Final Results

RNS Number : 9944J

Scientific Digital Imaging Plc

24 July 2013

 



SCIENTIFIC DIGITAL IMAGING PLC

Final Results for the year Ended 30 April 2013

 

Cambridge, UK 24 July 2013: Scientific Digital Imaging's (AIM: SDI, "SDI" or the "Company"), the AIM quoted group that builds and sells scientific instruments based on digital imaging technology, predominantly for applications in the life sciences, announces today its final results for the year ended 30 April 2013.  

Financial Highlights

·      Revenue increased by 6.9% to £7.7m (2012: £7.2m)

·      Operating profit for the year was £280k (2012: £84k) after reorganisation costs of £14k (2012: £73k) and share based payments £4k (2012; £nil)

·      Basic profit per share was 1.05p per share (2012: 0.11p)

·      Expenditure on research and development in the current year was £600k, representing 7.8% of Group sales (2012: £494k representing 6.9% of Group sales)

Operational Highlights

·      Large order for Synbiosis systems from the Chinese State Food and Drug Administration

·      New division Synoptics Health formed to market and supply ProReveal

o  Global demand has notably increased and a number of new worldwide distributors have been appointed

·      To meet demand Syngene has introduced new PXi Touch systems for image capture which are selling well

Post-period events

·      Successful equity fundraising of £850,000 (before expenses) to enable a loan note repayment and to reinvest in the business

Commenting on the results, Ken Ford, Chairman of SDI said: "I am convinced we will drive the Company to even greater success in the coming year".

--ENDS--

FOR FURTHER INFORMATION

Scientific Digital Imaging plc                                              01223 727144

Ken Ford, Chairman

Mike Creedon, Chief Executive Officer

www.scientificdigitalimaging.com

finnCap Ltd.                                                                        020 7220 0500

Ed Frisby/Rose Herbert - Corporate Finance

Simon Starr - Corporate Broking

JW Communications

Julia Wilson - Investor & Public Relations                                0781 8430877

Note to Editors

Scientific Digital Imaging Plc

Scientific Digital Imaging plc (SDI) is focused on the application of digital imaging technology to the needs of the scientific and technology community. Its principal subsidiary is Synoptics Limited, which designs and manufactures special-purpose instruments for use mainly in the life sciences, supplying customers in the academic, research and health sectors. Within Synoptics, the recently formed Synoptics Health division has launched the Synoptics Health ProReveal system.  This patented system offers a highly sensitive fluorescence-based test to detect dirty surgical instruments in hospitals and aims to reduce incidences of cross contamination of patients.  In addition, under the Atik brand, SDI designs and manufactures high-sensitivity cameras for both astronomical and life science applications.

 www.scientificdigitalimaging.com

Chairman's statement

OVERVIEW

I am delighted to confirm that in my first report as Chairman for the 12 months ended 30 April 2013, Scientific Digital Imaging plc ("SDI") has continued to generate profits during this period of continued weakened global trading conditions. With the internal reorganisation completed and the advances in SDI in-house product development programmes, we now have several new competitively priced, automated systems in our portfolio, launched in the past year for which demand is exceeding supply. The Board is confident that SDI is well positioned to continue to grow.

Post-year end SDI raised £850,000 by way of a placing for cash to enable repayment of a loan note and to reinvest in the business. This placing ensures we can fulfil the forward orders of our products, especially the ProReveal system for which global demand has notably increased.

Group revenues increased and gross margins remained stable in the year following SDI's reorganisation. Additionally, re-engineering of the technology portfolio to eliminate the use of third party camera components is producing improved profitability.  The outcome of these successful activities is a significant turnaround in the business and there are many opportunities for the Group to develop especially within the Synoptics Health and Synbiosis brands to enable on-going growth for the coming year.

FINANCIAL RESULTS

Revenue for the period increased to £7.7m (2012: £7.2m), an increase of 6.9%. This has resulted in an operating profit for the year of £280k, a profit margin of 3.6% after reorganisation costs of £14k (2012: £73k) and share based payments of £4k (2012: £nil). This result is inclusive of currency gains. The increase in SDI revenue is due to the Synoptics subsidiary, whose Syngene and Synbiosis brands saw increased revenue. Basic earnings per share were 1.05p and diluted earnings were 1.01p.

