FOR RELEASE
7.00 AM
25 SEPTEMBER 2008
AVID HOLDINGS PLC
("Avid" or the "Company")
INTERIM STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008
LOSS SIGNIFICANTLY REDUCED
Business Highlights in the Period
* Turnover including acquisitions increased by 166.5% from �679,356 to
�1,810,723
* Gross profit increased 157.6% from �228,951 to �589,849
* Group loss before tax reduced by 49.8% to �186,292 from �370,937
* Loss per share reduced by 66.7% to 0.04p from 0.12p
* Acquisition of Alpha Anodising completed in March
* An order for the first 12 electropacTM feeders to Boots received via a
German OEM
* All operating companies operating profitably before central overheads
* Confident of a further improved trading performance for the full year
For further information contact:
Jonathan Bobbett, Chief Executive
Avid Holdings Plc
Tel: +44 (0)1622 872 022
http://www.avidholdings.co.uk
Ross Andrews, Nominated Adviser
Zeus Capital Limited
Tel: +44 (0) 161 831 1512
Stephen Goschalk, Stockbroker
Newland Stockbrokers Limited
Tel: +44 (0) 20 7290 2400
Brian Coleman-Smith / James Verstringhe, Financial Public Relations
Cubitt Consulting Limited
Tel: +44 (0) 20 7367 5100
Background note
Avid focuses on acquiring stable and profitable businesses within the precision
engineering sector. As the target sector is highly fragmented the Company
strongly believes that value can be added through consolidation.
The Group came into being through the acquisition of 3 Point Blue, which was
founded by Jonathan Bobbett, the Group's Chief Executive, and was reversed into
Euro Investment Fund plc in June 2006 and changed its name to Avid Holdings plc
on being admitted to trading on AIM in June 2006. Since then the Company has
made two further acquisitions.
Pill Protect
3 Point Blue became the first operating company in the emerging Group changing
its name to Pill Protect which provides pharmaceutical companies with child
resistant and senior friendly packaging solutions for their blister pack drugs.
Electro-Mec
Electro-Mec, founded in 1969, is a precision engineering business producing
high quality blister pack change tooling for the pharmaceutical industry (from
which it generates the majority of its revenues) as well as offering some
machining and assembly for the defence industry. It was acquired in February
2007 for a total consideration of �1.55 million of which �759,000 is dependent
on future profits.
Alpha Anodising
Alpha was established in 1972 and is a high quality metal finishing business
based in Buckinghamshire. It has developed a highly diversified customer base
due to its specialised expertise and reputation. Its offerings include a wide
range of production techniques such as mechanical and chemical finishes, high
quality surface and sub-surface printing, as well as professional design and
prototyping services. The company supplies the medical, scientific, defence and
audio industries. It was acquired for �799,813 of which �120,000 is deferred.
AVID HOLDINGS PLC
("Avid" or the "Company")
INTERIM STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008
Chairman's Statement
During the period under review Avid has achieved a significant increase in
turnover and gross profit through the acquisition of Alpha Anodising and
through sustainable organic growth. The results include three months trading
from Alpha Anodising, which was acquired in March of this year.
The Group continues to develop as a consolidator in the precision engineering
sector and, subject to the availability of funding, will seek further
acquisitions to contribute to overall group profitability and enhanced
long-term shareholder value.
I was delighted to welcome Bob Dover, former Chairman and Chief Executive of
Jaguar and Land Rover, as a Non Executive Director at the AGM and I am sure
that his sector expertise will be invaluable to the Group.
Results for the period ended 30 June 2008
The loss before taxation for the period and loss per share amounted to �186,292
(2007: �370,937) and 0.04 pence per share (2007: 0.12 pence per share)
respectively. As at 30th June 2008, net assets were �2,843,787 (2007: �
3,259,066). The Directors do not propose a dividend at this time.
In March 2008, as part of the acquisition of Alpha Anodising Ltd, the Group
negotiated new banking facilities with HBOS. These arrangements include
extensive drawdown facilities and an overdraft which are utilised as required.
For this reason, good Treasury Management resulted in a nil cash position on
the Balance Sheet at the period end.
Operating Review
Electro-mec (Reading) Limited
Electro-mec is near to completing the industrial version of the electropacTM, a
fully automated system for the production of patient packs that can be used for
all solid and semi-solid formulations.
The electropacTM system uses innovative technology that enables the fully
automated filling, in the pharmacy, of weekly dose packs for elderly patients.
The equipment has been designed to handle a full range of formulated drugs
including tablets, capsules, caplets and gels in varying shapes and sizes.
Electro-mec's existing vibration tray technology has been adapted to allow
automated filling through seven channels into each day's unit tray.
International Patents have been filed and an order received for the first 12
units to be installed at Boots.
A smaller desktop machine designed for individual pharmacists is under
development with DTI support.
Alpha Anodising Limited
The acquisition of Alpha Anodising was completed in March adding a valuable
income and profit stream to the group. Early indicators are that it is
performing slightly above our expectations returning a �40,187 operating profit
for the 3 months to 30 June 2008.
