Lo-Q plc
UNAUDITED INTERIM RESULTS
for the six month period ended 30 April 2010
and BOARD CHANGES
Lo-Q plc, the AIM listed provider of virtual queuing systems for theme parks and major attractions, announces unaudited Interim Results for the six month period ended 30 April 2010 and changes to the Board of the Company.
Lo-Q designs, installs and operates systems which allow members of the public to make ride and show reservations when they visit a theme park or other attractions. Lo-Q's flagship product, VQ2020, is a true virtual queuing system which uses hand-held units, called Q-bots, in major theme parks around the world. Lo-Q sites encompass 11 Six Flags theme parks in North America, Dollywood in the US, theme parks in Australia and Italy, as well as Legoland Windsor in the UK.
Financial Highlights
· Revenue up 21% to £2.46m (2009*: £2.04m)
· Operating losses reduced by £0.2m to £0.9m (2009*: £1.1m)
· Debt free, with net cash of £2.9m
* Unaudited pro-forma results for 6 month period to 30 April 2009
Operational Highlights
· Visitor utilisation of Lo-Q system up 18% during the period and total attendances within the parks in which we operate up 8%
· Two new parks signed up in 2010
· Successful first installation of the Q-txt queue management system in a US theme park
· A new premium version of the Q-bot introduced and selling well: the platinum Q-bot
· Increased investment on R&D work on existing and new systems, specifically into a new system that is expected to be initially trialled during the current year in two water parks
Board Changes
· The Board is in advanced discussions with its preferred candidate for new Chief Executive Officer
· Jeff McManus ceased to be a Director of the Company today
Commenting, Leonard Sim, Founding Director and Acting Chief Executive of Lo-Q, said today:
"Lo-Q has added new customers and maintained a strong cash position during this period whilst strengthening relationships within the existing consumer base.
"Progress is being made in securing new customers for our products, so the period ahead continues to look exciting. An extensive strategic review identified potential areas where our innovative approach to the problems of queuing could enable us to begin to broaden our reach.
"The Board would like to thank Jeff for his significant contribution to Lo-Q over the last ten years and we wish him well for the future."
Contacts:
Lo-Q plc |
Leonard Sim Acting Chief Executive |
Tel: 01491 577 210 |
|
|
|
Arbuthnot Securities Limited |
Hugh Field Ed Gay |
Tel: 020 7012 2000 |
|
|
|
Walbrook PR Ltd |
|
Tel: 020 7933 8780 |
|
Paul McManus
|
Mob: 07980 541 893 paul.mcmanus@walbrookpr.com |
These Interim Results are available on Lo-Q's website at www.lo-q.com.
Lo-Q plc ("Lo-Q" or the "Company")
Interim Results for the six month period ended 30 April 2010
Acting Chief Executive's Statement
Financial Results
I am pleased to report continued good performance and an improved financial position for the Company against the corresponding period in 2009 in what is still a challenging economic environment.
The change in our year end to 31 October, which was implemented in 2009, means that the first six months of the financial year now only includes limited trading activity in our parks, as the majority of the parks and attractions in which we operate have reduced activity between November and April. The last Interim Results that we presented for the six month period to 30 June 2009 are therefore not a meaningful comparison to the results that we are now publishing for the six month period to 30 April 2010. Accordingly an unaudited 'pro-forma' comparison for the six month period to 30 April 2009 has also been presented.
On a pro-forma basis, revenue was up 21% to £2.46m (2009: £2.04m). The substantial uptake of the platinum Q-bot, our new premium product launched in 11 of the parks in which we operate, has been well received and contributed to the increase in revenue. Similarly the introduction of the gold Q-bot into parks that only sold regular Q-bots last year is helping improve their trade. The Company will also further benefit from the 3 new parks introduced in 2009. New parks traditionally achieve significant increased growth in their second full year of operation.
Visitors utilizing our systems were up 18% during the period, whilst total attendances within the parks in which our products are used were up 8%. The impact of poor weather, which can have a significant impact on our operation, was thankfully limited and sporadic amongst the parks in the first six months, although the Texas Spring Break was negatively impacted by unseasonal snow.
Administrative expenses have remained stable on the comparative pro-forma basis.
