RNS Number : 5456X
Appian Technology PLC
26 June 2008
Appian Technology plc / Ticker: ATT / Market: AIM / Sector: Technology
26 June 2008
Appian Technology plc ('Appian', 'the Company')
Interim Results
Appian Technology plc, the AIM-traded provider of Automatic Number Plate Recognition ('ANPR') systems and traffic management products
and solutions, announces its interim results for the six months ended 31 March 2008.
Overview
* Initiatives implemented during the period to increase sales, widen customer base and geographical penetration, reduce costs and
strengthen team and balance sheet
* Reduced costs and streamlined operations anticipated to provide annualised cost saving of �1.54 million
* Product development programme ongoing to further reduce production costs and enhance margins
* Balance sheet strengthened having raised �1.39 million (net) from a placing of new shares and approximately �1.24 million through
the issue of Convertible Loan Notes
* Record order intake of �5.4 million in year to date
Chairman's Statement
I am pleased to report on the progress that Appian has made in the first six months of the financial year, during which we have expanded
our geographic reach and strengthened our position as a leading provider of ANPR systems to security and law enforcement agencies worldwide.
As mentioned in my last statement to shareholders, the second half of the financial year ended 30 September 2007 was challenging, due to
a combination of the delay in the receipt of anticipated orders by circumstances outside our and our customers' control and the increase in
our cost base following the acquisition of Genesis. We therefore initiated a strategic review, which has been our focus during this period,
centred on increasing sales, widening our customer base and geographical penetration, reducing costs and strengthening the management team,
board and balance sheet. As our various contract wins and sales orders received in the year to date indicate, together with reducing costs,
these actions are now bearing fruit, although they will not be reflected in the Company's profit and loss account until the full year
results.
Operations Report
Appian made progress in all its markets, namely in the UK and Ireland, the Middle East and the Americas, resulting in a number of
contract wins and its best half year to date for order intake. Business in hand in the year to date is �5.4 million in aggregate, which,
with the exception of �0.26 million, is anticipated to be delivered by the end of the current financial year. This includes all orders
received so far and annual maintenance revenue. Total sales in the last financial year amounted to �4.77 million.
In the UK and Ireland market, Appian has grown its market share and successfully won a number of strategic tenders. In particular, our
fixed-site ANPR business has developed, with new systems recently installed at 4 UK international airports (East Midlands, Manchester,
Southampton and London City) and at a UK military base. We have successfully displaced our competitors and are now supplying our ANPR
technology to a number of new UK police forces including North Yorkshire, Lincolnshire and Leicestershire and a major UK security force.
Internationally, our profile continues to develop and we have doubled our level of sales. We secured contracts to install ANPR systems
at 3 further prestigious Middle Eastern hotels. In order to capture the increasing global demand for ANPR technology, and to expose our
products to new geographical markets, we have a number of new international partners, including Transguard, a division of the Jumerah group,
and Norbain. Norbain are a major global security distributor and we are excited to be working with them on the Middle Eastern and on a
number of African projects. We also have a number of international contracts pending, which we hope to announce in due course.
Our Maltese joint venture company, CVA, in which we have a 30% interest, is receiving excellent feedback for its operation of the
Congestion Charging Scheme in Valetta. Launched in May 2007 under a 10 year contract, the system is currently undergoing acceptance testing
and we expect this to be revenue generating in the next financial year. Importantly, the scheme was recently voted the best case study of
2007 by the European Local Transport Information Service and is generating considerable interest in other European countries where
policymakers are evaluating the possibility of introducing similar systems in major towns and cities. The scheme is also being presented at
the European Local and Regional Government Finance Conference meeting in Rome.
During the period, Appian signed its first original equipment manufacturer agreement ('OEM') with US based Civica Software ('Civica'),
its Californian based distributor. This has now been devolved to a new company, Platescan Inc ('Platescan') and, as part of the agreement,
Appian has been granted an initial 5% of free equity in Platescan with the option to acquire a further 5% at the same price at which new
shares were issued to a government-backed venture capital investor, recently announced by Platescan.
Platescan is focused on developing and distributing technology products for the US Government and law enforcement agencies. Under the
terms of the agreement, Platescan will integrate Appian's TalonSP* recognition engine into its proprietary hardware and software system,
PlateScan*, to create a superior product that enables customers to proactively identify vehicles of interest during routine patrols.
Product Development
Our decision to develop and contract manufacture our own camera products, rather than purchasing commodity cameras off the shelf, has
improved our product range and enhanced strategic independence. Adjustment to this changed business operation resulted in a one-off delay in
order delivery during the period but has since proved to be successful.
