Preliminary Results
Stanelco PLC
28 February 2006
28th February 2006
Stanelco PLC ('Stanelco', 'the Company' or 'the Group')
Preliminary Results for the Year ended 31st October 2005
Highlights
• Turnover of £1.5 million (2004: £1.3 million)
• Loss on ordinary activities before taxation of £3.2 million (2004: loss £2.8
million)
• Strategy focussed on the transformation from a manufacturer and supplier
of capital goods to an IP business
• Two successful placings of Ordinary Shares with UK institutions, raising a
total of £14.3 million (before expenses)
• Acquisition of Biotec GmbH in September for US$25 million
• Continued work towards commercialisation of GREENSEAL lidding project;
ASDA supplier machines are currently being commercialised
Philip Lovegrove, Chairman of Stanelco PLC, commented:
'This has been a significant year for the Company as it continued to transform
into a leading Intellectual Property business, making good progress in relation
to the developments of GREENSEAL, Starpol and Biotec products.
'With a strong management team and growing opportunities for our products, we
look forward to the next year with optimism as we work towards the
commercialisation of our technologies.'
For further information please contact:
Martin Wagner, Chief Executive Officer Tel: 02380 867100
Stanelco PLC
Jonathon Brill/Caroline Stewart Tel: 020 7831 3113
Financial Dynamics
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005
STANELCO PLC
CHAIRMAN'S STATEMENT
The Board's strategy over the last year has been to continue the transformation
of the Group from a manufacturer and supplier of capital goods into an
intellectual property business. This allows the Company to exploit the Group's
core technologies in Radio Frequency Technology, RF Applications and
Biodegradable starch film material directed at the international packaging
industry.
Stanelco's involvement with Walmart Sustainable Value Network in the United
States announced recently is an illustration of this strategy. Your Company is
now initiating a series of investigations as to how best to meet the potential
requirements of retailers and fast food outlets by establishing joint venture
manufacturing units to supply converters with Starpol starch based material.
The intention is to offer a number of manufacturing licences in the US to
produce its range of materials through a micro manufacturing program for supply
to the supermarket and quick service restaurant industry. These licences will
enable converters to ensure a guaranteed supply of biodegradeable material in
order to satisfy the demands of these industries. Each licence will be for a
minimum of 20,000 tonnes and will be operated as joint ventures. This program
will ensure the availability of product in order that the market will be able to
have a rapid uptake of biodegradable materials. Recent negotiations with
manufacturers that are particularly concerned with the future of petroleum based
plastics have shown great interest in vertically integrating resin production in
or beside their plants.
The Managing Director's Statement and the Chief Executive's Review provide a
detailed and extensive analysis of the various strategies and innovations
undertaken by the Company in the financial year. The Group has made steady
progress which is continuing in the current year.
The accounts for the year show a loss for the group of £3.2 million on a
turnover of £1.5 million. Turnover is primarily related to sales of traditional
RF equipment, the receipt of royalties from Aquasol products and two months of
sales of materials from our subsidiary Biotec which we acquired in September
2005. The operating loss of £3.2 million was principally due to substantial
further investment in research and development and considerable management
involvement in procuring joint venture partners and building our capabilities to
grow the business in the pursuit of our main objectives. These continue to
ensure that the commercialisation of the GREENSEAL lidding project is achieved
as is the exploitation of the markets for our range of environmentally
responsible packaging materials. An additional £690,000 charge in the year
relates to the recent settlement of our legal dispute in regard to defence of
patents.
The Group's balance sheet was strengthened as funds were raised on two occasions
during the year. £14.3 million of equity funding (net of expenses) was
successfully raised in order to continue the Group's investment in technology,
and £7.1 million of this was utilised in relation to the first instalment of the
purchase of our 50% owned subsidiary Biotec in Germany in partnership with
SPhere (formerly SP Metal) of France. A further investment of EU1.5 million was
made by each shareholder of Biotec in order to fund expansion of Biotec's
research and production facilities.
The Board is not recommending a dividend for the financial year under review,
but will consider distributions as soon as the Company's profitability warrants
such a decision.