The Company continues to invest at a progressively higher rate on R&D and patent protection of new products and systems and is recruiting more staff in this sector to enable further advancement to take place.
Operating losses reduced in the period by £0.2m to £0.9m (Proforma 2009: £1.1m).
Cash position
The cash outflow of £1.6m in the first six months has resulted in net cash balances of £2.9m at 30 April 2010. The Company, which remains debt free, has cash and cash equivalents of £1.6m million more than at the same time in the prior year. The end of April, which is at the start of the theme park season, normally represents the annual cash low point for the Company.
The Board is comfortable with the current cash position which reflects the impact of increased expenditure in Research and Development incurred in the six month period and also the consequence of the company having substantially utilised its tax losses in its various countries of operation.
New Business and Contract Extensions
The period has seen significant activity in the areas of new business and the strengthening of relationships within the existing customer base.
Two new parks were added in the first six months of 2010. The addition of Six Flags America, located in the Baltimore/Washington, D.C. region of the US brings the total number of Six Flags installations to eleven and now allows any guest, at any Six Flags dry theme park, in North America to rent a Flash Pass from the Lo-Q sales point.
The second addition for the 2010 season is the installation of our Q-txt queue management system in the Lake Compounce Family Theme Park in Bristol, Connecticut, USA. This is Lo-Q's first Q-txt installation in a US theme park.
The Lake Compounce park is operated by Palace Entertainment, part of the Parques Reunidos group of parks. Palace Entertainment is the largest operator of waterparks and family entertainment centres in the USA with over 14 million visitors annually at 38 locations with seven theme parks, 10 waterparks and 21 family entertainment centres. Lake Compounce itself has over 700,000 visitors annually and attendance continues to grow. This is a one year agreement, extendable to a four year contract. Mirabilandia, in Italy, which started operation with Q-bots last year, is also part of the Parques Reunidos group.
In terms of existing business, Lo-Q is pleased to have secured the following contract extensions during the period:
· LEGOLAND® Windsor (UK), for a further three years
· Dreamworld (Australia), for a further three years
· Mirabilandia (Italy), for a further four years
· Dollywood of Tennessee (USA), for a further year
Parque Isla Mágica in Seville, Spain, agreed on 26 March 2010 to extend its agreement to a one year rolling contract for the supply of Lo-Q's Q-txt, queue management system.
Largest Customer
We are pleased to report that our largest customer emerged from Chapter 11 bankruptcy proceedings in the US in April 2010, following a 10 month period of re-organisation, which had little impact to the performance of the Company. Subsequent senior management changes within this company are not expected to adversely impact our strong relationship.
Currency
Recent activity in the currency markets had seen a sustained period of the US dollar strengthening against sterling. Such strengthening would benefit the result of the Group as it reports in sterling but as previously reported, the policy of the Board is to hedge a proportion of its dollar exposure at the start of year. The hedging in place in respect of the current year will predefine a large percentage of the amount of currency impact in this current year.
Research & Development
R&D work continues on enhancements to existing and new systems and specifically the Company is expending significant resource on a new system that is expected to be trialed for the first time during the current year in two water parks.
Our patent applications in relation to this system were published in May 2010 and the patents have received significant interest from potential customers, where it is expected that this new innovation will have wider applications than theme parks, whether attraction or water based.
More details of the system and the trials will be released by the Company once these activities have been concluded.
Board Changes
For the previous four years Jeff McManus has acted as both Chairman and Chief Executive of the Company. In February 2010, Jeff however, decided to step down from the role as Chief Executive and to continue as part time Chairman as he did not feel he would be able to consistently commit the necessary time for the dual role. On 20 July 2010, Jeff ceased to be a Director of the Company. The Board would like to thank Jeff for his significant contribution to Lo-Q over the last ten years and we wish him well for the future.
I have taken over the duties of Acting Chief Executive, and will continue to carry out this role whilst the Board finalises the appointment of a new Chief Executive. The Board is currently in advanced discussions with its preferred candidate for the position of Chief Executive Officer and expects to make a further announcement in the near future.
John Lillywhite has agreed to take over as Acting Chairman with immediate effect. An announcement about the role of Chairman of the Company will be made in due course.
