Final Results
24 Mars 2005 - 8:00AM
UK Regulatory
RNS Number:1634K
AeroBox plc
24 March 2005
24 March 2005
AEROBOX PLC
("Aerobox" or the "Company")
AUDITED RESULTS FOR YEAR ENDED 31 DECEMBER 2004
Summary
* Equity placings raised #7.2m to fund development and working capital
* Third and final stage of manufacturing plant fully operational
* 400 Aerobox containers now in use with airlines worldwide
* Over 25,000 successful flights with minimal damage reported
* Operating loss before goodwill amortisation of #3.1m
Commenting on prospects, David Sebire, Chairman, said:
"The Board of AeroBox is pleased to report the significant progress made by the
group over the last year. The transformation from development to full scale
production is almost complete. Just over one year ago we were a promising
company with a development prototype but no customers or commercial production
capacity. We now have a strong management team, installed production capacity, a
proven product, industry recognition and initial customers who have indicated
their intention to expand their deployment of the Aerobox. The opportunities for
our technology and know how beyond the initial aviation market are being
evaluated. Following the placing at the end of 2004, we now have the funds in
place to exploit these exciting medium term opportunities and enhance
shareholder value."
Enquiries:
David Sebire , Chairman AeroBox plc Today: +44 20 7929 5599
Richard Scott, Finance Director AeroBox plc
Jonathan Wright Seymour Pierce +44 20 7107 8000
David Bick/Trevor Phillips Holborn +44 20 7929 5599
CHAIRMAN'S STATEMENT
Results
The financial statements cover the year ending 31 December 2004. The 2003
comparatives cover the 15 month period from the incorporation of the Company on
2 October 2002 to 31 December 2003. The group's only operating subsidiary,
Aerospace Composite Structures LLC ("ACS") was acquired on 20 March 2003 and
therefore only 8 months of ACS's results are included in the comparative results
for 2003. Operating loss before goodwill amortisation for 2004 amounted to
#3,094,000 (2003: #1,673,000). Goodwill amortisation amounted to #882,000 (2003:
#690,000). Net interest payable totalled #nil (2003: #257,000). Loss on ordinary
activities before taxation for the period amounted to #3,976,000 (2003:
#2,620,000). This represented a loss per share of 4.0p (2003: 4.8p).
Finance
During 2004, 43 million shares were issued via placings with investors to raise
#7.2m net of costs to fund developments and working capital. On 27 July 2004, 7
million shares were issued at par to Watermark Group plc as part of an agreed
settlement arising from the dissolution of the global sales and marketing joint
venture. HSBC Bank plc has been appointed bankers to the group. The group had
cash balances of #3.9m at 31 December 2004.
Review of Operations
The transition from an early stage development company producing one container
per week to a volume manufacturer of air cargo containers is proceeding well.
The third and final stage of the new plant at Albuquerque is now operational
with both the panel laminating and core extrusion lines installed and
commissioned. Weekly production capability has increased from 10 to 50
containers per week. Shipment of the 85kg production version of the Aerobox
("AKE2") has started. The roll out of 250 Aerobox containers at the London
Gatwick operations of Virgin Atlantic has been completed and there were over 400
Aerobox containers in use with airlines at the year end.
Aerobox air containers have now flown over 25,000 flights. Damage rates and
repair costs are less than 25% of those of aluminium containers. For a typical
airline the net present value of these savings over a whole life cycle exceeds
the capital cost of an aluminium air cargo container. The payback period is
short - between 12 and 24 months. The original Aerobox AKE that entered trials
in late 2003 was only available with a curtain door opening and a standard flat
base. The Aerobox AKE is now also available with a bifold solid door and a
fork-liftable base. All three variants are now in trials with airlines. Given
the impressive results from trials and widespread industry recognition, we
remain optimistic that significant orders will be received in 2005 from some of
the leading global airlines notwithstanding the financial challenges facing the
aviation industry.
As our manufacturing subsidiary Aerospace Composite Structures ("ACS") is
resident in the USA, it is subject to routine inspections by the Federal
Aviation Administration ("FAA") that cover systems, manuals, processes and
production facilities as well as products. There has been an almost continuous
dialogue with the FAA on commissioning the new factory and developing and
certifying new variants of the Aerobox AKE for airline operations. The FAA has
approved the new production facilities and several variants of the Aerobox AKE.
The actively refrigerated container has started airline trials.
As well as producing air cargo containers, the plant will produce composite
panels and honeycomb core material for other markets such as automotive,
construction and the military. The first non-aviation contract has been signed
and shipments have commenced.
Management
The group has now established a strong management team with extensive experience
in the aviation industry. Matt Donnelly and Art McMahon have joined as VPs of
Production and Sales respectively at ACS. Charles Edwards has been promoted to
Chief Operating Officer of ACS. The Board is grateful to all management and
staff for their hard work and contribution during a key transition year.
Prospects
Sales have not developed as fast as we hoped despite the reputation the AeroBox
has gained in the aviation industry as a robust product with low experience of
structural damage. The aviation industry continues to experience severe
financial challenges exacerbated by escalating fuel prices. This, coupled with
the lengthy decision making process amongst many airlines and the effect of raw
material price increases means that ACS will not achieve break even before 2006.
