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ViaLogy PLC (VIY)

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Friday 30 December, 2011

ViaLogy PLC

Interim Report & Accounts

RNS Number : 7393U
ViaLogy PLC
30 December 2011
 



ViaLogy PLC ("ViaLogy" or "the Company")

 

Interim Report and Unaudited accounts for six months ended 30 September 2011

 

 

Chairman's statement for the six months ended 30 September 2011

The Interim Report covers the six-month period to 30 September 2011. The figures show a loss for the period of £2,389,096 which includes a non-cash loss of £1,544,535 for amortisation and depreciation. The amortisation charges relate to the value of ViaLogy's Intellectual Property and associated research and development which is amortised over a period of six years. The cash outflow from operations during the period was £1,031,145.

The results themselves mask the substantial advances ViaLogy has made during the period under review. Our senior personnel were in continuous detailed discussions with a number of global oil and gas operators and our technical team conducted significant pilot projects. This is in line with our strategy of focusing our efforts as much as possible on the larger firms whose endorsement and routine operational use of our technology will ensure the company's mainstream business success. Our proprietary and patented seismic data analysis technology, QuantumRD, is being scrutinised and put to the test by some of the most important and critical E&P companies in the world. Much as we would have wished the examination process to be less onerous and perhaps quicker, it is the potential clients who impose the schedule. We respect the reasons for such a rigorous, detailed and comprehensive approach. Our analysis technology is very different from other systems, and with new drilling prospects often costing tens of millions of dollars these major firms need to be totally convinced of its efficacy before adoption. 

We are pleased to say that our efforts are beginning to bear commercial fruit. We are in advanced talks with multinational E&P organisations on three continents. Client restrictions prohibit us from naming companies without their permission, at least until specific project contracts are signed, but we can confirm the following achievements:

·     Successful completion of a pilot project for a supermajor (the word used to describe one of the 
world's six biggest O&G companies). The latest news is that our client is "enthusiastic" about the QuantumRD results and confirms that the technology has outperformed their previous analysis techniques.

·     Contract details have been prepared and conditionally agreed with a National Oil Company in 
Asia for ViaLogy to provide QuantumRD analysis on a major offshore project. Government approval is required, and in process, for export of the seismic data prior to contract completion.

·     Following completion of a successful pilot project on an extensive but difficult exploration field in 
Asia, ViaLogy has been asked by a Fortune 500 company based in South Asia, the lease operator, to tender for data analysis services on a major section of the prospect. Contract discussions proceed on the basis of set timescales and processes.

·     At the invitation of a European-based supermajor, ViaLogy's founder and Chief Technology 
Officer, Dr. Sandeep Gulati, recently presented a technical explanation of QuantumRD to a gathering of over 50 of the supermajor's senior geophysicists in five locations around the world. Detailed technical talks are now proceeding with a view to QuantumRD being piloted on one of its large projects.

·     Under contract to Oklahoma-based Samson, one of the largest independent E&P companies in 
the US, ViaLogy has delivered its QuantumRD analysis for a major redevelopment of a field in Texas. The client's initial evaluation and quality control of ViaLogy's results confirm established field model results. In a double blind exercise ViaLogy seismic signal enhancement technology confirmed known porosities and lithologies (a deliverable the customer described as unique and important in the market and in their critical path of exploration and development) and located new productive zones.

Equally as important as the progress with client recruitment and demonstrating the efficacy of the technology in the field, the company has achieved major development milestones in QuantumRD's software development. Ultimately, and with additional resources, we believe we can progress our automated software analysis of properly conditioned seismic data to determine essential features such as porosity, fluid presence, and lithology features. Our clients acknowledge our unique, ground-breaking approach that implements quantum techniques for the first time successfully (to our knowledge) in geophysical analysis. We are making business and technical progress in a sustained and increasingly difficult economic and financial environment.  Everything and everyone, from governments and businesses to professional and private investors, are suffering. ViaLogy is in a large, vital, conservative, and technically sophisticated market where we are doing everything we can to accelerate the uptake of the technology, the growth of the business, and success for our shareholders. 