We continue to upgrade our range of cameras, including the fixed site Cobra camera, which has sold very successfully since its launch in
January 2007. We have also rolled out the new Stinger range, an enhanced Cobra with inbuilt processing and communications capabilities, as
well as the Viper range, an in-car dual purpose video and ANPR camera aimed at the police market.
Re-engineering of our principal camera products to further reduce production costs and enhance margins is currently underway.
Board and Management Team
The management team has been strengthened and reorganised to ensure that we maximise our potential and remain at the forefront of ANPR
technology development and provision. Commercial Director, Tom Keene is responsible for sales and marketing, with particular focus on
developing international and traffic markets. Tony Price is Head of Operations, Dr. Peter Csakany was appointed Head of Development in
December 2007 and Adrian Cadd has been promoted to the position of UK Sales Director.
The financial team has been strengthened with the appointment of Simon Michaels who joined as Finance Manager in April 2008 with a view
to a future appointment to the Board. Simon, aged 40, is a chartered accountant, who has wide ranging business experience at plc level
having previously held positions with Coopers & Lybrand, RP Corporate Strategy, Finance Director UK and US Operations for Harvey Nash Group
plc and Group Finance Director and Company Secretary of Mercury Group plc.
Mr Michaels replaces the Company's former FD David Hearn, who stepped down from the Board in April and the interim CFO, Philip Lindsell,
who departed at the end of April. Additionally, the Board plans to appoint a non-executive Chairman in the near future.
Financials
In line with expectations, the Company is reporting a turnover of �2,037,222 (2007: �3,511,063) and gross profit of �945,297 (2007:
�1,702,987) for the six months ended 31 March 2008. The Company incurred a post tax loss of �1,280,916 (2007: loss of �431,226).
Non-recurring costs in this half year amounted to �0.305 million. The Board is not declaring a dividend.
The Board anticipates that with the exception of �0.26 million, business in hand of �5.4 million generated this year will be delivered
and reflected in the Company's 2008 year end results.
In this financial year, Appian has raised �1.39 million (net) from a placing of new shares in December 2007 and approximately �1.24
million through the issue of two tranches of convertible loan notes in March and June 2008. Certain directors have contributed significantly
to these issues.
The Company has implemented an aggressive cost reduction programme with the aim of reducing costs to a rate of �3.4 million per annum by
the end of this financial year from an annualised peak of �4.9 million in the second half of the financial year to September 2007. Further
opportunities to reduce costs are being constantly assessed.
Outlook
With a record period for order intake and pipeline, steady gross margin and the implementation of an aggressive cost cutting programme
whose major benefits will be seen during the remainder of this financial year and next, we believe that Appian has significant future
potential in this emerging market. We remain committed to being at the forefront of ANPR technology and we believe the improvement in order
intake reflects that the Company's products are gaining further recognition and traction both in the UK and internationally and demonstrates
the continuing growth of the market.
Patrick Ryan
Executive Chairman and CEO
26 June 2008
APPIAN TECHNOLOGY PLC
Consolidated interim income statement
For the six months ended 31 March 2008 Restated Restated
Unaudited Unaudited Unaudited
6 months 6 months 12 months
ended ended ended
31-Mar-08 31-Mar-07 30-Sep-07
� � �
Revenue 2,037,222 3,511,063 4,775,548
Cost of sales (1,091,925) (1,808,076) (2,883,089)
Gross profit 945,297 1,702,987 1,892,459
Administrative expenses (2,236,471) (2,006,233) (4,476,695)
Share based payment (43,308) (151,299) (224,355)
Depreciation (24,579) (16,600) (42,833)
Amortisation of intangibles (56,531) (9,738) (15,240)
Operating expenses (2,360,889) (2,183,870) (4,759,123)
Operating loss (1,415,592) (480,883) (2,866,664)
Impairment of investments - - (101,425)
Net finance costs (51,533) 4,859 (44,528)
Loss before tax (1,467,125) (476,024) (3,012,617)
Tax on loss 186,209 44,798 47,371
Loss for the period (1,280,916) (431,226) (2,965,246)
Basic and diluted loss per share (0.75) (0.29) (2.01)
(pence)
APPIAN TECHNOLOGY PLC
Consolidated interim balance sheet
As at 31 March 2008 Restated Restated
Unaudited Unaudited Unaudited
31-Mar-08 31-Mar-07 30-Sep-07
� � �
Non-current assets
Goodwill 1,366,501 2,060,201 1,366,501
Other intangible assets 659,076 439,882 634,652