During the last two years the Group has been moving rapidly from a research and
development base to a commercialisation phase. In order to keep pace with the
management requirements of the Group, the Board has recently revised the
structure of the management organisation. The Group Board now consists of
myself as Chairman, Elizabeth Filkin as Senior Independent non-Executive
Director, together with Martin Wagner as Chief Executive, Ian Balchin as
Executive Vice-Chairman, Robert Boardman as Finance Director and Howard White as
Managing Director and President of Stanelco's U.S. Operations. An Executive
Management Board has been established to manage and supervise the day-to-day
activities of the Group and as a result Terry Robins, Robert Duggan and Graham
Whitchurch have been appointed to this body. They have resigned from the Group
Board which will now focus on strategy and finance in accordance with Corporate
Governance Guidelines.
The Board continues to be greatly encouraged at the recent substantial
developments made by the Group and it looks forward to further progress in this
financial year.
Philip Lovegrove
Chairman
27 February 2006
MANAGING DIRECTORS STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005
STANELCO PLC
MANAGING DIRECTORS STATEMENT
The Group has been in a transitional phase which is now coming to an end. There
have been significant strides forward in this time with regard to GREENSEAL and
our biodegradable product offerings which are new, groundbreaking, innovative
and exciting. The opportunities for commercialisation are substantial and as a
result we have attracted the attention of some of the largest companies in the
world. The message coming back from these companies is that we have the product
ranges, at the right price, which is engaging their attention at the highest
level. It is clear that our products can help meet the increasing demand for
environmental responsibility. Whilst the specific requirements in Europe are
biodegradability, compostability and sustainability, in the U.S. it is primarily
about sustainability, always with cost competitiveness in mind. We are
encouraged that our product ranges comfortably satisfy most requirements in
these areas.
In 2005 we began to develop these technologies into a targeted marketplace. The
acquisition of Biotec GMBH allows us to have a complete solution to the
environmentally, cost competitive challenges that face the packaging world
today. We believe 2006 will be the year that we commence full commercialisation
of these technologies. In order to satisfy likely market demand for our
biodegradable materials it will be necessary to build a number of manufacturing
plants referred to as micro manufacturing facilities in the Chairman's
statement. This will enable us to build up our capacity much more rapidly as we
will be in partnership with existing end users, who have the manpower and skills
to achieve production goals in a short time frame. This will also help to
provide global availability for our products.
With regard to GREENSEAL, our ongoing co-operation with a number of Original
Equipment Manufacturers ('OEMs') will ensure that as soon as we have
commercially demonstrated the process in its totality, the OEMs will be ready
to offer GREENSEAL technology as an option on their new machines. Research and
Development is by its very nature frustrating, often seeming like two steps
forward and one step back. The development of GREENSEAL technology has been no
exception and mirrors similar experiences in the process engineering industry on
production machinery. However, we have now reached the point where we are
testing the equipment in a commercial environment on an extended shift work
basis.
Harald Schmidt, MD of Biotec in Germany has in Starpol 2000 developed an
incredibly versatile material that can be blown into film, cast into sheet and
injection moulded, all on standard equipment. I would like to give some
indication of our potential market, especially in the US. We are evaluating one
tray, for one customer that has a current usage of 1.5 billion units per annum.
Each tray weighs approx 50 grams and therefore consumes around 75,000 tonnes of
(non-environmentally friendly) plastic a year. It would require between 500 and
600 tray lidders to seal just these trays. We are able to offer a complete
solution through the supply chain.
Stanelco therefore finds itself at the forefront of addressing a lot of the
environmental issues that exist today. Our experience to date has shown us that
whilst the environment is a cause celebre at this time, the message is loud and
clear, solve it but at no extra cost. We believe that our solutions are at
worst, cost neutral but in most cases, cost beneficial to the end user. What is
revolutionary about our offering is that Starpol 3000 is less expensive than
current APET prices but its performance is comparable. There are still some
significant developments going on but we believe that we lead the world in these
functional products and that we are significantly ahead of any competition with
comprehensive patent cover on all of our technologies.
From a management perspective we have, over the last year, built up a stronger
management team, and I particularly welcome the addition of Martin Wagner to
spearhead the commercialisation phase of Stanelco's growth. We have made
enormous strides in the US under Stephanie Morgan-Fisher, CEO, where recent
developments have alluded to much greater things to come, and the assistance of
Graham Whitchurch, MD of Adept Polymers has accelerated this situation and I
acknowledge the many hours he has spent travelling to potential customers over
the last months. I continue to work closely with Ian Balchin and the rest of the
board and executive team; we continue to look to strengthen ourselves to meet
the demanding and exciting challenges ahead.
