Interim Results

RNS Number : 6229E

Screen Technology Group plc

30 September 2008

 



Screen Technology Group plc
("Screen Technology" or the "Company")

Announcement of Results for the six months to 30 June 2008

The Company announced on 23 May 2008 details of an important and essential financial restructuring culminating in the Placing and Open Offer which was completed on 17 June 2008, led by Scaent Holdings Cooperatie UA.  Ongoing overhead expenditure in the business has been significantly reduced and the balance sheet position simplified and improved with resolution on a number of major liabilities together with the new investment.  These measures have provided a stable financial platform from which the business can move forward.

The restructuring continues to take time to 'bed down', however good progress has been made on commercial and manufacturing fronts.  The Company now operates with a lean staff and overhead structure and has relocated to lower cost premises in Cambridgeshire. Screen Technology's ITrans® product is a potentially significant play in world markets and reaction both from intended end users and our technology partners continues to be positive.  It remains the case however that the "out of home" advertising market, in particular, is conservative when it comes to new technology and has been slow to adopt a novel offering from a young business, however these barriers to entry are gradually being overcome.

It is essential that good relations with strategic partners are maintained for the Company to be able to deliver an internationally scaleable business, while controlling costs through a small core operation.  I am pleased to report that we have made good progress on this front.  The key historical partnerships are recovering after the challenge of the restructuring and the Company has added two new relationships, both with Taiwan based companies.  The first of these is a manufacturing agreement with Scandinavian Health Limited ("SHL"), a large and high quality supplier of mouldings and assemblies, principally to the pharmaceutical and other technical markets.  SHL have already successfully installed a low speed tile assembly machine and we plan to commission the first high speed tile assembly machine from them in the first quarter of 2009. In addition they have committed to significant investment in moulding machines and mould tools to enable the scale up of tile manufacture.  SHL are capable of supporting a significant increase in production volume of tiles as demand dictates. This relationship complements our existing European manufacturing arrangement with GerresheimerWilden.  The Company has also signed an OEM agreement with Litemax Electronics Inc ("Litemax"), a specialist high brightness display company based in Taiwan.  Under the terms of the agreement, Litemax will develop and market low cost modular displays using ITrans® tiles and prototypes have already been demonstrated at major exhibitions.  These two new relationships will enable Screen Technology to reduce manufacturing costs for the tile and display modules by at least 50%, using current dollar exchange rates.

The Company has made slow but steady progress on sales and commercial relationships. A number of small but prestigious installations have taken place in Europe.  In the Far East the Company has recently received an order for a pilot batch of modules ultimately destined for two Chinese Railway stations, a particularly pleasing result in the face of low cost local LED manufacture.  In addition, a small pilot batch of modules has been successfully supplied to a Value Added reseller in Malaysia. 

The company has plans for a number of marketing and sales initiatives over the coming months. Production capacity is planned to increase significantly over the next six months and this will of course put demands on the sales and marketing function to perform.  It is anticipated that during this early scale up phase it will be difficult to match production with demand as sales will tend to be irregular and difficult to forecast accurately as is normal for a new technology company.

I am optimistic that with continued financial support from our new investors, increasing input from the partnerships we are developing and a growing sales interest the Company can begin to deliver on its promise.  This "turn-around", which has only just begun, has been a difficult time for staff and I would like to thank them all for their exceptional commitment and effort over the recent months.

Tom Jarman

Chief Executive Officer

30 September 2008

  Group Income Statement

for the six months ended 30 June 2008

	Note	Unaudited 6 months ended 30 June 2008	Unaudited 6 months ended 30 June 2007	Audited Year ended 31 December 2007
		£	£	£
Revenue	3	17,432	33,919	34,919
Cost of sales		(9,780)	(10,566)	(10,577)
		-------------	-------------	-------------
Gross profit		7,652	23,353	24,342
Administrative expenses - other		(517,154)	(1,348,473)	(2,817,611)
		-------------	-------------	-------------
Operating loss before exceptional items		(509,502)	(1,325,120)	(2,793,269)
Administrative expenses - exceptional items	4	944,061	(437,916)	(437,916)
		-------------	-------------	-------------
Operating profit/(loss) after exceptional items		434,559	(1,763,036)	(3,231,185)
Finance income		1,445	28,818	34,177
Finance expense		(30,413)	(47,004)	(156,698)
		-------------	-------------	-------------
Profit/(loss) before taxation		405,591	(1,781,222)	(3,353,706)
Income taxes		-	324,207	324,207
		-------------	-------------	-------------
Retained profit/(loss) for the period attributable to equity shareholders		405,591	(1,457,015)	(3,029,499)
		-------------	-------------	-------------
Earnings/(loss) per ordinary share	5
Basic		0.86p	(4.14)p	(8.61)p
Diluted		0.86p	(4.14)p	(8.61)p