Property, plant and equipment 160,693 155,486 167,474
Investments 176,425 202,850 101,425
2,362,695 2,858,419 2,270,052
Current assets
Inventories 865,044 923,797 711,324
Trade and other receivables 2,265,497 2,997,641 1,727,662
Cash and cash equivalents 355,246 1,212,042 70,589
3,485,787 5,133,480 2,509,575
Total assets 5,848,482 7,991,899 4,779,627
Current liabilities
Trade and other payables 1,998,152 2,493,550 2,188,106
Bank borrowings 828,681 622,687 555,068
2,826,833 3,116,237 2,743,174
Non-current liabilities 1,106,396 634,351 247,921
Total liabilities 3,933,229 3,750,588 2,991,095
Net assets 1,915,253 4,241,311 1,788,532
Equity
Share capital 1,897,687 1,526,550 1,528,550
Share premium 11,367,215 10,365,838 10,372,023
Other reserve 623,432 623,432 623,432
Share options reserve 418,937 302,573 375,629
Retained earnings (12,392,018) (8,577,082) (11,111,102)
Total equity 1,915,253 4,241,311 1,788,532
Restated Restated Restated Restated Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share capital Share premium Share options Other reserve Retained earnings Total
reserve
� � � � � �
Balance at 1 October 2006 1,506,550 10,290,347 151,274 623,432 (8,145,856) 4,425,747
Changes in equity for 6 months
Share based payment charge - - 151,299 - - 151,299
Net income recognised directly - - 151,299 - - 151,299
to equity
Loss for the period - - - - (431,226) (431,226)
Total recognised income and 1,506,550 10,290,347 302,573 623,432 (8,577,082) 4,145,820
expense for the period
Issue of share capital 20,000 75,491 - - - 95,491
Balance at 31 March 2007 1,526,550 10,365,838 302,573 623,432 (8,577,082) 4,241,311
Balance at 1 October 2006 1,506,550 10,290,347 151,274 623,432 (8,145,856) 4,425,747
Changes in equity for the year
Share based payment charge - - 224,355 - - 224,355
Net income recognised directly - - 224,355 - - 224,355
to equity
Loss for the period - - - - (2,965,246) (2,965,246)
Total recognised income and 1,506,550 10,290,347 375,629 623,432 (11,111,102) 1,684,856
expense for the year
Issue of share capital 22,000 81,676 - - - 103,676
Balance at 30 September 2007 1,528,550 10,372,023 375,629 623,432 (11,111,102) 1,788,532
Share capital Share premium Share based payments Other reserve Retained earnings Total
reserve
� � � � � �
Balance at 1 October 2007 1,528,550 10,372,023 375,629 623,432 (11,111,102) 1,788,532
Changes in equity for 6 months
Share based payment charge - - 43,308 - - 43,308
Net income recognised directly - - 43,308 - - 43,308
to equity
Loss for the period - - - - (1,280,916) (1,280,916)
Total recognised income and 1,528,550 10,372,023 418,937 623,432 (12, 392,018) 550,924
expense for the year
Issue of share capital 369,137 1,107,411 - - - 1,476,548
Expense of equity share issue - (112,219) - - - (112,219)
Balance at 31 March 2008 1,897,687 11,367,215 418,937 623,432 (12, 392,018) 1,915,253
APPIAN TECHNOLOGY PLC
Condensed consolidated cash flow
statement
For the six months ended 31 March Restated Restated
2008
Unaudited Unaudited Unaudited
6 months 6 months 12 months
ended ended ended
31-Mar-08 31-Mar-07 30-Sep-07
� � �
Loss on ordinary activities before (1,467,125) (476,024) (3,012,617)
tax
Depreciation 24,579 16,600 42,833
Amortisation of intangibles 56,531 9,738 15,240
Impairment of available-for-sale - - 101,425
investment
Share based payments 43,308 151,299 224,355
Net interest payable/(receivable) 51,533 (4,859) 44,528
(Increase)/decrease in inventories (153,720) (85,844) 126,629
(Increase)/decrease in trade and (537,835) (367,155) 902,824
other receivables
Decrease in trade and other (223,431) (65,987) (103,930)
payables
Net interest paid (51,533) 4,859 (44,528)
Tax received/(paid) 186,209 44,798 47,371
Net cash outflow from operating (2,071,484) (772,575) (1,655,870)
activities
Purchases of property, plant & (17,799) (111,464) (149,685)
equipment
Purchases of intangibles (80,954) (262,797) (463,369)
Acquisition of investment (75,000) (202,850) (202,850)
Net cash used in investing (173,753) (577,111) (815,904)
activities
Issue of loan stock 903,000 - -
Repayments of borrowings 75,276 - -
Share issue (net proceeds) 1,364,329 95,491 103,676
Net cash flows on finance leases (20,798) 141,284 194,353
Net cash raised in financing 2,321,807 236,775 298,029
activities
Net increase/(decrease) in cash & 76,570 (1,112,9110) (2,173,745)
cash equivalents
Cash & cash equivalents at (472,563) 1,714,182 1,714,182
beginning of period
Cash & cash equivalents at end of (395,993) 601,271 (472,563)
the period
APPIAN TECHNOLOGY PLC
NOTES TO THE INTERIM RESULTS
For the six months ended 31 March 2008
1 BASIS OF PREPARATION
The interim financial information has been prepared by applying the IFRS-compliant accounting policies published on the group's website,
www.appian-tech.com.
