TIDMSNT
RNS Number : 5018D
Sabien Technology Group PLC
31 January 2018
For immediate release
31 January 2018
Sabien Technology Group Plc
("Sabien", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 31 December
2017
Sabien Technology Group plc (AIM: SNT), the manufacturer of the
patented M2G energy saving devices, announces its unaudited interim
results for the six month period ended 31 December 2017 (the
"Period") (comparatives are shown for the comparable period in the
previous year unless otherwise stated):
Highlights in the Period
-- Sales revenue GBP462k (2016: GBP298k)
-- Sales orders received GBP225k (2016: GBP313k)
-- Loss before tax GBP233k (2016: - GBP826k loss)
-- Net cash at the end of the period GBP133k (GBP240k as at 31 December 2016)
-- Sales pipeline of GBP10.1m at 30 January 2018
-- Overseas sales GBP171k (2016: GBP166k)
Current trading and outlook
The Board has continued to manage the Group's working capital
tightly during the Period, and the cost reduction policy
implemented during 2017 has been effective in reducing the
operating loss in the Period to GBP233k compared to GBP826k in the
comparable six month period ended 31 December 2016.
The Board is still targeting monthly breakeven by December 2018,
although the Group will continue to need to raise additional equity
funding to provide further working capital. The Group plans to
raise additional equity funding during the first quarter of 2018
and the Chairman, Bruce Gordon, has re-confirmed his intention to
subscribe for GBP100,000 of new ordinary shares in such a funding
as and when it proceeds.
The Board continues to focus its efforts on returning the Group
towards profitability and remains frustrated by the
unpredictability of conversion of the sales pipeline into sales
orders, with disappointing sales for the period under review,
albeit improved compared to the comparable period in 2016. However,
the Board is focusing on developing recurring revenues from rental
contracts and from Forensic Boiler Audits, a new consultancy
service being offered by the Company. The Board believes that these
new rental contracts offer the potential to provide stable,
consistent revenues and thereby over time provide a greater
visibility to the Board on future financial performance.
Despite the challenges, the Board remains confident about the
Group's product and services, the potential market and therefore
the prospects for the year ahead.
Bruce Gordon Alan O'Brien
Chairman Chief Executive Officer
31 January 2018 31 January 2018
For further information please contact:
Sabien Technology Group
plc
Alan O'Brien +44(0)20 7993 3700
Beaumont Cornish Limited
Michael Cornish / Roland
Cornish
www.beaumontcornish.com
(Nominated Advisor & Broker) +44(0)20 7628 3396
This announcement is inside information for the purposes of
Article 7 of Regulation 596/20014. The person who arranged for the
release of this announcement on behalf of the Company was Alan
O'Brien, Chief Executive Officer.
A copy of this announcement is available on the Company's
website at http://www.sabien-tech.co.uk
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Comprehensive Income for
the period ended 31 December 2017
Notes Year to
6 months 6 months 30
to 31 December to 31 December June
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 462 298 509
Cost of Sales (99) (78) (173)
Gross Profit 363 220 336
Administrative expenses (597) (1,047) (1,990)
Operating Loss (234) (827) (1,654)
Investment revenues 1 1 3
Loss before tax (233) (826) (1,651)
Tax credit 3 - 30 30
---------------- ---------------- --------
Loss for the period attributable
to equity holders of the
parent company (233) (796) (1,621)
Other comprehensive income
for the period - - -
---------------- ---------------- --------
Total comprehensive income
for the period (233) (796) (1,621)
================ ================ ========
Loss per share in pence
- basic 4 (0.3)p (1.4)p (2.3)p
Loss per share in pence
- diluted 4 (0.3)p (1.4)p (2.3)p
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Financial Position as at
31 December 2017
Notes 31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 36 90 59
Other intangible assets 390 437 414
Total non-current assets 426 527 473
------------ ------------ ---------
Current assets
Inventories 88 202 133
Trade and other receivables 60 98 82
Cash and cash equivalents 133 240 26
------------ ------------ ---------
Total current assets 281 540 241
------------ ------------ ---------
TOTAL ASSETS 707 1,067 714
============ ============ =========
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 382 127 156
------------ ------------ ---------
Total current liabilities 382 127 156
------------ ------------ ---------
EQUITY
Equity attributable to
equity holders of the parent
Share capital 5 2,531 2,294 2,531
Other reserves 1,080 944 1,080
Retained earnings (3,286) (2,298) (3,053)
