Final Results

RNS Number : 9552E

Scientific Digital Imaging Plc

22 July 2016

 

SCIENTIFIC DIGITAL IMAGING PLC

Final Results for the year ended 30 April 2016

 

Cambridge, UK 22 July 2016: Scientific Digital Imaging (AIM: SDI, "SDI", the "Company" or the "Group"), the AIM quoted group focused on scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation, is pleased to announce its final audited results for the year ended 30 April 2016.  

Financial Highlights

·      Revenue £8.5m (2015: £7.0m)

·      Increased gross margin 61.1% (2015: 59.2%)

·      Operating profit £536,000 (2015: £59,000)

·      Adjusted operating profit £792,000 before costs of reorganisation, acquisition costs, amortisation of acquired intangibles and share based payments (2015: £420,000)

·      Basic earnings per share 1.17p (2015: 0.15p)

Operational Highlights

·      Successful £2.5m equity fundraising enabled us to make the earnings enhancing acquisition of Sentek Limited

·      Atik sales and profitability exceeded budget

Post balance sheet

·      The Department of Health's new guidance confirms that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods.  ProReveal, our highly sensitive fluorescence-based patented protein detection test, is the only marketed product of which we are aware that can adhere to these stringent guidelines. It allows the testing of the whole instrument for protein, rather than just a small, swabbed area, and will be invaluable to the Sterile Services Departments in hospitals throughout the UK and overseas.

Commenting on the results, Ken Ford, Chairman of SDI said: "During the year SDI has seen continued growth in its Synbiosis and Synoptics Health brands alongside high levels of growth in Artemis CCD. Together with the acquisition of Sentek, these have been the major contributors to the Group's improved profitability. As well as investing in its current operations, SDI will continue to assess new businesses with complementary products and plans to add further new companies to the Group. "

FOR FURTHER INFORMATION

Scientific Digital Imaging Plc Ken Ford, Chairman Mike Creedon, Chief Executive Officer www.scientificdigitalimaging.com	01223 727144
finnCap Ltd            Ed Frisby/ Simon Hicks - Corporate Finance Mia Gardner - Corporate Broking	020 7220 0500
JW Communications Julia Wilson - Investor & Public Relations	07818 430 877

About Scientific Digital Imaging plc:

Scientific Digital Imaging plc ("SDI") designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation. SDI plans to continue to grow through its own technology advancements as well as strategic, complementary acquisitions.

www.scientificdigitalimaging.com

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

 

Chairman's Statement

Overview

The year to 30 April 2016 was a turning point for Scientific Digital Imaging Plc ("SDI"), A successful fundraising enabled us to acquire the earnings enhancing company, Sentek Limited ("Sentek") and we are continuing to grow a diversified company with increasing revenue streams.

Having raised £2.5 million in the year, we will continue to pursue our buy and build strategy and have identified a number of potential acquisitions that have complementary technologies.

The Board is confident that SDI is now in an excellent position for continued good growth through increased revenue and the potential for further acquisitions in 2016/17.

Financial results

Revenue for the year ended 30 April 2016 was £8.5m (2015: £7.0m). This has resulted in an operating profit for the year of £738k before acquisition, fund raising costs and share based payments. This result is inclusive of currency losses. Basic earnings per share were 1.17p (2015: 0.15p) and diluted earnings per share were 1.15p (2015: 0.15p).

Strategy

During the year SDI has seen continued growth in its Synbiosis and Synoptics Health brands alongside high levels of growth in Artemis CCD. Together with the acquisition of Sentek, these have been the major contributors to the Group's improved profitability. SDI continues to assess new businesses with complementary products and plans to add further new companies to the Group by the end of 2016/17. SDI will also continue to invest in its current operations.

Current trading and outlook

In the financial year to the end of April 2016, SDI successfully added Sentek to the SDI group and has continued to make process improvements to maintain the Company's skill base and output capability.

Artemis CCD significantly exceeded its budget. It introduced a new astronomy camera, Infinity, which has opened up a new and lucrative market segment for the division. Synbiosis has invested in and has achieved an in-vitro diagnostics (IVD) medical devices CE mark for its new antimicrobial resistance testing system, ChromaZona. These successful new products launches demonstrate the Group's commitment to investing in product development.