These results are the best we have reported since 2009 and the Board believes business for the future continues to look promising. We look forward to new sales from the patented ProReveal product launched during the year.

STRATEGY

During the year SDI has focused on improving the underlying business which has proved a successful strategy. In the year, the Group did not add any new companies but the Board believes the Group is now in a position to acquire new businesses with complementary product portfolios and this will be part of SDI's strategy in the year ending 2014. SDI will also continue to invest in its current operations to take advantage of the under-exploited rapid microbiology testing and healthcare sectors where SDI's new products are currently well positioned for growth.

CURRENT TRADING AND OUTLOOK

The financial year to the end of April 2013 marked a turning point for SDI, increasing profitability and recommencing its acquisition strategy. SDI has come through the recession very robustly, aided by its modernisation and investment programme. We have continued to seek process improvements during the downturn and also maintained our skill base and output capability. These factors stand us in good stead as volume recovery continues.

We continue to see investment in our imaging products in the developing markets in the Asia-Pacific region continue to invest in our imaging products.SDI received a large order for Synbiosis systems from the Chinese State Food and Drug Administration (SFDA), where there is on-going interest in our automation. We will promote our products globally but will focus on developing our North American market and on the Asia-Pacific region where we have put in place six new distributors to exploit Synoptics Health's unique ProReveal technology.

The Board expects SDI to continue to make good progress over the coming financial year as we will continue to pursue our strategy of organic and acquisitive growth. We believe that the recent SFDA order independently validates our technology as the "gold standard" and consider that our growth in Asia will continue to be fuelled by their need for excellent automation in the life sciences. The Company's new products, especially in the rapid microbiology testing and healthcare sectors show commitment to innovation and the Board views SDI's prospects for 2013 positively.

STAFF

On behalf of the Board, I would like to thank our staff. They have continued to work tirelessly to ensure our new technology portfolio is ready for launch at key events. It is their commitment which has helped SDI to be successful and I am convinced will drive the Company to even greater success in the coming year.

Ken Ford

Chairman

23 July 2013

CHIEF EXECUTIVE'S OPERATING REPORT

SDI designs and manufactures digital imaging technology for use by the scientific community, through its Synoptics brands (Syngene, Synoptics Health, Synbiosis, and Syncroscopy) and the Artemis CCD Company brands (Atik Cameras and Artemis CCD Cameras).

SYNOPTICS

Synoptics designs and manufactures scientific instruments based on digital imaging technology, mainly for the life science, microbiology healthcare and microscopy markets. The Divisions offer their products under marketing brands including G:BOX, PXi, ProtoCOL and ProReveal, each targeting a different sector of these markets.

Syngene

Syngene remains the largest of the Synoptics brands and accounted in 2013 for 83 percent of the Synoptics company's turnover. The brand provides systems and software for documenting and analysing 'gels' and 'blots' used by scientists in genomic and proteomic studies. Almost all research in biological sciences requires an understanding of the underlying molecular processes involving DNA, RNA and proteins, and gel electrophoresis and Western blotting continue to be key processes in many laboratories working in this area.

To keep pace with the continuing global trend for the smaller format imaging systems, this year, Syngene extended its range by adding the PXi gel documentation product with the introduction of six new touch screen versions. These new systems have been selling successfully in Europe and the US where research budgets remain restricted. The PXi system is also selling well in Asia because lab space is at a premium and smaller format gels are routinely used in research.

To ensure PXi and Syngene's higher end G:BOX imaging systems continue to be competitively priced and generate good gross margins, the products have been re-engineered to include cameras (one of the most expensive components of the systems) sourced not from a third party, but instead from SDI's Artemis CCD Company. 

We continue to build a strong sales and marketing team for these products and this year have appointed a new distributor in Canada and invested in a dedicated sales person and manufacturer's representative to cover North America, where a number of our competitors are based.  Our new sales team for the UK and Europe is performing well and our Syngene sales in the Asia-Pacific and Middle East region continue to grow. 