It is against this background that I want to thank all our investors, large and small, for their continued support, patience and understanding. Also, on behalf of the directors, I express our gratitude to the company's loyal staff for the hours and effort they put in, above and beyond the call of duty, to ensure ViaLogy's success.

Terry Bond

Chairman

ViaLogy PLC

 

30 December 2011

 

Enquiries: 

 

ViaLogy PLC

 

01235 834734  

Terry Bond, Chairman   

 

 

 

 

 

Seymour Pierce Limited

 

020 7107 8000

Mark Percy/Catherine Leftley (Corporate Finance)

Katie Ratner (Corporate Broking)

 

 

 

 

 

 

Consolidated income statement for the six months ended 30 September 2011

 

 

 

Unaudited

Unaudited

Audited

 

 

6 months

6 months

Year to

 

 

to 30 Sep

to 30 Sep

to 31 Mar

 

Notes

2011

2010

2011

 

 

 

£

£

£

Revenue

2

40,915

57,031

58,365

Cost of  sales

 

209,393

356,973

535,645

 

 

--------

--------

--------

Gross loss

2

(168,478)

(299,942)

(477,280)

 

 

 

 

 

Share based payments

 

118,626

217,467

575,306

Depreciation and amortisation

 

1,544,535

1,591,506

3,239,218

Other administrative expenses

 

798,654

1,257,010

2,066,625

 

 

 

 

 

 

 

 

 

 

Total administrative expenses

 

2,461,815

3,065,983

5,881,149

 

 

--------

--------

--------

Loss from Operations

 

(2,630,293)

(3,365,925)

(6,358,429)

 

 

 

 

 

Finance income

 

139

651

969

 

 

--------

--------

--------

Loss for the period / year before  taxation

 

(2,630,154

(3,365,274)

(6,357,460)

 

 

--------

--------

--------

 

 

 

 

 

Taxation

3

241,058

257,022

532,116

 

 

 

 

 

 

 

--------

--------

--------

Loss for the period / year attributable to equity

 

 

 

 

holders of the parent

2

(2,389,096)

(3,108,252)

(5,825,344)

 

 

--------

--------

--------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

Basic  and diluted

4

(0.330)p

(0.449)p

(0.834)p

 



Consolidated statement of comprehensive income for the six months ended
 30 September 2011

 

 

 

Unaudited

Unaudited

Audited

 

 

6 months

6 months

year to

 

 

to 30 Sep

to 30 Sep

31 Mar

 

 

2011

2010

2011

 

 

£

£

£

Loss after taxation

 

(2,389,096)

(3,108,252)

(5,825,344)

 

Other comprehensive income

  Exchange differences on translating foreign operations

 

 

 

83,884

 

 

(313,947)

 

 

(394,365)

 

 

--------

--------

--------

Total other comprehensive income / (loss) for the period / year

 

83,884

(313,947)

(394,365)

 

 

--------

--------

--------

Total comprehensive income for the period / year attributable to the equity holders of the parent company

 

(2,305,212)

(3,422,199)

(6,219,709)

 

 

--------

--------

--------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Consolidated statement of changes in equity for the six months ended 30 September 2011

 

Unaudited

Share

Share

Foreign

Retained

Total

 

capital

premium

exchange

deficit

 

 

 

account

reserve

 

 

 

 

 

 

 

 

 

At 1 April 2011

7,341,027

21,438,079

1,606,422

(23,510,012)

6,875,516

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income recognised for the period

-

-

83,884

(2,389,096)

(2,305,212)

Issue of shares

1,024

2,021

-

-

3,045

Share options expense

-

-

-

118,626

118,626

 

 

 

 

 

 

 

--------

--------

--------

--------

--------

Balance at 30 September 2011

7,342,051

21,440,100

1,690,306

(25,780,482)

4,691,975

 

--------

--------

--------

--------

--------

 

