Final Results - Replacement
Zytronic PLC
16 December 2004
The following replaces the Preliminary Results for the year ended 30 September
2004 issued on 9 December 2004 at 0700 under RNS number 1923G.
The previous announcement was released with typographical errors which have been
highlighted below with an asterisk. All other details remain unchanged.
Immediate Release 9 December 2004
ZYTRONIC PLC
Preliminary Results for the Year ended 30 September 2004
Zytronic plc, a leading specialist manufacturer of touchscreens and optical
filters for electronic displays, announces its preliminary results for the year
ended 30 September 2004.
Highlights
• Turnover increased 54% to £8.8m (2003: £5.7m);
• Operating profit showed a significant recovery to £0.37m (2003: loss
£0.35m); pre-tax profit improved to £0.35m (2003: £0.37m loss)
• Operating activities continued to generate positive gross cash inflows of
£1.0m (2003: £0.4m);
• Return to positive distributable reserves;
• Orders strengthened in all areas of the business, but in particular
ZYTOUCH(R) touchscreens;
• Pilot production plant for new touchscreen product ZYPOS(R) came on stream
at end of November 2004;
• On outlook, Chairman John Kennair said:
'The introduction of ZYPOS(R) after three years of development is expected to
provide exciting new opportunities for the business over the medium term.
As we move into the new financial year, the order book continues to strengthen
not only from the Group's existing accounts but also from new customers
generated from the increasing global awareness of the technical advantages of
ZYTOUCH(R).
The Directors, therefore, are confident of continued progress of the Group going
forward.'
Notes to Editors
Zytronic Plc is an industry leader in the development and manufacture of
customised optical filters to enhance electronic display performance. It is also
an innovator in the production of specialised and transparent laminates for
niche markets.
Based on this lamination expertise, Zytronic has developed a unique range of
touchscreen products employing projected capacitive technology which enables the
pointing device to sense through an anti-vandal screen in front of the display.
This system offers significant benefits to electronic display manufacturers.
Operating from two modern factories near Newcastle-upon-Tyne in England,
Zytronic assembles touchscreens and filters, utilising special glass and plastic
materials, in environmentally controlled clean rooms.
Enquiries:
John Kennair, Chief Executive
Denis Mullan, Finance Director
Zytronic plc (Today: 020 7466 5000; thereafter 0191 414 5511)
Richard Darby, Isabel Podda
Buchanan Communications 020 7466 5000
Chairman's Statement
Strong growth in sales in the year to 30 September 2004, combined with a
substantial improvement in operations, have led to good progress not just in the
overall profitability of the business but in most key indicators.
Results
Sales and profit
Turnover for the year under review increased 54% to £8.76m (2003: £5.69m)
resulting in a pre-tax profit of £350,000 (2003: loss of £366,000). This is
after a pre-tax loss of £71,000 in the first half.
Cash
The Group's cash position has strengthened in the second half with cash balances
at the year-end of £1.17m (£308,000 at 31 March 2004). Gross cash generated from
trading in the course of the year (operating profit before depreciation and
amortisation) increased to a healthy £1.0m (2003: £347,000).
Trading
Orders strengthened in all areas of the business but in particular for ZYTOUCH
(R) touchscreens. The Group now has a range of blue chip customers in the ATM,
telecommunications, information kiosk, petrol pump, entertainment and ticketing
sectors. The Group * has not only experienced growth from existing accounts but
also, with the acceptance of the technology in the market place, is* continually
winning new accounts which will further serve the overall growth of the
business.
The fall in the value of the dollar adversely impacted on results in the first
half. To provide protection against further adverse movements we have
implemented specification changes to some of our products, extended our natural
hedging and made some limited use of forward foreign exchange contracts. The
benefits of the specification changes will flow through by the end of December
2004 and our protective steps will continue to be monitored on an ongoing basis.
With the continued strength of the order book, the focus in the future will be
to drive down manufacturing costs in the business to further improve margins as
volumes increase.
