Final Results

RNS Number : 4153V
Feedback PLC
28 October 2014
 

28 October 2014

Feedback plc

('Feedback' or "the Company')

 

Final results for the year ended 31 May 2014

 

Chairman's statement

 

The financial year ended 31 May 2014 was transformational for Feedback plc. It saw the Company sell the industrial site formerly occupied by Feedback Instruments, which was the completion of the long played out disposal decision made in May 2012. The net cash proceeds of the sale amounted to £940,000 and this sum was used to extinguish the Company's outstanding indebtedness of approximately £200,000. The removal of this debt allowed the Company to move forward with implementing its investment strategy and accordingly on 19 May 2014 the Company entered the medical imaging market when it completed the acquisitions of Cambridge Computed Imaging Limited ("CCI") and TexRAD Limited ("TexRAD") by way of a reverse takeover and readmission to trading on the AIM market.

 

Since then the Company has made significant progress with CCI achieving ISO 13485, the International Standard relating to quality management systems for organisations involved in the manufacture of medical devices, and also strengthening the software development team. TexRAD continues to develop its product into a commercial version for the pharmaceutical trials market while maintaining sales of its research version to the leading oncology research centres in hospitals around the world. The board is pleased to announce that the Company is about to seek regulatory approval for TexRAD to be used in pharmaceutical trials and are hopeful that FDA approval can be achieved within the coming financial year.

 

Ahead of the launch of the pharmaceutical trials version of the TexRAD software the Group has reconfirmed its arrangements with Imaging Endpoints II, LLC ("IE2") in the USA. As set out in the Company's admission document, TexRAD entered into a software licence agreement and strategic partnership with IE2 in which TexRAD granted IE2 the exclusive licence to use TexRAD Research Software in the state of Arizona in the USA, and to use TexRAD Clinical Trial Software worldwide with an expected termination date of 12 September 2014. This agreement has now been re-signed on substantially the same terms and will run for two years from the validation date of the TexRAD Clinical Trial Software, i.e. the date at which it has achieved compliance with 21 CFR part 11 of the Code of Federal Regulations. IE2 will therefore remain our exclusive partner worldwide for imaging core lab purposes.

 

The board intends to continue to develop CCI and TexRAD and will also look to increase the Group's presence in the medical imaging sector with bolt on acquisitions and collaborations with research institutions to further grow the business. The board is pleased with the progress that has been made to date and enthused by new opportunities that present themselves to the Group.

 

It is with this in mind that the board has considered its current configuration. Whilst the board is involved with the day-to-day running of the operations of the Group at a high level, the board considers it appropriate that the directors of the Company should be focused on considering and actively pursuing potential acquisition opportunities. Accordingly, the Company today announces a reorganisation of the board of directors with immediate effect.

 

The board will now comprise three non-executive directors being Simon Barrell, Trevor Brown and Tom Charlton with Simon Barrell assuming the role of non-executive chairman. Nick Shepheard will leave the Company to pursue his other business interests. Senior management, being Mike Hayball, Dr Balaji Ganeshan and Dr Stephen Brown, will be responsible for the day-to-day management of the trading businesses.

 

I would like to thank Nick Shepheard for his time at Feedback and seeing the Group through the difficult years and the change in direction. The board wishes him success in the future. 

 

It is with great sadness that we have learned that Professor John Westcott, the Life President of Feedback plc, has passed away at the age of 93. Professor Westcott was one of the original founders of the Company in 1958 and also Emeritus Professor of Control Systems and a Senior Research Fellow at Imperial College. He served as a director of Feedback for 54 years until his resignation on health grounds in November 2012. We send our deepest condolences to his family and friends.

 

Simon Barrell

Chairman

 

For further information contact:

Feedback plc

Tel: 01954 718072

Simon Barrell




Sanlam Securities UK

Simon Clements / Virginia Bull

Tel: 020 7628 2200



 

Consolidated Statement of Comprehensive Income

 

 

 

Note

2014

2013

2013

2013

 

 

 

 

£000

£000

£000

£000

 

 

 

 

Total

Continuing

Discontinued

Total

 

 

 

 

 

 

 

 

REVENUE

 

 

 

7

-

1,719

1,719

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

-

-

(1,010)

(1,010)

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

 

7

-

709

709

 

 

 

 

 

 

 

 

Other Operating Expenses

 

 

 

(314)

(492)

(890)

(1,382)

Costs associated with the acquisition of subsidiaries

 

 

 

4

 

(164)

 

-

 

-

 

-

 

 

 

 

 

 

 

 

Total operating expenses

 

 

 

(478)

(492)

(890)

(1,382)