The Board expects SDI to make good progress over the coming financial year as we will continue to pursue our strategy of organic and acquisitive growth. As well as the positive contribution of Sentek, Opus Instruments and Atik, the new Synoptics products released in 2016, together with a focused sales strategy, are expected to drive continued growth.

With growing interest in our products from North America, particularly in the rapid microbiology and antibiotic resistance testing sectors, the Board views the next financial year with confidence.

Dividend policy

The Board propose that dividends will be paid to shareholders when SDI has generated distributable profits and has surplus cash flow.

Our team

On behalf of the Board, I would like to thank all our staff for their creativity in ensuring that our new products meet our customers' current and future needs. The Board looks forward to the coming financial year with confidence.

Ken Ford

Chairman

21 July 2016

Chief Executive's Operating Report

SDI designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation, through its Synoptics brands (Syngene, Synbiosis, Synoptics Health and Syncroscopy), its Artemis CCD brands (Atik and Artemis CCD) and Opus Instruments brand (Osiris). Through its recent acquisition of Sentek, SDI has broadened its offering into the development and manufacture of electrochemical sensors.

Synoptics 

Synoptics designs and manufactures scientific instruments based on digital imaging, for the life science research, microbiology and healthcare markets. Synoptics is the largest of the SDI companies and its division offer its products under brands including G:BOX, PXi, ProtoCOL 3, Protos 3 and ProReveal, each targeting a different sector of these markets.

Syngene 

Syngene develops, manufactures and markets systems and software for visualising, analysing and recording gels and blots used by life scientists. Almost all research in biological sciences requires an understanding of molecular processes involving DNA, RNA and proteins, so gel electrophoresis and Western blotting are widely used by laboratories in this sector.

The market for image analysers is mature and Syngene continues to experience aggressive pricing competition in the DNA imaging sector. This has become more apparent this year in Europe and the Asia Pacific region. Syngene is addressing this issue with the introduction of NuGenius, a new, competitively priced imager. The new imager, the only one in the world using a Raspberry Pi processor, received positive feedback at the trade show Analytica. It is also beginning to attract interest in China, Syngene's largest Asia Pacific territory.

Syngene's G:BOX Chemi XRQ mid-range system continues to sell well in all territories. The upgraded GeneGnome XRQ, a budget system, also sold well during the year; a new competitor system in North America could not match its technical capabilities. We intend to improve revenue and margins by cutting costs and in particular by introducing low end systems such as NuGenius.

Competitive pricing is not enough: Syngene must also differentiate itself by providing excellent service. To this end, Syngene continuously assesses its worldwide network of distributors. We have recruited eight new, life-science focused distributors in the Asia Pacific region and we now have four non-exclusive distributors in Germany, our largest European market, including two recruited in the period. Syngene has also developed an inexpensive OEM imager for one of its largest European distributors, which will contribute to European sales.

With new Asia Pacific and European distributors in place alongside competitively-priced own-brand and OEM imaging systems, Syngene expects to maintain its market share in the coming year.

Synbiosis 

Synbiosis provides image analysis systems for microbiological testing in food, water and pharmaceutical applications. Its products reduce labour costs, provide more reproducible results, and record data for audit purposes, an increasingly important area as testing becomes more regulated.

During the year, Synbiosis had a more focused commercial strategy, with increased commitment to training and support for its largest target markets, and the appointment of new distributors in Europe. These efforts were rewarded by very significant sales growth, driven by its high-end ProtoCOL 3 automated colony counter and zone measurement system.

Protos 3 is a new, mid-range automated colony counter that can also identify colonies on chromogenic plates automatically. It is selling well into the food microbiology sector across Europe and North America, where objective, fully traceable results are required. To capitalise on the increased interest from the food microbiology sector, the Division has launched a new, low-cost colony counter, aCOLyte HD. To the same end, a complementary range of systems to help scientists prepare food samples for microbial testing is about to be launched, ProBlend and ProDilute.

In September 2015, Synbiosis launched the new eAST software to measure zones around antibiotic sensitivity discs and automatically predict antibiotic resistance from the results. The software, which can be used as a standalone product or with the ProtoCOL 3, was upgraded in 2016 to measure zones around Minimum Inhibitory Concentration (MIC) strips from major suppliers. The enhancement makes eAST attractive to a wider market. During 2016, this software will be further upgraded to include the Clinical and Laboratory Standards Institute (CLSI) database of MIC breakpoint values, making it easier for analysts to adhere to quality standards in North America and the Asia Pacific region.