Dividend
The Board remains conscious that its future cash requirements will depend, inter alia, on the requirement for investment into new products and the subsequent release of these products into the market place. Once the new Chief Executive has undertaken his review of the Group and the Board has agreed its strategic direction and investment requirements, the Board will consider the appropriateness of introducing a dividend policy.
Outlook
Trading in the year to date, which is the quieter period of the financial year, has been satisfactory but the eventual out-turn for the rest of the year as always will be very dependent on park attendance. The Group's positive cash generation profile has allowed Lo-Q to add additional patent rights to its intellectual property portfolio. We have acquired the various patents and applications from Palmtop Productions and, as these lie in parallel areas to our existing patents, this will further strengthen our operating position.
Progress is being made in securing new customers for our products, so the period ahead continues to look exciting. An extensive strategic review identified potential areas where our innovative approach to the problems of queuing could enable us to begin to broaden our reach. Our respected position in the theme park industry should enable growth in the numbers of theme parks who operate our systems and our expanded engineering capabilities will enable the features in our current offerings to be expanded, also.
Leonard Sim
Acting Chief Executive
20 July, 2010
Statement of Comprehensive Income
For The Six Month Period Ending 30 April 2010
|
|
Actual |
|
Pro - Forma |
|
Actual |
|
|
Six months to |
|
Six months to |
|
Six months to |
|
|
30 April 2010 |
|
30 April 2009 |
|
30 June 2009 |
INCOME STATEMENT |
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
Revenue |
|
2,457,214 |
|
2,042,725 |
|
5,893,364 |
|
|
|
|
|
|
|
Cost of Sales |
|
(2,147,989) |
|
(1,974,197) |
|
(4,802,247) |
|
|
|
|
|
|
|
GROSS PROFIT |
|
309,225 |
|
68,528 |
|
1,091,117 |
|
|
|
|
|
|
|
Administrative expenses |
|
(1,211,632) |
|
(1,210,521) |
|
(922,236) |
|
|
|
|
|
|
|
OPERATING (LOSS)/PROFIT |
|
(902,407) |
|
(1,141,993) |
|
168,881 |
|
|
|
|
|
|
|
Finance costs |
|
(15) |
|
(28) |
|
(15) |
|
|
|
|
|
|
|
Finance income |
|
2,635 |
|
27,078 |
|
8,176 |
|
|
|
|
|
|
|
(LOSS)/PROFIT BEFORE TAX |
|
(899,787) |
|
(1,114,943) |
|
177,042 |
|
|
|
|
|
|
|
Tax |
|
188,955 |
|
234,000 |
|
(35,572) |
|
|
|
|
|
|
|
(LOSS)/PROFIT FOR THE PERIOD |
|
(710,832) |
|
(880,943) |
|
141,470 |
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations |
|
64,436 |
|
88,205 |
|
(108,680) |
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, |
|
|
|
|
|
|
NET OF TAX |
|
64,436 |
|
88,205 |
|
(108,680) |
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
|
(646,396) |
|
(792,738) |
|
32,790 |
|
|
|
|
|
|
|
(Loss)/Profit attributable to |
|
|
|
|
|
|
Owners of the parent |
|
(710,832) |
|
(880,943) |
|
141,470 |
|
|
|
|
|
|
|
Total comprehensive income attributable to |
|
|
|
|
|
|
Owners of the parent |
|
(646,396) |
|
(792,738) |
|
32,790 |
|
|
|
|
|
|
|
Earnings per share (pence) |
|
|
|
|
|
|
Basic |
|
(4.47) |
|
(5.64) |
|
0.91 |
Diluted |
|
(4.27) |
|
(5.14) |
|
0.83 |
|
|
|
|
|
|
|
All activities of the company are classified as continuing. |
|
|
|
|
|
|
Statement of Financial Position
As at 30 April 2010
|
|
Actual |
|
Pro - Forma |
|
Actual |
|
|
|
30 April 2010 |
|
30 April 2009 |
|
30 June 2009 |
|
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
|
|
Intangible assets |
|
846,007 |
|
579,019 |
|
611,797 |
|
Property, plant and equipment |
|
70,062 |
|
55,923 |
|
56,255 |
|
Installed Systems |
|
24,822 |
|
