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Crystalband PLC (FRME)

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Friday 30 March, 2007

Crystalband PLC

Final Results

Crystalband PLC
30 March 2007

                                CRYSTALBAND PLC

                          RESULTS TO 30 SEPTEMBER 2006

Chairman's Statement



Turnover for the period ended 30 September 2006 was £5.035m, an increase of
£0.820m on the previous year ended 30 September 2005. We believe this is a
reflection of the strategic decision taken by the directors of the Company to
diversify into the trade, new build and commercial market and away from the low
margin, high volume sectors of the industry.



Disappointingly we have to report that the transition has resulted in further
losses being made this year with losses on ordinary activities before taxation
amounting to £0.654m.



These losses have arisen principally as a result of operational inefficiencies
and a number of bad debts being incurred at a time when the previous management
team expanded too rapidly.  This expansion resulted in quality and service
levels decreasing which led to difficulties in collecting debts from a number of
customers.  Management changes were implemented in November 2006 and the new
members of the management team have worked on restoring quality and service
levels back up to the standards we and our customers expect.



Given the losses sustained in the year the board does not recommend a dividend
to be paid at this time.



I have to report that the year has been very tough not only for us, but for many
of the manufacturers in our industry.  The board however has made no compromises
in maintaining and improving the quality of the Company's products and I do
believe we are heading in the right direction with the current management team.
We are continuing our search for a new managing director and I believe this
appointment will complete a young and enthusiastic team who can build the
business from what the board now believes are stable foundations.



We have recently undertaken a further review of our operational systems and
focused on a further cost reduction programme with a view to ensuring we are
operating as efficiently as we can.  We believe that this review and the
decisions implemented are now beginning to show through in the results of the
business which show that overheads are now under control and the Company is
operating more efficiently.



One very pleasing aspect is the further development of our relationship with the
local authority contract reported in the previous Chairman's Statement and I am
delighted to report that we have negotiated further contracts in this area.  In
addition, we have made a number of significant additions to our customer base in
the first six months of the current year.  This is very pleasing and I believe
has resulted directly from the changes that have recently been implemented.



In summary, the year has undoubtedly been a challenging one but despite the
results for the period I believe we have finally laid a solid foundation for the
future and have a team in place to deliver good operational and financial
performance in the remainder of the financial year.





Alan Rothwell

Chairman

30 March 2007





PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED 30 SEPTEMBER 2006




                                                                                   Year end           Period to
                                                                                   30.09.06            30.09.05
                                                                  Notes                   £                   £
Turnover                                                              2           5,035,471           4,215,112
Cost of sales                                                                    (3,731,419)         (3,769,976)
                                                                                

Gross Profit                                                                      1,304,052             445,136

Administrative expenses                                                          (1,899,155)         (1,840,935)
                                                                              
Other operating income                                                3               2,693              31,006
Operating Loss                                                        4            (592,410)         (1,364,793)

Exceptional item - restructuring costs                                                    -            (119,431)
Interest receivable                                                                  72,627              68,312
Interest payable and similar charges                                               (134,821)            (57,899)

Loss on Ordinary Activities Before Taxation                                        (654,604)         (1,473,811)

Tax on loss on ordinary activities                                                        -                   -

Loss for the Financial Period                                                      (654,604)         (1,473,811)

Loss per ordinary share (pence)                                       6                (2.3)              (7.13)

All of the activities of the group are classed as continuing.

The group has no recognised gains or losses other than the 
results for the period as set out above.

There is no difference between the results for the year shown 
above and those presented on the historical costs basis.





RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 30 SEPTEMBER 2006


                                                                               Year to                Period to
                                                                              30.09.06                 30.09.05
                                                                         £           £           £            £
Loss for the financial year
                                                                              (654,604)              (1,473,811)
New equity share capital subscribed                                      -                 139,432
Net premium on new share capital subscribed                              -               2,768,865
                                                                                     -                2,908,297
                                                                                     
Net (reduction)/addition to funds                                             (654,604)                1,434,486
                                                                          

Opening shareholders equity funds                                            1,434,486                        -
                                                                                                             

Closing shareholders' equity funds                                             779,882                1,434,486
                                                                                                 





GROUP BALANCE SHEET

FOR THE YEAR ENDED 30 SEPTEMBER 2006


                                                                              Year to                  Period to
                                                                             30.09.06                   30.09.05
                                                      Notes            £            £            £             £
Fixed Assets
Intangible assets                                                           2,894,094                  3,054,877
Tangible assets                                                               535,210                    318,885

                                                                            3,429,304                  3,373,762
Current Assets
Stocks                                                    7      252,341                   290,919
Debtors                                                   8    1,367,578                   935,486
Short term deposits                                            1,600,000                 1,600,000
Cash in hand                                                         554                     5,530
                                                               3,220,473                 2,831,935

Creditors: Amounts falling due within one year            9  (5,770,810)              (4,727,156)


Net Current Liabilities                                                   (2,550,337)                (1,895,221)

Total Assets Less Current Liabilities                                         878,967                  1,478,541