Syngene's products are particularly strong in the area of imaging multiple fluorescent dyes. To maintain our competitive position in this application, we intend to update our image analysis software, GeneTools, which we anticipate will help us continue to grow the Syngene's brand. 

Synoptics Health

During the year, SDI introduced the new brand of Synoptics Health to market and supply ProReveal, an automated viewer and fluorescence-based spray test to detect proteins remaining on surgical instruments after the decontamination process. ProReveal could help to prevent hospital infections caused by protein based prions such as variant Creutzfeldt-Jakob Disease (vCJD). The unique ProReveal fluorescence imaging technology, the result of our successful strategic collaboration with Queen Mary University of London, has been well received in the UK. Independent studies have shown ProReveal can detect nanogram amounts of protein, which is 100 times more sensitive than current gold standard tests being used in sterile services department (SSDs).

ProReveal is well positioned in the healthcare market to meet new UK guidelines for decontamination as the Department of Health (DOH) in England is preparing to issue a minimum safe standard for the amount of protein that is allowed to remain on a surgical instrument after decontamination. The Ninhydrin kit (the current gold standard test), used in UK SSDs is not sensitive enough to provide an adequate level of protein detection. ProReveal is the only technology currently available that can meet nanogram levels of detection and could potentially be installed in 300 SSD's, in hospitals and private decontamination companies throughout the UK. 

In 2013, 10 ProReveal systems were sold in the UK and Synoptics Health's UK distributor has installed three ProReveal systems in two major SSD's of leading London hospitals and one in an NHS  training facility. This means that existing and future SSD personnel receiving training at these sites will be familiar with this technology and are more likely to consider it for use in their own hospital SSDs.

Synoptics Health is currently enjoying a first mover advantage in this untapped healthcare market sector not just in the UK but internationally. During the period, the Synoptics Health Division appointed a network of six new distributors throughout the Asia-Pacific region and these partners intend to show the ProReveal system in numerous hospitals in the region in Q3 of 2013. In Europe, the Division has appointed a new distributor in Germany and sold four systems, which are being independently evaluated by German hospitals. There are plans to have Dutch and Italian distributors in place, as well as a North American distributor within the next few months ensuring growth in demand for the ProReveal viewer and more importantly, a recurring revenue stream for the ProReveal spray over the coming year.

Synbiosis

The Synbiosis division provides systems for microbiologists to automatically count and measure microbial colonies and these are used for microbiological testing in the food, water and pharmaceutical markets.  These systems benefit users by reducing labour costs, providing more reproducible results, and by automatic recording data for audit purposes, an area which is becoming increasingly important as microbiological testing becomes more regulated.

Like the molecular biology sector, there is a need for affordable automated microbiology testing and to fill this niche, in 2013 Synbiosis re-designed and launched aCOLyte 3, a low cost automated colony counter, which will appeal to the large clinical and academic markets, where equipment budgets remain restricted.

In 2013, the ProtoCOL 3 automated high end colony counter proved popular, especially in Asia where 25 systems were sold in China to the major government organisation, the Chinese State Food and Drug Administration (SFDA).  This ProtoCOL 3 placement is significant as it was the result of a six month tender process, in which technology from 10 other international companies was assessed alongside and thus validates the ProtoCOL 3 as a world leading system for automated colony counting.

To build on the success of this brand, Synbiosis launched its new ProtoCOL 3 statistical analysis software in 2013. The software is compatible with new European Pharmacopoeia/US Pharmacopeia regulations and allows microbiologists to rapidly obtain potency data from their zone measurements or colony count results. The Chinese SFDA is currently reviewing the software, with a view to adding the package to each of the 25 ProtoCOL 3 systems installed throughout China.

To allow Synbiosis to enter the lucrative market of rapid microbiology testing, we are collaborating with CHROMagar, an international company that supplies the world's widest range of chromogenic media to introduce a version of ProtoCOL 3 which will automatically recognise and identify different types of microorganisms based on colony colour. This innovation provides another first mover advantage as no other commercial colony counter currently in the microbiology market can perform this task with the same level of accuracy and because of our competitive advantage Synbiosis expects good sales growth of this product.