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

 

(471)

(492)

(181)

(673)

 

 

 

 

 

 

 

 

Net finance expense

 

 

 

-

(57)

-

(57)

 

 

 

 

 

 

 

 

Loss on ordinary activities before taxation

 

 

 

 

(471)

 

(549)

 

(181)

 

(730)

 

 

 

 

 

 

 

 

Tax charge

 

 

 

-

-

-

-

 

 

 

 

 

 

 

 

LOSS ON ORDINARY ACTIVITIES AFTER TAX

 

 

 

(471)

 

(549)

 

(181)

 

(730)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit on disposal of discontinued operations

 

 

 

4

 

-

 

-

 

382

 

382

 

 

 

 

 

 

 

 

(Loss)/profit for the year attributable to the equity Shareholders of the Company

 

 

 

 

(471)

 

(549)

 

201

 

(348)

 







 

Other comprehensive income/(expense)








Translation differences on overseas operations

 

 

 

 

(3)

 

 

 

(3)

 

 

 

 

 

 

 

 

Total comprehensive expense for the year

 

 

 

 

(474)

 

 

 

(351)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE (pence)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

3

(0.35)

(0.42)

0.15

(0.27)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Consolidated Statement of Changes in Equity

 

GROUP

Share Capital

Share Premium

Capital Reserve

Retained Earnings

Translation Reserve

Convertible Debt Option Reserve

Total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

At 1 June 2012

327

851

300

(162)

(204)

-

1,112

Total comprehensive expense for the year

 

-

 

-

 

-

 

(348)

 

(3)

 

-

 

(351)

 

 

 

 

 

 

 

 

At 31 May 2013

327

851

300

(510)

(207)

-

761

 

 

 

 

 

 

 

 

New shares issued

150

598

-

-

-

-

748

 

 

 

 

 

 

 

 

Costs associated with the raising of funds

 

-

 

(40)

 

-

 

-

 

-

 

-

 

(40)

 

 

 

 

 

 

 

 

Share option and warrant costs

-

-

-

14

-

-

14

 

 

 

 

 

 

 

 

Convertible debt raised in the year

-

-

-

-

-

189

189

 

 

 

 

 

 

 

 

Total comprehensive expense for the year

 

-

 

-

 

-

 

(471)

 

(3)

 

-

 

(474)

 

 

 

 

 

 

 

 

At 31 May 2014

477

1,409

300

(967)

(210)

189

1,198

 

 

 

 

 

 

 

 

 

 



 

Consolidated Balance Sheet

 

 

 

2014

2013

 

Notes

 

£000

£000

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

 

1

-

Intangible assets

6

 

848

-

 

 

 

849

-

Current assets

 

 

 

 

Trade receivables

 

 

87

-

Other receivables

7

 

121

15

Cash and cash equivalents

 

 

874

342

 

 

 

1,082

357

 

 

 

 

 

Non current assets held for sale

5

 

-

940

 

 

 

 

 

Total assets

 

 

1,931

1,297

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

Capital and reserves attributable to the Company's equity shareholders

 

 

 

 

Called up share capital

9

 

477

327

Share premium account

 

 

1,409

851

Capital reserve

 

 

300

300

Translation reserve

 

 

(210)

(207)

Retained earnings

 

 

(967)

(510)

 

 

 

1,009

761

 

 

 

 

 

Convertible debt option reserve

 

 

189

-

 

 

 

 

 

TOTAL EQUITY

 

 

1,198

761

 

 

 

 

 

LIABILITIES

 

 

 

 

Deferred tax liabilities

 

 

80

-

 

 

 

80

-

Current liabilities

 

 

 

 

Trade payables

 

 

225

102

Other payables

8

 

428

434

 

 

 

 

 

 

 

 

653

536

 

 

 

 

 

Total liabilities

 

 

733

536

 

 

 

 

 

TOTAL EQUITY AND LIABILITES

 

 

1,931

1,297

 



 

Consolidated Cash Flows Statement

 

2014

2013

 

£000

£000

 

 

 

Cash flows from operating activities

 

 

Loss before tax

(471)

(730)

Adjustments for:

 

 

Cost of acquisition of subsidiaries

164

-

Impairment provision against property

-

110

Net finance expenditure

-

57

Depreciation and amortisation

-

241

Loss on disposal of property, plant and equipment

-

17

Foreign exchange difference

3

3

Decrease in inventories

-

193

Decrease in trade receivables

-

31

(Increase)/decrease in other receivables

(80)

136

Decrease in trade payables

57

36

(Decrease)/increase in other payables

(155)

39

 

 

 

 

(11)

863

 

 