------------ ------------ ---------
Total equity 325 940 558
------------ ------------ ---------
TOTAL EQUITY AND LIABILITIES 707 1,067 714
============ ============ =========
Sabien Technology Group Plc
Unaudited Condensed Group Cash Flow Statement for the period
ended 31 December 2017
6 months 6 months Year
to to to
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss before taxation (233) (826) (1,651)
Adjustments for:
Depreciation and amortisation 47 56 107
Profit on disposal of property,
plant and equipment (3)
Finance income (1) (1) -
Transfers to equity reserves - 1 1
Decrease in trade and other
receivables 22 111 127
Decrease in inventories 45 19 88
Increase/(decrease) in trade
and other payables 226 (90) (60)
Cash generated by/(used in)
operations 106 (730) (1,391)
Corporation taxes recovered - 30 30
Net cash inflow/(outflow)
from operating activities 106 (700) (1,361)
Cash flows from investing
activities
Proceeds from share issue - 705 1,147
Purchase of property, plant
and equipment and intangible
assets - (1) (1)
Proceeds on disposal of property
plant and equipment 6
Finance income 1 1 -
Net cash inflow from investing
activities 1 705 1,152
Net increase/(decrease) in cash
and cash equivalents 107 5 (209)
Cash and cash equivalents at
beginning of period 26 235 235
Cash and cash equivalents at
end of period 133 240 26
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Changes in Equity as at
31 December 2017
Share Share Share based Retained Total equity
capital premium payment earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July
2016 2,200 165 168 (1,502) 1,031
Loss for the period
1 July 2016 to
31 December 2016 - - - (796) (796)
Share issue 94 611 - - 705
Balance at 31
December 2016 2,294 776 168 (2,298) 940
Loss for the period
1 January 2017
to 30 June 2017 - - - (825) (825)
Share issue 237 205 - - 442
Employee share
option scheme
- value of services
provided - - 1 - 1
Transfer to retained
earnings re lapsed
options - - (70) 70 -
Balance at 30
June 2017 2,531 981 99 (3,053) 558
Loss for the period
1 July 2017 to
31 December 2017 - - - (233) (233)
Balance at 31
December 2017 2,531 981 99 (3,286) 325
Sabien Technology Group Plc
Notes to the Financial Statements for the period ended 31
December 2017
1. Accounting policies
The interim financial information has not been audited or
reviewed by the auditors and does not constitute statutory accounts
for the purpose of Sections 434 and 435 of the Companies Act
2006.
The financial information in this document has been prepared
using accounting principles generally accepted under International
Financial Reporting Standards and is consistent with those used in
the preparation of the most recent annual financial statements.
The following significant principal accounting policies have
been used consistently in the preparation of the consolidated
financial information of the Group. The consolidated information
comprises the Company and its subsidiaries (together referred to as
"the Group").
a) Basis of Preparation: The financial information in this
document has been prepared using accounting principles generally
accepted under International Financial Reporting Standards
("IFRS"), as adopted by the European Union.
The directors expect to apply these accounting policies which
are consistent with International Financial Reporting Standards in
the Group's Annual Report and Financial Statements for all future
reporting periods.
The Directors believe that, despite the losses incurred in the
past two financial years and this six month period and the
uncertainty as to the timing of future profitability, the Group is
a going concern and have accordingly prepared these financial
statements on a going concern basis.
The key performance indicator for the Group is the conversion of
its sales pipeline to revenue. The pipeline comprises business
cases submitted to clients. The annualised conversion of opening
pipeline to sales revenue in the period amounted to 10.6% which was
a significant reduction on previous years' conversion rates but was
an improvement compared to the 30 June 2017 conversion rate of
2.7%. If this conversion rate were to be applied to the sales
pipeline at 31 December 2017, cashflow forecasts prepared by the
Directors confirm that the Group will have sufficient working
capital to settle its liabilities as they fall due for a period of
not less than 12 months from the period end.
The interim consolidated financial statements have been prepared
on the historical cost basis and are presented in GBP'000 unless
otherwise stated.
b) Basis of consolidation: The consolidated financial statements
incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) at 31 December 2017.
Control is achieved where the Company has the power to govern the
financial and operating policies of an investee entity so as to
obtain benefit from its activities.