Syncroscopy

The Syncroscopy Division provides digital imaging software to microscope users.  Its main product, AutoMontage is a software package that allows customers to overcome the severely limited depth of field in an optical microscope. AutoMontage continues to sell well under licence to Leica Microsystems, a leading microscope manufacturer as an optional part of Leica's LAS software suite. 

ARTEMIS CCD

The Artemis CCD Company acquired by SDI in October 2008 designs and manufactures high-sensitivity cameras. These are sold to life science and industrial applications under its Artemis Cameras brand and for deep-sky astronomy imaging as Atik Cameras. During 2013 we have reorganised to reduce costs and improve our competitive advantage.

Artemis Cameras.

In the period, the new Artemis CCD Camera brand together with a dedicated web site was created to differentiate the scientific camera range from the existing astronomy focussed Atik brand. This is proving successful in guiding OEM customers towards long term direct business to business relationships. Artemis CCD Cameras provide additional features and compatibility with scientific equipment control and image analysis software plus a wider model range to improve flexibility of integration for the system designer. A completely new VS range was introduced aimed specifically at the OEM customer base and fluorescence microscopy users. The Company also appointed its first distributor for scientific cameras in the territories of France, UK, Ireland and Spain.

Atik Cameras

During the year Atik Camera sales grew again with increases in sales to the US leading the way.  The release of new, high performance, sensors from Sony has enabled the introduction of new cameras based on existing designs.  These have proved popular and provided a cost efficient way to introduce new products as well as giving Atik a competitive edge against companies relying more heavily on sensors from other manufacturers. 

The Atik dealer network continues to grow with new appointments being made in America, India, Brazil, Japan and China as well as in Europe.  While it is expected the majority of sales to continue to come from established western markets Atik are in a good position to take advantage of increases in discretionary expenditure coming from faster growing economies.

The majority of Atik's development effort in the year has been spent on a new platform which is planned to be used to introduce a new range of cameras this year targeting increased ease of use and integration of functions.  Collaborations with third party developers has brought MacOS support for our camera to customers not wishing to run the cameras through Microsoft Windows.

SUMMARY

At Synoptics, Syngene has introduced new PXi Touch systems for image capture, which are selling well and the Synbiosis ProtoCOL 3 continues to be purchased as the global gold standard colony counter. These successes combined with the introduction of our flourishing new Synoptics Health Division and its ProReveal technology ensure current and forecast sales are very positive.

Artemis CCD continues to make an increasing contribution to the SDI Group thanks to both intra-group revenues to Synoptics and to growth in both its amateur astronomy and science markets.

Life science markets are beginning a tentative recovery and we anticipate that new products, especially in rapid microbiology testing and healthcare sectors released during the first half of 2013 together with the on-going cost efficiencies within the Group, should result in steady growth for SDI throughout the coming year.

Mike Creedon

Chief Executive Officer

FINANCIAL REVIEW

Group Summary

Group revenue for the year increased by 6.9% to £7.7m (2012: £7.2m).

Gross profit increased to £4.4m (2012: £4.1m) with gross margins at 56.9% (2012: 56.9%).

Operating profit for the year was £280k (2012: £84k) after reorganisation costs of £14k (2012: £73k) and share based payments of £4k (2012: £nil).

Investment in R&D

Total research and development in the current year was £600k, representing 7.8% of Group sales (2012: £494k representing 6.9% of Group sales). Under IFRS we are required to capitalise certain development expenditure and in the year ending 30 April 2013 £430k of cost was capitalised and added to the balance sheet. This expenditure represents the Group's investment in new product development. The amortisation charge for 2013 was £247k (2012: £235k). The carrying value of the capitalised development at 30 April 2013 was £622k (2012: £454k) to be amortised over three years.  

Reorganisation Costs

The Board has carried out a thorough review of the operations and structures of the Group in 2012 and £14k of costs from the review and reorganisation were incurred in 2013.

Earnings per Share

Basic earnings per share for Group were 1.05p (2012: 0.11p), diluted earnings per share for the Group were 1.01p (2012: 0.10p).   

Finance Costs and Income

Net financing expense was £67k (2012: £64k).  Loan stock interest charges for the year were £34k (2012: £34k).  Loan stock of £379k was issued in July 2008.