Appian Technology's consolidated interim financial statements are presented in Pounds Sterling (�), which is also the functional
currency of the parent company.
These interim consolidated financial statements are for the six months ended 31 March 2008. They have been prepared following the
recognition and measurement principles of IFRS, because they are part of the period covered by the Group's first IFRS financial statements
for the year ending 30 September 2008. They do not include all of the information required for full annual financial statements, and should
be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2007.
These financial statements have been prepared on the going concern basis, under the historical cost convention.
These consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting
policies published on the Group's website which are based on the recognition and measurement principles of IFRS in issue as adopted by the
European Union (EU) and are effective at 30 September 2008 or are expected to be adopted and effective at 30 September 2008, our first
annual reporting date at which we are required to use IFRS accounting standards as adopted by the EU.
Appian Technology plc's consolidated financial statements were prepared in accordance with United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice) until 30 September 2007. The date of transition to IFRS was 1 October 2006. The comparative
figures in respect of 2007 have been restated to reflect changes in accounting policies as a result of adoption of IFRS. The disclosures
required by IFRS 1 concerning the transition from UK GAAP to IFRS are shown on the group's website. The transition to IFRS has not resulted
in any adjustments to the previously reported results and balance sheets other than in respect of format and disclosure requirements.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated
interim financial statements.
2 LOSS PER ORDINARY SHARE
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average
number of shares in issue during the year. Loss per share has been calculated on the "net basis".
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
Unaudited Unaudited Unaudited
6 months 6 months 12 months
ended ended ended
31-Mar-08 31-Mar-07 30-Sep-07
Loss after taxation (�) (1,280,916) (431,226) (2,965,246)
Weighted average number of ordinary 170,571,118 146,600,050 147,188,146
shares in issue during the period
Loss per ordinary 1 p share (pence) (0.75) (0.29) (2.01)
3 Tax
The tax credit arises on research and development.
4 Dividends
During the interim period, no dividends were paid to the shareholders, (2007: �nil).
5 Property, plant and equipment
During the period the Group acquired new computer equipment of �17,799 under a finance lease.
6 Borrowings
The Company issued �653,000 of Convertible Loan Notes on 18 March 2008, which are unsecured and bear an annual interest rate of 8.25 per
cent. They are payable quarterly in arrears and are convertible at any time into ordinary shares of �0.01 in Appian at 4 pence per share.
The loan stock in issue at the beginning of the period was rolled forward on the same terms.
7 share capital
During December 2007 the Company issued 36,913,700 new ordinary shares of �0.01 each for a cash price of �0.04.
No warrants were exercised in the period.
The difference between the total consideration and the nominal value of the shares issued has been credited to the share premium
account.
8 Post balance sheet events
Following the period end the Company issued �513,000 of loan stock. The Convertible Loan Notes bear an annual interest rate of 8.25 per
cent. payable quarterly in arrears and are convertible at any time into ordinary shares of �0.01 in the Company at 4 pence per share.
9 PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this interim report does not constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The figures for the year ended 30 September 2007 have not been extracted from the statutory financial statements for
that year. Those financial statements, which were prepared under UK Generally Accepted Accounting Principles, have been reported on by the
Company's auditors and filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did
not contain a statement under Section 237 (2) or (3) of the Companies Act 1985.
* * ENDS * *
For further information please visit www.appian-tech.com or contact:
Pat Ryan Appian Technology plc Tel: 01628 554750
Tom Keene Appian Technology plc Tel: 01628 554750
Chris Welsh St Brides Media and Finance Ltd Tel: 020 7236 1177
Tom Griffiths Arbuthnot Securities Tel: 020 7012 2000
Notes to Editors
Appian Technology Plc is a leading provider of Automated Number Plate Recognition (ANPR) based enforcement, crime reduction, counter
terrorism (CT) and traffic management systems and products. It provides these products to a diverse growing global market, helping
governments, local authorities, national and international police forces and commercial organisations in all aspects of security,
surveillance and traffic management.
Appian's key products include its world leading Talon ANPR software as well as the recently launched range of Cobra ANPR cameras. The
Company has an active R&D department, which continues to develop and customise new products for the global markets.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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