Interim Results
Timestrip PLC
28 September 2007
TIME.L
Timestrip Plc
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2007
Timestrip Plc is pleased to announce its unaudited interim results for the 6
months to 30 June 2007.
Timestrip Plc develops, manufactures and sells patented Timestrip smart labels
which monitor how long perishable food and other limited life products have been
open or in use.
Key Points
• Steady progress being made despite lengthy sales cycles within global
multinationals. New contract secured with Whirlpool, existing contracts
progressing well
• Partnerships agreed with leading packaging companies CCL Label and
Plastek
• Significant $3 million contract win post period end with leading US
consumer goods company
• Healthy sales pipeline building, underpinned by global references
Paul Freedman, Timestrip's joint CEO, commented:
'We remain committed to our strategy of pursuing substantial and sustainable
revenues through supply contracts with some of the largest consumer product,
food and beverage companies worldwide. Sales cycles across these companies are
proving to be lengthy, resulting in erratic short term revenues, however we
remain confident that the pipeline for potential future orders is extremely
healthy and will deliver significant recurring revenues into the longer term. We
believe that the recently announced $3 million contract win with a leading North
American consumer goods company is a crucial step along this process.
Product freshness, supply chain integrity and customer compliance with usage
instructions have become an absolute pre-requisite for leading brands. The
Timestrip technology can meet all of these needs and is therefore ideally
positioned to play a leading role in the intelligent packaging market in the
future.
We remain confident in our ability to evolve a revenue model that combines sales
from in-house manufacturing with royalty revenues and raw material sales derived
from manufacturing licenses. Indeed, we have received a number of approaches
from companies interested in acquiring manufacturing licenses and it is likely
that one of these will be agreed over the coming months.'
For further information:
Paul Freedman, Joint CEO, Timestrip 01462 440 700
Shane Dolan, Biddicks 020 7448 1000
Fergus Marcroft, Evolution Securities 020 7071 4300
Chairman's Statement
I am pleased to report that we have made some significant progress towards our
objective of establishing Timestrip as a household name and a new standard in
product labelling. So far in 2007 we have concluded our largest contract to
date, (expected to generate at least $3million in revenues over the first three
years) as well as deals with global brands such as Whirlpool and partnerships
with leading packaging companies such as CCL Label and Plastek. These
achievements, along with the many other projects we are progressing, lead us to
the firm belief that the technology is moving closer to a 'tipping point' in
several key markets.
Financial Results
Turnover for the six months to 30 June 2007 was £109,647 (30 June 2006 as
restated - £215,932). At the pre-tax level the Company recorded a loss of
£730,429 (2006 as restated - £397,460) including a charge relating to FRS20
(accounting for share based payments) amounting to £137,396 (2006 as restated -
£36,894). The resultant loss per share is 0.23p (2006 - 0.13p). The Company had
cash resources of £1.83m as at the end of June, which your Board considers to be
sufficient to take the business through to profitability
Operations
As is reported in the Joint Chief Executives' statement below, we have made good
progress towards the widespread adoption of our core technology in a number of
different markets and sectors.
Increasing awareness of the technology has led to a sharp increase in the number
of demands placed on the business by potential customers, but I am pleased to
report that we continue to exceed customer expectations, delivering customised
products and solutions for uses ranging from market tests to full scale
production.
Additionally, our employees remain highly motivated and well incentivised to
drive forward the Timestrip business and the Board wishes to thank them for
their continued hard work and commitment.
Current Trading and Prospects
We appreciate the frustration caused by both the speed at which revenues are
coming on stream as well as the confidentiality restrictions that prevent us
from fully disclosing the breadth and quality of the sales pipeline and revenue
potential therein. These extended timetables imposed by our potential customers
make it probable that the contracts necessary for us to exceed 2006's sales will
not be finalised in time for shipment to fall in 2007. However, we remain
committed to our strategy of targeting customers in each market who are able to
generate not only large volume orders but also predictable and repeatable
revenue streams for the Company, even if the consequences are prolonged
development cycles in many cases. We retain a tight control over our monthly
cash costs and therefore, despite the time being taken to secure these contracts
we remain confident that the Company has adequate financial resource to reach
profitability.