 

 

 

 

 

 

Audited

Share

Share

Foreign

Retained

Total

 

capital

premium

exchange

deficit

 

 

 

account

reserve

 

 

 

 

 

 

 

 

 

At 1 April 2010

6,904,753

20,665,231

2,000,787

(18,259,974)

11,310,797

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income recognised for the period

-

-

(394,365)

(5,825,344)

(6,219,709)

Issue of shares

436,274

872,848

-

-

1,309,122

Share issue expenses

-

(100,000)

-

-

(100,000)

Share options expense

-

-

-

575,306

575,306

 

 

 

 

 

 

 

--------

--------

--------

--------

--------

Balance at 31 March 2011

7,341,027

21,438,079

1,606,422

(23,510,012)

6,875,516

 

--------

--------

--------

--------

--------

 

 

 

 

 

 

 



 

Consolidated statement of financial position at 30 September 2011

 

 

 

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

30 Sep

30 Sep

31 Mar

 

 

2011

2010

2011

 

Notes

£

£

£

Assets

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

   Property, plant and equipment

 

442,537

540,387

461,805

   Intangible assets

 

4,180,010

6,769,210

5,473,599

 

 

 

 

 

 

 

--------

--------

--------

 

 

4,622,547

7,309,597

5,935,404

 

 

--------

--------

--------

Current assets

 

 

 

 

   Trade and other receivables

 

269,874

373,470

268,102

   Cash and cash equivalents

 

455,627

1,670,705

1,624,130

 

 

--------

--------

--------

 

 

725,501

2,044,175

1,892,232

 

 

--------

--------

--------

Total Assets

2

5,348,048

9,353,772

7,827,636

 

 

--------

--------

--------

Liabilities

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

   Trade and other payables

 

114,086

163,057

180,043

 

 

 

 

 

Non-current liabilities

 

 

 

 

   Deferred tax liability

3

541,987

1,030,350

772,077

 

 

--------

--------

--------

Total liabilities

2

656,073

1,193,407

952,120

 

 

 

 

 

Capital and reserves attributable to equity

 

 

 

 

holders of the Company

 

 

 

 

   Share capital

 

7,342,051

6,922,753

7,341,027

   Share premium account

 

21,440,100

20,701,531

21,438,079

   Foreign Exchange  reserve

 

1,690,306

1,686,840

1,606,422

   Retained deficit

 

(25,780,482)

(21,150,759)

(23,510,012)

 

 

--------

--------

--------

Shareholders' funds

 

4,691,975

8,160,365

6,875,516

 

 

--------

--------

--------

Total equity and liabilities

 

5,348,048

9,353,772

7,827,636

 

 

--------

--------

--------

 



Consolidated statement of cash flows for the six months ended 30 September 2011

 

 

Unaudited

Unaudited

Audited

 

 

30 Sep

30 Sep

31 Mar

 

 

2011

2010

2010

 

 

£

£

£

Cash flows from operating activities

 

 

 

 

  Loss  from operations before tax

 

(2,630,293)

(3,365,274)

(6,357,460)

 

 

 

 

 

  Adjustments for :-

 

 

 

 

          Finance income

 

(139)

(651)

(969)

          Depreciation

 

44,636

31,271

133,072

          Amortisation

 

1,499,899

1,560,235

3,106,146

          Share option expense

 

118,626

217,467

575,306

          Foreign exchange movements

 

3,717

(2,112)

89,576

 

 

--------

--------

--------

Operating activities before changes in working capital

 

(963,554)

(1,559,064)

(2,454,329)

 

 

 

 

 

  Decrease/(Increase)  in trade and other  receivables

 

(1,773)

(283,464)

(178,096)

 (Decrease) / Increase/ in trade and other payables

 

(65,957)

1,127

18,113

  Interest received

 

139

651

969

 

 

 

 

 

Tax  recovered

 

-

-

23,388

 

 

--------

--------

--------

Net cash flows from operating activities

 

(1,031,145)

