Final Results
18 Avril 2007 - 4:23PM
UK Regulatory
RNS Number:0900V
Jumpit ASA
18 April 2007
For Immediate Release 18 April 2007
Jumpit ASA
("Jumpit" or the "Company")
Preliminary Unaudited Results for the year ended 31 December 2006
Overview
* Revenue fallen from NOK13.1 million to NOK2.6 million
* The Company made a loss for the year of NOK37.4 million (2005: NOK2.0
million)
* Disappointing results attributable to lower than expected orders from
licence partner, ESI, which has resulted in Jumpit terminating the agreement
* Changes in Norwegian legislation mean that Jumpit are now looking to
appoint appropriate female board members to replace Magnar Mokkelgard and
Steven Hartley who have offered to resign
* Jumpit have signed agreements with partners in new regions including Japan
* Revenues generated in the first quarter 2007 show improvement over the
same period in the previous year
Statement from the Chief Executive Officer and Chairman of Jumpit ASA
Introduction
2006 was a difficult and challenging year for the Company. The disappointing
results are, in part, a consequence of continuing issues with ESI, the Company's
exclusive license partner for disposable batteries. The demand for the
Company's products generated by ESI in either the USA or appropriate other
markets has fallen significantly short of our expectations and contracted
minimum order quantities and payment terms have not been met. The contract with
ESI has been terminated and we have started to develop new distribution channels
to provide a greater degree of control over the future of the business.
In November we appointed Morten Hansson as CEO to implement the new distribution
strategy and the revenues for January, February and March are an improvement
over the same period the previous year. We will focus on generating sales and
distribution agreements for our disposable mobile phone battery products and
MultiChargers. We have also taken action to reduce the cost base and the Company
now runs its operation on a significantly lower cost base than in 2006.
Financial Overview
Jumpit's revenue fell by NOK10.5 million to NOK2.6 million (2005: NOK13.1
million). This generated a loss of NOK37.4 million (2005: NOK2.0 million).
Exceptional charges of NOK21.2 million have been taken to write down the value
of intellectual property rights ("IPR") and goodwill as a consequence of changes
to estimates and forecasts used to calculate the annual impairment test of
goodwill. This relates to the write off of goodwill relating to the i-Recharge
which the board decided to cease production of as part of the Company's strategy
to focus on generating sales for Jumpit's disposable mobile phone battery
products and MultiChargers.
This result has led to a loss per share of NOK0.740 (2005: NOK0.041)
At the year end the Company has cash balances of NOK9.1 million (2005: NOK22.9
million) and is confident it has sufficient cash to support its immediate
trading objectives.
Based on a conservative accounting approach, the board has determined not to
include the agreed minimum guaranteed revenue of US$ 1,750,000 (NOK 10 850 000)
due from ESI within its 2006 revenues. Revenue received in respect of 2006 in
the future will be disclosed and accounted for separately.
The board acknowledge that the performance of the Company has been disappointing
and is working hard to implement sales agreements which will see an improved
performance for 2007.
We have adopted IFRS in the production of our consolidated financial statements.
Sales and Marketing
Jumpit's previously exclusive license partner for the disposable batteries, ESI,
did not meet their order obligations for 2006. As a consequence of this
shortfall and under the terms of the contract and agreements between ESI and the
Company, the Company gave notice to ESI to terminate the contract. The contract
contains provisions for dispute resolution through Arbitration under UK law. The
board has resolved to take an active role together with the company's legal
advisers in an attempt to reach an early resolution of this legal dispute.
1) New distribution channels
In the first quarter of 2007, we have been active to secure sales in different
parts of the world. The Company has reached an agreement with the Japanese
trading conglomerate Itochu. The launch is expected to commence with a test
sale period in June 2007, following a period of product development (to adjust
the batteries to Japanese mobile phone standards) and commercial negotiations,
with a broader launch to follow later in the year.