Taxation

The tax charge of £21k (2012: £nil) is largely due to the deferred tax charge in the Group, this is inclusive of any deduction for R & D expenditure.

Cash Flow

During the year the Group had improved cash flow, reporting a cash balance of £388k (2012: £285k) at the year end.

Currency Translation

The results for the Group's overseas businesses are translated into Pounds Sterling at the average exchange rates for the relevant year. The balance sheets of overseas businesses are translated into Pounds Sterling at the relevant exchange rate at the year end. Exchange gains or losses from translating these items from one year to the next are recorded in other comprehensive income.

As with the majority of international companies, the Group's UK and overseas businesses purchase goods and services, and sell some of their products, in non-functional currencies. Where possible, the Group nets such exposures or keeps this exposure to a minimum. The Group's principal exposure is to US Dollar and Euro currency fluctuations.

Funding and Deposits

The Group utilises short-term facilities to finance its operations. The Group has one principal banker with an invoice discounting facility of up to £500k. At the year end the Group had cash on the balance sheet. Surplus funds are placed on short-term deposit.

The Group utilises long-term borrowings from the issue of loan stock and finance leases.

Summary

The reorganisation of the Group is now complete and it is in a position to offer competitive products at competitive prices whilst achieving improved gross margins.

CONSOLIDATED INCOME STATEMENT

Note					2013		2012
					£000		£000
Revenue	1				7,665		7,170
Cost of sales					(3,304)		(3,090)
Gross profit					4,361		4,080
- currency exchange (losses)/gains				(2)		2
- reorganisation costs				(14)		(73)
- share based payments				(4)		-
- other administrative expenses				(4,061)		(3,925)
Total administrative expenses					(4,081)		(3,996)
Operating profit					280		84
Finance income				-		1
Finance payable and similar charges				(67)		(65)
Net financing expenses					(67)		(64)
Profit before tax					213		20
Income tax	2				(21)		-
Profit for the year					192		20

Earnings per share
Basic earnings per share	5				1.05p		0.11p
Diluted earnings per share	5				1.01p		0.10p

All activities of the Group are classed as continuing.

STATEMENT OF COMPREHENSIVE INCOME

					2013	2012
					£000	£000
Profit for the period					192	20
Other comprehensive income
Exchange differences on translating foreign operations					39	(21)
Total comprehensive income for the period					231	(1)

CONSOLIDATED BALANCE SHEET

	Note			2013	2012
Assets				£000	£000
Intangible assets				896	726
Property, plant and equipment				415	386
Deferred tax asset	3			125	113
				1,436	1,225
Current assets
Inventories				947	826
Trade and other receivables				1,467	1,527
Cash and cash equivalents				388	285
				2,802	2,638
Total assets				4,238	3,863
Liabilities
Non-current liabilities
Borrowings	4			38	423
Deferred tax liability	3			164	138
				202	561
Current liabilities
Trade and other payables				1,423	1,282
Provisions for warranty				17	17
Borrowings	4			472	114
Current tax payable				-	-
				1,912	1,413
Total liabilities				2,114	1,974
Net assets				2,124	1,889
Equity
Share capital				194	187
Merger reserve				2,606	2,606
Share premium account				335	262
Own shares held by Employee Benefit Trust				(85)	(85)
Other reserves				100	176
Foreign exchange reserve				(34)	(73)
Retained earnings				(992)	(1,184)
Total Equity				2,124	1,889

Ken Ford                                                                                                  Mike Creedon
Chairman                                                                                                 Chief Executive Officer