- |
|
- |
|
Deferred tax |
|
188,955 |
|
256,026 |
|
159,428 |
|
|
|
|
|
|
|
|
|
|
|
1,129,846 |
|
890,968 |
|
827,480 |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
Inventories |
|
448,131 |
|
795,323 |
|
357,761 |
|
Trade and other receivables |
|
1,066,506 |
|
149,785 |
|
826,692 |
|
Tax receivable |
|
1,027 |
|
3,393 |
|
569 |
|
Cash and cash equivalents |
|
2,865,833 |
|
1,272,399 |
|
1,901,287 |
|
|
|
|
|
|
|
|
|
|
|
4,381,497 |
|
2,220,900 |
|
3,086,309 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
Trade and other payables |
|
577,840 |
|
541,386 |
|
505,834 |
|
Tax payable |
|
213,717 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
791,557 |
|
541,386 |
|
505,834 |
|
|
|
|
|
|
|
|
|
NET CURRENT ASSETS |
|
3,589,940 |
|
1,679,514 |
|
2,580,475 |
|
|
|
|
|
|
|
|
|
NET ASSETS |
|
4,719,786 |
|
2,570,482 |
|
3,407,955 |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Called up share capital |
|
160,637 |
|
153,141 |
|
155,066 |
|
Share premium |
|
5,093,077 |
|
5,001,063 |
|
5,008,950 |
|
Capital redemption reserve |
|
12,473 |
|
12,473 |
|
12,473 |
|
Other reserves |
|
108,148 |
|
45,607 |
|
65,606 |
|
Retained earnings |
|
(654,549) |
|
(2,641,802) |
|
(1,834,140) |
|
|
|
|
|
|
|
|
|
Total equity |
|
4,719,786 |
|
2,570,482 |
|
3,407,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
4,719,786 |
|
2,570,482 |
|
3,407,955 |
|
Statement of Cash Flows
For The Six Month Period Ending 30 April 2010
|
|
Actual |
|
Pro - Forma |
|
Actual |
|
|
Six months to |
|
Six months to |
|
Six months to |
|
|
30 April 2010 |
|
30 April 2009 |
|
30 June 2009 |
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
Cash generated from operations |
|
(1,253,686) |
|
(1,489,795) |
|
(501,952) |
Interest paid |
|
(15) |
|
(28) |
|
(15) |
Tax paid |
|
(75,011) |
|
(20,538) |
|
(10,562) |
|
|
|
|
|
|
|
Net cash outflow from operating activates |
|
(1,328,712) |
|
(1,510,361) |
|
(512,529) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Purchase of intangible fixed assets |
|
(238,032) |
|
(126,291) |
|
(146,980) |
Purchase of tangible fixed assets |
|
(51,318) |
|
(20,732) |
|
(16,469) |
Interest received |
|
2,635 |
|
27,078 |
|
8,176 |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(286,715) |
|
(119,945) |
|
(155,273) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Share Issue |
|
1,720 |
|
- |
|
1,850 |
Share Premium |
|
40,928 |
|
- |
|
7,888 |
|
|
|
|
|
|
|
Net cash from financing activities |
|
42,648 |
|
- |
|
9,738 |
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
(1,572,779) |
|
(1,630,306) |
|
(658,064) |
Cash and cash equivalents at beginning of year |
|
4,438,612 |
|
2,902,705 |
|
2,559,351 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
2,865,833 |
|
1,272,399 |
|
1,901,287 |
Statement of Changes in Equity
For The Six Month Period Ending 30 April 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share |
|
Retained |
|
Share |
|
Capital |
|
Share |
|
Total |
Actual: 6 Months Ended 30 |
|
capital |
|
earnings |
|
premium |
|
redemption |
|
based |
|
|
April 2010 |
|
|
|
|
|
|
|
reserve |
|
payment |
|
|
|
|
|
|
|
|
|
|
|
|
reserve |
|
|
|
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
Balance at 1 November 2009 |
|
158,917 |
|
(8,153) |
|
5,052,149 |
|
12,473 |
|
87,148 |
|
5,302,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for Period |
|
- |
|
(710,832) |
|
- |
|
- |
|
- |
|
(710,832) |
Foreign exchange |
|
- |
|
64,436 |
|
- |
|
- |
|
- |
|
64,436 |
Issue of share capital |
|
1,720 |
|
- |
|
40,928 |
|
- |
|
- |
|
42,648 |
Recognition of share-based Payments |
|
- |
|
- |
|
- |
|
- |
|
21,000 |
|
21,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 April 2010 |
|
160,637 |
|