  Group Balance Sheet 

at 30 June 2008

	Note	Unaudited 30 June 2008	Unaudited 30 June 2007	Audited 31 December 2007
ASSETS		£	£	£
Non-current assets
Property, plant and equipment	7	1,610,998	2,555,714	2,478,424
		-------------	-------------	-------------
Current assets
Inventories		105,500	531,707	105,500
Trade and other receivables		217,160	108,735	103,674
Current tax assets		-	324,207	-
Cash and cash equivalents		747,316	798,680	83,505
		-------------	-------------	-------------
		1,069,976	1,763,329	292,679
		-------------	-------------	-------------
TOTAL ASSETS		2,680,974	4,319,043	2,771,103
		-------------	-------------	-------------
LIABILITIES
Non-current liabilities
Borrowings		449,810	747,249	814,681
		-------------	-------------	-------------
Current liabilities
Trade and other payables		493,638	1,603,842	1,402,116
Borrowings		202,776	329,211	517,014
Provisions		20,927	20,927	20,927
		-------------	-------------	-------------
		717,341	1,953,980	1,940,057
		-------------	-------------	-------------
TOTAL LIABILITIES		1,167,151	2,701,229	2,754,738
		-------------	-------------	-------------
EQUITY
Share capital	6	1,799,334	1,760,573	1,762,573
Share premium account	6	8,938,824	7,998,121	8,001,921
Share based payment reserve		-	175,042	140,277
Other reserve		7,602,857	7,602,857	7,602,857
Retained losses		(16,827,192)	(15,918,779)	(17,491,263)
		-------------	-------------	-------------
		1,513,823	1,617,814	16,365
		-------------	-------------	-------------
TOTAL EQUITY AND LIABILITIES		2,680,974	4,319,043	2,771,103
		-------------	-------------	-------------

  Group Cash Flow Statement 

for the six months ended 30 June 2008

	Note	Unaudited 6 months   ended 30 June	Unaudited 6 months   ended 30 June	Audited Year ended   31 December
		2008	2007	2007
		£	£	£
Cash flow from operating activities
Profit/(loss) for the period		405,591	(1,457,015)	(3,029,499)
Exceptional items	4	(1,019,964)	437,916	437,916
Depreciation and other non-cash items:
Depreciation charges		62,179	117,440	234,819
Loss on disposal of property, plant and equipment		-	40,000	-
Share based payment charge/(credit) - normal		42,300	(243,528)	(278,293)
Share based payment charge - exceptional	4	75,903	-	-
(Increase)/decrease in trade and other receivables		(163,486)	406,577	411,638
(Increase)/decrease in inventories		-	(282,173)	144,034
Increase in trade and other payables		200,563	343,579	81,339
Finance income		(1,445)	(28,818)	(34,177)
Finance expense		30,413	47,004	156,698
Income taxes		-	(324,207)	(324,207)
		-------------	-------------	-------------
Cash generated from operations		(367,946)	(943,225)	(2,199,732)
Income taxes received		-	164,042	488,249
Exceptional items paid		(87,086)	-	-
		-------------	-------------	-------------
Net cash flow from operating activities		(455,032)	(779,183)	(1,711,483)
		-------------	-------------	-------------
Cash flows from investing activities
Purchase of property, plant and equipment		-	(94,823)	(94,912)
		-------------	-------------	-------------
Net cash flows from investing activities		-	(94,823)	(94,912)
		-------------	-------------	-------------
Cash flows from financing activities
Proceeds from issue of share capital		873,664	5,625	11,425
Proceeds from sale and finance leaseback transaction		-	1,145,000	1,145,000
Proceeds from drawdown of loan		307,068	-	344,327
Repayment of loan		(34,657)	-	(5,719)
Repayment of capital element of finance leases		(8,235)	(75,751)	(159,124)
Interest received		1,445	28,818	34,177
Interest paid		(20,442)	(47,004)	(96,184)
		-------------	-------------	-------------
Net cash flows from financing activities		1,118,843	1,056,688	1,273,902
		-------------	-------------	-------------
Increase in cash and cash equivalents for the period		663,811	182,682	(532,493)
Cash and cash equivalents at the start of the period		83,505	615,998	615,998
		-------------	-------------	-------------
Cash and cash equivalents at the end of the period		747,316	798,680	83,505
		-------------	-------------	-------------