CONSOLIDATED STATEMENT OF CASHFLOW

		2013	2012
		£000	£000
Operating activities
Profit for the year		192	20
Depreciation and amortisation		492	457
Profit on sale of property, plant and equipment		(2)	-
Finance costs and income		67	64
Taxation expense in the income statement		21	-
Increase in provisions		-	-
Exchange difference		39	(26)
Employee share based payments		4	-
Operating cash flows before movement in working capital		813	515
Increase in inventories		(139)	(45)
Changes in trade and other receivables		48	(136)
Changes in trade and other payables		153	228
Cash generated from operations		875	562
Interest paid		(67)	(56)
Income taxes received/(paid)		-	5
Cash generated from operating activities		808	511
Investing activities
Capital expenditure		(356)	(155)
Expenditure on development		(430)	(229)
Sale of property, plant and equipment		93	41
Interest received		-	-
Net cash used in investing activities		(693)	(343)
Financing activities
Movement of finance leases		(12)	(21)
Bank borrowing movement		-	(25)
Issues of shares and warrants		-	2
Net cash from financing		(12)	(44)
Net changes in cash and cash equivalents		103	124
Cash and cash equivalents, beginning of year		285	158
Foreign currency movements on cash balances		-	3
Cash and cash equivalents, end of year		388	285

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Merger reserve	Foreign exchange	Share premium	Own shares held by EBT	Other reserves	Retained earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Balance at 30 April 2013	187	2,606	(73)	262	(85)	176	(1,184)	1,889
Shares issued as deferred payment	7	-	-	73	-	(80)	-	-
Share based payments	-	-	-	-	-	4	-	4
Transaction with owners	7	-	-	73	-	(76)	-	4
Profit for the year Foreign exchange on consolidation of subsidiaries	-	-	39	-	-	-	192 -	192 39
Total comprehensive income for the period	-	-	39	-	-	-	192	231
Balance at 30 April 2013	194	2,606	(34)	335	(85)	100	(992)	2,124

	Share capital	Merger reserve	Foreign exchange	Share premium	Own shares held by EBT	Other reserves	Retained earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Balance at 30 April 2012	187	2,606	(52)	260	(85)	176	(1,204)	1,888
Share options issued	-	-	-	2	-	-	-	2
Transactions with owners	-	-	-	2	-	-	-	2
Profit for the year	-	-	-	-	-	-	20	20
Foreign exchange on consolidation of subsidiaries	-	-	(21)	-	-	-	-	(21)
Total comprehensive income for the period	-	-	(21)	-	-	-	20	(1)
Balance at 30 April 2012	187	2,606	(73)	262	(85)	176	(1,184)	1,889

Note 1 SEGMENT ANALYSIS

Management consider that there is a single operating segment being the supply of digital imaging equipment, encompassing Synoptics three marketing brands: Syngene, Synbiosis, Syncroscopy and the Atik brand which is used within Synoptics brands and sold externally to the amateur astronomy market. Each of the brands have a number of products and whilst sales performance of each brand are monitored, resources are managed and strategic decisions made on the basis of the Group as a whole. 

The geographical analysis of revenue by destination and non-current assets (excluding deferred tax) by location is set out below:

Revenue by destination of external customer	2013	2012
	£000	£000
United Kingdom (country of domicile)	747	802
Germany	774	505
Rest of Europe	1,443	1,376
America	2,354	2,248
Hong Kong	743	500
India	482	665
Rest of Asia	809	734
Rest of World	313	340
	7,665	7,170

Non-current assets by location	2013	2012
	£000	£000
United Kingdom	1,076	894
Portugal	62	61
America	173	157
	1,311	1,112

           NOTE 2 TaxATION

		2013	2012
		£000	£000
Corporation tax:
Corporation tax due		-	10
Current year R & D claim		-	-
Prior year R & D claim		2	-
		2	10
Deferred tax expense/(credit)		19	(10)
Income tax charge		21	-

Reconciliation of effective tax rate

		2013	2012
		£000	£000
Profit on ordinary activities before tax		213	20
Profit on ordinary activities multiplied by standard rate of Corporation tax in the UK of 23.92% (2012: 25.84%)		51	5
Effects of:
Expenses not deductible for tax purposes		1	14
Additional deduction for R&D expenditure		(104)	(58)
Transferred to tax losses		73	39
		21	-

The Group takes advantage of the enhanced tax deductions for Research and Development expenditure in the UK and expects to continue to be able to do so. 

