Interim Results
Screen Technology Group plc
27 September 2006
For Immediate Release 27 September 2006
Screen Technology Group plc
("Screen Technology" or "the Company")
2006 interim results
Screen Technology Group plc ("Screen Technology" or "the Company" or "the
Group") the designer and manufacturer of revolutionary high-resolution
large-screen displays for high ambient light environments announces its
unaudited results for the six months ended 30 June 2006.
Highlights for the year to date
• Production process enhancements complete
• First large-scale high-speed machines to be operational in October
• Modular product in advanced prototype form
• Technical and financial partnership with Wilden for moulding and tile manufacture
• Increase in staff focusing on technical, production
engineering and sales and customer support
Key financial information
• Consolidated operating loss before tax £1.9 million
• Cash at bank at 30 June 2006 £2.6 million
• Partnership with Wilden improves cash position
Peter Smyth, Non-executive Chairman, commented:
"This first half of the year has been a period of intense effort to enhance our
production processes and prepare for large-scale high-speed production. Although
it has taken us longer to get here than we initially envisaged, we have achieved
the key goals we set ourselves midway through the first half of the year. We are
now producing consistently high quality ITrans tiles and are close to the
capacity of our existing production machines.
We are very excited by the partnership with Wilden AG, which will give us a
strengthened platform for growth. The investment Wilden is putting into the
partnership will give us greater ability to expand to meet expected market
demand. The potential sales pipeline remains strong and we are looking forward
to the delivery of our first high speed tile manufacturing machine this Autumn."
For more information please contact
Screen Technology Group plc
www.screentechnology.com
Thomas Jarman, CEO 01223 559600
Simon Barton, Finance Director
Buchanan Communications 020 7466 5000
Isabel Podda
Charles Stanley Securities 020 7149 6000
Dugald Carlean, Henry Fitzgerald-O'Connor
Chairman's statement
Overview
During the first half of 2006 we have made further
significant steps forward in the development of our
business. As announced in June, the transition from the
first production units to a more commercial scale has taken
longer than the Board had initially expected, but we have
achieved our key objectives prior to full high-speed
production. The issues encountered earlier in the year with
the production of ITrans tiles have been resolved.
Production of quality ITrans tiles is now consistent and
running close to the capacity of existing production
machinery and we have the technical and sales staff to take
the business forward.
Sales
The business remained capacity constrained during the first
half of the year with the limited production capabilities of
the first two tile manufacturing machines. The first
high-speed production machine is due to start production in
the last quarter of this year and is expected to reach full
production capacity in the beginning of next year.
Screen Technology has used this time of limited production
capacity to concentrate on enhancing production processes in
the three main areas of the manufacturing process, the
injection moulding of light guides, the manufacture of
ITrans tiles and the assembly of completed displays.
The business has also taken the opportunity to strengthen
the existing links with value-added resellers and to develop
new sales channels by concentrating the current
manufacturing resources available on the production of more
demonstration units.
Screen Technology opened a London sales office earlier this
year. Based in the heart of Soho and close to many of Screen
Technology's key customers, the office has already hosted
many demonstrations. We have also exhibited at key
international audio-visual industry exhibitions. These
demonstrations have been very successful, further
underlining the demand for ITrans displays being expressed
by the marketplace. The Board believes that ITrans continues
to be the only solution capable of producing large seamless
displays viewable over short or long distances in
high-brightness environments. Considerable interest has been
shown for applications in exhibition halls, retail window
displays, transport concourses, shopping malls and other
specialist media.
As was announced in March of this year, orders have been
taken for ITrans displays starting in the second half of the
year however the Company has delayed acceptance of any major
orders with long lead times until large scale production is
underway and the modular product is available.
The Company is working on a number of high profile sales
contracts for this year and in preparation for modular
product availability early next year. The Directors expect
that significant sales contracts will be announced in the
second half of 2006.
Product development
During the first half of the year, the Company has been
developing a modular product in response to market demand
for a flexible method to transport very large displays to
customer locations and to assemble them on site. We have
been working closely with Hantarex/Sambers Italy S.p.a, a
major international company with extensive interests in the
commercial large-screen display market to develop a modular
product.
Hantarex has invested considerable resources in the project
which will result in Hantarex becoming an OEM customer for
ITrans tiles to manufacture ITrans displays of its own as
well as being a supplier of modular components for Screen
Technology's modular displays. The project is progressing
very well and is in an advanced prototype form having
successfully been through early prototype stages. Hantarex
will shortly order tooling to produce the first production
models by the end of the year. The Board expects modular
products to be a significant proportion of sales revenue
during 2007.