  Group Statement of Changes in Equity 

for the six months ended 30 June 2008

	Share capital	Share premium	Share based payment reserve	Other reserve	Retained losses	Total
	£	£	£	£	£	£
Balance at 1 January 2007	1,755,448	7,997,621	418,570	7,602,857	(14,461,764)	3,312,732
Changes in equity for the first half of 2007:
Total recognised income and expense and loss for the period	-	-	-	-	(1,457,015)	(1,457,015)
Issue of share capital	5,125	500	-	-	-	5,625
Share based payment charge	-	-	(243,528)	-	-	(243,528)
	-------------	-------------	-------------	-------------	-------------	-------------
Balance at 30 June 2007 and 1 July 2007	1,760,573	7,998,121	175,042	7,602,857	(15,918,779)	1,617,814
Changes in equity for the second half of 2007:
Total recognised income and expense and loss for the period	-	-	-	-	(1,572,484)	(1,572,484)
Issue of share capital	2,000	3,800	-	-	-	5,800
Share based payment credit	-	-	(34,765)	-	-	(34,765)
	-------------	-------------	-------------	-------------	-------------	-------------
Balance at 31 December 2007 and 1 January 2008	1,762,573	8,001,921	140,277	7,602,857	(17,491,263)	16,365
Changes in equity for the first half of 2008:
Total recognised income and expense and profit for the period	-	-	-	-	405,591	405,591
Issue of share capital	36,761	1,089,403	-	-	-	1,126,164
Share issue expenses	-	(152,500)	-	-	-	(152,500)
Share based payment charge – normal	-	-	42,300	-	-	42,300
Share based payment charge – exceptional	-	-	75,903	-	-	75,903
Transfer	-	-	(258,480)	-	258,480	-
	-------------	-------------	-------------	-------------	-------------	-------------
Balance at 30 June 2008	1,799,334	8,938,824	-	7,602,857	(16,827,192)	1,513,823
	-------------	-------------	-------------	-------------	-------------	-------------

  Notes to the Interim Report

1. Nature of operations and general information

Screen Technology and its subsidiaries' ("the Group") principal activity is to design, manufacture and sell display solutions to the commercial AV market making large, high-brightness, high-resolution display screens a reality.

Screen Technology is the Group's ultimate parent company. It is incorporated and domiciled in England and Wales. The address of the registered office of the Company is Precision House, St Thomas Place, Cambridgeshire Business Park, Ely, Cambridgeshire CB7 4EX. It trades through a wholly owned subsidiary, Screen Technology Limited, whose place of business is at the registered office. Screen Technology's shares are listed on the AIM Market of the London Stock Exchange.

The Group financial statements of Screen Technology are presented in Pounds Sterling (£), which is also the functional currency of the parent.

These interim financial statements have been approved for issue by the Board of Directors on 30 September 2008.

The financial information set out in the interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31 December 2007 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.

2. Basis of preparation

These interim Group financial statements are for the six-month period ended 30 June 2008 and are unaudited. They have been prepared under the historical cost convention and in accordance with the recognition and measurement principles of International Financial Reporting Standards ("IFRS"). The accounting policies adopted are consistent with those adopted in the preparation of the annual financial statements for the year ended 31 December 2007 and represent those to be used in the preparation of the annual financial statements for the year ending 31 December 2008. 

The comparative figures are an abridged version of the Group's full financial statements and, together with other financial information contained in these interim results, do not constitute statutory financial statements of the Group within the meaning of section 240 of the Companies Act 1985.

Statutory financial statements for the year ended 31 December 2007 have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors was not qualified and did not contain a statement under section 273(2) or (3) of the Companies Act 1985.

3. Segmental information

The Group's principal activity (and its primary business segment) is the design, manufacture and sale of display solutions to the commercial AV market. As such its primary segmental information is the income statement.

Whilst the Directors do not consider there is any further secondary segmental analysis required the Group gives an additional geographic analysis of revenue by destination. 

	Unaudited 6 months ended 30 June 2008	Unaudited 6 months ended 30 June 2007	Audited Year ended 31 December 2007
	£	£	£
Turnover by destination
UK	311	–	1,000
Rest of world	17,121	33,919	33,919
	-------------	-------------	-------------
Total	17,432	33,919	34,919
	-------------	-------------	-------------

4. Exceptional items

All exceptional items are included within administrative expenses.