Howard White
Managing Director
27 February 2006
CHIEF EXECUTIVE'S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005
STANELCO PLC
CHIEF EXECUTIVE'S STATEMENT
GREENSEAL
During the year Stanelco has continued to develop its RF sealing platform
technology for the welding of recyclable plastic 'mono materials' for
tray-lidding and thermoforming, specifically for the food packaging market. This
process offers substantial financial benefits to food packing houses,
supermarkets and an improved end product for consumers. The process replaces
heat-sealing as the method for sealing plastic film lids on to plastic trays for
food packaging.
By using Stanelco's GREENSEAL technology it is possible to offer considerable
savings to both the retailers and their food packers by:
• eliminating the need for a PE layer and creating a secure seal, even
through contamination. This should considerably reduce wastage rates from
the factory and through the supply chain to the retailer.
• using a mono material means the tray is fully recyclable and all factory
waste can be reused.
• replacing heat sealing methods with GREENSEAL can provide a further energy
saving of up to 70 per cent.
• reducing the waste and financial penalties associated with leaking packs
Stanelco licences GREENSEAL technology to the end users and will retain
ownership of the patented RF system. End users pay a yearly license fee that
includes maintenance of the system and ongoing user training and operational
technology updates. Patents in regard to key aspects of this technology have
also been applied for.
We announced on 29 July 2005 that we had signed a contract with ASDA Stores for
an exclusive arrangement for a minimum of one year for the UK and Ireland to
introduce GREENSEAL technology to a minimum of 200 machines into ASDA's supplier
base. The first two of these machines are in the process of being
commercialized at two of ASDA's suppliers.
We are currently working with ASDA and five of its key suppliers including those
referred to above to fulfil the initial stage of the ASDA contract.
In addition, we are working with a key player in the produce market to adapt
GREENSEAL technology for use with vertical form fill seal machines - in a market
which is even larger than tray lidding
The Company is also making significant progress with a number of Original
Equipment Manufacturers (OEMs) to adopt GREENSEAL as an option. This is likely
to lead to further opportunities of deliveries in parallel to the retro fit
programme with ASDA and increase the rate of roll out. The Group continues to
work closely with a number of equipment manufacturers, including Reiser (USA)
and Mondini (Italy).
Interest in GREENSEAL remains high outside the UK. The Company remains in
active negotiation with other major supermarket chains in both the US and
Continental Europe. Discussions continue with Walmart in regard to GREENSEAL and
other Stanelco technologies. The first US specification machine is now in the
United States with our partner Advanced Technologies for further development
prior to being shown to potential US customers.
BIOTEC AND STARPOL MATERIALS
In September 2005 we completed the purchase of Biotec from EKI and the
subsequent part disposal to Sphere.
Biotec is one of the world's leading exponents of starch technology. Biotec also
has a considerable intellectual property portfolio, including many patents,
extending to uses in pharmaceutical and edible applications, as well as within
the food and beverage industries.
The starch products from Biotec are currently used by Stanelco in the following
projects: Starpol starch blend films used in packaging; sheet for making food
trays; starch film for air pillows; starch pellets for food trays; and starch
film for edible packaging. Biotec will also be a supplier of film to the InGel
capsule project.
Sales of Biotec materials (Biodegradable, compostible and edible polymers based
upon starch) are continuing to both SPhere (formerly SP Metal) and other
customers enabling Biotec to concentrate further resource on R&D. The
relationship with SPhere is working well. We are on schedule to substantially
increase in 2006 the production capacity of these materials - including Starpol
- and expect have a capacity of 20,000 tonnes in Germany by early 2007.
In December 2005 we entered into a landmark cooperation with Perseco
(www.perseco.com) for the two companies to participate in a joint effort to
explore Stanelco's technologies, with a view toward developing materials and
products that are focused on fulfilling Perseco's growing requirements for
environmentally friendly, cost effective, innovative packaging solutions.
Perseco, a subsidiary of HAVI Global Solutions (www.havigroup.com), is an
international leader in Packaging and Supply Chain Services to the food service
and beverage industries. Amongst their clients are some of the world's leading
fast food brands in the US.
