Interim Results
30 Juillet 2003 - 9:00AM
UK Regulatory
RNS Number:1123O
Flomerics Group PLC
30 July 2003
IMMEDIATE RELEASE 30 July 2003
FLOMERICS GROUP PLC
INTERIM RESULTS
For the 6 months ended 30 June 2003
Flomerics Group PLC, supplier of analysis software to the telecommunications,
semiconductor and computer industries, and other sectors of the electronics
industries, announces its results for the six months to 30 June 2003.
Key Points
* Turnover fell 18% to #4.88 million (2002: #5.97 million). (14% at
constant exchange rates).
* Loss before amortisation of goodwill of #103,000 (2002: profit of
#188,000).
* Strong cash balance of #2 million. (2002 : #1.1m)
* A major new release of FLOTHERM in June 2003 and the release of the
first merged product of FLO/EMC with FLOTHERM - already benefiting the
sales of both products.
* Increased turnover from FLO/EMC although sales of other products
continued to be difficult.
Commenting on the results, David Mann, the Chairman, said:
"When the economic conditions improve, we are well placed for growth and there
are some signs that the worst is over. We expect the remainder of 2003 to be
challenging, but with the release of the major new merged product of FLO/EMC and
FLOTHERM, measures taken to reduce costs and some scheduled large renewals, the
directors currently see good prospects for the Company to end the year with
reasonable results."
For further information please contact:
Flomerics:
David Tatchell, Chief Executive 020 8941 8810
Chris Ogle, Finance Director
Buchanan Communications:
Tim Thompson / Nicola Cronk 020 7466 5000
Interim Results 2003
Chairman's Statement
Results
In common with the electronics industry as a whole, Flomerics continued to
experience difficult trading in the six months ended 30 June 2003 . By tight
management of costs the Company incurred only a small loss in the period and
maintained strong cash balances.
In spite of lower turnover overall, customer renewals were good and exceeded our
budget; all of the major accounts that were expected to renew during the period
did so and there was some expansion of use within existing accounts. Recurring
revenues accounted for 74% of sales (2002:73%). However, sales to new customers
continued to be difficult and the levels were disappointing compared to previous
years.
Turnover from FLO/EMC increased compared to the same period last year. Whilst
sales were slower to close than hoped for, the reception from our customers has
been extremely positive and we expect to benefit significantly from the release
of the new version of the product.
Total turnover at #4.88 million (2002: #5.97 million) was down 18% (14% at
constant rates of exchange). Administration costs of #4.85 million (2002: #5.54
million) were down by 12%. The reduction in costs was achieved by overall
vigilance but also by some reduction in staff during the period.
The result was a loss before amortisation of goodwill in the period of #103,000
(2002: #188,000 profit). With some large licence renewals occurring in the
second half of the year, it is not abnormal for Flomerics to make a loss at the
interim stage, although in the last three years we have been pleased to achieve
a small profit.
Cash remains strong and at the end of June was #2.0 million (30 June 2002: #1.1
million).
Product Releases
I am very pleased to announce that a very significant milestone was reached in
June with a major new release of FLOTHERM, and the release of the first merged
product of FLO/EMC with FLOTHERM.
Kimberley Communications Consultants Limited was acquired as a means of entering
the EMC market, but we knew that the full potential benefit would be realised
only when the FLO/EMC product could be combined with FLOTHERM, giving customers
the benefit of the FLOTHERM user interface and allowing users of both products
to share models. The linking of thermal and EMC, now available in the new
release is unique, and has proved of real interest to existing and potential
customers. We believe that it will benefit the sales of both products, and
indeed is already doing so.
In addition, the new release of FLOTHERM represents a major upgrade in its own
right, and provides many valuable benefits to users, including automatic design
optimisation and a multi-level nested grid, which reduces calculation times by
up to a factor of ten. This release has also been well received by the market.
Prospects
The fundamental drivers of Flomerics' business remain unchanged: because of the
relentless growth in the power of today's microprocessors, there is a continuing
and increasing need for analysis software to address both thermal and EMC
problems in electronics. Nevertheless, since mid-2001, sales of the Company's
products have been disappointing; extreme financial pressures on organisations
operating in the electronics sector around the world have caused them to defer
expenditure on many items, inevitably affecting our business.
When the economic conditions improve, we are well placed for growth and there
are some signs that the worst is over. We expect the remainder of 2003 to be
challenging, but with the release of the major new product, measures taken to
reduce costs and some scheduled large renewals, the directors currently see good
prospects for the Company to end the year with reasonable results.