A recent influential industry report* has predicted growth in the intelligent
packaging market in the US to $165m in 2011, led principally by label
technologies that help improve food safety and reduce losses in perishables from
temperature abuse in the supply chain. Technologies that monitor 'compliance'
(i.e. replace every three months, use once a month) are also indentified as a
key driver to this growth. Timestrip has the unique ability to deliver
meaningful benefits in all three of these areas and we are ideally positioned to
become the leading player in this exciting market.
Stephen Oakes
Chairman
28 September 2007
* Active & Intelligent Packaging., The Freedonia Group Inc.
Joint Chief Executives' Statement
Operating Review
We are pleased to report some good progress in the six international mass
markets in which relative expiry dates are predominantly found:
Appliances and Consumables
Timestrip is gaining widespread acceptance as the technology of choice for
appliances with Period after Opening/Time in Service dates. It has been adopted
as an integrated component in devices sold globally by Whirlpool, Hamilton Beach
/Febreze(R), Hygolet, DryandStore (Dry Brik II), and Bioconservacion SA.
Our increasing exposure in this sector has generated a pipeline with a number of
potentially lucrative deals, each with the prospect for recurring annual
revenues. In each case, the client has selected Timestrip as its preferred
technology partner. Customised product has been supplied for use in a variety of
market tests ranging from confidential home trials to regional test launches.
Our ability to convert these deals and the timing of them now depends on the
progress of the tests. Initial reports are very encouraging and we expect to
report definitive progress later this year.
Catering and Food Services
We continue to work closely with our US and European distributors to gain wider
adoption of the technology amongst catering establishments, where Timestrips are
positioned as an essential upgrade to existing food safety systems. Substantial
new distribution opportunities are being actively evaluated in order to expand
our presence in an expansive global market. Recent accreditation of the
technology by the German food safety organization BVLK will help in our
marketing of Timestrip in this sector.
We are actively targeting both small to medium size businesses who will help
build a track record for us in this sector, as well as large chains who can
provide large volume orders and excellent reference sites for the technology.
We recently became involved in a partnership, which includes two leading food
manufacturers and a major restaurant chain, looking to employ the Timestrip
technology as a device to monitor time and temperature abuse in the supply chain
of fresh and frozen produce in hot climates. The revenue potential for such a
device is substantial.
Food and Beverage
Timestrips represent an opportunity for manufacturers and brands to promote the
freshness of their products as well as to help consumers avoid unnecessary waste
by alerting them to how long an item has been open. The F & B sector is a
natural home for Timestrip, and although the pace of progress has been much
slower than anticipated, the revenue potential is so significant that it remains
at the heart of our efforts.
The growing trend towards stating 'Period after Opening' dates on fresh products
in North America has opened up a number of exciting opportunities to integrate
Timestrip technology into the packaging of premium brand fresh foods which have
a 'once opened use within..' instruction. The process is lengthy and involves
the brand owner, manufacturer and packaging company, however we believe that our
first landmark deal in this market is close to fruition.
Timestrip technology still features on the packaging of sauces sold by Nestle
Foodservice UK and progress continues to be made towards our goal of widespread
adoption in the retail food market. In this regard we would like to thank our
partners CCL Label and Plastek for their co-operation in the development of
solutions for the integration of Timestrips into labels and closures.
Cosmetics, Pharmaceuticals, Medical Devices
We recently started to supply a leading European medical equipment company who
are looking to integrate the technology with one of their core products, to
communicate the useful life of the product after first use. Market testing and
product development is expected to last another three to six months after which
a full scale adoption would generate an important source of predictable
revenues.
There is an unprecedented level of interest in the Timestrip technology from the
cosmetics industry, where European legislation requires a 'Period After Opening'
date on most products, and newspaper reports have highlighted health issues
surrounding the prolonged use of items such as mascara and face creams. The
opportunity for integrated packaging solutions as well as shorter term
promotions is being actively pursued.