We have also established sales and distribution in the Nordic Region, UK, Russia
(including all countries in the Commonwealth of Independent States ("CIS")) and
in UAE. We believe that we have succeeded in finding financially strong
partners, who have the dedicated resources to secure significant order volumes
in each of their own regions.
In order to attract strong and loyal distribution partners we are seeking to
actively support them with marketing campaigns as well as our product know-how
and product development.
2) Product development
During 2007 we will focus on two products: Disposable batteries and
MultiChargers. We continue to focus our development work on improving and
extending the existing disposable battery product range, in particular we expect
to produce a battery which is half the size and has double the capacity of the
existing battery without being any more expensive. Our research indicates that
certain markets have a strong demand for this type of product
Board Changes
As a result of new Norwegian Company legislation which is due to be implemented
by the end of 2007, all Norwegian public companies must retain a minimum number
of female board members. Jumpit will make the necessary changes in the upcoming
General Meeting in order to fulfill this requirement. Both Magnar Mokkelgard,
who has been a board member for the last three years and Steven Hartley who
joined the board on Jumpit's admission to AIM in July 2005, have offered to
resign in order for the company to appoint two qualified females.
Outlook
We expect the dispute with ESI to be resolved in due course and will inform
shareholders once the position is clarified.
Although conditions during 2007 will remain challenging, we will endeavour to
secure new distribution channels for our existing and new products. We are in
the early stages of our new distribution model. We have generated small volumes
of sales in 5 markets and we are encouraged that the expansion into Japan and
the CIS could generate significant sales volumes. We remain confident in the
Company's products and the potential of the new markets.
The Company's Annual General Meeting will be held on 4 June 2007 at 15.00 local
time at the offices of Jumpit asa , Martin Lingesv 15-25 1330 Fornebu.
_____________ _________________
Morten Hansson J. Chr. Borchgrevink
CEO Chairman of the Board
Consolidated income statement (All amounts in NOK)
Year ended 31. Year ended 31.
December 2006 December 2005
Note
Revenues
Sales 3 2 616 780 13 132 870
Operating Cost
Cost of goods sold 2 350 407 4 679 766
Net other gains (155 981)
Salaries/social expenses 3 824 592 2 781 824
Depreciations 8 1 520 713 1 268 222
Write down 8 21 216 731
Other operating cost 6 11 909 494 6 809 694
Total operating cost 40 821 937 15 383 525
Operating/(loss)/profit ( 38 205 157) (2 250 655)
Financial items
Net financial items (331 144) 323 877
Result before income tax (38 536 301) (1 926 778)
Income tax expense 1 087 615 (91 554)
(Loss)/profit for the year (37 448 686) (2 018 332)
(Loss)/earnings per share basic 11 (0.740) (0.041)
(Loss)/earnings per share basic 11 (0.719) (0.035)
Consolidated balance sheet (All amounts in NOK)
31.December 2006 31. December 2005
Note
Assets
Non-current assets
Production equipment 1 148 812 1 398 654
Goodwill 8 4 370 850 21 854 248
Other intangible assets 8 453 666 4 666 668
Long term receivables 1 056 901 2 180 172
Deposits 5 278 862 92 446
Total non-current assets 7 309 091 30 192 188
Current assets
Inventory 581 475
Trade and other receivables 471 789 5 113 641
Cash and cash equivalents 5 9 235 152 22 853 601
Total current assets 10 288 416 27 967 242
Total assets 17 597 507 58 159 430
Equity
Paid in capital
Share capital 1 264 914 1 222 414
Share premium 52 329 824 52 354 825
Other contributed equity 11 272 003 9 825 444
Total paid in equity 64 866 741 63 402 683
Other equity (49 451 054) (12 002 373)
Sum other equity (49 451 054) (12 002 373)
Total Equity 15 415 687 51 400 310
Liabilities
Non-current liabilities
Deferred tax liabilities - 1 087 615
Current liabilities
Trade payables 1 164 796 2 156 305
Public dues and taxes 123 938
Other current liabilities 1 017 024 3 391 262
Total liabilities 2 181 820 6 759 120
Total equity and liabilities 17 597 507 58 159 430
Consolidated statement of changes in equity (All amounts in NOK)
