RNS Number:4544M
Indigo Vision Group PLC
18 June 2003
INDIGOVISION GROUP PLC
Results for the nine months to 30 April 2003
Third quarter financial highlights:
* Revenues increased 14% on Q2 at #0.48m
* Nine month revenues #1.2m (2002: #1.8m)
* Operating overhead reduced 13% on Q2 at #1.26m
* Cash burn reduced 23% on Q2 at #1.0m, ahead of expectation
* Gross margin 46%
* Cash return of 17p per share completed
Third quarter operational highlights:
* Supply agreement concluded with new European CCTV manufacturer
* First three deployments of MPEG4 concluded
* Recent installations showing significant cost advantage over
competition
* Prestige university reference site completed at Jesus College,
Cambridge
Oliver Vellacott, Chief Executive Officer, said:
"Following our planned change of business model from technology licensing to
being a product business we are starting to see some revenue growth. This,
combined with our continued focus on cost reduction, is moving IndigoVision
steadily towards breakeven."
ENQUIRIES:
IndigoVision Oliver Vellacott (CEO) 0131 475 7200
INDIGOVISION GROUP PLC
Results for the nine months to 30 April 2003
We have experienced an encouraging third quarter, with revenues for the quarter
up 14% on the second quarter at #0.48m, in line with expectations. Overhead has
also reduced as planned, by 14% from the second quarter at #1.26m. Gross margin
was 46% and exceptional costs at #0.4m, resulting in a net cash burn of #1.0m
for the third quarter, 23% lower than the previous quarter. On 21st May 2003 we
completed the return to shareholders of surplus cash of 17p per share, and now
revenues and overhead are both moving in the right direction to reduce cash burn
and move IndigoVision toward breakeven. In the first nine months of this year
our product revenues have matched those of the previous twelve months, part of
last year's revenues having derived from technology licensing from which the
group has withdrawn.
Results
Following restructuring we have retained sales offices in London, Boston and
Tokyo at reduced cost, and the geographic split of revenues over the nine month
period was 59% Europe, 27% US and 14% Asia. Research and development
expenditure in the nine month period was #1.6m (2002: #2.4m) representing 34% of
total overhead before exceptional items. Other overhead was reduced by 48% to
#3.1m (2002: #6.0). Total operating costs before exceptional items reduced 44%
on the same period last year. An exceptional charge of #0.4m was made during Q3
in respect of restructuring and capital reduction costs. Headcount at the end
of Q3 was 60.
The operating loss for the nine month period before exceptional items was #4.2m
(2002: #7.2m). After charging exceptional items of #0.4m in respect of
restructuring and capital reduction, and net interest received of #0.5m (2002:
#0.9m), the loss before taxation for the nine month period was #4.1m (2002:
#6.6m). Net cash balances at the close of the period were #18.6m, before the
return of capital in May which absorbed approximately #11m. Stock at the end of
the period was #0.7m (2002: #0.9m)
Operational progress
We made steady progress during Q3 with the implementation of the product-focused
business model, concluding a supply agreement with a new European CCTV
manufacturer following an extensive competitive tender process. We have also
been the first to deploy MPEG4, with three significant projects deployed in
transportation and city centres. Our partners are now reporting installations in
which they have achieved significant cost savings over competitive solutions in
the form of analog CCTV and/or DVRs (Digital Video Recorders).
Move to AIM
The board has been reviewing the costs of maintaining a full listing and of the
current quarterly reporting requirement, and has concluded that the Alternative
Investment Market would be more appropriate to the scale and stage of
development of IndigoVision, and would reduce costs. Accordingly, the board
intends that the company move from the full listing to AIM following the
announcement of the final year results for 2003.
Outlook
We are continuing to see tangible signs that the market for our technology is
developing, and are confident that our product-focused business is well
positioned to capitalise on this.