 

Net cash (used in)/ generated by operating activities

(482)

133

 



Cash flows from investing activities

 

 

Purchase of tangible fixed assets

-

(9)

Purchase of intangible assets

-

(126)

Proceeds from sale of assets held for resale

940

-

Cash received on purchase of subsidiaries

65

-

Cash paid on acquisition of subsidiaries

(31)

-

Cash on acquisition of subsidiaries including costs

(164)

-

Net cash disposed of with subsidiary

-

(11)

Net proceeds from sale of subsidiary

-

570

 

 

 

Net cash generated from investing activities

810

424

 



Cash flows from financing activities

 

 

Interest paid

-

(57)

Loan repayment

(245)

-

Equity based loan received

189

-

Net proceeds of share issue

260

-

 

 

 

Net cash generated from/(used in) financing activities

204

(57)

 

 

 

Net increase in cash and cash equivalents

532

500

Cash and cash equivalents at beginning of year

342

(158)

 

 

 

Cash and cash equivalents at end of year

874

342

 

1              ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (October 2014). The accounting policies have been consistently applied to all the years presented.

 

These consolidated financial statements have been prepared under the historical cost convention. During the prior period the group disposed of its subsidiary Feedback Data plc. The results of the subsidiary were disclosed as discontinued operations.

During the year the group disposed of its property (held by Brickshield Limited). The disposed property was classified 'as held for sale' in 2013.

 

The financial information set out above does not comprise the Company's statutory accounts for the periods ended 31 May 2014 or 31 May 2013. Statutory accounts for 31 May 2013 have been delivered to the Registrar of Companies and those for 31 May 2014 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2014 or for 2013.

 

2              GOING CONCERN

The Group disposed of its investment property for £940,000 during the year. The Company was an Investing Company until, on 19 May 2014, the Company acquired two subsidiaries in the medical imaging market, Cambridge Computed Imaging Limited and TexRAD Limited. The Group is now focused on medical imaging.

The Directors have produced forecasts which show that the Group and Company has adequate cash resources for at least the next twelve months from the date of this report. The Directors believe that the company is a going concern and have therefore prepared the financial statements on a going concern basis

3.             LOSS PER SHARE

Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of £471,000 (2013: £348,000) and on the weighted average of 132,912,773 (2013: 130,949,746) shares in issue.



As at 31 May 2014

 

As at 31 May 2013

 



£'000

£'000





Net loss attributable to ordinary equity holders


(471)

(348)







As at 31 May 2014

 

As at 31 May 2013

Weighted average number of ordinary shares for basic earnings per share


132,912,773

130,949,746

Effect of dilution:




Share Options


-

-

       Warrants


-

-

Weighted average number of ordinary shares adjusted for the effect of dilution


132,912,773

130,949,746





Loss per share (pence)




Continuing


(0.35)

(0.42)

Discontinued


-

0.15

Basic


(0.35)

(0.27)





 

4              INVESTMENTS

On 19 May 2014 the Group acquired Cambridge Computed Imaging Limited and TexRAD Limited. These are both consolidated from the date of acquisition. The Group was an investing company until this time and has invested in two companies in Medical Imaging. The company relisted as a trading company at the time of the acquisitions.

During 2013 the group disposed of its interests in Feedback Data plc. The results of this subsidiary are included in the income statement to the date of the disposal, 31 May 2013.

2014

Acquisition of Cambridge Computed Imaging Limited and TexRAD Limited


Cambridge Computed Imaging Limited

TexRAD Limited

Total

Fair value adjustments

Fair Value of assets acquired


£'000

£'000

£'000

£'000

£'000

Intangible assets

115

41

156

400

556

Tangible assets

1

-

1

-

1


116

41

157

400

557

Current assets






Debtors

32

91

123

-

123

Cash

29

36

65

-

65

Deferred tax

-

-

-

(80)

(80)

Net liabilities

(261)

(209)

(470)

-

(470)


(84)

(41)

(125)

320

195







Cost of acquisition






Issue of shares

200

227

427

-

427

Cash consideration

13

13

26

-

26

Issue of warrants

-

14

14

-

14


213

254

467


467







Goodwill arising on consolidation representing intangible assets not qualifying for separable recognition.

 

272







 

The costs related to the acquisitions of £164,000 have been recognised as part of the administration costs, although shown separately, in the statement of comprehensive income. The subsidiaries contributed £7,000 of revenue to the group and no profit or loss in the period since acquisition.

Had the subsidiaries been part of the Group for the full year from 1 June 2013, Group revenue would have been £364,000 and Group loss would have been £471,000.

None of the goodwill arising on consolidation is tax deductible.