Except as noted below, the financial information of subsidiaries
is included in the consolidated financial statements using the
acquisition method of accounting. On the date of acquisition the
assets and liabilities of the relevant subsidiaries are measured at
their fair values.
All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
Accounting for the Company's acquisition of the controlling
interest in Sabien Technology Limited: The Company's controlling
interest in its directly held subsidiary, Sabien Technology
Limited, was acquired through a transaction under common control,
as defined in IFRS 3 Business Combinations. The directors note that
transactions under common control are outside the scope of IFRS 3
and that there is no guidance elsewhere in IFRS covering such
transactions.
IFRS contain specific guidance to be followed where a
transaction falls outside the scope of IFRS. This guidance is
included at paragraphs 10 to 12 of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors. This requires, inter
alia, that where IFRS does not include guidance for a particular
issue, the directors may also consider the most recent
pronouncements of other standard setting bodies that use a similar
conceptual framework to develop accounting standards. In this
regard, it is noted that the UK standard FRS 6 addresses the
question of business combinations under common control.
In contrast to IFRS 3, FRS 6 sets out accounting guidance for
transactions under common control. The guidance contained in FRS 6
indicates that merger accounting may be used when accounting for
transactions under common control.
Having considered the requirements of IAS 8, and the guidance
included in FRS 6, it is considered appropriate to use a form of
accounting which is similar to pooling of interest when dealing
with the transaction in which the Company acquired its controlling
interest in Sabien Technology Limited.
In consequence, the consolidated financial statements for Sabien
Technology Group Plc report the result of operations for the year
as though the acquisition of its controlling interest through a
transaction under common control had occurred at 1 October 2005.
The effect of intercompany transactions has been eliminated in
determining the results of operations for the year prior to
acquisition of the controlling interest, meaning that those results
are on substantially the same basis as the results of operations
for the year after the acquisition of the controlling interest.
Similarly, the consolidated balance sheet and other financial
information have been presented as though the assets and
liabilities of the combining entities had been transferred at 1
October 2005.
The Group took advantage of Section 131 of the Companies Act
1985 and debited the difference arising on the merger with Sabien
Technology Limited to a merger reserve.
c) Property, plant and equipment: Property, plant and equipment
are stated at cost less accumulated depreciation. Assets are
written off on a straight-line basis over their estimated useful
life commencing when the asset is brought into use. The useful
lives of the assets held by the Group are considered to be as
follows:
Office equipment, fixtures and fittings 3-4 years
d) Intangible assets: Intellectual property, which is controlled
through custody of legal rights and could be sold separately from
the rest of the business, is capitalised where fair values can be
reliably measured.
Intellectual property is amortised on a straight line basis
evenly over its expected useful life of 20 years.
Impairment tests on the carrying value of intangible assets are
undertaken:
-- At the end of the first full financial year following acquisition
-- In other periods if events or changes in circumstances
indicate that the carrying value may not be fully recoverable.
If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the
impairment loss (if any). Recoverable amount is the higher of the
fair value, less costs to sell, and value in use. In assessing the
value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
as an expense immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but only in so far that the increased carrying
amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in
prior years. A reversal of an impairment loss is recognised in
income immediately.
e) Fixed asset investments: Fixed asset investments are stated
at cost less any provision for impairment in value.
f) Inventories: Inventories are valued at the lower of average
cost and net realisable value.
g) Financial Instruments
Financial Assets
The Group classifies its financial assets as loans and
receivables and cash. The classification depends on the purpose for
which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are
classified as non-current assets.
Trade receivables are classified as loans and receivables and
are recognised at fair value less provision for impairment. Trade
receivables, with standard payment terms of between 30 to 65 days,
are recognised and carried at the lower of their original invoiced
and recoverable amount. Where the time value of money is material,
receivables are carried at amortised cost. Provision is made when
there is objective guidance that the Group will not be able to
recover balances in full. Balances are written off when the
probability of recovery is assessed as being remote.
Financial Liabilities
The Group classifies its financial liabilities as trade payables
and other short term monetary liabilities. Trade payables and other
short term monetary liabilities are recorded initially at their
fair value and subsequently at amortised cost. They are classified
as non-current when the payment falls due more than 12 months after
the balance sheet date.
h) Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, other short term highly liquid investments with
original maturities of three months or less, and bank
overdrafts.
i) Revenue recognition: Revenue from sale of goods is recognised
upon delivery and installation at a customer site or delivery to a
customer's incumbent facilities manager which subsequently carries
out the installation itself. Where goods are delivered to overseas
distributors, revenue is recognised at the time of shipment from
the Group's warehouse.