CONSOLIDATED PROFIT AND LOSS
ACCOUNT
Interim results for the six monthsto
30 June 2003
30-Jun-03 30-Jun-02 31-Dec-02
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Turnover 4,881 5,966 11,711
Cost of sales (152) (226) (355)
Gross Profit 4,729 5,740 11,356
Administrative expenses (4,855) (5,539) (10,570)
Amortisation of goodwill (41) (41) (82)
Operating (Loss)/Profit (167) 160 704
Other interest receivable and other 46 8 26
income
Interest payable and similar (23) (21) (95)
charges
(Loss)/Profit on Ordinary Activities (144) 147 635
Before Taxation
Tax on profit on ordinary - (37) (160)
activities
(Loss)/Profit on Ordinary Activities (144) 110 475
After Taxation
Dividends - - (146)
Transferred to Reserves (144) 110 329
(Loss)/earnings per share (0.98p) 0.75p 3.25p
Diluted (loss)/earnings per share (0.98p) 0.75p 3.23p
STATEMENT OF TOTAL RECOGNISED GAINS
AND LOSSES
30-Jun-03 30-Jun-02 31-Dec-02
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
(Loss)/Profit for the Period (144) 110 475
Unrealised gain / (loss) on
translation of foreign currency
investments 17 (19) (96)
Total Recognised (Loss)/Gains (127) 91 379
CONSOLIDATED BALANCE SHEET 30-Jun-03 30-Jun-02 31-Dec-02
At 30 June 2003 (Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed Assets
Intangible assets 499 581 540
Tangible assets 1,783 1,969 1,908
2,282 2,550 2,448
Current Assets
Debtors 3,934 5,182 4,216
Cash at bank and in hand 1,975 1,124 2,159
5,909 6,306 6,375
Creditors: amounts falling due within (3,072) (3,659) (3,546)
one year
Net Current Assets 2,837 2,647 2,829
Total Assets Less Current 5,119 5,197 5,277
Liabilities
Creditors: amounts falling due after (543) (603) (574)
one year
Provisions for Liabilities and - (33) -
Charges
Net Assets 4,576 4,561 4,703
Capital and Reserves
Called up share capital 146 146 146
Share premium account 1,602 1,602 1,602
Merger reserve 759 759 759
Profit and loss account 2,069 2,054 2,196
Equity Shareholders' Funds 4,576 4,561 4,703
CONSOLIDATED CASH FLOW STATEMENT 30-Jun-03 30-Jun-02 31-Dec-02
for the six months to 30 June 2003 (Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Operating Activities
Operating (loss)/profit (167) 160 704
Depreciation and amortisation 281 371 635
charges
Profit on disposal of fixed assets - - (17)
Exchange differences 17 (19) (80)
Decrease / (increase) in debtors 282 (73) 893
(Decrease) / increase in creditors (261) 34 (121)
Net Cash Inflow From Operating 152 473 2,014
Activities
Net cashflow from returns on
investments and servicing
of finance 23 (13) (69)
Taxation (38) - (234)
Net cashflow from capital expenditure
and
financial investment (115) (153) (314)
Equity Dividend paid (146) (146) (146)
Net Cashflow Before Financing (124) 161 1,251
Net Cashflow From Financing (60) (85) (140)
(Decrease) / increase in Cash in the (184) 76 1,111
Period
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
30-Jun-03 30-Jun-02 31-Dec-02
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
(Decrease) / increase in Cash in the (184) 76 1,111
Period
Cash outflow from decrease in debt 60 85 140
and lease financing
Movement in Net Funds in the Period (124) 161 1,251
Net Funds at Beginning of Period 1,486 235 235
Net Funds at End of Period 1,362 396 1,486
NOTES TO THE INTERIM REPORT
1. ACCOUNTING POLICIES
The financial information contained in this Interim Report does not
constitute statutory accounts. The interim results, which have not been
audited, have been prepared using accounting policies consistent with those
used in the preparation of the Annual Report and Accounts for the year
ended 31 December 2002. Those accounts have been filed with the Registrar
of Companies and received an unqualified audit report.
2. TAXATION
During the six months to 30 June 2003 the company incurred a loss and no
provision for taxation has been made.
3. (LOSS)/EARNINGS PER SHARE
Basic (loss)/earnings per share have been calculated by dividing the
(loss)/profit on ordinary activities after taxation in the period by the
weighted average number of shares in issue in the period of 14,646,580 (six
months to 30 June 2002: 14,646,580). The diluted (loss)/earnings per share
calculation has been based on a fair value of 54p per share (30 June 2002:
73p). The diluted weighted average number of shares is 14,676,338 (30 June
2002: 14,694,665).
4. SEGMENTAL INFORMATION
The group's turnover for each geographic area of operation is:
30 June 03 30 June 02 31 December 02
#'000 #'000 #'000
United States of America 2,428 3,057 5,908
Europe and Asia Pacific 2,453 2,909 5,803
------- ------- -------
4,881 5,966 11,711
Segmental information on profit before tax and net assets is disclosed in the
Annual Report.
5. ANALYSIS OF NET FUNDS
30 June 03 30 June 02 31 December 02
#'000 #'000 #'000
Cash in hand and at bank 1,975 1,124 2,159
Debt due after one year (543) (597) (574)
Debt due within one year (56) (50) (56)
Finance leases (14) (81) (43)
------ ------ -------
Total 1,362 396 1,486
Debt represents a mortgage that was taken out on a property acquired in 2001.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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