During 2005 we plan to:
* consolidate our position as a major supplier of air cargo containers
to the airline industry;
* enter the market place for temperature sensitive products;
* apply our advanced composite technology to other industries.
* confirm the feasibility of a production joint venture in China
Our current business plan sets out a significant growth strategy for the group
based upon complementary business areas where we can deploy our core expertise
in applying advanced composite technology. The Board is also reviewing potential
acquisition targets in areas adjacent to the existing business.
The Board of AeroBox is pleased to report the significant progress made by the
group over the last year. The transformation from development to full scale
production is almost complete. Just over one year ago we were a promising
company with a development prototype but no customers or commercial production
capacity. We now have a strong management team, installed production capacity, a
proven product, industry recognition and initial customers who have indicated
their intention to expand their deployment of the Aerobox. The opportunities for
our technology and know how beyond the initial aviation market are being
evaluated. Following the placing at the end of 2004, we now have the funds in
place to exploit these exciting medium term opportunities and enhance
shareholder value.
David Sebire
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
2004 2003
#'000 #'000 #'000 #'000
TURNOVER 172 -
Cost of sales 320 -
GROSS LOSS (148) -
Administrative expenses - goodwill amortisation (882) (690)
- other (2,946) (1,673)
(3,828) (2,363)
OPERATING LOSS (3,976) (2,363)
Net interest payable and similar charges - (257)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (3,976) (2,620)
TAX ON LOSS ON ORDINARY ACTIVITIES - -
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (3,976) (2,620)
Loss per share - basic and diluted (4.0)p (4.8)p
All of the activities of the group are classed as continuing.
CONSOLIDATED BALANCE SHEET
As at 31 December
2004 2003
(restated)
#'000 #'000 #'000 #'000
FIXED ASSETS
Intangible fixed assets 7,255 8,137
Tangible fixed assets 1,606 221
8,861 8,358
CURRENT ASSETS
Debtors 141 231
Cash at bank and in hand 3,886 516
4,027 747
CREDITORS: amounts falling due within one year (694) (263)
NET CURRENT ASSETS 3,333 484
TOTAL ASSETS LESS CURRENT LIABILITIES 12,194 8,842
CREDITORS: amounts falling due after more than one year (172) (126)
NET ASSETS 12,022 8,716
CAPITAL AND RESERVES
Called up share capital 1,345 842
Share premium account 9,319 2,541
Other reserve 6,408 7,290
Profit and loss account (5,050) (1,957)
SHAREHOLDERS' FUNDS - All Equity 12,022 8,716
CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED CASH FLOW STATEMENT
2004 2003
#'000 #'000
Net cash flow from operating activities (2,462) (1,933)
Returns on investments and servicing of finance - (39)
Capital expenditure and financial investment (1,381) (36)
Acquisitions and disposals - (9)
CASH OUTFLOW BEFORE FINANCING (3,843) (2,017)
Financing 7,213 2,533
INCREASE IN CASH IN THE PERIOD 3,370 516
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2004 2003
#'000 #'000
Increase in cash in the period 3,370 516
Cash decrease from decrease in debt and lease financing (78) (154)
MOVEMENT IN NET FUNDS IN THE PERIOD 3,292 362
Net funds at 31 December 2003 362 -
NET FUNDS AT 31 DECEMBER 2004 3,654 362
NOTES
1. LOSS PER SHARE
The calculation of loss per share is based on the loss for the financial
year of #3,976,000 (2003: #2,620,000) and a weighted average number of ordinary
shares in issue during the year of 98,719,000 (2003: 54,348,893).
2. STATUS OF FINANCIAL INFORMATION
The financial information set out in this report does not constitute the
Company's statutory accounts for the year ended 31 December 2004, but is derived
from those accounts. Statutory accounts for the year ended 31 December 2004
will be delivered to the Registrar of Companies shortly. The auditors have
reported on the statutory accounts for the year ended 31 December 2004 and their
opinion was unqualified for these financial statements. The 2003 comparatives
cover the 15 month period from the incorporation of the Company on 2 October
2002 to 31 December 2003.
3. GOODWILL
Goodwill arising on the acquisition of Aerospace Composite Structures
LLC amounting to #8,827,000 has been capitalised and amortised through
the profit and loss account on a straight line basis over a period of
10 years.
4. TAXATION
The group has no liability to current taxation due to the existence of
tax losses. The group has no potential liability to deferred taxation.
5. DIVIDEND
The Directors are not recommending the payment of a dividend.
6. PRIOR YEAR RESTATEMENT
The group has taken advantage of s131 of the Companies Act 1985 and has
credited the premium arising on the acquisition of Aerospace Composite
Structures LLC ("ACS") to a merger reserve included in other reserves;
the comparative figures for Share Premium and Other Reserves in 2003
have been restated to reflect this change in accounting policy.
7. COPIES OF THE REPORT AND ACCOUNTS
The report and accounts for the period ended 31 December 2004 will be
posted to shareholders in due course and further copies will be available
from 1 May 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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