Revenue from services generally arises from pilot projects for
customers and is recognised once the pilot has been completed and
the results notified to the customer. Pilot projects generally have
a duration of between 1 and 3 months.
Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group.
Interest income is accrued on a time basis by reference to the
principal outstanding and at the effective interest rate
applicable.
j) Share-based payments: The Group has applied the requirements
of IFRS2 Share-based Payments. The Group issues options to certain
employees. These options are measured at fair value (excluding the
effect of non-market based vesting conditions) at the date of
grant. The fair value determined at the grant date is expensed on a
straight-line basis over the vesting period based on the Group's
estimate of the shares that will eventually vest and adjusted for
the effect of non-market based vesting conditions.
Fair value is measured by use of the Black-Scholes model. The
expected life used in the model has been adjusted, based on
management's best estimate for the effects of non-transferability,
exercise restrictions and behavioural conditions.
k) Operating leases: Rentals applicable to operating leases
where substantially all of the benefits and risks of ownership
remain with the lessor are charged to the statement of
comprehensive income on the straight line basis over the lease
term.
l) Taxation: The charge for current tax is based on the results
for the period as adjusted for items that are non-assessable or
disallowed. It is calculated using rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability
method in respect of temporary differences arising from differences
between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax basis used in the
computation of taxable profit. In principle, deferred tax
liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction which affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interest in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
Deferred tax is calculated at the rates that are expected to
apply when the asset or liability is settled. Deferred tax is
charged or credited in the statement of comprehensive income,
except when it relates to items credited or charged directly to
equity, in which case the deferred tax is also dealt with in
equity.
Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net
basis.
2. Segmental reporting
Based on risks and returns, the directors consider that the
primary reporting business format is by business segment which is
currently just the supply of energy efficiency products, as this
forms the basis of internal reports that are regularly reviewed by
the company's chief operating decision maker in order to allocate
resources to the segment and assess its performance. Therefore the
disclosures for the primary segment have already been given in
these financial statements. The secondary reporting format is by
geographical analysis by destination. Non-UK revenues amounted to
GBP171k which were 37% of total revenues for the period.
During the period, sales to the Group's largest customers were
as follows:
Sales revenue % of total
revenue
GBP'000
Customer 1 259 56
Customer 2 86 19
Customer 3 68 15
3. Taxation
Year to
6 months 6 months 30
to 31 December to 31 December June
2017 2016 2017
GBP'000 GBP'000 GBP'000
Corporation tax recovered - 30 30
4. Earnings per share (EPS)
The calculation of the basic earnings per share is based on the
earnings attributable to the ordinary shareholders, divided by the
weighted average number of shares in issue in the period.
Year to
6 months 6 months 30
to 31 December to 31 December June
2017 2016 2017
GBP'000 GBP'000 GBP'000
Loss for the period (233) (796) (1,621)
Basic and Diluted:
Weighted average number of
shares in issue 71,504,867 56,504,867 71,504,867
Loss per share - basic and
diluted (0.3)p (1.4)p (2.3)p
5. Share capital
The Company's issued Ordinary share capital is:
Amount Number Number
of New of Deferred
Ordinary Shares
Shares of 4.5p
of 0.5p each
each
Allotted, called up and fully
paid:
At 31 December 2017 and 30 June
2017 GBP2,531,495 110,254,867 44,004,867
At 31 December 2016 GBP2,293,993 62,754,867 44,004,867
At a general meeting of the Company held on 13 July 2016, the
Ordinary shares of 5p each were split into 44,004,867 New Ordinary
shares of 0.5p each and 44,004,867 Deferred shares of 4.5p each.
The Deferred shares have no right to receive notice of attendance
or vote at any general meetings of the company and no right to
receive any dividend or other distribution.
On 16 September 2016, the Company raised GBP750k (gross) by the
issue of 18,750,000 New Ordinary shares of 0.5p each at a price of
4p per share. Net proceeds after expenses amounted to GBP704k.
On 19 April 2017, the Company raised GBP475k (gross) by the
issue of 47,500,000 New Ordinary shares of 0.5p each at a price of
1p per share. Net proceeds after expenses amounted to GBP443k.
6. Seasonality
The business of the Group is not seasonal.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FKDDNBBKDBDN
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