After the period, Synbiosis introduced ChromaZona for antibiotic resistance testing in clinical laboratories, using the new eAST software. This is a timely product as there is a drive globally to fund the discovery of new antibiotics, as well as to rapidly test bacteria for antibiotic resistance. The system was registered with the MHRA (Medicines and Healthcare Products Regulatory Agency) and in 2016 it successfully achieved an in-vitro diagnostics (IVD) medical devices CE mark. This registration and the upgrade of the eAST software to include the CLSI database enables Synbiosis to promote ChromaZona for clinical diagnostic use in hospital laboratories, especially in North America. This is a very large market segment that Synbiosis has not previously been able to address.

The newly widened range of products for food microbiologists will help to drive sales in this market. Additionally, new software and automation for antimicrobial resistance testing can command higher prices. We expect Synbiosis to deliver further growth in the coming year.

Synoptics Health

The Synoptics Health Division manufactures and supplies ProReveal, an automated imaging system and spray test to detect microgram amounts of protein left on surgical instruments after the hospital decontamination processes. ProReveal is the only commercial test on the market that complies with new recommendations for preventing iatrogenic variant Creutzfeldt-Jakob disease (vCJD) infection. ProReveal has achieved the BS EN ISO 15883-1 standard, a test for measuring washer-disinfector efficacy.

ProReveal is unlike any other test for detecting proteins on surgical instruments because it utilises fluorescence, which is far more sensitive than colorimetric detection. It offers a highly sensitive alternative to past techniques. Moreover, it tests the whole instrument for protein, not just a small, swabbed area. Taking less than five minutes to complete, ProReveal offers a visual display of the presence (or absence) of any protein and these results can be documented and archived as proof of process cleanliness.

ProReveal is gaining acceptance as the benchmark test of the performance of washer-disinfectors in the USA, potentially the largest market for this product. Systems have been sold to prestigious hospitals such as the Piedmont Hospital in Atlanta and others that are part of large healthcare groups. Synoptics Health believes that sales of ProReveal will continue to increase steadily in North America as more hospitals in each healthcare group become aware of the technology.

To drive sales of ProReveal internationally, Synoptics Health is building a commercial team and new distributors have been appointed in Europe and the Asia Pacific region.

New guidelines from the UK Department of Health (DOH), issued on 8 July 2016, that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods*. Detecting protein levels on surgical instruments is an important means of minimising transmission risk of Creutzfeldt-Jakob Disease (CJD) and variant Creutzfeldt-Jakob Disease (vCJD) in healthcare settings, and the DOH continue to recommend that the upper limit of acceptable protein contamination after processing to be 5µg BSA equivalent per instrument side, with a lower level necessary for neurosurgical instruments.

It is a goal that all healthcare providers engaged in the management and decontamination of surgical instruments used in acute care will be expected to have implemented this guidance by 1 July 2018. However, providers whose instruments are likely to come into contact with higher risk tissues, for example neurological tissue, are expected to give this guidance higher priority and move to in situ protein detection methodologies by 1 July 2017.

The Department of Health's new guidance confirms that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods.  ProReveal, our highly sensitive fluorescence-based patented protein detection test, is the only marketed product of which we are aware that can adhere to these stringent guidelines. It allows the testing of the whole instrument for protein, rather than just a small, swabbed area, and will be invaluable to the Sterile Services Departments in hospitals throughout the UK and overseas."

* https://www.gov.uk/government/publications/management-and-decontamination-of-surgical-instruments-used-in-acute-care

Synoptics Health believes that its commercial strategy will generate steady growth of product sales in the coming year.

Artemis CCD

Artemis CCD designs and manufactures high-sensitivity cameras. These are sold for life science and industrial applications under its Artemis Cameras brand and for deep-sky astronomy imaging as Atik Cameras.

Artemis CCD Cameras

Artemis CCD had its best year for sales and profitability of CCD cameras in the life science industry and continues to sell cameras to its established OEM customers. In addition it is expanding into new product sectors and territories. Over the year Artemis has been able to offer a highly bespoke approach to potential OEM customers resulting in optimised versions of our core products for specific applications. This has helped sales in this area and is expected to provide further growth as additional projects move towards the production phase during 2016.