Share Share premium Other Other Equity
capital contributed equity
equity
Equity at 01.01.2005 242 766 4 444 338 9 504 058 (10 794 085) 3 397 077
Reduction share premium (810 049) 810 049
Share issue by
contribution in kind 170 000 24 830 030 25 000 030
Issue share capital 619 148 (619 148)
Increase of capital 3000 1 448 200 1 451 200
Issue of capital 187 500 34 162 500 34 350 000
Listing costs (11 101 047) (11 101 047)
Option programme 321 386 321 386
Result for the period (2 018 332) (2 018 332)
Equity at 31.12.2005 1 222 414 52 354 824 9 825 444 (12 002 368) 51 400 314
Issue share capital 25 000 (25000)
Option program 1 446 559 1 446 559
Share issue - option 17 500 17 500
Result for the period (37 448 686) (37 448 686)
Equity at 31.12.2006 1 264 914 52 329 824 11 272 003 (49 451 054) 15 415 687
Consolidated cash flow statement (All amounts in NOK)
Year ended 31. Year ended 31.
December 2006 December 2005
Cash outflow from operating activities
Result before tax (38 536 301) (1 926 778)
Ordinary depreciation 1 520 713 1 268 223
Write down 21 216 731
Expensed options 449 535 321 386
Change in trade receivables 4 641 852 (2 729 171)
Changes in trade payables (991 509) 1 733 937
Other changes (1 145 768) 558 957
Net cash outflow from operating activities (12 844 747) (773 446)
Cash flow from investing activities
Purchase of property, plant and equipment (791 202) (771 617)
Purchase of other current assets (320 823)
Net cash outflow from investing activities (791 202) (1 092 440)
Cash flow from financing activities
Proceeds from issuance of ordinary shares 17 500 23 965 934
Net inflow from financing activities 17 500 23 965 934
Net change in cash and cash equivalents (13 618 449) 22 100 048
Cash and cash equivalent at the beginning of the period 22 853 601 753 553
Cash and cash equivalent at the end of the period 9 235 152 22 853 601
Notes to consolidated financial information
1 General information
Jumpit ASA ('the Company') and its subsidiary, Jumpit Manufacturing AS
(together "the Group"), develops, and distributes disposable and
rechargeable batteries to handheld electronic devices. The market for the
company is world wide.
The company has a production agreement with Dunggan Pacific Cheery
Electronics LTD in China.
The Company is a limited liability company incorporated and domiciled in
Norway with it's headquartering at Snaroya, outside Oslo.
The Company has its listing on AIM at the London Stock Exchange.
These group consolidated financial statements were authorised for issue by
the Board of Directors on 17 April 2007
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise
stated.
Basis for preparation:
The consolidated financial statements of Jumpit ASA have been prepared in
accordance with International Financial Reporting Standards (IFRS). The
consolidated financial statements have been prepared under the historical
cost convention, as modified by the revaluation of land and buildings,
available-for-sale financial assets, and financial assets and financial
liabilities (including derivative instruments) at fair value through profit
or loss.
The preparation of financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the
accounting policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in the report.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed
below.
Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated. The recoverable amounts of
cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of estimates.
3. Revenue
Revenue in 2006 is generated from sales of Multicharger and disposable
batteries.
The Group's revenue is lower than expected because of the following factor;
The group is in dispute with ESI, the Company's exclusive license partner
for disposable batteries. The demand for the Company's products generated
by ESI in either the USA or appropriate other markets has fallen
significantly short of expectations and contracted minimum order
quantities. Payment terms have not been met by ESI. The contract with ESI
has been terminated and we have started to develop new distribution
channels to provide a greater degree of control over the future of the
business. Based on a conservative accounting approach, the board has
determined not to include, the agreed minimum guaranteed revenue of
US$ 1,750,000, (NOK 10.850.000) due from ESI within its revenues for 2006.