ZYPOS(R)
For the past three years, a new touchscreen product (ZYPOS(R)) has been under
development for the 'point of sale' market. This sector has much greater volumes
than the market for ZYTOUCH(R), but at lower prices, and it has been necessary
to develop a simpler product that will compete in this market place on price,
without compromising margins. The pilot production plant came on stream at the
end of November 2004. Prototype samples will be supplied to selected companies
for evaluation whilst the product undergoes an environmental testing programme
in January 2005.
The official trade launch of the product will take place in Shanghai at the '
Electronica China 2005' trade show in March 2005 and in the USA at the 'Society
for Information Display' trade show in Boston in May 2005.
The Directors anticipate that this new product will begin to impact on trading
in 2005/06 and I look forward to reporting further on progress in the future.
Intellectual property
In June of this year, an agreement was completed which extends until 2014
Zytronic's rights to the Intellectual Property relating to its touchscreen
technology. This agreement has also given Zytronic the rights to manufacture the
electronic controlling device for the touchscreen, which will further improve
margins as the Group moves forward.
Management
I would like to express my thanks to all Group employees and in particular the
managers and Directors of the operating subsidiary, Zytronic Displays Ltd. Their
dedication and commitment has enabled the substantial improvement in the
performance of the business in the second half of the year.
Following Ian Lawson's resignation in June 2004, I have resumed the role of
Chief Executive Officer.
Outlook
The introduction of ZYPOS(R) after three years of development is expected to
provide exciting new opportunities for the business over the medium term.
As we move into the new financial year, the order book continues to strengthen
not only from the Group's existing accounts but also from new customers
generated from the increasing global awareness of the technical advantages of
ZYTOUCH(R).
The Directors, therefore, are confident of the continued progress of the Group
going forward.
J M Kennair MBE
Chairman
9 December 2004
Group profit and loss account
for the year ended 30 September 2004
2004 2003
Notes Unaudited* Audited*
£'000 £'000
Group turnover 8,756 5,690
Cost of sales 6,187 4,075
Gross profit 2,569 1,615
Distribution costs 121 80
Administration expenses
• before exceptional item 2,078 1,801
• exceptional reorganisation costs - 87
Total administration costs 2,078 1,888
2,199 1,968
Group operating profit/(loss) 370 (353)
Interest payable (26) (35)
Interest receivable 6 22
Profit/(loss) on ordinary activities before taxation 350 (366)
Tax (charge on profit)/credit on loss on ordinary activities 3 (114) 59
Profit/(loss) on ordinary activities after taxation 236 (307)
Ordinary dividends on equity shares * - -
Retained profit/(loss) for the year 236 (307)
Earnings/(loss) per share - basic 4* 1.7p (2.1)p
Earnings/(loss) per share - diluted 4* 1.6p* (2.1)p
There were no recognised gains or losses as defined in Financial Reporting
Standard No. 3 other than those stated above.
The results for both the above years derive from continuing operations.