Sales to amateur astronomers have also grown, led by the introduction of the Atik Infinity camera. This new product introduced during the year is aimed at bridging the gap between the complex astrophotography hobby and visual star gazing. The camera and its associated software automates in real time much of the complex image processing that has been a required part of imaging deep sky objects such as galaxies and distant nebulae.

The division is investing in new staff in software engineering and digital marketing to ensure that creative product development continues and is driven by customer needs.

During the year, Artemis CCD entered into an agreement with one of the world's leading life science companies, to supply cameras for a new life science product. It introduced a new cooled CCD camera in the period and this, together with the success of its existing products, is helping Artemis CCD to make an increasing contribution to the SDI Group via intra-group revenues to Synoptics and growth in OEM sales.

Opus Instruments

Opus Instruments designs and manufactures cameras for art conservation and restoration.

The Opus OSIRIS camera was developed as a collaboration with the National Gallery and has become a world leader in the field of Infrared Reflectography. There were further sales of the camera throughout the year to prestigious institutions including the Metropolitan Museum of Art in New York.

The Opus range currently comprises of a single camera and its associated accessories. During 2016, we will invest in the development to broaden the range of products we can offer customers within this market.

Sentek

Sentek manufactures and sells electrodes primarily for the measurement of pH and conductivity of aqueous solutions. Applications range from the laboratory, to manufacture of foods, beverages and personal care products, through to leisure. Sentek's electrodes have a working life of only 6-12 months, and therefore need to be replaced regularly.

Sentek represents a transformational deal for SDI. It is earnings enhancing, creates a scientific instrument company with a strongly growing top and bottom line and diversifies the company into a new area of instrumentation. We believe the integration risk is low: Sentek management will remain with the business and SDI and Sentek share many distributors in common.

Mike Creedon

Chief Executive Officer

21 July 2016

 

Strategic review

Principal activity and business review

Scientific Digital Imaging Plc (SDI) designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation.

The Board intends to pursue a strategy of acquiring related companies, as well as seeking to generate organic growth. The Board believes there are many businesses operating within the market, a number of which have not achieved critical mass, and that this presents an ideal opportunity for consolidation. This strategy will be primarily focused within Europe but, where opportunities exist, acquisitions in the United States and elsewhere will also be considered. The acquisition of Artemis and Perseu represented the first step in the implementation of this strategy in 2008 followed by the acquisition of Opus Instruments in 2014 and recently the acquisition of Sentek in October 2015

The Chairman's Report and Chief Executive's Operating Report give an overview of the performance of the Group during the year and likely future developments.

Key Performance Indicators

The key financial performance indicators (KPI's) used to monitor the business include the order pipeline, revenue, gross profit, operating profit, cash and earnings per share. The KPI's are reviewed on a monthly basis against budget by the Directors and management in respect of changes within periods and changes between reporting periods.

The non-financial key performance indicators are monitoring cost and timelines for research and development projects compared to project management targets.

Group Summary

Group revenue for the year is stable at £8.5m (2015: £7.0m).

Gross profit increased to £5.2m (2015: £4.1m) with increased gross margin at 61.1% (2015: 59.2%).

Operating profit for the year was £536k (2015: £59k) and £738k (2015: £393k) before reorganisation costs, acquisition costs and share based payments

Investment in R&D

Total research and development in the current year was £596k, representing 7% of Group sales (2015: £618k representing 8.9% of Group sales). Under IFRS we are required to capitalise certain development expenditure and in the year ended 30 April 2016 £478k (2015: £280k) 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 2016 was £122k (2015: £312k). The carrying value of the capitalised development at 30 April 2016 was £882k (2015: £770k) to be amortised over three years.  

Reorganisation Costs

The Board constantly carries out a thorough review of the operations and structures of the Group which gave rise to £17k (2015: £200k) of costs from the review and reorganisation incurred in 2015.

Acquisition and Fundraising Costs

£179k of costs relating to the acquisition of Sentek. In 2015 the group incurred £126k of costs relating to work on potential acquisitions and fundraising in the year.

Earnings per Share

Basic profit per share for Group was 1.17p (2015: 0.15p) and diluted profit per share for the Group was 1.15p (2015: 0.15p).   