Creditors: Amounts falling due after more than
one year                                                 10                  (99,085)                  (44,055)
                       

                                                                              779,882                  1,434,486

Capital and Reserves
Called-up equity share capital                           11                   139,432                    139,432
Share premium account                                                       2,768,865                  2,768,865
Profit and loss account                                                    (2,128,415)               (1,473,811)

Shareholders' Funds                                                           779,882                  1,434,486



GROUP CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 SEPTEMBER 2006

                                                                           Year to                  Period to
                                                                          30.09.06                   30.09.05
                                                                     £           £             £            £
Net Cash Inflow From Operating Activities                                  107,655                (2,458,714)

Returns on Investments and Servicing of Finance
Interest received                                               72,627                  68,312
Interest paid                                                (120,610)                (56,220)
Interest element of hire purchase                             (14,211)                 (1,679)

Net Cash Inflow From Returns on Investments & Servicing                   (62,194)                      10,413
of Finance


Capital Expenditure
Payments to acquire tangible fixed assets                    (121,477)               (118,355)
Receipts from sale of fixed assets                              29,000                  123,500

Net Cash Outflow From Capital Expenditure                                 (92,477)                       5,145

Acquisitions and Disposals
Cash acquired with subsidiary                                        -                  186,000

Net Cash Inflow From Acquisitions and Disposals                                  -                    186,000

Cash Outflow Before Financing                                             (47,016)
                                                                                                   (2,257,156)

Financing
Issue of equity share capital                                        -              3,434,082
Expenses paid in connection with share issue                         -               (461,705)
Bonus issue                                                          -                (64,080)
Consideration shares issued on acquisition of subsidiary             -               (660,000)
Principal payment of hire purchase                            (55,053)                 (5,554)

Net Cash Inflow From Financing                                            (55,053)                   2,242,743

Decrease in Cash                                                         (102,069)                     (14,413)




RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
                                                                           Year to                     Year to
                                                                          30.09.06                    30.09.05
                                                                     £           £             £             £
Operating loss                                                           (592,410)                  (1,484,224)
Amortisation                                                               160,783                     160,783
Depreciation                                                                71,035                      30,877
Loss on disposal of fixed assets                                             5,117                     169,643
Decrease/(Increase) in stocks                                               38,578                     (4,429)
(Increase) in debtors                                                    (432,092)                 (1,941,486)
Increase in creditors                                                      856,644                     610,122

Net Cash Inflow From Operating Activities                                  107,655                  (2,458,714)




                           RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                                                           Year to                     Year to
                                                                          30.09.06                    30.09.05
                                                                     £           £             £             £
Decrease in cash in the period                               (102,069)                  (14,413)
New hire purchase agreements                                                            (70,700)
Cash outflow in respect of hire purchase                        55,053                     5,554
                                                                          (47,016)                 (79,559)

Change in net debt                                                        (47,016)                 (79,559)
Net Funds at 30 September 2005                                            (79,559)
                                                                                                       -

Net Debt at 30 September 2006                                            (126,575)                 (79,559)

The prior year net debt has been restated to include hire purchase liabilities.  Net debt previously recorded
at £8,859.

ANALYSIS OF CHANGES IN NET DEBT
                                                                    At                                      At
                                                              30.09.05  Cash flows      Non-Cash      30.09.06
                                                                     £           £             £             £
Net cash                                                       5,530       (4,976)             -           554
Cash in hand and at bank                                     (19,943)     (97,093)             -     (117,036)
                                                             (14,413)    (102,069)             -     (116,482)

Debt:
Hire purchase agreement                                      (65,146)      55,053       (200,000)    (210,093)

Net Debt                                                     (79,559)     (47,016)      (200,000)    (326,575)          
   
                                                                                   


NOTES

1                ACCOUNTING POLICIES

Basis of accounting
The financial statements have been prepared under the historical cost convention, and in accordance with applicable
accounting standards.

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the company and all group undertakings.
As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is
omitted from the group financial statements by virtue of Section 230 of the Companies Act 1985.

Turnover
The turnover shown in the profit and loss account represents amounts invoiced during the period, exclusive of Value
Added Tax.

Goodwill
Positive purchased goodwill arising on acquisitions is capitalised, classified as an asset on the Balance Sheet and
amortised over its estimated useful life up to a maximum of 20 years.  This length of time is presumed to be the
maximum useful life of purchased goodwill because it is difficult to make projections beyond this period.  Goodwill is
reviewed for impairment at the end of the first full financial year following each acquisition and subsequently as and
when necessary if circumstances emerge that indicate that the carrying value may not be recoverable.

Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful
economic life of that asset as follows: -

Goodwill                                -            20 years straight line

Fixed Assets
All fixed assets are initially recorded at cost.

Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful
economic life of that asset as follows: -

Plant & Machinery                     -           10 years straight line
Fixtures & Fittings                   -           10 years straight line
Motor Vehicles                        -            3  years straight line

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow
moving items.

Work in Progress
Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity.
Provision is made for any foreseeable losses where appropriate.  No element of profit is included in the valuation of
work in progress.