Group balance sheet*
at 30 September 2004
2004 2003
Unaudited* Audited*
£'000 £'000
Fixed assets
Intangible assets 2,172 2,235
Tangible assets 2,155 2,258
4,327 4,493
Current assets
Short term property investment 75 75
Stocks 1,084 1,086
Debtors:
Amounts falling due within one year 1,873 1,134
Cash at bank and in hand 1,171 954
4,203 3,249
Creditors: amounts falling due within one year 1,569 1,126
Net current assets 2,634 2,123
Total assets less current liabilities 6,961 6,616
Creditors: amounts falling due after more than one year 394 367
Provisions for liabilities and charges
Deferred tax 172 90
6,395 6,159
Capital and reserves
Called up share capital 143 143
Share premium 6,212 6,212
Profit and loss account 40 (196)
Equity shareholders' funds 6,395 6,159
Group statement of cashflows
for the year ended 30 September 2004
2004 2003
Notes Unaudited Audited
£'000 £'000
Net cash inflow from operating activities 5a* 520 365
Return on investments and servicing of finance
Interest received 6 22
Interest paid - (11)
Interest element of finance lease rental payments (26) (34)
Net outflow from returns on investments and servicing of finance (20) (23)
Taxation
Corporation tax paid - (86)
Capital expenditure and financial investment
Payments to acquire intangible fixed assets (164) (80)
Payments to acquire tangible fixed assets (237) (198)
Payment to acquire short term property investment - (75)
Net outflow from capital expenditure and financial (401) (353)
investment
Equity dividends paid - -
Net cash inflow/(outflow) before financing 99 (97)
Financing
Receipt from new bank loan 250 -
Net repayments of capital element of finance lease (132) (125)
Net inflow/(outflow) from financing 118 (125)
Increase/(decrease) in cash 217 (222)
Reconciliation of net cashflow to movement in net funds
Increase/(decrease) in cash 217 (222)
Receipt from new bank loan (250) -
Net repayments of capital element of finance lease 132 125
Movement in net funds 99 (97)
Net funds at beginning of year 455 552
Net funds at end of year 5b* 554 455
Notes
1. Basis of preparation
The preliminary results have been prepared under the historical cost
convention and in accordance with applicable accounting standards. The
preliminary results have been prepared on the basis of the accounting
policies set out in the group's statutory accounts for the year ended 30
September 2003.
We have revised our estimate of the useful economic lives of certain items
of plant and machinery which has the effect of reducing the depreciation
charge for the year by £82,000.
2. Basis of consolidation
The group results consolidate the accounts of Zytronic plc and all its
subsidiary undertakings drawn up to 30 September 2004.
3. Tax * (charge on profit)/credit on loss on ordinary activities
2004 2003
Unaudited Audited
£'000 £'000
Current tax:
UK corporation tax (38) -
Corporation tax over-provided in prior years 6 -
Total current tax (32) -
Deferred tax:
Origination and reversal of timing differences (82) 59
Group deferred tax (82) 59
Tax (charge on profit)/credit on loss on ordinary activities (114) 59
Factors affecting current tax *(charge)/credit:
(Profit)/loss on ordinary activities multiplied by standard rate
of UK corporation tax of 30% (2003: 30%) (105)* 110
Expenses not deductible for tax purposes (includes
amortisation of goodwill and licences) (80) (70)
Deferred revenue expenses and tax credits 43 18
Accelerated capital allowances 13* (58)
Differences in UK corporation tax rates 25* -
Utilisation of brought forward tax losses 66 -
*Adjustments in respect of prior years 6 -
Total current tax (32) -
*4. Earnings/(loss) per share
The calculations of earnings per share are based on a profit after taxation
of £236,000 (2003: loss £307,000), and a basic and diluted weighted average
of 14,291,539 shares and *14,338,685 shares respectively (2003: basic and
diluted weighted average of 14,291,539 shares).
*5. Notes to the group statement of cashflows
(a) Reconciliation of operating *profit/(loss) to net cash inflow from
operating activities:
2004 2003
Unaudited Audited
£'000 £'000
Operating profit/(loss) 370 (353)
Depreciation 402 498
Amortisation 229 202
Gross cash inflows 1,001 347
Decrease/(increase) in stocks 2 (191)
(Increase)/decrease in debtors (747) 130
Increase in creditors 264 79
Net cash inflow from operating activities 520 365
(b) Analysis of net funds
2003 Cashflows 2004
Audited Unaudited Unaudited
£'000 £'000 £'000
Cash at bank and in hand 954 217 1,171
Bank loan - (250) (250)
Finance lease (499) 132 (367)
455 99 554
*6. Report and accounts
The above unaudited results do not represent statutory accounts. The audit
report is yet to be signed. The audited accounts will be mailed to
shareholders shortly and will be available from the registered office at
Patterson Street, Blaydon, Tyne & Wear, NE21 5SG.
The results for the year ended 30 September 2003 have been extracted from
the 2003 accounts of Zytronic plc. The 2003 accounts, which have been filed
with the Registrar of Companies, received an unqualified audit report and
did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985.
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