Finance Costs and Income

Net financing expense was £40k (2015: £36k). 

Taxation

The tax credit of £75k (2015: £21k) is largely due to prior year corporation tax adjustments and tax credits.

Cash Flow

During the year the Group improved cash flow, reporting a cash balance of £1.7m (2015: £876k) at the year end.

In October 2015 the Group raised £2.5m through an issue of 31.25m new shares at 8p. The funds raised were used to acquire Sentek Limited.

Funding and Deposits

The Group utilises short-term facilities to finance its operations. The Group has one principal banker with an invoice discounting facility and bank loan. Surplus funds are placed on short-term deposit.

The Group utilises long-term borrowings from bank loans, other loans and finance leases.

Principal risks and uncertainties

The following represent, in the opinion of the Board, the principal risks of the business. It is not a complete list of all the risks and the priority, impact and likelihood of the risks may change over time.

Dependence on key distributors

Failure to effectively manage our distributors of products could damage customer confidence and adversely affect our revenues and profits.

In order to mitigate this risk the Group has a team dedicated to maintaining close relationships with our distributors.

Competition

Competition from direct competitors or third party technologies could impact upon our market share and pricing.

In order to mitigate this risk the Group continues to invest in researching its markets and continues to offer new products in response to changing customer preferences. In addition the Group invests in research and development to maintain its competitive advantage.

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.

Going concern

The company's business activities, together with the factors likely to affect its future development, performance and position are set out within this Strategic report. The financial position of the company, its cash flows, liquidity position and borrowing facilities are described above. In addition, notes to the financial statements include the company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Board has prepared forecasts for the period to 31 August 2017. These reflect the sales projections for new products coming on stream as a result of the Group's research and development activity and continued cost management. The Group meets its cash flow and borrowing requirements through an invoice discounting facility which is a 12 month rolling contract and a bank loan. The Board's forecasts indicate that the Group will continue to trade within its existing facilities with scope to further manage its cost base if necessary. The Board is confident that continued focus on research and development, new product development and sales & marketing will deliver growth. The Board considers that the Group will have adequate cash resources within its existing facilities to continue to trade for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Acquisition strategy

The Board plans to make acquisitions of businesses if the targets fit appropriately into the Group by strengthening our product range and existing technologies, offering new and attractive routes to market, high performance and motivated management and a proven track record.

The successful implementation of our acquisition strategy depends on our ability to identify targets, in completing the transactions, to achieve an acceptable rate of return, and to successfully integrate the business in a timely manner post acquisition.

An example of the acquisition strategy is the acquisition of Sentek Limited this year. The deal is earnings enhancing, creates a scientific instrument company with a strong top and bottom line and diversifies the company into a new area of instrumentation.

Summary

The Strategic report, which incorporates the Chairman's Statement, Chief Executive's Operating Report and Strategic review was approved by the Board of Directors, and signed on its behalf by:

Mike Creedon

Chief Executive Officer

21 July 2016

 

Consolidated income statement

For the year ended 30 April 2016

					2016		2015
					£000		£000
Revenue					8,473		6,955
Cost of sales					(3,298)		(2,837)
Gross profit					5,175		4,118
Administrative expenses					(4,639)		(4,059)
Operating profit					536		59
Analysed as:
Gross profit				5,175		4,118
Other administrative expenses				(4,437)		(3,725)
				738		393
Reorganisation costs				(17)		(200)
Share based payments				(7)		(8)
Acquisition and fundraising costs				(178)		(126)
Operating profit					536		59
Finance payable and similar charges				(40)		(36)
Net financing expenses					(40)		(36)
Profit before tax					496		23
Income tax					75		21
Profit for the year					571		44

Earnings per share
Basic  earnings per share					1.17p		0.15p
Diluted earnings per share					1.15p		0.15p

All activities of the Group are classed as continuing.