Factory production is forecast to increase by over 60% with the introduction of
an additional shift in the second half of 2008. The anodising work from
Electro-mec will take up much of the increased capacity absorbing development
costs leading to increased profitability in 2009.
Alpha Anodising was selected to anodise a series of tables designed by
BarberOsgerby, UK Designers of The Year 2007. The complex design featured up to
60 individual sections of aluminium that Alpha anodised in different colours to
the exact specification of the designer. The tables are being exhibited and
sold through Established & Sons in Duke Street, London.
Pill protect
The pharmaceutical industry has been slow to adopt the BS EN14375 regulations.
Pill protect continues to supply Reckitt Benkiser with child-resistant blister
packaging solutions for a number of their well known brands and revenue
continues to grow slowly and make a small contribution to the group.
Outlook
With the three trading companies successfully integrated and now operating
profitably before holding company overheads, I remain confident that the Group
will show a further improvement in trading performance at the year end.
Michael Walter
Chairman
CONSOLIDATED INCOME STATEMENT Six months Six months Year end
For the period to 30 June 2008 Ended Ended 31 December
30 June 30 June 2007
2008 2007
Audited
(Unaudited) (Unaudited)
� � �
Revenue 1,810,723 679,356 1,746,105
Cost of sales (1,220,874) (450,405) (1,336,499)
Gross profit 589,849 228,951 409,606
Administrative expenses (751,455) (593,174) (1,234,709)
Operating loss (161,606) (364,223) (825,103)
Finance income 15,236 18,866 33,162
Finance expenses (39,922) (25,580) (56,684)
Loss before tax (186,292) (370,937) (848,625)
Income taxes (note 6) - - 60,058
Loss for the period (186,292) (370,937) (788,567)
Basic and diluted loss per share from (0.04)p (0.12)p (0.25)p
continuing and total operations (note 2)
STATEMENT OF CHANGES IN EQUITY
For the period to 30 June 2008
Six months Six months Year end
Ended Ended 31
December
30 June 30 June
2008 2007 2007
(Unaudited) (Unaudited) Audited
� � �
Loss for the financial period (186,292) (370,937) (788,567)
Issue of share capital 32,000 1,395,470 1,545,470
Increase in reserve for potential share - 11,244 17,887
issues
Net increase in shareholders' equity (154,292) 1,035,777 774,790
Equity at the start of the period 2,998,079 2,223,289 2,223,289
Equity at the end of the period 2,843,787 3,259,066 2,998,079
CONSOLIDATED BALANCE SHEET
As at 30 June 2008
As at As at As at
30 June 30 June 31 December
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
� � �
ASSETS Non-current assets
Property, plant and equipment 579,204 505,333 477,557
Goodwill 2,419,106 2,268,745 2,270,544
Other intangible assets 606,803 508,579 521,924
3,605,113 3,282,657 3,270,025
Current assets
Inventories 612,255 352,127 407,064
Trade receivables 856,755 331,161 391,330
Other current assets 303,928 129,210 73,333
Cash and cash equivalents - 226,676 96,113
1,772,938 1,039,174 967,840
Total assets 5,378,051 4,321,831 4,237,865
EQUITY AND LIABILITIES
Equity attributable to equity holders of
the parent
Share capital 2,110,334 1,903,334 2,078,334
Share premium 2,383,736 2,408,736 2,383,736
Share to be issued reserve 17,887 11,244 17,887
Retained earnings (1,668,170) (1,064,248) (1,481,878)
Total equity 2,843,787 3,259,066 2,998,079
Non-current liabilities
Long-term borrowings 517,356 311,570 248,140
Deferred tax 20,496 - 7,452
Total non-current liabilities 537,852 311,570 255,592
Current liabilities
Cash and cash equivalents 121,733 - -
Trade and other payables 1,190,246 628,318 644,255
Short term borrowings 420,777 - 224,931
Current portion of long-term borrowings 263,656 122,877 115,008
Total current liabilities 1,996,412 751,195 984,194
Total liabilities 2,534,264 1,062,765 1,239,786
Total equity and liabilities 5,378,051 4,321,831 4,237,865
CONSOLIDATED CASH FLOW STATEMENT
For the period to 30 June 2008
Six months Six months Year end
Ended Ended 31 December
30 June 30 June 2007
2008 2007
Audited
(Unaudited) (Unaudited)
�
� �
Cash flows from operating activities
Operating loss (161,606) (364,223) (825,103)
Adjustments for:
Depreciation 41,227 39,002 63,142
Loss on disposal 2,007 - 7,797
Amortisation 16,574 - 20,077
Equity-settled share-based payment - 11,244 -
expense
Increase in trade and other receivables (474,967) 14,961 10,669
Increase in inventories (98,949) (118,205) (173,142)
Increase in trade payables 621,043 (212,187) 79,845
Income taxes - - 14,547
Net cash flows used in operating (54,671) (629,408) (802,168)
activities
Cash flows from investing activities
Acquisition of subsidiary net of cash (410,221) (554,557) (554,557)
acquired
Purchase of property, plant and equipment (45,679) (254,421) (60,631)
Purchase of intangible assets (101,453) - (28,267)
Proceeds from sale of equipment 1,000 224,880 21,774
Net cash used in investing activities (556,353) (584,098) (621,681)
Cash flows from financing activities
Proceeds from issue of share capital - 995,470 1,163,357
Proceeds from long-term borrowings 417,863 215,809 165,066
Payment of debt - - (20,556)
Interest received 15,237 18,866 33,162
Interest paid (39,922) (25,580) (56,684)
Net cash used in financing activities 393,178 1,204,565 1,284,345
