Preliminary Results
Screen Technology Group plc
20 April 2006
For immediate release 20 April 2006
Screen Technology Group plc
("Screen Technology" or "the Company")
2005 PRELIMINARY 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 first
consolidated results for the year ended 31 December 2005.
Highlights
• Successful flotation in July 2005 raising £7.1m for production expansion
• Successful launch of ITrans to international market
• First displays shipped to value added resellers
• Orders placed for high speed production equipment
• Expanded and strengthened management team
Key financial information
• Sales £115,500 in line with expectations
• Consolidated operating loss before tax £1.9 million
• Cash at bank at 31 December 2005 £5.6 million
Peter Smyth, Non-executive Chairman, said today:
"This year has been a very exciting one for Screen Technology. We have moved
from being a small research and development based company to being a quoted
manufacturing company. Since our flotation in August of 2005, the workforce has
nearly doubled and we have shipped our first products. We are now concentrating
on building up our production resources to capitalise on the growing demand for
ITrans."
For more information please contact
Screen Technology Group plc 01223 559600
Tom Jarman, CEO
Simon Barton, Finance Director
www.screentechnology.com
Buchanan Communications 0207 466 5000
Isabel Podda
Chairman's statement
2005 has seen a major step forward for Screen Technology. The year has seen the
development of the Group's technology into a product that can be manufactured on
a commercial scale, the flotation of the business on AIM, the launch of ITrans
on the international market to considerable acclaim from the display industry,
an expansion and strengthening of the management team, the first products
shipped to customers and the commencement of our planned substantial investment
in production capacity.
The Group's key product, ITrans, remains the only solution capable of producing
high-resolution, large seamless displays viewable over short or long distances
in high brightness environments. The commercial display industry has continued
to show very strong interest in ITrans. Since the flotation the Group's focus
has been to increase production capacity to deliver commercial quantities to
satisfy the levels of demand being expressed by the marketplace. By the end of
2005, orders had been placed for two additional production machines and two
further machines have been ordered since the year end.
I was delighted to join the Screen Technology team prior to its flotation in
July 2005. Simon Barton joined the executive board as Finance Director at the
time of the flotation and his extensive experience has made a significant
contribution to the management of the business. Tony Kellett however resigned
as CEO in April 2006 and has been replaced by Tom Jarman, previously a
non-executive director of the Group. I would like to thank Tony for his
contribution to Screen Technology's development.
Screen Technology's management board has been substantially enhanced and
strengthened during 2005. Alex Suszko joined the management board as Production
Director at the end of 2005. His many years of manufacturing experience have
been invaluable in driving through the changes in the business from being a
research based technology company to become a manufacturing company delivering
quality product in volume. Andy Holmes joined the management board as
Commercial Director in March 2005. His extensive knowledge of the display
industry and contacts around the world have been valuable in raising the profile
of Screen Technology and providing the platform for sales growth.
Staff numbers have increased significantly since the beginning of 2005 and rapid
growth is continuing and I would like to thank all our staff for their hard work
and dedication during the period.
Business review
Flotation
On 28 July 2005, Screen Technology Group plc was formed with the acquisition of
Screen Technology Limited and the Group floated on the AIM market on 1 August.
This move was made possible with the almost simultaneous launch of ITrans, the
Group's revolutionary high-brightness, high-resolution large seamless display
technology, the culmination of nine years of development. First discussions
with key prospective customers in the display industry demonstrated the
potential of the technology and it became clear that the top priority was to
increase production capacity to meet the demand being expressed.
£7.1 million was raised (net of expenses) from institutional investors and
private individuals of which £2.0 million came from MTI Partners, one of Screen
Technology's early backers. These funds have been earmarked principally for
expenditure on new production machinery to take the Group's existing low volume
capacity to a high-volume fully automated production facility. Funds were also
required for an increase in staff numbers as the business grows and also to fund
a continuing product development process to keep ITrans at the forefront of
commercial large screen display technology.
Expansion in production capacity
At the time of the flotation in August 2005, Screen Technology had one machine
capable of low volume production of ITrans tiles that go to make a seamless
ITrans display. This machine produced a number of demonstration units and the
ITrans product was successfully launched to an expectant display industry in
September 2005. Further demonstration units have been produced and also the
first production units were shipped in December 2005. These production units
have been shipped to value-added resellers, Screen Technology's key route to
market, in Dubai, Singapore and the UK where they are being used to build
awareness of the ITrans product with end-users such as airports, railway
stations and shopping malls.