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Consolidated statement of comprehensive income

For the year ended 30 April 2016

					2016	2015
					£000	£000
Profit for the period					571	44
Other comprehensive income
Exchange differences on translating foreign operations					82	40
Total comprehensive income for the period					653	84

 

Consolidated balance sheet

for the year ended 30 April 2016

			2016	2015
Assets			£000	£000
Intangible assets			4,309	2,012
Property, plant and equipment			382	417
Deferred tax asset			67	105
			4,758	2,534
Current assets
Inventories			1,378	982
Trade and other receivables			1,496	1,584
Current tax assets			132	5
Cash and cash equivalents			1,708	876
			4,714	3,447
Total assets			9,472	5,981
Liabilities
Non-current liabilities
Borrowings			314	156
Trade and other payables			-	101
Deferred tax liability			377	174
			691	431
Current liabilities
Trade and other payables			1,447	1,452
Provisions for warranties			18	18
Borrowings			401	269
Current tax payable			151	-
			2,017	1,739
Total liabilities			2,708	2,170
Net assets			6,764	3,811
Equity
Share capital			642	329
Merger reserve			3,030	3,030
Share premium account			3,457	1,478
Own shares held by Employee Benefit Trust			(85)	(85)
Other reserves			81	73
Foreign exchange reserve			13	(69)
Retained earnings			(374)	(945)
Total equity			6,764	3,811

The financial statements were approved by the Board of Directors on 21 July 2016.

Ken Ford                                                                                                               Mike Creedon
Chairman                                                                                                              Chief Executive Officer

The accompanying accounting policies and notes form an integral part of these financial statements.

Company registration number: 6385396

 

Consolidated statement of cashflows

For the year ended 30 April 2016

		2016	2015
		£000	£000
Operating activities
Profit for the year		571	44
Depreciation		216	199
Amortisation		447	372
Finance costs and income		40	36
Increase in provision			1
Taxation in the income statement		(75)	(21)
Employee share based payments		8	8
Operating cash flows before movement in working capital		1,207	639
Increase in inventories		(166)	135
Changes in trade and other receivables		421	(298)
Changes in trade and other payables		(164)	(37)
Cash generated from operations		1,298	439
Interest paid		(40)	(26)
Income taxes received/(paid)		5	(4)
Cash generated from operating activities		1,263	409
Investing activities
Capital expenditure on fixed assets		(209)	(255)
Expenditure on development and other intangibles		(511)	(299)
Acquisition of subsidiaries, net of cash		(2,360)	-
Sale of property, plant and equipment		65	65
Net cash used in investing activities		(3,015)	(489)
Financing activities
Finance leases repayments		(21)	(33)
Loan stock repayment			-
Proceeds from bank borrowing		500	-
Repayment of borrowings		(189)	(30)
Issues of shares		2,292	466
Net cash from financing		2,582	403
Net changes in cash and cash equivalents		830	323
Cash and cash equivalents, beginning of year		876	539
Foreign currency movements on cash balances		2	14
Cash and cash equivalents, end of year		1,708	876

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Consolidated statement of changes in equity

For the year ended 30 April 2016

			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 2015		329		3,030		(69)		1,478		(85)			73			(945)			3,811
	Shares issued		313						1,979											2,292
	Share based payments													8						8
	Transactions with owners		313		-		-		1,979		-			8			-			2,300
	Profit for the year																571			571
	Foreign exchange on consolidation of subsidiaries						82													82
	Total comprehensive income for the period						82										571			653
	Balance at 30 April 2016		642		3,030		13		3,457		(85)			81			(374)			6,764

	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 2014	278	3,030	(109)	1,063	(85)	65	(989)	3,253
Shares issued	51			415				466
Share based payments						8		8
Transactions with owners	51	-	-	415	-	8	-	474
Profit for the year							44	44
Foreign exchange on consolidation of subsidiaries			40					40
Total comprehensive income for the period			40				44	84
Balance at 30 April 2015	329	3,030	(69)	1,478	(85)	73	(945)	3,811

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Notes to the consolidated financial statements

For the year ended 30 April 2016

1.   SEGMENT ANALYSIS

Management consider that there is a single operating segment encompassing Synoptics three marketing brands: Syngene, Synbiosis, Synoptics Health, the Atik brand which is used within Synoptics brands and sold externally to the amateur astronomy market, Osiris and Sentek. 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	2016	2015
	£000	£000
United Kingdom (country of domicile)	1,772	834
Europe	2,037	2,121
America	2,794	2,290
Rest of Asia	1,487	1,413
Rest of World	383	297
	8,473	6,955

Non-current assets by location (excluding deferred tax)	2016	2015
	£000	£000
United Kingdom	4,309	2,225
Portugal	58	60
America	134	144
	4,501	2,429