(654,549) |
|
5,093,077 |
|
12,473 |
|
108,148 |
|
4,719,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro-Forma: 6 Months Ended 30 April 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
Balance at 1 November 2008 |
|
153,141 |
|
(1,849,064) |
|
5,001,063 |
|
12,473 |
|
52,770 |
|
3,370,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for Period |
|
- |
|
(880,943) |
|
- |
|
- |
|
- |
|
(880,943) |
Foreign exchange |
|
- |
|
88,205 |
|
- |
|
- |
|
- |
|
88,205 |
Recognition of share-based Payments |
|
- |
|
- |
|
- |
|
- |
|
(7,163) |
|
(7,163) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 April 2009 |
|
153,141 |
|
(2,641,802) |
|
5,001,063 |
|
12,473 |
|
45,607 |
|
2,570,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual: 6 Months Ended 30 June 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
|
£ |
Balance at 1 January 2009 |
|
153,216 |
|
(1,866,930) |
|
5,001,062 |
|
12,473 |
|
45,606 |
|
3,345,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for Period |
|
- |
|
141,470 |
|
- |
|
- |
|
- |
|
141,470 |
Foreign exchange |
|
- |
|
(108,680) |
|
- |
|
- |
|
- |
|
(108,680) |
Issue of share capital |
|
1,850 |
|
- |
|
7,888 |
|
- |
|
- |
|
9,738 |
Recognition of share-based Payments |
|
- |
|
- |
|
- |
|
- |
|
20,000 |
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2009 |
|
155,066 |
|
(1,834,140) |
|
5,008,950 |
|
12,473 |
|
65,606 |
|
3,407,955 |
Cash Flow Statement
For The Six Month Period Ending 30 April 2010
|
|
Actual |
|
Pro - Forma |
|
Actual |
|
|
Six months to |
|
Six months to |
|
Six months to |
|
|
30 April 2010 |
|
30 April 2009 |
|
30 June 2009 |
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
(Loss)/Profit before tax |
|
(899,787) |
|
(1,114,943) |
|
177,042 |
Depreciation charges |
|
127,177 |
|
87,450 |
|
88,280 |
Share based payment |
|
21,000 |
|
(7,163) |
|
20,000 |
Foreign exchange |
|
64,436 |
|
88,205 |
|
(108,680) |
Finance costs |
|
15 |
|
28 |
|
15 |
Finance income |
|
(2,635) |
|
(27,078) |
|
(8,176) |
|
|
|
|
|
|
|
|
|
(689,794) |
|
(973,501) |
|
168,481 |
|
|
|
|
|
|
|
Increase in inventories |
|
(33,003) |
|
(569,593) |
|
(50,737) |
Increase in trade and other receivables |
|
(409,462) |
|
(134,975) |
|
(728,214) |
(Increase)/Decrease in trade and other payables |
|
(121,427) |
|
188,274 |
|
108,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash outflow from operations |
|
(1,253,686) |
|
(1,489,795) |
|
(501,952) |
Notes to the Interim Statements
1. These accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS).
2. The financial information in this statement is unaudited and does not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006. The accounts of the Company for the financial period ended on 31 October 2009 have been reported on by the Company's auditors and have been delivered to the Registrar of Companies. The report of the auditors was unqualified and did not include any statement under section 498 of the Companies Act 2006.
3. The change in the year end to 31 October in 2009 means that the Interim results presented for the 6 month period to 30 June 2009 are not a meaningful comparison to the results for the six month period to 30 April 2010 presented here. Therefore a 'pro-forma' comparative position has been presented.
4. A Corporation tax rate of 28% has been utilised to determine the tax credit on the result for the period.
5. Earnings per share have been calculated on the result for the period after taxation and the weighted average number of shares in issue of 15,916,281. The diluted earnings per share is calculated with 16,650,004 shares.
6. The directors have not declared an interim dividend. No dividend is shown in the income statement.