The pharma market has notoriously long cycles for product innovation but our
exposure to this market is growing and we remain very optimistic about this
market in the medium term.
iStrip(R)
Introduced in late 2006, iStrip is a unique, patent pending label that changes
colour irreversibly if an accidental freezing event takes place in the cold
chain for products such as vaccines and agri-chemicals.
We are working closely on the specification for the product with the
Non-Government Organisation PATH as well as one of the largest global logistics
companies, whose recent field trials have produced some very encouraging
results.
The potential clearly exists to generate initial revenues from selling case
level iStrips to a variety of distributors in the time/temperature industry.
Production capacity has been secured but the product will not be launched until
product development and comprehensive testing is complete.
In summary, we firmly believe in our strategy of targeting blue chip customers
with the potential to provide high volume recurring revenues. Although this has
led to delays in delivering significant revenues to date, the recent contract
win and the growing number of international brand names who have adopted the
technology gives us great cause for optimism.
Paul Freedman Reuben Isbitsky
Joint Chief Executive Officer Joint Chief Executive Officer
28 September 2007 28 September 2007
Consolidated Income statement
6 months to 30 June 2007 6 months to 30 June 2006 12 Months to 31 December 2006
Unaudited Unaudited Audited
As restated* As restated*
£ 000's £ 000's £ 000's
Revenue 110 216 379
Cost of sales (56) (139) (281)
-------- ---------- ----------
Gross Profit 53 77 98
Distribution - - -
costs
Administrative
expenses (838) (538) (1,288)
Loss from Operations (784) (462) (1,190)
Investment
Revenue 54 64 123
Finance - - (8)
costs
-------- ---------- ----------
Loss before tax (730) (397) (1,075)
Taxation - - 90
-------- ---------- ----------
Loss for the
period (730) (397) (985)
-------- ---------- ----------
Loss for the
period
attributable
to ordinary
shareholders (730) (397) (985)
======== ========== ==========
Basic and
diluted EPS (0.23) p (0.13) p (0.32) p
*Re-stated in accordance with IFRS
Summary Consolidated Balance Sheet
6 months to 30 June 2007 6 months to 30 June 2006 12 Months to 31 December 2006
Unaudited Unaudited Audited
As restated* As restated*
£ 000's £ 000's £ 000's
Non current assets
Goodwill 5,643 5,643 5,643
Other
intangible
assets 1,637 1,148 1,320
Property,
plant &
equipment 370 252 372
---------- ----------- -----------
7,650 7,043 7,335
---------- ----------- -----------
Current assets
Inventory 225 72 183
Trade and
other receivables 213 250 186
Corporation tax 109 0 195
Cash and cash
equivalents 1,831 3,369 2,517
---------- ----------- -----------
2,378 3,691 3,082
---------- ----------- -----------
Total Assets 10,027 10,734 10,416
---------- ----------- -----------
Current Liabilities
Trade and other (417) (234) (404)
payables
Bank overdrafts
and loans (14) (14) (21)
Obligations
under finance
leases (6) (6) (6)
---------- ----------- -----------
(438) (254) (430)
---------- ----------- -----------
Non-current Liabilities
Bank Loans (45) (60) (52)
Obligations
under finance
leases (44) (13) (18)
---------- ----------- -----------
Total
Liabilities (527) (326) (501)
---------- ----------- -----------
---------- ----------- -----------
Net Assets 9,501 10,408 9,915
========== =========== ===========
Equity
Share Capital 3,608 3,607 3,607
Share Premium
Account 27,719 27,524 27,542
Share Options
Reserve 318 103 180
Retained
losses (22,144) (20,825) (21,414)
---------- ----------- -----------
Equity
Shareholders funds 9,501 10,408 9,915
========== =========== ===========
*Re-stated in accordance with IFRS
Consolidated statement of changes in equity
Share capital Share Premium Share Options reserve Retained losses Total Equity
£ 000's £ 000's £ 000's £ 000's £ 000's
Balance at
1 January 2006 3,603 26,588 66 (20,428) 9,830
Loss for
the - - - (397) (397)
period
Total
