed - - 1
assets
Decrease / (increase) in debtors 170 (484) (548)
Increase / (decrease) in creditors 129 (481) (586)
Net cash outflow from operating (1006) (809) (803)
activities
Returns on investments and
servicing of finance
Interest received 146 22 56
Taxation - - (180)
Capital expenditure and financial
investment
Purchase of tangible (448) (54) (126)
fixed assets
Sale of tangible - - 5
fixed assets
Cash outflow before use of liquid (1,308) (841) (1,048)
resources and financing
Management of liquid resources
(Increase) / (7,751) 750 950
decrease in treasury deposit
account
Financing
Proceeds from share issues 9,244 - -
Increase / (decrease) in cash in 185 (91) (98)
period
Reconciliation of net cash flow to
movement in net funds
Increase /(Decrease) in cash in 185 (91) (98)
period
Cash inflow / (outflow) from
increase / (decrease) in liquid
resources 7,751 (750) (950)
Change in net funds resulting from 7,936 (841) (1,048)
cash flow
Opening net funds 864 1,912 1,912
Closing net funds 8,800 1,071 864
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 30 September 2001
1 BASIS OF PREPARATION
The financial information contained in this interim report does not constitute
statutory accounts within the meaning of section 240 Companies Act 1985. The
interim results, which have been reviewed but not audited, have been prepared
using accounting policies consistent with those used in the preparation of the
Annual Report and Accounts for the year ended 31 March 2001. Those accounts
have been filed with the Registrar of Companies and received an unqualified
audit report which did not contain a statement under section 237(2) or (3)
Companies Act 1985. The audited financial information for the six months ended
30 September 2000 was extracted from the AIM admission document.
2 TURNOVER
The company's turnover was all derived from its principal activity and was
made to the following geographical markets:
6 months ended 30 6 months ended 30 12 months ended
September September 31 March
2001 2000 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
United States of America 492 1,006 2,177
United Kingdom 13 74 113
Rest of Europe 36 8 35
Rest of the World 7 7 13
_______ _______ _______
548 1,095 2,338
Sales by business activity
were as follows:
Development engineering 117 423 559
Licence fees and technology 65 16 75
sales
Royalties 366 656 1,704
548 1,095 2,338
3 TAXATION
Taxation for the six months to 30 September 2001 is based on the effective
rate of taxation which is estimated to apply to the year ending 31 March 2002.
4 EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the loss for the
period of #1,123,326 (2000: #151,007 profit) by the weighted average number of
shares in issue during the period. During the period the weighted average
number of shares in issue was 39,215,982 (2000: 29,629,600).
There is no dilution as a result of outstanding options.
5 FINANCIAL INSTRUMENTS
The company's financial instruments comprise cash balances as follows:
6 months ended 30 6 months ended 30 12 months ended
September September 31 March
2001 2000 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
Sterling money market 8,601 1,050 850
deposit
Current accounts 199 21 14
8,800 1,071 864
The company holds small balances in foreign currencies to meet current trading
requirements. Cash surplus to immediate requirements is held on money market
deposits.
The company's income is received principally in US Dollars. Where practical
in respect of timings and certainty of amounts, the company considers the use
of forward exchange facilities to hedge individual foreign currency
transactions. Included in debtors due within one period is #372,472 (2000 : #
474,536) relating to balances designated in US Dollars. Similarly, creditors
due within one period are #89,696 (2000: #332,048) relating to balances
designated in US Dollars.
6 SHARE CAPITAL
On 6 April 2001 the company issued 9,900,990 1p ordinary shares at 101p each
as part of a placing of shares and admission to the Alternative Investment
Market of the London Stock Exchange.
On 18 July 2001, 23,800 ordinary 1p shares were issued at 45p on the exercise
of share options.
7 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
6 months ended 30 6 months ended 30 12 months ended
September September 31 March
2001 2000 2001
(unaudited) (audited) (audited)
#'000 #'000 #'000
(Loss) / profit for the (1,123) 151 315
financial period
Proceeds from share issue 9,244 - -
Net addition to 8,121 151 315
shareholders' funds
Opening shareholders' funds 1,486 1,171 1,171
Closing shareholders' funds 9,607 1,322 1,486
The total of shareholders'
funds comprise:
Non-equity interests - 1 -
Equity interests 9,607 1,321 1,486
9,607 1,322 1,486
8 The interim financial statements set out on pages 1 to 7 were
approved by the directors on 4th December 2001.
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