1.       ACCOUNTING POLICIES (Continued)

Hire Purchase Agreements
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their
fair value.  The capital element of the future payments is treated as a liability and the interest is charged
to the profit and loss account on a straight line basis.

Operating Lease Agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain
with the lessor are charged against profits on a straight line basis over the period of the lease.

Pension Costs
The company operates a defined contribution pension scheme for employees.  The assets of the scheme are held
separately from those of the company.  The annual contributions payable are charged to the profit and loss
account.

Deferred Taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the
balance sheet date where transactions or events have occurred at that date that will result in an obligation to
pay more, or a right to pay less or to receive more tax, with the following exceptions: -


Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed
assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the
extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned.
However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is
more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only
where the replacement assets are sold.

Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than
not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted.

Deferred tax is measure on an undiscounted basis at the tax rates that are expected to apply in the periods in
which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance
sheet date.

2                TURNOVER

The turnover is attributable to the one principal activity of the group.

An analysis of turnover is given below: -
                                                                                              2006         2005
                                                                                                 £            £
United Kingdom                                                                           5,035,471    4,215,112


3                OTHER OPERATING INCOME

                                                                                              2006         2005
                                                                                                 £            £
Other operating income                                                                       2,693       31,006


4                OPERATING LOSS

Operating loss is stated after charging: -                                                    2006         2005
                                                                                                 £            £
Amortisation                                                                               160,783      160,783
Depreciation of owned fixed assets                                                          23,933       22,884
Depreciation of assets held under HP agreements                                             47,102        7,993
Loss on disposal of fixed assets                                                             5,117      169,643
Auditors remuneration                                                                       10,000       10,150
Operating lease costs:
- plant & equipment                                                                          3,437        4,206
- vehicles                                                                                  98,217       42,141


                                                                                            91,594      121,985

5                INTEREST PAYABLE AND SIMILAR CHARGES                                         2006         2005

                                                                                                 £            £
Interest payable on bank borrowing                                                          67,535       56,220
Finance charges                                                                             14,211        1,679
Debt factoring charge                                                                       53,075            -

                                                                                           134,821       57,899




6                LOSS PER SHARE                                                               2006         2005

                                                                                             pence        Pence
Loss per ordinary share                                                                      (2.3)        (7.13)
                                                                                                      

Loss per share has been calculated on the net basis on the loss on ordinary activities after taxation of
£654,604 (2005: £1,473,811) using the weighted average number of ordinary shares in issue of 20,672,242 (2005:
20,672,242).


7                STOCKS                                                        Group
                                                                  2006          2005
                                                                     £             £
Raw materials                                                  175,398       218,595
Work in progress                                                41,960        19,756
Finished goods                                                  34,983        52,568

                                                               252,341       290,919

8                DEBTORS                                                       Group

                                                                  2006          2005
                                                                     £             £
Trade debtors                                                1,193,124       732,748
Amounts owed by group undertakings                                   -             -
VAT recoverable                                                  4,916             -
Other debtors                                                        -         6,969
Prepayments & accrued income                                   169,538       195,769

                                                             1,367,578       935,486


9                CREDITORS: Amounts falling due within one year          Group           Group
                                                                          2006            2005
                                                                             £               £
Bank loans and overdrafts                                              117,036          19,943
Trade creditors                                                      1,063,182         868,476
Other tax and social security payable                                  239,500          62,811
Hire purchase agreements                                               111,008          21,091
Other creditors                                                      4,118,889       3,585,568
Accruals & deferred income                                             121,195         169,267

                                                                     5,770,810       4,727,156

                                                                         Group           Group
                                                                          2006            2005
                                                                             £               £
Debt factoring advances                                                549,739               -
Bank loans & overdrafts                                                117,036          42,265
Hire purchase agreements                                               111,008          21,091

                                                                       777,783          63,356

10            CREDITORS: Amounts due after more than one year            Group           Group
                                                                          2006            2005
                                                                             £               £
Hire purchase agreements                                                99,085          44,055


                                                                         Group           Group
                                                                          2006            2005
                                                                             £               £
Hire purchase agreements                                                99,085          44,055


Future commitments under hire purchase agreements are as                
follows: -                                                               Group           Group
                                                                          2006            2005
                                                                             £               £
Amounts payable within 1 year                                          111,008          21,091
Amounts payable between 1 to 2 years                                    66,666          21,091
Amounts payable between 2 to 5 years                                    32,419          22,964

                                                                       210,093          65,146



11            SHARE CAPITAL

Authorised share capital:                                                                    2006          2005
                                                                                                £             £
31,000,000 Ordinary shares of £0.005 each                                                               155,000

Allotted, called up and fully paid                                             2006                        2005
                                                                Number            £        Number             £
Ordinary shares of £0.005 each                              27,886,401      139,432    27,886,401       139,432


12            AVAILABILTY OF REPORT

The Annual Report has been despatched to shareholders today. Copies are available from the Company's head
office: Unit 22, Castle Park Industrial Estate, Evans Street, Flint, Clwyd, CH6 5XA



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