Revenue received in respect of 2006 in the future will be disclosed and
accounted for separately.
4. Segment information
The primary segment for the Group's business is batteries to handheld
electronic devices. The secondary segment is geography. The main part of
the Group's sales in 2006 has taken part in the European market.
2006 2005
Markets
United States - 6,755,831
Europe 2,616,780 -
Total revenue 2,616,780 6,755,831
5. Cash and cash equivalents
Cash and cash equivalent consist of bank deposits. Restricted bank deposits
amounts to NOK 405 502.
6. Other operating costs
Other operating cost consist of :
(NOK) 2006 2005
Consultancy services 6,350,126 3,524,809
Product development / patent costs 912,517 1,810,247
Other administrative costs 4,646,851 1437,638
Option programme 0 37,000
Total 11,909,494 6,809,694
7. Share option programme
The Share option programme
Share options are granted members of the Board, employees and close
associates. The options have duration of two years from the issue date. At
the date of issue, there are no conditions related to the execution of the
options with the consequence that the costs (fair value) are charged
directly to the P&L. Options shall be exchanged for share in the company.
The company has no obligation of legal or other reasons to buy back or
otherwise settle the options in cash.
Outstanding options
Name Function Option Exercise price NOK Expiry date
Helge Lindalen Former CFO 200 000 4.00 08/04/2007
50 000 4.00 03/05/2007
Petter Kleppe Former CEO 250 000 4.00 03/05/2007
Morten Hansson CEO 500 000 2.45 30/11/2007
Steve Hartley Board Member 100 000 4.00 03/05/2007
HansonWesthouse Nomad 412 760 4.91 03/05/2007
Hanson Westhouse Limited is the Nominated adviser to the Company in
relation to its AIM quotation. The exercise price of GBP 0.4 is equal to
the admission price upon the date of admission.
8. Goodwill
Other
Intangible
Goodwill assets Total
NOK NOK NOK
2005
Opening net book amount
Additions 21 854 248 5 000 000 26 854 248
Depreciation charge 333 332 333 332
Closing net book amount 21 854 248 4 666 668 26 520 916
At 31 December 2005
Cost 21 854 248 5 000 000 26 854 248
Accumulated depreciation 333 332 333 332
Net book amount 21 854 248 4 666 668 26 520 916
2006
Opening net book amount 21 854 248 4 666 668 26 520 916
Additions -
Depreciation charge 479 669 479 669
Write down 17 483 398 3 733 333 21 216 731
Closing net book amount 4 370 850 453 666 4 824 516
At 31 December 2006
Cost 21 854 248 5 000 000 26 854 248
Accumulated depreciation 813 001 813 001
Write down 17 483 398 3 733 333 21 216 731
Net book amount 4 370 850 453 666 4 824 516
Goodwill and other intangible assets are related to the acquisition of
Multi Power Technology the 3rd of May 2005.
Impairment test of goodwill
Impairment test of the net book value of goodwill is performed annually.
Impairment test is also performed whenever there is a reason to believe
that a write-down of goodwill is deemed necessary. The recoverable amount
of a cash-generating unit (CGU) is determined based on value-in-use
calculations. These calculations use cash flow projections based on
financial budgets approved by management covering a four-year period. Cash
flows beyond the four-year period are extrapolated using the estimated
growth rates stated below. The growth rate does not exceed the long-term
average growth rate for the business in which the CGU operates. The
goodwill in Jumpit ASA is from Multicharger (20%) and from i-Recharge
(80%). The impairment test as at 31st December 2006 is based on the
following assumptions for projected future cash flows:
Projection period: 4 years
Risk free rate: 4,35%
Risk premium: 15,9%
Average growth rate: 35%
Based on calculations performed based on the above assumptions the CGU
Multicharger, it is in the opinion of the Board of Directors there is no
reason to impair goodwill related to this product as of 31. December 2006.