(1,840,750)

(2,589,955)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

   Internally generated  intangible asset

 

(115,787)

(108,865)

(451,115)

   Purchase of property, plant and equipment

 

(15,254)

(104,594)

(136,321)

   Payment for non compete services

 

-

-

(331,873)

 

 

 

 

 

 

 

--------

--------

--------

 

 

(131,041)

(213,459)

(919,309)

Cash flows from financing activities

 

 

 

 

  

 

 

 

 

    Cash inflow from issue of new shares

 

-

-

1,309,122

    Share issue costs

 

-

-

(100,000)

    Cash inflow from exercise of options          

 

3,045

54,300

-

 

 

--------

--------

--------

 

 

3,045

54,300

1,209,122

 

 

 

 

 

Decrease in cash and cash equivalents

 

(1,159,141)

(1,999,909)

(2,300,142)

 

 

 

 

 

  Foreign exchange differences on translation of cash and cash equivalents.

 

(55,937)

(27,252)

226,406

  Cash and cash equivalents at beginning of  period /year

 

1,670,705

3,697,866

3,697,866

 

 

--------

--------

--------

 

 

 

 

 

Cash and cash equivalents at end of period / year

 

455,627

1,670,705

1,624,130

 

 

--------

--------

--------

 



Notes forming part of the parent company financial statements

 

1     Accounting policies

Basis of preparation

The interim financial information has been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. The interim financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial information for the year ended 31 March 2012.

 

The interim financial information for the period 1 April 2011 to 30 September 2011 is unaudited.  In the opinion of the Directors the interim financial information for the period presents fairly the financial position, results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied.  The interim financial information incorporates comparative figures for the interim period 1 April 2010 to 30 September 2010 and the audited financial year to 31 March 2011.The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. The comparatives for the full year ended 31 March 2011 are not the Company's full statutory accounts for that year.  A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.  The auditor's report on those accounts was unqualified, and did include references to any matters to which the auditor drew attention by way of emphasis in respect of going concern, without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

 

Going concern

 

The Group's current pipeline of sales from existing clients and new significant customers will generate cash inflows but in order to continue to develop the Group's assets and fully fund its working capital requirements additional financing will be needed. While the directors are confident that additional funding can be raised in order to meet its development and working capital requirements there is an inherent uncertainty that this funding may not be raised. This condition indicates the existence of a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern.

 

The financial information has been prepared on a going concern basis, however the conditions outlined above indicate the existence of material uncertainties which may cast doubt about the Company's and the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

 

 

2     Segmental analysis

The Group has two reportable segments:

·    Head office - this segment is the head office of the Group.

·    Operations - this segment is involved in sales technology development in the USA.

The operating results of these segments are regularly reviewed by the Group's chief operating decision maker in order to make decisions about the allocation of resources and assess their performance.

30 September 2011 reportable segment analysis - unaudited

 

 

 

 

 

 

 

Operations

Head Office

Consolidated

 

 

£

£

£

Revenue from external customers

 

40,915

-

40,915

 

 

--------

--------

--------

Gross loss

 

(168,478)

-

(168,478)

Finance income

 

-

139

139

Tax credit

 

241,058

-

241,058

 

 

--------

--------

--------

Loss for the year after taxation

 

(2,122,415)

(266,681)

(2,389,096)

Segment assets

 

100,464

625,037

725,501

Segment liabilities

 

587,358

68,715

656,073

 

 

--------

--------

--------

Costs to acquire plant, property and equipment

 

15,254

-

15,254

Costs to acquire intangible assets

 

115,787

-

115,787

Depreciation and amortisation

 

1,541,672

2,864

1,544,536

Share based payments

 

52,625

66,001

118,626

 

 

--------

--------

--------

 

 

 

 

 

 

Year ended 31 March 2011 Reportable segment analysis - audited

 

 

 

 

 

 

 

Operations

Head Office

Consolidated

 

 

£

£

£

Revenue from external customers

 