recognised
income and
expense for
the period 3,603 26,588 66 (20,825) 9,432
Shares issued
during period 4 935 - - 939
Share Option
charge - - 37 - 37
------- -------- ------- -------- ---------
Balance at
30 June 2006 3,607 27,524 £103 (20,825) £10,408
======= ======== ======= ======== =========
Balance at
1 January 2007 3,607 27,542 180 (21,414) 9,915
Loss for
the period - - - (730) (730)
Total
recognised
income and
expense
for the 3,607 27,542 180 (22,144) 9,185
period
Shares
issued 1 177 - - 179
during
period
Share
Option - - 137 - 137
charge
------- -------- ------- -------- ---------
Balance at
30 June 2007 3,608 27,719 318 (22,144) 9,501
======= ======== ======= ======== =========
Summary Cash Flow Statement
6 months to 30 June 2007 6 months to 30 June 2006 12 Months to 31 December 2006
Unaudited Unaudited Audited
As restated* As restated*
£ 000's £ 000's £ 000's
Net cash
outflow from
operating
activities (526) (382) (972)
--------- --------- ----------
Investing activities
Interest received 54 64 123
Investment in
Intangible assets (344) (235) (429)
Purchase of Property
plant & equipment (36) (22) (117)
--------- --------- ----------
Net cash used in
investing activities (326) (193) (424)
--------- --------- ----------
Financing activities
Proceeds of issue of
ordinary share capital 179 939 957
Repayments
of borrowings (7) - (24)
--------- --------- ----------
Net cash inflow from
financing activities 172 939 933
--------- --------- ----------
Net(decrease)/
increase in
cash and cash (680) 365 (462)
equivalents
Cash and cash
equivalents
at the 2,517 2,979 2,979
beginning
of the year
Effect of foreign
exchange rate changes (6) 25 0
--------- --------- ----------
Cash and cash
equivalents 1,831 3,369 2,517
at end of year ========= ========= ==========
*Re-stated in accordance with IFRS
Notes to the cashflow statement
6 months to 30 June 2007 6 months to 30 June 2006 12 Months to 31 December 2006
Unaudited Unaudited Audited
As restated* As restated*
£ 000's £ 000's £ 000's
Loss from Operations (784) (462) (1,190)
Adjustment for:
Amortisation
and impairment
of Intangible
fixed assets 27 24 53
Depreciation
of property
plant & equipment 37 44 67
Share based
payments 137 37 114
Decrease/(Increase)
in inventories (41) (6) (117)
Decrease/(Increase)
in receivables (28) (55) (97)
Increase in
payables 39 36 207
---------- ---------- -----------
Cash utilised (612) (382) (963)
by operations ---------- ---------- -----------
Corporation
tax received/(paid) 87 - -
Interest paid - - (8)
---------- ---------- -----------
Net cash (outflow)
from operating
activities (526) (382) (972)
========== ========== ===========
*Re-stated in accordance with IFRS
Notes To The Interim Results:-
1. Basis of preparation
The Group's interim results for the half year ended 30 June 2007 have been
prepared in accordance with International Financial Reporting Standards (IFRS)
for the first time and on a historical basis. As a consequence, a number of the
accounting policies adopted in the preparation of these statements are different
to those adopted in preparing the financial statements for the year ended 31
December 2006, which were prepared in accordance with UK Generally Accepted
Accounting Practice (UK GAAP).
The comparative figures are an abridged version of the Group's full financial
statements, adjusted for the impact of IFRS accounting policies, 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 2006 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.
The Group has adopted IFRS from 1 January 2006, the date of transition.
Reconciliations and descriptions of the impact of IFRS are shown in the appendix
to this statement.
2. Basis of consolidation
The consolidated profit and loss account and balance sheet include the financial
statements of the company and its subsidiary undertakings made up to 30 June
2007.
3. Share capital
During the period the following shares and warrants were issued:
On 15th January 2007, 217,771 Placing Warrants over Ordinary Shares of 0.02p
were issued at a price of 4p raising £8,711.