WELSH GRANT FUNDING
We are pleased to announce that we have received a substantial offer of Regional
Selective Assistance funding in relation to a proposed production and R&D
facility in Blaenau Gwent. The offer of funding would allow Stanelco to invest
in creating a 40,000 tonne facility for production and materials development
based upon Biotec's technologies for the primary purpose of substituting
conventional plastic for packaging and other applications with biodegradable
alternatives from replenishable sources such as starch.
CIGARETTE FILTERS
We announced our intention to dispose of our biodegradable starch-based
cigarette filter technology acquired through the Biotec joint venture.
Rothschild have been appointed to seek out interested parties.
QUANTUM FINISH
The launch in Europe of Reckitt Benckiser's new automatic dishwashing product
Finish Quantum (R) in addition to their sales of Electrasol Gelpacs (R) in the
same segment in the North American market is expected to contribute towards a
growing royalty stream through our Aquasol subsidiary which contributed
technology towards these products.
ELECTRASOL, GELPACS, FINISH and QUANTUM, are trade marks of Reckitt Benckiser
plc.
FROGPACK
FrogPack is a patent applied for box designed to replace traditional packaging
used for transporting delicate and or valuable items that are vulnerable to
damage in transit due to crushing or shock, such as electronic components, car
parts, glass items, compact discs, flowers, foodstuffs, medicines and medical
devices. Its unique design incorporates the unique SAAP (shock absorbing arcuate
panels) technology developed by Aquasol.
The distribution and manufacturing deals for FrogPack, have been reviewed and
restructured and we are now pleased to announce that we have agreed a deal with
Mondi Packaging.
PULSLINE
Pulsline is a unique security label patented by our subsidiary, Aquasol, which
will ensure authenticity of product. Negotiations have commenced with major
global companies about the take up of this technology.
FROGMAT
The latest development from Aquasol is a fully biodegradable cushioning material
that offers significantly increased protection, is non static and is fully
patented. Again we are in discussion with major suppliers in this arena with
regards to commercialisation.
Other products available from Aquasol include FrogWrap and Airbags.
HARD SHELL CAPSULES
Stanelco jointly owns a patent with Carclo plc for injection moulded water
soluble capsules for drug delivery and dietary supplements. We have made
encouraging progress in the last few months with this technology. We are working
closely with a customer who intends to use the technology in veterinary
applications. High level discussions are underway with major drug delivery
companies on the human application of the technology.
TRADITIONAL RF BUSINESS
We have now outsourced all manufacture of these items but retain control of the
intellectual property. We have, however, seen a useful recovery in the demand
for consumable items for RF furnaces. We continue to make sales of mobile RF
welding units for sealing industrial plastic bags and have seen increase in
demand for these items.
SOFT CAPSULES
InGel Technologies Limited (InGel) was established to commercialise Stanelco's
water soluble soft capsule making technology. The outstanding patent dispute
with BioProgress Technology Limited as reported last year, has been settled.
Stanelco is now free to exploit the technology for all applications including
edible capsules for pharmaceutical and dietry, dishwasher and laundry capsules
as well as other water soluble products.
FINANCIAL REVIEW
The Group has invested considerable financial resources in the development and
protection of its technologies in line with its strategy. £3.4 million has been
invested in research and development during the year.
The Group's balance sheet has strengthened via fundraisings and the acquisition
of Biotec with an increase in net assets of £12.8 million and a cash inflow of
£3.5 million for the year.
Due to the strength of its technology platform and importance of the Group's
products the Group has been able to raise £14.3 million (net of expenses) via
the issue of equity in the financial year. The Group has also been able to
obtain further funding for projects such as the government grant funding for its
proposed facility in Wales.
OUTLOOK
In light of the progress on all fronts but in particular in relation to the
commercialisation of GREENSEAL, Starpol and Biotec products we continue to view
the forthcoming year with optimism. We now have several major technologies and
products which are starting to reach their target markets.
THANK YOU
Thank you to the team of hard working people at Stanelco and Biotec who in
partnership with our customers, suppliers and partners continue to improve our
business.