Between the flotation and the end of the year, the Company placed orders for a
second low-volume machine and for the first of the Group's high-speed production
machines. The low volume machine was delivered in February 2006 and has begun
to contribute towards tile production but the fundamental shift in production
capacity foreseen at the time of the flotation will not occur until the delivery
of the first high-speed machine, which is expected to be in the mid to late
summer of 2006.
Since the end of 2005, two further orders have been placed for high-speed
machines with a total value of almost £2 million. These will have a significant
effect on production capacity towards the end of 2006 and would enable the Group
to meet our expected increase in sales in 2007.
Trading in 2005
As disclosed in the Group's trading statement in November 2005, Screen
Technology has been concentrating primarily on enhancements to production
processes and on the manufacture, using the limited production resources
available to it, of demonstrator units for use with potential customers and at
international display industry exhibitions.
Some small sales were however shipped to customers in December 2005 and the
Company is therefore pleased to announce sales of £115,500 for the period ended
31 December 2005.
Outlook for 2006
The Board of Screen Technology is looking forward with considerable confidence
to 2006, which promises to be another exciting year. The expected delivery of
three high-speed production machines during the year will transform the Group's
production capacity from a small-scale low-volume operation to a high-speed
automated production facility. The Group has, to date, been reluctant to accept
large orders as its limited production capacity would inevitably have meant long
lead-times leading to frustration amongst customers keen to get hold of the very
latest large display technology. The expected increases in production capacity
mean however that the Group is beginning to accept larger orders.
As disclosed last month, Screen Technology continues to see strong demand from
the display industry for ITrans and, has recently received firm orders in excess
of £0.5 million to commence shipment in the second half of the year.
The Group continues to develop relationships with value-added resellers ("VARs")
around the world. These VARs are a key route to market for Screen Technology as
they provide the local contacts and support network for Screen Technology's
products. The first products shipped in December 2005 were to VARs and in 2006
the Board expects VARs to be a significant source of orders.
A key development for 2006 will be the launch of a modular product allowing
screens of any size to be shipped easily to the customer and then assembled and
installed quickly on site. The modular product design is already in progress
and the board expects it to be launched during the third quarter of 2006.
Financial review
Overview
These consolidated results are presented on a merger accounting basis. Although
the Group was formed on 28 July 2005 with the acquisition of Screen Technology
Limited by Screen Technology Group plc, Screen Technology Group plc then floated
on AIM on 1 August 2005, the results are consolidated as though the merger took
place at the beginning of 2005, presenting a full year's results for Screen
Technology Limited. Comparable figures for the year ended 31 December 2004 are
for Screen Technology Limited alone.
Sales for the year were concentrated in December 2005 as the first production
units were shipped just before the year end. These were demonstrator units
shipped to key value-added resellers in the UK and overseas. The display
industry is truly international with very strong interest being shown in the UK,
Europe, the US and the Middle and Far East. The Group expects to focus
initially on Europe and the Middle and Far East in 2006 with expansion into the
US later in 2006.
The consolidated loss for the year after the flotation represents the continuing
development of ITrans resulting in the launch of a commercial product in July
2005. After the flotation, further significant expenditure using the funds
raised was incurred in moving towards full commercial sales production and the
losses for the five months after the flotation represent 60 per cent. of the
losses for the whole year. This has involved an increase in staffing levels,
from 12 at the beginning of 2005 to 23 by the end of December and large increase
in the employment of design consultancies and additional external engineering
resources to take the original low volume development machinery to a commercial
scale.
The loss for the year contains a number of costs that are reflective of Screen
Technology Limited's status in the first half of the year as a company backed by
private funds and without significant cash resources. Finance costs include
interest payable and the costs of negotiating and securing loan funding which
was no longer required as a result of the flotation.
Cash resources
The cash position of the business is strong. The £1.65 million of loan stock
outstanding at the beginning of 2005 was converted into shares in Screen
Technology Limited prior to the flotation. £7.1 million net of expenses was
raised at the time of the flotation and the year end cash position was £5.6
million.
The bulk of cash expenditure during the period has been on production machinery
with over £350,000 of capital expenditure since August 2005. That investment
was principally stage payments on machines being designed and built for Screen
Technology. One of the machines has since been delivered with a second machine
due to be delivered by the mid to late summer of 2006. Since the year end, the
Group has committed to further capital expenditure of almost £2.0 million for
two more high-speed tile production machines for delivery in late 2006.
The high-speed machines represent a significant cash commitment but the board
expects that they will quickly generate cash as production capacity becomes
available. The Group does not expect to need to raise any further cash from
external sources before the Group becomes cash positive.