Increasing production resources
In February of 2006, Screen Technology moved into its new
premises in Cambridge. These have provided greatly improved
offices, facilities, laboratory space and testing and
demonstration areas.
We have also strengthened our technical and production
engineering teams as well as sales and customer support in
order to prepare ourselves for manufacturing ITrans displays
in commercial volumes.
New technical and financial partnership
Screen Technology today has announced that it has signed
letters of intent with Wilden AG ("Wilden") to enter into a
partnership for the production of injection moulded light
guides and the operation of the Company's first high speed
tile assembly machine.
Wilden is a major producer of specialist high-quality
high-technology injection mouldings for the automotive,
electronic and telecommunications and medical industries.
Its customers include Daimler Chrysler, Astra Zeneca,
Siemens, Sennheiser and Roche. Wilden has a broad
international presence with facilities located in North
America, Western and Eastern Europe, and the Middle and Far
East.
The agreement provides that Wilden will manufacture two new
injection moulding tools to produce light guides for use in
the manufacture of ITrans tiles and will provide financing
to Screen Technology for the tools and also for the first
high-speed machine. In addition, Wilden will be investing
itself in dedicated injection moulding machinery to produce
the light guides on a 24/7 basis.
This partnership is a very exciting opportunity for Screen
Technology. In Wilden, we have found a partner with the
technical competence and the resources and global reach to
work with us through a period of rapid expansion.
Furthermore the investment that Wilden is putting into this
project in time and resources as well as significant cash
commitment underlines the faith we both have in the success
of ITrans.
Outlook
The remainder of 2006 promises to be an exciting time for
Screen Technology. In the final quarter, the first of the
Company's high-speed production machines will be
operational. This will dramatically increase the rate of
production of ITrans tiles, which has always been the
limiting factor in the production of displays. The
production engineering staff at Screen Technology will be
working hard to reach full production capacity by the end of
the year. At the same time the modular product is expected
to go into full production ready for shipping in commercial
quantities during 2007.
However, only a small proportion of the increase in capacity
brought about by the new machine is likely to be reflected
in sales for the year. The machine will begin to produce
tiles during November of 2006 and the Board does not expect
it to reach full production until the New Year. Sales for
the year will be dependent upon how many ITrans tiles can be
installed in displays and shipped in the last few weeks of
the year. The full impact of the increase in production
capacity will therefore not be felt until during 2007.
Screen Technology began to ship products to third parties in
August 2006 and expects production during the second half of
the year to be fully sold with a number of major projects
beginning in the final quarter of 2006.
The prospective order pipeline continues to be strong and as
soon as we have the capacity to deliver against large volume
orders we will look forward to confirming some exciting and
substantial orders during the second half of the year. The
outlook for 2007 is increasingly positive when we expect to
be able to start delivering products in larger quantities to
meet the significant interest being expressed by customers.
Financial review
Sales for the first half of the year were £5,680,
representing the shipment of an ex-demonstration ITrans
display to a value added reseller. As discussed above, the
remainder of the limited production during the first half of
the year has been used for the manufacture of new, and the
refurbishment of existing, demonstrator stock and for
continuing development of the Company's modular product.
The operating loss reflects continued expenditure on the
expansion of our production resources, both internal staff
and at our sub-contracted manufacturing operations as the
Company has prepared for larger scale production and has
been improving manufacturing processes. The increase in
research and development costs is largely due to increased
expenditure on product development, particularly on the
ITrans modular system. This is also reflected in increased
staff numbers in engineering development and the Company has
also brought in specialist external expertise where
appropriate.
The increase in fixed assets since the end of 2005
principally represents expenditure on new ITrans tile
manufacturing machinery. By the end of June 2006, payments
of approximately £342,000 had been made on the first machine
and £544,000 on the second and third machines, which will be
delivered next year. Since the half year, a further £342,000
has been paid on the first machine and a further £471,000
remains to be paid.
Cash position
As announced in June 2006, the machine due to be delivered
in the summer of 2006 has been delayed into 2007. This has
had an impact on expected sales for the first half and will
continue to have an impact in the second half also affecting
the cash position of the business. The delay into 2007 will
however reduce the cash cost that the business was expecting
to incur as no further expenditure will be made on that
machine until delivery in 2007. The Company has also reduced
cash costs on the third high speed machine originally due to
be delivered at the end of 2006 by delaying that project
until 2007.