Martin Wagner
Chief Executive
27 February 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED
31 OCTOBER 2005
Note 2005 2004
£'000 £'000
Turnover
Continuing operations 1,192 1,211
Acquisitions 262 121
----- -----
1 1,454 1,332
Cost of sales (889) (797)
----- -----
Gross profit 565 535
Distribution costs (67) (41)
Administrative expenses 1 (3,120) (1,682)
Exceptional items: provision in respect of conclusion
of patent defence. 1 (690) (1,669)
----- -----
OPERATING LOSS
Continuing operations (3,182) (2,787)
Acquisitions (130) (70)
----- -----
(3,312) (2,857)
Interest receivable and similar income 168 14
Interest payable and similar charges (35) (3)
----- -----
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION (3,179) (2,846)
Taxation 37 59
----- -----
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION (3,142) (2,787)
Minority interest 72 4
Dividends - (7)
----- -----
RETAINED LOSS FOR THE YEAR (3,070) (2,790)
----- -----
Basic and diluted loss per share - pence 2 (0.354) (0.370)
----- -----
All transactions arise from continuing operations.
All recognised gains and losses are included in the profit and loss account.
CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 2005
At 31 October 2005 At 31 October 2004
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 19,380 5,567
Tangible assets 3,235 918
----- -----
22,615 6,485
CURRENT ASSETS
Stock 2,604 610
Debtors 4,746 651
Cash at bank and in hand 4,396 920
----- -----
11,746 2,181
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR (10,347) (1,292)
----- -----
NET CURRENT ASSETS 1,399 889
----- -----
TOTAL ASSETS LESS CURRENT
LIABILITIES 24,014 7,374
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR (3,678) (159)
PROVISIONS FOR LIABILITIES AND
CHARGES 4 (1,453) (1,093)
----- -----
18,883 6,122
----- -----
CAPITAL AND RESERVES
Called up share capital 929 832
Share premium account 19,899 5,209
Shares to be issued 1,050 2,500
Profit and loss unrealised exchange 19 -
reserve
Profit and loss account (5,512) (2,442)
----- -----
SHAREHOLDERS' FUNDS 16,385 6,099
Minority interest - equity interest 2,498 23
----- -----
18,883 6,122
----- -----
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2005
2005 2004
Note £'000 £'000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 5 (4,095) (731)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 168 14
Interest paid (33) (3)
----- -----
NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE 135 11
----- -----
TAXATION
Corporation tax paid (10) -
----- -----
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Investment in intangible fixed assets (3,436) (1,466)
Sale of tangible fixed assets 25 79
Purchase of tangible fixed assets (807) (280)
----- -----
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (4,218) (1,667)
----- -----
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary (7,082) -
Cash at bank acquired with subsidiary 65 59
Part disposal of subsidiary 3,372 -
----- -----
(3,645) 59
EQUITY DIVIDENDS PAID
Dividends paid (1) (79)
----- -----
FINANCING
Issue of ordinary share capital 14,287 2,919
Issue of shares in subsidiary to minority interest 1,015 -
shareholder
Capital element of finance lease payments (19) (3)
New bank loan - 150
New finance leases 42 -
Repayment of loan capital (15) (3)
----- -----
NET CASH INFLOW FROM FINANCING 15,310 3,063
----- -----
INCREASE IN CASH 6 3,476 656
----- -----
NOTES
1. TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2005 2004
£'000 £'000
Turnover
Sales are made from the United Kingdom into the following
geographical markets:
United Kingdom 492 647
Europe 383 98
Asia 142 472
North America 430 40
Rest of world 7 75
----- -----
1,454 1,332
----- -----
The world-wide activities of Stanelco plc are highly integrated and, accordingly, it is
not possible to present geographical segment information for Profit Before Tax without
making internal allocations, some of which are necessarily subjective.
2005 2004
£'000 £'000
The profit on ordinary activities before taxation is stated after charging/
(crediting):
Depreciation, amortisation and impairment:
Intangible fixed assets, owned 422 348
Tangible fixed assets, owned 202 157
Tangible fixed assets, leased 14 14
Goodwill on investments 244 60
Loss on disposal of tangible fixed assets 10 68
Auditors' remuneration:
audit work 75 46
non-audit work 37 29
Hire of plant and machinery 20 5
Operating lease rentals: Land and buildings 140 123
Loss on foreign exchange transactions 317 2
Exceptional items
Best estimate of liabilities in relation to conclusion of 690 1669
patent defence.
Bad debt provision 2 -
----- -----
2. EARNINGS PER SHARE
The calculation of earnings per share is based on the loss after tax for the
year of £(3,142,000) (2004: £(2,787,000) and a weighted average of 888,097,434
(2004: 753,303,455) ordinary shares in issue.