The Group moved to new premises just after the year end at a very attractive
rental. The balance sheet at the year end includes a substantial prepayment
representing the entire rental on the premises for the 18 months that the
premises are available. This enabled the Group to secure the premises during
this 18 month period which allows time for new purpose built premises to be
constructed close to Cambridge.
Consolidated profit and loss statement (unaudited)
For the year ended 31 December 2005
Year ended 31 December
2005 2004
Screen Screen
Technology Technology
Group plc Limited
Consolidated
£ £
Turnover 115,500 -
Cost of sales (65,633) -
-------------
Gross profit 49,867 -
Administrative expenses (2,063,511) (1,239,104)
Other operating income - 127,589
------------- -------------
Operating profit / (loss) (2,013,644) (1,111,515)
Interest receivable and similar income 115,840 2,705
Interest payable and similar charges (43,806) (846)
------------- -------------
Loss on ordinary activities before taxation (1,941,610) (1,109,656)
Tax on loss on ordinary activities - -
------------- -------------
Loss for the financial year (1,941,610) (1,109,656)
------------- -------------
Consolidated balance sheet (unaudited)
at 31 December 2005
31 December 31 December
2005 2004
Screen Screen
Technology Technology
Group plc Limited
Consolidated
£ £
Fixed assets 364,585 54,604
Current assets
Stock & WIP 89,963 -
Debtors 475,811 131,170
Cash at bank and in hand 5,646,504 14,406
Creditors (amounts falling due within one year)
Convertible redeemable loan stock - (1,650,000)
Other creditors (478,502) (61,689)
------------- -------------
Net current assets 5,733,776 (1,566,113)
------------- -------------
Total assets less current liabilities 6,098,361 (1,511,509)
Creditors (amounts falling due after more than (7,273) -
one year)
------------- -------------
Net assets 6,091,088 (1,511,509)
------------- -------------
Capital and reserves
Called up share capital 1,624,449 -
Share premium 6,682,989 -
-------------
8,307,438 -
Other reserves 7,602,856 6,366,087
Profit and loss account (9,819,206) (7,877,596)
------------- -------------
6,091,088 (1,511,509)
------------- -------------
Consolidated cash flow statement (unaudited)
for the year ended 31 December 2005
Year ended
31 December
2005
£
Operating profit (2,013,644)
Depreciation 18,347
Loss on disposal of fixed assets 32,600
(Increase)in stocks (89,963)
(Increase)in debtors (344,641)
Increase in creditors 414,509
-------------
Net cash outflow from operating activities (1,982,792)
Returns on investments and servicing of finance 72,034
Capital expenditure and financial investment (351,351)
-------------
Cash (outflow) before management of liquid resources and financing (2,262,109)
Flotation proceeds 7,946,697
Other movements in reserves (633,018)
Share subscription (Screen Technology Limited) 80,528
Issue of convertible loan stock 500,000
-------------
Increase in cash for the period 5,632,098
-------------
Notes to the preliminary statement of results
1. Earnings per share
Earnings per share are calculated using a weighted average number of shares on
the assumption that the shares issued by Screen Technology Group plc on the
merger with Screen Technology Limited have been in issue since the beginning of
the year.
Shares in issue after the merger with
Screen Technology Limited 19,875,126
Shares issued on flotation 12,613,804
Weighted average number of shares 25,162,556
Loss per share 7.7p
2. Merger accounting
The financial information set out above is presented on a merger accounting
basis consistent with FRS6, treating Screen Technology Group plc as having
acquired Screen Technology Limited at the beginning of the year. Comparable
figures for the year ended 31 December 2004 are for Screen Technology Limited
alone.
In the consolidated cash flow statement, the flotation proceeds are shown before
expenses. The movement on reserves of £633,018 represents that element of the
expenses of the flotation set against the share premium account.
3. Financial information
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2005 and 31 December 2004, but
is derived from them. The accounting policies set out in the 2004 accounts have
been applied in preparing the information for 2005. Statutory accounts for
Screen Technology Limited for 2004 have been delivered to the Registrar of
Companies. The Auditors have reported on the accounts to 31 December 2004.
Their report was unqualified and did not contain statements under section 237
(2) or (3) of the Companies Act 1985. This preliminary announcement was
approved by the Board on 20 April 2006.
The Company will hold its Annual General Meeting in July 2006, following which
the statutory accounts for 2005 will be posted and delivered to the Registrar of
Companies.
The Annual Report and Accounts will be posted to shareholders in June 2006.
Copies of the Annual Report and Accounts and of this announcement will be
available at the Company's registered office, The Maris Centre, Hauxton Road,
Cambridge, CB2 2LQ.
This information is provided by RNS
The company news service from the London Stock Exchange
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