On 5th February 2007, 893,696 Placing Warrants over Ordinary Shares of 0.02p
were issued at a price of 4p raising £35,748.
On 15th February 2007, 1,425,072 'B' Warrants over Ordinary Shares of 0.02p were
issued at a price of 4p raising £57,002.
On 7th March 2007, 1,917,050 'B' Warrants over Ordinary Shares of 0.02p were
issued at a price of 4p raising £76,682.
On 2nd April 2007, 1,400,360 'C' Warrants over Ordinary Shares of 0.02p were
issued at a price of 0.02p raising £280.
On 20th June 2007, 1,000,000 'C' Warrants over Ordinary Shares of 0.02p were
issued at a price of 0.02p raising £200.
4. Dividends
No dividend is proposed for the period ended 30 June 2007.
5. Taxation
No taxation is expected to arise on the results for the period.
6. Loss per Share
The loss per share for the six months ended 30 June 2007 has been calculated on
the basis of the loss after taxation for the period of (£573,000) (June 2006:
(£397,000) as restated, and December 2006: (£986,000) as restated) and the
weighted average number of shares in issue during the period of 315,822,799
(2006: 307,892,658).
7. Segmental reporting
The Geographical segmental reporting by destination of sales was as follows:
Revenue
30-Jun-07 30-Jun-06 31-Dec-06
£'000 £'000 £'000
UK 3 7 18
Europe 48 127 158
North America 50 63 181
Rest of World 9 19 22
-------- -------- --------
110 216 379
======== ======== ========
Operating (Loss)
UK (31) (28) (57)
Europe (314) (300) (496)
North America (431) (102) (569)
Rest of World (8) (32) (68)
-------- -------- --------
(784) (462) (1,190)
======== ======== ========
8. Distibution
The interim statement will be made available on the company's website at
www.timestrip.com. Copies may also be obtained from Company Secretary:
International Registrar Limited, Finsgate, 5-7 Cranwood Street, London, EC1V 9EE
APPENDIX - Transition Statement
Introduction
Timestrip Plc ('Timestrip') has previously prepared its consolidated Financial
Statements under United Kingdom Generally Accepted Accounting Practice (GAAP).
With effect from 1 January 2007, it is required to prepare its consolidated
Financial Statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
The Group has adopted IFRS from 1 January 2006, the date of transition. The
first full set of audited Financial Statements prepared under IFRS will be for
the year ended 31 December 2007, and the first interim report prepared under
IFRS is for the half year ended 30 June 2007.
The IFRS transition statement has been prepared to explain the impact on the
reported result of Timestrip and to set out the changes to the accounting
policies of the group together with provision of reconciliations of the
restatement of previously published comparative financial information.
References to IFRS throughout this document refer to the application of
International Accounting Standards and International Financial Reporting
Standards.
Overview of impact of adoption of IFRS
Conversion to IFRS affects Timestrip's reporting, particularly in respect of
intangible assets and capitalised development expenditure. It does not affect
the cashflows or the underlying prospects of the business; however, the
implementation of the new standards may result in increased volatility in
reported results due to changes in accounting for intangible assets and
development expenditure.
It has not been possible to separately identify development expenditure which
met the criteria for capitalisation prior to the date of transition. Therefore
no capitalisation was performed as at the date of transition.
Revised group accounting policies under IFRS.
The following accounting policies represent changes from the accounting policies
stated in the financial statements for the year ended 31 December 2006. The
remaining accounting policies remain the same as in the financial statements for
the year ended 31 December 2006 which are consistent with IFRS.
Goodwill
All business combinations are accounted for by applying the purchase method.
Goodwill represents amounts arising on acquisition of subsidiary undertaking,
Timestrip UK Limited. In respect of business acquisitions, goodwill represents
the difference between the cost of acquisition and the fair value of the net
identifiable assets acquired. Goodwill is allocated to cash generating units and
is now no longer amortised but is tested annually for impairment at a consistent
time each year. Goodwill is now stated at cost or deemed cost less any
accumulated impairment losses.