Consolidated profit and loss account
For the 9 months to 30 April 2003
Note 9 months to 30 9 months to 30 Year to 31
April 2003 April 2002 July 2002
Unaudited Unaudited Audited
#000 #000 #000
Turnover 1,191 1,800 2,251
Cost of sales (642) (587) (1,098)
Gross profit 549 1,213 1,153
Research and development expenditure (1,567) (2,371) (3,267)
Other operating overhead expenses (3,144) (6,068) (7,844)
Exceptional items:
Restructuring costs (388) (263) (1,400)
Capital Reduction costs (77)
Operating loss (4,627) (7,489) (11,358)
Bank interest receivable 519 865 1,088
Interest payable and similar charges (6) (6) (10)
Loss on ordinary activities before
taxation (4,114) (6,630) (10,280)
Tax on loss on ordinary activities - - -
Retained loss for the period (4,114) (6,630) (10,280)
Loss per ordinary share 3
Basic and diluted (6.00p) (9.68p) (15.01p)
Loss per share before exceptional items (5.32p) (9.29p) (12.96p)
Consolidated statement of total recognised gains and losses
For the 9 months to 30 April 2003
9 months to 30 9 months to 30 Year to 31
April 2003 April 2002 July 2002
Unaudited Unaudited Audited
#000 #000 #000
Loss for the period (4,114) (6,630) (10,280)
Gain (Loss) on foreign currency
translation 3 (13) 82
Total recognised gains and losses
relating to the period (4,111) (6,643) (10,198)
Consolidated balance sheet
at 30 April 2003
As at 30 April 2003 As at 30 April As at 31 July
Unaudited 2002 2002
Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Fixed assets
Tangible assets 159 289 276
Current assets
Stocks 732 925 791
Debtors 586 1,019 916
Cash at bank and in hand 18,674 25,983 23,588
19,992 27,927 25,295
Creditors: amounts
falling due within one
year (1,612) (2,151) (1,870)
Net current assets 18,380 25,776 23,425
Total assets less current
liabilities 18,539 26,065 23,701
Creditors: amounts
falling due after more
than one year (37) (74) (65)
Deferred income - (26) -
Provisions for
liabilities and charges (72) (67) (1,194)
Net assets 18,430 25,898 22,442
Capital and reserves
Called up share capital 6,849 6,849 6,849
Share premium account 4 28,849 28,849 28,849
Other reserve 4 8,563 8,563 8,563
Profit and loss account 4 (25,831) (18,363) (21,819)
Shareholders' funds -
equity 18,430 25,898 22,442
Consolidated cash flow statement
For the 9 months to 30 April 2003
9 months to 9 months to Year to
30 April 2003 30 April 2002 31 July 2002
Unaudited Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Cash flow statement
Cash outflow from
operating activities 5 (5,402) (7,020) (9,693)
Returns on investments
and servicing of finance
Interest received 519 865 1,088
Interest paid (6) (6) (10)
513 859 1,078
Capital expenditure and
financial investment
Purchase of tangible
fixed assets - (163) (190)
Cash outflow before
management of liquid
resources and financing (4,889) (6,324) (8.805)
Financing
Repayment of loans (28) (39) (48)
Decrease in cash in the
period (4,917) (6,363) (8,853)
Reconciliation of net
cash flow to movement in
net funds 6
Decrease in cash in the
period (4,917) (6,363) (8,853)
Cash flow from movement
in debt 28 39 48
Translation adjustment 3 (13) 82
Movement in net funds in
the period (4,886) (6,337) (8,723)
Net funds at the start of
the period 23,486 32,209 32,209
Net funds at the end of
the period 18,600 25,872 23,486
Notes to the accounts:
1. The interim financial information has been prepared on the basis of
accounting policies consistent with those applied in the accounts for the year
ended 31 July 2002. The information is unaudited and does not comprise the
statutory accounts of the group. The statutory accounts of IndigoVision Group
plc for the year ended 31 July 2002 have been filed with the registrar of
companies. KPMG Audit Plc have reported on these accounts; their report was
unqualified and did not contain any statement under section 237 of the Companies
Act 1985.
2. This report was approved by the board of directors on Tuesday 17th June
2003.
3. Loss per share
Loss per share is calculated as follows:
Nine Nine Year to
months to months to 31 July
30 April 30 April
2003 2002 2002
#000 #000 #000
Loss for the period (4,114) (6,630) (10,280)
Exceptional items 465 263 1,400
(3,649) (6,367) (8,880)
Number Number Number
Weighted average number of shares in
issue:
For basic and diluted loss 68,493,520 68,493,520 68,493,520
Basic and diluted loss per share (6.00p) (9.68p) (15.01p)
Loss per share before exceptional (5.32p) (9.29p) (12.96p)
items
4. Share premium and reserves
Share Premium Other Profit & Loss
Account reserve Account
#000 #000 #000
At beginning of period 28,849 8,563 (21,819)
Retained loss for period - - (4,114)
Share options charge per UITF 17 - - 99
Currency exchange movements - - 3
At end of period 28,849 8,563 (25,831)
5. Reconciliation of operating loss to operating cash flows
Nine Nine months to Year
months to 30 April 2002 to
30 April 2003 #000 31 July
#000 2002
#000
Operating loss (4,627) (7,489) (11,358)
Depreciation 117 102 142
(Increase)/decrease in stocks 59 (559) (425)
(Increase)/decrease in debtors 330 172 275
Increase/(decrease) in creditors
(258) 449 142
Share option charges 99 297 396
Movement in provisions (1,122) 8 1,135
Net cash outflow from operating
activities (5,402) (7,020) (9,693)
6. Analysis of net funds
At 1 August Cash flow At 30 April
2002 2003
#000 #000 #000
Cash in hand and at bank 23,588 (4,914) 18,674
Debt due after one year (65) 28 (37)
Debt due within one year (37) - (37)
Total 23,486 (4,886) 18,600
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