Screen Technology has also significantly strengthened its
cash position with the partnership with Wilden outlined
above. Wilden is taking over the payment of the final
instalment for the first high speed machine and is providing
injection moulding tools with extended terms over three
years. This will boost Screen Technology's cash position by
over £500,000 by the beginning of next year and by over
£1.2 million in total. This partnership will greatly
increase Screen Technology's ability to expand production
capacity by reducing the cash resources required to invest
in new machinery and tooling. The Board expects that further
agreements of this nature will be possible with the second
and third high speed machines due to be delivered next year.
Consolidated profit and loss statement
for the six months ended 30 June 2006
6 months Year ended
ended 30 June 31December
2006 2005
(unaudited)
£ £
Turnover 5,680 115,500
Cost of sales (8,954) (65,633)
------------- -------------
Gross profit (3,274) 49,867
Administrative expenses (1,962,563) (2,063,511)
Other operating income - -
------------- -------------
Operating loss (1,965,837) (2,013,644)
Interest receivable and 50,194 115,840
similar income
Interest payable and similar (8,178) (43,806)
charges
------------- -------------
Loss on ordinary activities (1,923,821) (1,941,610)
before taxation
Tax on loss ordinary - -
activities
------------- -------------
Loss for the period (1,923,821) (1,941,610)
------------- -------------
Loss per ordinary share
Basic (5.92)p (5.97)p
Diluted (5.92)p (5.97)p
All activities derive from continuing operations.
There are no recognised gains or loses other than as stated in
the profit and loss account.
Consolidated balance sheet
at 30 June 2006
30 June 31 December
2005
2006
(unaudited)
£ £
Fixed assets
Tangible assets 1,236,530 364,585
Current assets
Stocks 184,925 89,963
Debtors 466,365 475,811
Cash at bank and in hand 2,577,173 5,646,504
------------- -------------
3,228,463 6,212,278
Creditors: amounts falling due
within one year
Other creditors (291,762) (478,502)
------------- -------------
Net current assets 2,936,701 5,733,776
------------- -------------
Total assets less current 4,173,231 6,098,361
liabilities
Creditors: amounts falling due
after more than (5,964) (7,273)
one year
------------- -------------
Net assets 4,167,267 6,091,088
------------- -------------
Capital and reserves
Called up share capital 1,624,448 1,624,448
Share premium account 6,682,989 6,682,989
------------- -------------
8,307,437 8,307,437
Other reserves 7,602,857 7,602,857
Profit and loss account (11,743,027) (9,819,206)
------------- -------------
Shareholders' funds 4,167,267 6,091,088
------------- -------------
Consolidated cash flow statement
for the six months ended 30 June 2006
6 months ended Year ended
30 June 31 December
2006 2005
(unaudited)
£ £
Reconciliation of operating profit to
net cash flow from operating activities
Operating loss (1,965,837) (2,013,644)
Depreciation charges 56,544 18,347
Impairment losses - 32,600
(Increase)/decrease in stocks (94,962) (89,963)
(Increase)/decrease in debtors 9,446 (419,904)
Increase/(decrease) in creditors (186,897) 414,509
------------- -------------
Net cash outflow from operating
activities (2,181,706) (2,058,055)
------------- -------------
Cash flow statement
Net cash outflow from operating activities (2,181,706) (2,058,055)
Returns on investments and servicing of finance 42,016 72,034
Capital expenditure and financial investment (928,489) (350,583)
------------- -------------
Cash outflow before management of liquid
resources and financing (3,068,179) (2,336,604)
Management of liquid resources
(Increase)/decrease in short term deposits with banks 5,400,000 (5,400,000)
Financing (1,152) 7,968,702
------------- -------------
Increase in cash for the period 2,330,669 232,098
------------- -------------
Notes to the interim results
Analysis of cash flows
6 months ended Year ended
30 June 31 December
2006 2005
(unaudited)
£ £
Financing
Issue of ordinary share
capital (net of expenses) - 7,313,679
Issue of ordinary share
capital (Screen - 80,528
Technology Limited)
Issue of convertible loan - 500,000
stock
Called up share capital paid - 75,263
Capital element of finance (1,152) (768)
lease rentals
------------- -------------
(1,152) 7,968,702
------------- -------------
Segmental information
6 months ended Year ended
30 June 31 December
2006 2005
(unaudited)
£ £
Turnover by destination
UK 5,680 38,500
Rest of world - 77,000
------------- -------------
Total 5,680 115,500
------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 2 hours ago Urban Logistics Reit
- 3 hours ago Ocado Group
- 3 hours ago AJ Bell
- 3 hours ago Foresight Enterprise VCT
- 3 hours ago Mitie Group