	Unaudited 6 months ended 30 June 2008	Unaudited 6 months ended 30 June 2007	Audited Year ended 31 December 2007
	£	£	£
Creditors written off via Company Voluntary Arrangement net of associated costs	1,111,748	-	-
Net effect of settlement agreements in relation to balance sheet restructuring	(91,784)	-	-
Write off of bad debt	-	(437,916)	(437,916)
	-------------	-------------	-------------
	1,019,964	(437,916)	(437,916)
Exceptional share based payment charge arising on cancellation of share options	(75,903)	-	-
	-------------	-------------	-------------
Exceptional items	944,061	(437,916)	(437,916)
	-------------	-------------	-------------

5.  Earnings / (loss) per share

The calculation of the basic earnings per share is based on the profits attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

The share options in issue at 30 June 2007 and at 31 December 2007 are anti-dilutive in respect of the basic earnings per share calculation and have therefore not been included.

	Unaudited 6 months ended 30 June 2008	Unaudited 6 months ended 30 June 2007	Audited Year ended 31 December 2007
Attributable profit/(loss)(£)	405,591	(1,457,015)	(3,029,499)
	-------------	-------------	-------------
Average number of ordinary shares in issue for basic and diluted earnings per share	47,374,588	35,189,315	35,200,484
	-------------	-------------	-------------
Earnings/(loss) per share (pence)
Basic	0.86p	(4.14)p	(8.61)p
Diluted	0.86p	(4.14)p	(8.61)p
	-------------	-------------	-------------

6. Share issues

On 22 April 2008 400,000 Ordinary Shares of 5p were issued at par to settle a debt owed by the Company.

On 19 June 2008 the Company approved the conversion of each of its 5p Ordinary Shares into one Ordinary Share of 0.01p and a Deferred Ordinary Share of 4.99p. On the same day 167,600,577 Ordinary Shares of 0.01p were issued for cash at 0.66p to raise £1,106,164 (£953,664 after expenses of £152,500).

7. Additions and disposals of property, plant and equipment

	Leasehold improvements	Fixtures, fittings, tools and equipment	Plant and machinery	Motor vehicles	Total
	£	£	£	£	£
Cost
At 1 January 2007	117,031	169,448	2,020,249	11,495	2,318,223
Additions	-	11,192	581,241	-	592,433
	-------------	-------------	-------------	-------------	-------------
At 30 June 2007 and 1 July 2008	117,031	180,640	2,601,490	11,495	2,910,656
Additions	-	-	40,089	-	40,089
	-------------	-------------	-------------	-------------	-------------
At 31 December 2007 and 1 January 2008	117,031	180,640	2,641,579	11,495	2,950,745
Disposals	-	-	(805,247)	-	(805,247)
	-------------	-------------	-------------	-------------	-------------
At 30 June 2008	117,031	180,640	1,836,332	11,495	2,145,498
	-------------	-------------	-------------	-------------	-------------
Depreciation
At 1 January 2007	44,712	92,639	94,777	5,374	237,502
Depreciation	29,258	12,949	73,337	1,896	117,440
	-------------	-------------	-------------	-------------	-------------
At 30 June 2007 and 1 July 2008	73,970	105,588	168,114	7,270	354,942
Depreciation	29,257	13,314	72,911	1,897	117,379
Reclassification	-	2,470	(2,470)	-	-
	-------------	-------------	-------------	-------------	-------------
At 31 December 2007 and 1 January 2008	103,227	121,372	238,555	9,167	472,321
Depreciation	13,358	11,763	35,161	1,897	62,179
	-------------	-------------	-------------	-------------	-------------
At 30 June 2008	116,585	133,135	273,716	11,064	534,500
	-------------	-------------	-------------	-------------	-------------
Carrying amounts
At 30 June 2007	43,061	75,052	2,433,376	4,225	2,555,714
	-------------	-------------	-------------	-------------	-------------
At 31 December 2007	13,804	59,268	2,403,024	2,328	2,478,424
	-------------	-------------	-------------	-------------	-------------
At 30 June 2008	446	47,505	1,562,616	431	1,610,998
	-------------	-------------	-------------	-------------	-------------

8. Taxation

Income tax represents amounts recoverable in respect of Research and Development tax credits.

At 30 June 2008, the Group has tax losses of approximately £15 million that are available for offset against future profits arising from the same trade. No provision has been made for deferred tax on losses carried forward in the Group. These losses will only be available for offset when the Group makes taxable profits. As the timing of these profits is not certain it has been assumed the losses will not be recoverable in the foreseeable future

9. Interim Report

The interim report will be circulated to all shareholders and copies will be available from the Company's head and registered office: Precision House, St Thomas Place, Cambridgeshire Business Park, Ely, Cambridgeshire CB7 4EX and available to download from the Company's website www.screentechnology.com.

 

END

 

 

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