Timestrip UK Limited has a product which is unique in the market place and is
able to cheaply and easily provide a record of elapsed time in the key ambient
temperatures of room, fridge and freezer. In addition, the company has also
spent many years working on the research and development associated with the
underlying diffusion technology and it is believed that this creates a
significant barrier to entry to any potential competition. Timestrip is
currently one of the leading companies in the world for understanding micron
diffusion. Finally, the company has spent significant money successfully
applying for global patents for the technology which further adds to the
protection. Hence, based on these facts the directors are of the opinion that no
impairment is necessary.
Internally-generated Intangible Assets - Research and Development Expenditure
Expenditure on research activities is recognised as an expense in the period in
which it is incurred.
An internally-generated intangible asset arising is recognised only if all of
the following conditions are met:
• an asset is created that can be identified ;
• it is probable that the asset created will generate future economic
benefits; and
• the development cost of the asset can be measured reliably.
Internally-generated intangible assets are amortised on a straight-line basis
over their useful lives. Where no internally-generated intangible asset can be
recognised, development expenditure is recognised as an expense in the period in
which it is incurred.
Transition statement from UK GAAP to IFRS as at 1 January 2006
Consolidated UK GAAP at 1 January Goodwill Amortisation IFRS at 1 January
balance sheet 2006 IAS 38 2006
£'000 £'000 £'000
Non current assets
Goodwill 5,408 235 5,642
Other intangible
assets 931 - 932
Property, plant &
equipment 304 - 304
---------- --------- --------
6,643 235 6,878
---------- --------- --------
Current assets
Inventory 66 - 66
Trade and other
receivables 194 - 194
Cash and cash
equivalents 2,979 - 2,979
---------- --------- --------
3,240 - 3,240
---------- --------- --------
---------- --------- --------
Total Assets 9,883 235 10,118
---------- --------- --------
Current Liabilities
Trade and
other payables 208 - 208
Bank overdrafts
and loans 14 - 14
---------- --------- --------
222 - 222
---------- --------- --------
Non-current Liabilities
Bank Loans 67 - 67
---------- --------- --------
Total Liabilities 289 - 289
---------- --------- --------
---------- --------- --------
Net Assets £9,594 £235 £9,829
========== ========= ========
Equity
Share Capital 3,603 - 3,603
Share Premium Account 26,588 - 26,588
Share Options Reserve 66 - 66
Retained losses (20,663) 235 (20,428)
---------- --------- --------
£9,594 £235 £9,829
========== ========= ========
Transition statement from UK GAAP to IFRS - 30 June 2006
Income UK GAAP at 30 June 2006 Goodwill Amortisation IAS 38 IFRS at 30 June 2006
statement £'000 £'000 £'000
Revenue 216 - 216
Cost of Sales (139) - (139)
---------- --------- ---------
Gross Profit 77 - 77
Administrative expenses (679) 141 (538)
Loss from Operations (603) 141 (462)
Investment Revenue 64 - 64
---------- --------- ---------
Loss before tax (539) 141 (397)
Taxation - - -
---------- --------- ---------
Loss for the period £ (539) £ 141 £ (397)
========== ========= =========
Transition statement from UK GAAP to IFRS - 30 June 2006
Consolidated UK GAAP at 30 June 2006 Goodwill Amortisation IAS 38 IFRS at 30 June 2006
Balance sheet £'000 £'000 £'000
Non current assets
Goodwill 5,267 376 5,643
Other intangible
assets 1,148 - 1,148
Property,
plant & equipment 252 - 252
---------- ----------- --------
6,667 376 7,043
---------- ----------- --------
Current assets
Inventory 72 - 72
Trade and
other receivables 250 - 250
Corporation tax 0 - 0
Cash and cash
equivalents 3,369 - 3,369
---------- ----------- --------
---------- ----------- --------
3,691 - 3,691
---------- ----------- --------
---------- ----------- --------
Total Assets 10,358 376 10,734
---------- ----------- --------
Current Liabilities
Trade and
other payables (234) - (234)
Bank overdrafts
and loans (14) - (14)
Obligations
under finance leases (6) - (6)
---------- ----------- --------
(254) - (254)
---------- ----------- --------
Non-current Liabilities
Bank Loans (60) - (60)
Obligations
under finance leases (13) - (13)
---------- ----------- --------
Total Liabilities (326) - (326)
---------- ----------- --------
---------- ----------- --------
Net Assets £10,032 £376 £10,408
========== =========== ========
Equity
Share Capital 3,607 - 3,607
Share Premium Account 27,524 - 27,524
Share Options Reserve 103 - 103
Retained losses (21,202) 376 (20,825)
---------- ----------- --------
£10,032 £376 £10,408
========== =========== ========
Under International Accounting Standard 38: Intangible assets (IAS 38) goodwill is no longer
amortised on a straight line basis, but instead is subject to annual impairment testing under
International Accounting Standard 36 (IAS 36). Goodwill totalling £376,183 which had previously
been amortised to the profit and loss account has been reinstated in the balance sheet.