          NOTE 3 Deferred tax

			2013		2012
			Deferred tax   asset	Deferred tax  liability	Deferred  tax asset	Deferred  tax liability
			£000	£000	£000	£000
At 1 May 2012			113	(138)	113	(148)
Deferred tax on capitalised R & D			-	(20)	-	6
Tax losses utilised			-	-	19	-
Short term temporary differences			12	(14)	(11)	(4)
Charge on intangibles recognised on acquisition			-	8	-	8
Share based payments			-	-	(8)	-
At 30 April 2013			125	(164)	113	(138)

			2013		2012
			Asset	Liability		Asset	Liability
			£000	£000		£000	£000
Deferred tax on capitalised R & D			-	(129)		-	(109)
Other temporary differences			12	(20)		1	(13)
Deferred tax on acquisition intangibles			-	(15)		-	(16)
Trading losses recognised			113	-		112	-
			125	(164)		113	(138)

Deferred tax assets are recognised for tax losses available for carrying forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred tax assets of £430k (2012: £524k) in respect of losses. Total losses (provided and unprovided) totalled £1.8m (2012: £2.4m).

There were no unrecognised taxable temporary differences.

            NOTE 4 Borrowings

Borrowings are repayable as follows:

		2013	2012
		£000	£000
Within one year
Loan stock		368	-
Bank finance		76	91
Finance leases		28	23
		472	114
After one and within five years
Loan stock		-	368
Finance leases		38	40
		38	408
Over five years
Finance leases		-	15
Total borrowings		510	537

Bank finance relates to amounts drawn down under the Group's invoice discounting facility.

The proceeds of £368,000 from the issue of the loan stock are stated after adjustment in accordance with the accounting treatment required under IAS 32. Certain rights that are attached to the Company's loan stock result in it having characteristics of both equity and liabilities. Therefore the loan stock is considered to be a compound instrument.

The value of the liability component has been calculated based on the present value of the future cash flows in respect of payments the Company is obliged to make to holders of its loan stock. A value of £40,986 included within equity under the heading 'Other reserve' is the residual amount.

The loan stock is unsecured, bears interest at 9% per annum and could have been converted at any time prior to 30 April 2013 at a rate of one ordinary share for every £0.70 nominal amount of loan stock. Any unconverted loan stock is due for repayment on 31 July 2013.

Subscribers to the loan stock also received warrants to subscribe for one ordinary share at a price of £0.70 for each £4.00 of loan stock subscribed for. The warrants are valid until 31 July 2013, except that this period may be extended by the Company at its sole option. The total number of warrants issued by the Company was 94,750.

            NOTE 5 Earnings per share

The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, excluding shares held by the Synoptics Employee Benefit Trust.  All earnings per share calculations relate to continuing operations of the Group.

			Profits attributable to shareholders	Weighted   average   number of   shares	Basic earnings per share amount in pence
			£000
Year ended 30 April 2013			192	18,323,464	1.05
Year ended 30 April 2012			20	17,989,257	0.11

The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging Plc divided by the weighted average number of shares in issue during the year, as adjusted for dilutive share options and dilutive deferred consideration. 

					Diluted earnings per share amount in pence
Year ended 30 April 2013					1.01
Year ended 30 April 2012					0.10

The reconciliation of average number of ordinary shares used for basic and diluted earnings is as below:

	2013	2012
Weighted average number of ordinary shares used for basic earnings per share	18,323,464	17,989,257
Weighted average number of ordinary shares used as deferred consideration	-	666,500
Weighted average number of ordinary shares under option	659,063	370,927
Weighted average number of ordinary shares used for diluted earnings per share	18,982,527	19,026,684

Since the balance sheet date the Group announced that it had raised approximately £850,000 (before expenses) through a placing and a subscription of new ordinary shares. This will increase the shares in issue to 25,034,910. The impact would be a dilution of the earnings per share amount to 0.76p.  

                      NOTE 6 FINANCIAL INFORMATION

The financial information set out above, which has been extracted from the annual report and accounts for the year ended 30 April 2013 does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.

The annual report and accounts will shortly be sent to shareholders and will be available on the Company's website, www.scientificdigitalimaging.com

The Company's Annual General Meeting is due to take place at Francis House, 112 Hills Road, Cambridge CB2 1PH on 16 September 2013 at 11:00 am.

 

END

 

 

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