2.   pROFIT BEFORE TAXATION

Profit for the year has been arrived at after charging/(crediting):

		2016	2015
		£000	£000
Amortisation other intangibles		81	60
Depreciation charge for year:
Property, plant and equipment		199	164
Property, plant and equipment held under finance leases		17	35
Research and development costs:
Expensed as incurred		239	338
Amortisation charge		366	312
Auditor's remuneration Group:
Audit of Group accounts		18	11
Fees paid to the auditor and its associates in respect of other services:
Audit of Company's subsidiaries		45	35
Tax advisory services		8
Tax services		11	6
Other services		-	3
Currency exchange (gains) and losses		(33)	40
Rental of land and buildings		165	128
Rental of other items		13	18

During the year the Board carried out a thorough review of the operations and structures of the Group which gave rise to £17k of costs incurred for the reorganisation (2015: £200k).

Additionally £179k of costs relating to work on acquisitions and fundraising (2015: £126k) were also incurred.

3.   TaxATION

		2016	2015
		£000	£000
Corporation tax:
Prior year corporation tax adjustment		(127)	(19)
		(127)	(19)
Deferred tax expense		51	(2)
Income tax charge		(75)	(21)

Reconciliation of effective tax rate

		2016	2015
		£000	£000
Profit on ordinary activities before tax		496	23
Profit on ordinary activities multiplied by standard rate of Corporation tax in the UK of 20% (2015: 20.92%)		99	5
Effects of:
Expenses not deductible for tax purposes		5	19
Additional deduction for R&D expenditure		(63)	-
Prior year tax adjustments		(127)	(19)
Transferred to/(from) tax losses		11	(26)
		(75)	(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. 

4.   Borrowings

Borrowings are repayable as follows:

		2016	2015
		£000	£000
Within one year
Bank finance		378	248
Finance leases		23	21
		401	269
After one and within five years
Bank finance		264	83
Other loan		50	50
Finance leases		-	23
		314	156
Total borrowings		587	425

Bank finance relates to amounts drawn down under the Group's invoice discounting facility          (£128k (2015: £148k)) and bank loans (£514k (2015: £183k)), secured by a fixed and floating charge over the Group's undertakings. The bank loans were taken out to finance

(a)  the acquisition of Opus Instruments, is repayable in monthly instalments and attracts interest at a rate of 6.1% over NatWest base rate.

(b)  the acquisition of Sentek Limited, is repayable in monthly instalments and attracts interest at a rate of 5.95%over NatWest base rate.

During the year to 30 April 2014 loan stock of £368k was converted into 833,334 ordinary shares of 1 pence at a market price of 15 pence each and cash of £254k and (included outstanding loan interest of £11k), £50k of which was loaned back to the Group by a shareholder. This has been included under "Other loan", and is repayable between June 2014 and June 2018. Interest is charged at a rate of 9%.

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.

			Profit/(loss) attributable to shareholders	Weighted average number of shares	Basic earnings/(loss)  per share amount in pence
			£000
Year ended 30 April 2016			571	48,697,240	1.17
Year ended 30 April 2015			44	28,902,787	0.15

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. 

					Diluted  earnings/(loss) per share amount in pence
Year ended 30 April 2016					1.15
Year ended 30 April 2015					0.15

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

	2016	2015
Weighted average number of ordinary shares used for basic earnings per share	48,697,240	28,902,787
Weighted average number of ordinary shares under option	885,877	-
Weighted average number of ordinary shares used for diluted earnings per share	49,583,116	28,902,787

6.   FINANCIAL INFORMATION

The preliminary results for the year ended 30 April 2016 and the results for the year ended 30 April 2015 are prepared under International Financial Reporting Standards as adopted for use in the EU ("IFRS"). The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 30 April 2016.

The financial information set out above, which was approved by the Board on 21 July 2016, is derived from the full Group accounts for the year ended 30 April 2016 and does not constitute the statutory accounts given with the meaning of section 434 of the Company Act 2006. The group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2016, will be delivered to the Registrar of Companies in due course.

The Company's Annual General Meeting is due to take place at Botanic House, 100 Hills Road, Cambridge CB2 1PH on 23 September 2016 at 11:00 am.

 

END

 

 

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