3. DIVIDEND
The directors do not recommend the payment of a dividend.
4. PROVISIONS FOR LIABILITIES AND CHARGES
Deferred tax Warranty Other Total
provision provision provisions
£'000 £'000 £'000 £'000
At 1 November 2004 - 12 1,081 1,093
Utilised in the year - (12) (444) (456)
On acquisition - - 99 99
Provided in year - 2 715 717
----- ----- ----- -----
At 31 October 2005 - 2 1,451 1,453
----- ----- ----- -----
At 1 November 2003 64 18 - 82
Utilised in the year (64) (18) - (82)
Provided in year 12 1081 1093
----- ----- ----- -----
At 31 October 2004 - 12 1081 1093
----- ----- ----- -----
The warranty provision is for expected warranty claims on products sold during
the financial year by Stanelco RF Technologies Limited (formerly Stanelco Fibre
Optics Limited). It is expected that this expenditure will be incurred in the
next financial year.
Other provisions relate primarily to best estimates of the liabilities incurred
in respect of action in defence of patents. On 9th February 2005 Stanelco Plc
announced that it had reached a settlement of the legal dispute between two of
their subsidiaries with BioProgress plc. Stanelco plc agreed to issue to
BioProgress new ordinary 0.1p shares and or cash up to a maximum market value of
£1,000,000. Stanelco Plc subsequently announced that these shares had been
issued and sold by BioProgress Plc and that this represents full and final
settlement of the dispute. The Board have made provision against the estimated
liabilities associated with the conclusion of this litigation following the end
of the financial year.
5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
2005 2004
£'000 £'000
Operating loss (3,312) (2,857)
Amortisation and impairment of intangible fixed assets 422 348
Depreciation of tangible fixed assets 216 171
Amortisation of goodwill 244 60
Loss / (profit) on sale of tangible fixed assets 10 68
(Increase)/ decrease in stocks (1,504) (61)
(Increase)/ decrease in debtors (172) (98)
Increase/ (decrease) in creditors (261) 563
Increase in provision for liabilities and charges 262 1,075
----- -----
Net cash outflow from operating activities (4,095) (731)
----- -----
6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2005 2004
£'000 £'000
Increase/ (decrease) in cash in the year 3,476 656
Cash inflow/(outflow)from increase in debt lease financing 34 (144)
New finance leases (42) (54)
----- -----
Change in net debt resulting from cash flows 3,468 458
Net funds at 1 November 2004 722 264
----- -----
Net funds at 31 October 2005 4,190 722
----- -----
7. ANALYSIS OF CHANGES IN NET FUNDS/DEBT
1 November Acquisition Other non- 31 October
2004 Cashflow (excl. cash cash changes 2005
and
overdrafts)
£'000 £'000 £'000 £'000 £'000
Cash in hand and at bank 920 3,476 - - 4,396
-----
3,476
Bank loan (147) 15 - - (132)
Finance leases (51) 19 - (42) (74)
----- ----- ----- ----- -----
722 3,510 - (42) 4,190
----- ----- ----- ----- -----
8. CONTINGENT LIABILITIES
Certain patents relating to Stanelco's edible capsule making technology had been
the subject of litigation between our subsidiary Stanelco RF Technologies Ltd
and BioProgress Technology Limited, more details of which are set out in the
Chief Executives Statement.
On 9th February 2005 Stanelco Plc announced that it had reached a settlement of
the legal dispute between two of their subsidiaries with BioProgress plc.
Stanelco plc agreed to issue to BioProgress new ordinary 0.1p shares and or cash
up to a maximum market value of £1,000,000. Stanelco Plc subsequently announced
that these shares had been issued and sold by BioProgress Plc and that this
represents full and final settlement of the dispute. The Board have made
provision against the estimated liabilities associated with the conclusion of
this litigation following the end of the financial year.
9. REPORT AND FINANCIAL STATEMENTS
The information relating to the year ended 31 October 2005 is extracted from the
audited accounts that have not yet been filed at Companies House and on which
the auditors issued an unqualified opinion.
The information relating to the year ended 31 October 2004 is extracted from the
audited accounts that have been filed at Companies House and on which the
auditors issued an unqualified opinion.
The above financial information does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985.
This information is provided by RNS
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