Net increase in cash and cash equivalents (217,846) (8,941) (139,504)
Cash and cash equivalents at beginning of 96,113 235,617 235,617
period
Cash and cash equivalents/(debt) at end (121,733) 226,676 96,113
of period
Note A. Acquisition of subsidiary
During the period the Group acquired Alpha Anodising Limited. The fair value of
assets acquired and liabilities assumed were as follows:
Property, plant and equipment 100,202
Inventories 106,242
Accounts receivable 221,054
Cash 431,015
Trade payables (120,795)
Long-term debt (13,044)
724,674
Goodwill 148,562
Total acquisition cost 873,236
Less:
Cash and cash equivalents acquired (431,015)
Non-cash consideration (32,000)
Cash outflow on acquisition 410,221
Notes to the unaudited interim report
1. Basis of preparation
While the financial information included in this interim announcement has been
computed in accordance with International Financial Reporting Standards (IFRS),
this announcement does not itself contain sufficient information to comply with
IFRS. The interim financial information has been prepared on the basis of the
accounting policies set out in the Company's statutory accounts to 31 December
2007 which were prepared in accordance with IFRS, International Accounting
Standards and their interpretations issued or adopted by the International
Accounting Standards Board as adopted for use in the European Union. The
interim figures have not been audited. The interim financial statement does not
constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985 (the "Act"). Comparative financial information for the 12
months ended 31 December 2007 has been extracted from the statutory accounts
for the period which have been delivered to the Registrar of Companies and upon
which the auditors gave an unqualified report, with no statement under Section
237(2) or (3) of Act.
2. Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on the result for
the period, for continuing operations as well as total acquisitions, and the
weighted average number of shares in issue during the period.
Six months Six months Year ended
to to
31 December
30 June 30 June 2007
2008 2007
Weighted average number of ordinary 418,848,985 309,203,702 345,108,057
shares in issue
Dilutive potential ordinary shares: - 10,104,545 4,480,812
Employee share options
Loss after tax (�) (186,292) (370,937) (848,625)
Basic earnings per share - pence per (0.04p) (0.12p) (0.39p)
share (p)
There are no potentially dilutive employee share options in existence at 30
June 2008 (30 June 2007: 10,104,545) which relate to share options granted to
employees where the exercise price is less than the average market price of the
Company's ordinary shares during the period.
3. Business Combination
On 27th March 2008 Avid Holdings plc completed the purchase of the entire share
capital of Alpha Anodising Limited for initial consideration of �679,813. This
consisted of a cash payment of �647,813 and the issue of 6,400,000 new Ordinary
Shares in Avid Holdings plc at a price of 0.5 pence.
Deferred cash consideration of up to �120,000 will be due dependent on the
future profits of Alpha Anodising. The Board of Directors have considered the
likelihood that the future profits of Alpha Anodising will reach the necessary
levels for this to become payable and have made a provision of �80,000 based on
expected results. It is anticipated that profits will not reach the necessary
levels for the full deferred consideration to be payable and no provision,
therefore, for the additional �40,000 has been made.
The book value of the acquisition can be found in Note A of this report.
In addition, directly attributable costs of �193,423 were incurred in relation
to the business combination.
4. Segmental Reporting
The Group's core activities are the supply of specialist packaging solutions
and the production of precision tooling both for the pharmaceutical industry as
carried out by the subsidiary companies. There are no geographical segments.
Six months ended Six months Year
30 June ended ended
2008 30 June 31 December
� 2007 2007
� �
Revenue
Packaging solutions 155,740 18,945 121,148
Precision tooling 1,328,361 656,861 1,620,757
Metal finishing 326,222 - -
Group activities 400 3,550 4,200
1,810,723 679,356 1,746,105
Profit
Packaging solutions 7,461 (183,723) (215,305)
Precision tooling 113,113 (1,312) (219,761)
Metal finishing 40,187 - -
Group activities (322,367) (179,188) (390,037)
Underlying operating loss (161,606) (364,223) (825,103)
Finance income 15,236 18,866 33,162
Finance expenses (39,922) (25,580) (56,684)
Loss for the period (186,292) (370,937) (848,625)
5. Due to the Company's losses, no taxation charge has arisen for the period.
6. The Directors have not declared an interim dividend.
7. The financial statements for the six months ended 30 June 2008 were
approved by the Board of Directors on 24 September 2008.
These financial statements do not constitute statutory accounts within the
meaning of the Companies Act 1985 and are neither reviewed nor audited.
8. Copies of this statement are available to shareholders and members of the
public, free of charge, from the Company's registered office at Unit 10
Woodfalls Farm, Gravelly Way, Laddingford, Kent, ME18 6DA.
Michael Walter
Chairman
END
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