58,365

-

58,365

 

 

--------

--------

--------

Gross loss

 

(477,280)

-

(477,280)

Finance income

 

-

969

969

Tax credit

 

502,440

29,676

532,116

 

 

--------

--------

--------

Loss for the year after taxation

 

(5,510,114)

(315,230)

(5,825,344)

 

 

 

 

 

Segment assets

 

6,331,689

1,495,947

7,827,636

Segment liabilities

 

867,340

84,780

952,120

 

 

--------

--------

--------

Costs to acquire property, plant  and equipment

 

130,313

6,008

136,321

Costs to acquire intangible assets

 

451,115

-

451,115

Depreciation and amortisation

 

3,234,992

4,226

3,239,218

Share based payments charged

 

511,781

63,525

575,306

 

 

--------

--------

--------

 

 

 

 

 

 

All material non-current assets are owned by the USA subsidiary and are located in the USA.

3     Deferred Tax

 

 

 

 

 

Unaudited

Unaudited

 

 

 

Period to

Period to

 

 

 

30 September

30 September

 

 

 

2011

2010

 

 

 

£

£

 

 

 

 

 

At 1 April

 

 

772,077

1,340,108

 

 

 

 

 

Credit to the income statement for the six months to 30 September

 

 

(241,058)

(257,022)

Foreign exchange translation

 

 

10,968

(52,736)

 

 

 

--------

--------

At 30 September

 

 

541,987

1,030,350

 

 

 

--------

--------

 

 

 

 

 

Audited

 

 

 

 

Year ended

 

 

 

 

31 March 2011

 

 

 

 

£

 

 

 

 

 

 

At 1 April

 

 

1,340,108

 

 

 

 

 

 

Credit to the income statement for the year

 

 

(502,440)

 

Foreign exchange translation

 

 

(65,591)

 

 

 

 

--------

 

At 31 March

 

 

772,077

 

 

 

 

--------

 

 

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 35%.

 

4     Loss per share

Basic

 

The calculation of loss per share is based on the loss for the period of £2,389,096 (2010 - loss £3,108,252, 2011 full year £5,825,344) and on 734,191,944 (2010 - 691,844,101 , 2011 full year 698,322,321) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

 

Diluted

 

Diluted loss per share dilutes the basic loss per share to take into account share options and warrants.  The calculation includes the weighted average number of ordinary shares that would have been issued on the conversion of all the dilutive share options and warrants into ordinary shares.  97,572,756 options and 1,193,654 warrants (2010 - 104,641,820 options and 1,193,654 warrants, 2011 full year 108,152,274 options and 1,193,654 warrants) have been excluded from this calculation as this would reduce the loss per share.



 

5     Share capital -unaudited

    

 

Allotted, called up and fully paid

 

2011

2010

2011

2010

 

Number

Number

£

£

Ordinary Shares of 1p each

 

 

 

 

 

 

 

 

 

At 1 April 

734,102,725

690,475,334

7,341,027

6,904,753

Employee share options exercised

102,405

1,800,000

1,024

18,000

 

 

--------

--------

--------

--------

At 30 September

734,205,130

692,275,334

7,342,051

6,922,753

 

 

 

 

__________

__________

__________

__________

 

Year Ended 31 March 2010 Share capital - audited

 

 

 

 

 

 

 

 

Allotted, called up and fully paid

 

 

2011

2010

2011

2010

 

 

Number

Number

£

£

 

Ordinary shares of 1p each

 

 

 

 

 

 

 

 

 

 

 

At 1 April

690,475,334

503,773,621

6,904,753

5,037,736

 

Shares issued

43,627,391

186,701,713

436,274

1,867,017

 

 

 

 

 

 

 

 

--------

--------

--------

--------

 

At 31 March

734,102,725

690,475,334

7,341,027

6,904,753

 

 

__________

__________

__________

__________

6   Post Reporting events

The company raised £177,500 via a private placing of 17,750,000 shares at 1 pence per share on 11 October 2011.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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