In 2006 the Board of Directors decided to cancel the production of the
i-Recharge product. The CGU i-Recharge therefore cease to exist, and all
goodwill related to i-Recharge product is written of in 2006.
9. Related party transaction
During 2006, the company paid consultancy fees to Motivator AS in total NOK
1 160 000. The annual fee for 2005 was NOK 1 200 000. Motivator AS is fully
owned by board member Petter Sorlie.
10. Equity
The company's share capital is NOK 1,264,914 and consisted at 31.12.2006 of
50,596,570 shares with par value NOK 0.025 with equal voting rights.
List of all major shareholders in Jumpit ASA as of December 31, 2006:
Shareholders No. of shares % of total
CAPITA IRG TRUSTEES LIMITED 25 374 824 50.15 %
MOTIVATOR AS 5 049 397 9.98 %
CABEHEFA AS 2 980 006 5.89 %
JOHAN C.BORCHGREVINK 1 901 160 3.76 %
PETTER KLEPPE 1 860 000 3.68 %
OLE S. DALAN 1 454 109 2.87 %
OIVIND RESCH 1 200 000 2.37 %
HALVOR ISAKSEN 1 108 597 2.19 %
PER MAGNE KRISTIANSEN 1 000 000 1.98 %
PESIKIA AS 750 000 1.48 %
KVANTUM INVEST A/S 573 810 1.13 %
XANTIN INVEST AS 565 000 1.12 %
BJORDAL INVEST AS 499 550 0.99 %
FURULUND AS 450 000 0.89 %
JON GALTUNG DYSVIK 400 000 0.79 %
LOBEMA AB 400 000 0.79 %
ALEXANDER OLSSON 365 000 0.72 %
LILLIAN B.OLSSON 360 000 0.71 %
BANK OF NEW YORK, BRUSSELS BRANCH 300 000 0.59 %
GUNNAR H.CEDERGREN 286 110 0.57 %
HELGE SCHJAERVE 252 390 0.50 %
Shareholders with less than 0.5% 3 466 617 6.85 %
Total 50 596 570 100,00 %
The Board of Directors owns or has control over 9,930,563 shares (19.6%).
Name Function Direct Holding Held Indirectly Total Held % of total
J. Chr. Borchgrevink Chairman 1.901.160 2,980,006 4,881,166 9.7%
Petter Sorlie Non executive director 5,049,397 5,049,397 9.9%
The indirect shareholding of J. Chr. Borchgrevink is held through Cabehefa
AS, a company which he controls. The shareholding of Petter Sorlie is held
indirectly trough by Motivator AS. See note 12 for more information.
11. Earnings per share
The company's share capital consisted at 31.12.2006 of 50,596,570 shares.
Outstanding options at the end of the period were 1,512,760
Earnings per share basic Annual result divided by no of shares Loss per Share (NOK)
Year end 31/12/2006 NOK(37 448 686)/50 596 570 (0.740)
Year end 31/12/2005 NOK(2 018 332)/48 896 570 (0.041)
Earning per share diluted Annual result divided by no of shares and options
Year end 31/12/2006 NOK(37 448 686)/52 109 330 (0.719)
Year end 31/12/2005 NOK(2 018 332)/58 430 400 (0.035)
12. Financial information
The financial information set out in this announcement does not constitute
the Company's statutory accounts for the years ended 31 December 2006 or
2005. The statutory accounts for the year ended 31 December 2006 will be
finalised on the basis of the financial information presented by the
directors in this preliminary announcement and will be delivered to the
Registrar of Companies.
13. Timetable
The report and financial statements will be despatched to shareholders on
21 May 2007 the annual general meeting will be held on 4 June 2007 at 15.00
local time at the offices of Jumpit asa, Martin Lingesv 15-25 1330 Fornebu.
14. Distribution
Copies of the full report and financial statements for the year ended 31
December 2006 will be available from the Company, Martin Lingesv 15-25 1330
Fornebu after 4 June 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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