Transition statement from UK GAAP to IFRS - 31 December 2006
Income UK GAAP at Goodwill Research & IFRS at 31
statement 31 December Amortisation Development December
2006 IAS 38 IAS 38 2006
£'000 £'000 £'000 £'000
Revenue 379 - - 379
Cost of sales (281) - - (281)
-------- ---------- --------- --------
Gross Profit 98 - - 98
Administrative
expenses (1,707) - 419 (1,288)
Loss from
Operations (1,609) - 419 (1,190)
Investment Revenue 123 - - 123
Finance costs (8) - - (8)
-------- ---------- --------- --------
Loss before tax (1,495) - 419 (1,075)
Taxation 90 - - 90
-------- ---------- --------- --------
Loss for the period (1,405) - 419 (985)
======== ========== ========= ========
Transition statement from UK GAAP to IFRS - 31 December 2006
Consolidated UK GAAP at Goodwill Research IFRS at 31
balance sheet 31 December Amortisation & Development December
2006 IAS 38 IAS 38 2006
£'000 £'000 £'000 £'000
Non current assets
Goodwill 5,408 235 - 5,643
Other intangible
assets 901 - 419 1,320
Property,
plant & equipment 372 - - 372
---------- --------- --------- --------
6,680 235 419 7,335
---------- --------- --------- --------
Current assets
Inventory 183 - - 183
Trade and
other receivables 186 - - 186
Corporation tax 195 - - 195
Cash and cash
equivalents 2,517 - - 2,517
---------- --------- --------- --------
3,082 - - 3,082
---------- --------- --------- --------
---------- --------- --------- --------
Total Assets 9,762 235 419 10,416
---------- --------- --------- --------
Current Liabilities
Trade and
other payables 404 - - 404
Bank overdrafts
and loans 21 - - 21
Obligations
under finance
leases 6 - - 6
---------- --------- --------- --------
430 - - 430
---------- --------- --------- --------
Non-current
Liabilities
Bank Loans 52 - - 52
Obligations
under finance
leases 18 - - 18
---------- --------- --------- --------
Total Liabilities 501 - - 501
---------- --------- --------- --------
---------- --------- --------- --------
Net Assets £9,261 £235 £419 £9,915
========== ========= ========= ========
Equity
Share Capital 3,607 - - 3,607
Share Premium
Account 27,542 - - 27,542
Share Options
Reserve 180 - - 180
Retained losses (22,068) 235 419 (21,414)
---------- --------- --------- --------
£9,261 £235 £419 £9,915
========== ========= ========= ========
Under International Accounting Standard 38: Intangible assets (IAS 38) goodwill is no longer amortised on a straight
line basis, but instead is subject to annual impairment testing under International Accounting Standard 36 (IAS 36).
Goodwill totalling £235,114 which had previously been amortised to the profit and loss account has been reinstated in
the balance sheet.
Under International Accounting Standard 38: Intangible assets (IAS 38) the criteria for the recognition of expenditure
on research and development allow for the capitalisation of expenditure previously expensed. The total expenditure for
the year ended 30 December 2006 which it was allowable to capitalise was £419,193.
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