2013

Disposal of subsidiary undertaking, Feedback Data plc.


£'000



Intangible assets

264

Tangible assets

13


277

Current assets


Inventories

123

Debtors

323

Cash

11

Deferred tax

(86)

Net liabilities

(460)



Total net assets disposed of

188



Net proceeds

(570)



Profit on disposal

382

On the acquisition of the entire issued share capital of Feedback Data plc, the buyer assumed all assets, liabilities and TUPE obligations of the Company.



 

The cash flows relating to Feedback Data plc were as follows:


2014

2013


£'000

£'000

Operating cash flows

-

225

Investing cash flows

-

(138)

 

5.             ASSETS HELD FOR SALE

 

 

Land & Buildings

Total

 

 

£000

£000

 

 

 

 

At 31 May 2012

 

1,050

1,050

Impairment

(110)

(110)

 

At 31 May 2013

940

940

 

 

 

 

Disposed of in year

 

(940)

(940)

 

 

 

 

At 31 May 2014

 

-

-

 

 

 

 

The property was sold for £940,000 in July 2013.

 

6.             INTANGIBLE ASSETS

 

Software

Customer relationships

Patents

Goodwill

Development Expenditure

Total

GROUP

£000

£000

£000

£000

£000

£000

Cost

 

 

 

 

 

 

At 31 May 2012

-

-

-

-

2,117

2,117

Additions

-

-

-

-

126

126

Disposed on sale of subsidiary

-

-

-

-

(2,243)

(2,243)

 

-

-

-

-

-

-

At 31 May 2013

 

 

 

 

-

 

Additions

20

-

-

-

-

20

Acquired with subsidiary

415

100

41

272

-

828

At 31 May 2014

435

100

41

272

-

848

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

At 31 May 2012

-

-

-

-

1,787

1,787

Charge for the year

-

-

-

-

192

192

Disposed on sale of subsidiary

-

-

-

-

(1,979)

(1,979)

 

-

-

-

-

-

-

At 31 May 2013

 

 

 

 

 

 

Charge for the year

-

-

-

-

-

-

 

 

 

 

 

 

 

At 31 May 2014

-

-

-

-

-

-

 

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

 

At 31 May 2014

435

100

41

272

-

848

 

 

 

 

 

 

 

At 31 May 2013

-

-

-

-

-

-

 

 

 

 

 

 

 

 

7              OTHER RECEIVABLES

 

Group

 

2014

2013

 

£000

£000

Amounts falling due within one year

 

 

Amounts owing by subsidiary undertakings

-

-

Other receivables

94

-

Prepayments

27

15

 

 

121

15

 

 

8.             OTHER PAYABLES

 

Group

 

2014

2013

 

£000

£000

Amounts falling due within one year

 

 

Other payables

196

349

Other taxes and social security

11

22

Accruals

50

63

Deferred income

171

-

 

 

 

 

428

434

 

 

 

 

 

 

Included within other payables is a loan and interest thereon from a company connected to a shareholder of £Nil (2013 £245,000). The loan attracted interest at 12% per annum and was secured on the group's property. The loan was repayable within 6 months and was fully repaid on 31 July 2013 following the sale of the property.

Included in other payables is an amount of £189,000 due to T Charlton. Mr Charlton had a debt due by Cambridge Computed Imaging Limited to Panvista Limited assigned to him. For further detail see note 23.

 

9.             SHARE CAPITAL

 

 

 

 

 

 

2014

2013

 

 

 

 

 

 

 

 

 

 

 

£000

£000

Authorised and issued share capital

 

 

 

 

Ordinary shares of 0.25 pence each

 

 

477

327

 

 

 

 

 

Allotted, called up and fully paid share capital:

 

 

 

 

 

Number

Number

As at 1 June  2013

130,946,746

130,946,746

 

 

 

Issued during the period

 

 

On 19 May 2014

 

 

·      On acquisition of Cambridge Computed Imaging Limited

16,000,000

-

·      On Acquisition of TexRAD Limited

18,200,000

-

·      On Acquisition of Intellectual Property

1,600,000

-

·      Placing of shares

24,000,000

-

 

 

 

As at 31 May 2014

190,746,746

130,946,746

 

 

 

 

 

9. PUBLICATION OF ANNOUNCEMENT AND REPORT AND ACCOUNTS

A copy of this announcement will be available at the Company's registered office (Unit 5 Grange Park, Broadway, Bourn, Cambridgeshire CB23 2TA) and on its website - www.fbk.com.

 

This announcement is not being sent to shareholders. The Annual Report will be posted to shareholders shortly and will be made available on the website.


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