RNS Number:6934P
NXT PLC
12 September 2003
12 September 2003
NXT plc
Preliminary Results for the year ended 30 June 2003
NXT plc, the British audio and speech technology company, today announces its
preliminary results for the year ended 30 June 2003.
* Overall group sales up 60% at #8.0m (2002: #5.0m).
* Core flat-panel technology sales of #4.1m up 216% on previous year (2002:
#1.3m), including major contribution of licence with 3M.
* Loss for the period was #9.3m (2002: #10.8m).
* Cash balances at 30 June 2003 of #6.0m (2002: #12.2m).
* Rights Issue successfully completed to raise an additional #9.5m net of
expenses since year end.
* Net cash outflow of #1.5m, including 3M cash, in six months to 30 June
2003.
* Significant new licences with 3M and Pioneer.
* NEC launch range of SoundVu-based LCD monitors and exhibit SoundVu-based
mobile phone technology demonstrator.
* Johnson Controls and Philips Sound Solutions demonstrate General Motors
Zafira with NXT direct drive loudspeakers this week.
* 20/20 Speech signs US resellers for legal deposition market.
Commenting on the results, Gordon Owen, Chairman, said:
"Key developments in the year have been the further strengthening of
relationships with major corporations such as NEC, TDK and Pioneer in Japan; 3M
and Brookstone in North America; and, Philips in Europe. NEC successfully
launched the world's first SoundVu LCD monitors in October 2002 and has expanded
the range to 20 models. In June 2003 NEC announced that it has developed mobile
phone prototypes for the 3G market using NXT SoundVu technology."
For additional information, please contact:
NXT PLC
David Pearson, Chief Executive 020 7343 5050
Peter Thoms, Finance Director
Capital MS&L
Nick Lockwood 020 7878 3181 or 07941 783 324
Paula Crymble
CHAIRMAN'S STATEMENT
In the year to 30 June 2003 NXT plc achieved revenues of #8.0 million, a 60%
increase on the previous year. The retained loss for the Group was #9.3 million
compared with #10.8 million in the previous year. At the end of the year cash
balances were #6.0 million compared with #12.2 million at 30 June 2002 and thus
cash outflows in the year were #6.2 million, compared with #10.5 million in the
previous twelve months. This progress has been achieved both by increases in
revenue, helped substantially by a major contribution from the licence with 3M
announced in February, and by further reductions in overheads. Volume sales of
loudspeaker products using NXT technology grew in the year by 40% and we expect
this strong trend to accelerate.
On 29th July we announced a proposed 1 for 5 rights issue, fully underwritten by
our new advisers Bridgewell, which was approved by shareholders at an EGM held
on 14th August 2003. On 8th and 9th September 2003 the Company issued an
aggregate of 14,850,425 ordinary shares pursuant to the rights issue for a net
cash consideration of #9.5 million after expenses. These proceeds will be used
to strengthen the balance sheet:
* to place the Group in a stronger financial position which should assist
in negotiations with our potential customers;
* to allow NXT to defend robustly its intellectual property should it be
necessary; and
* to ensure that the Company is not at risk from any delays in its
customers' product launch plans.
The great majority of shareholders (91.3%) took up their rights and the Board
has asked me to express our thanks for your continued support to the Company.
In the last twelve months sales growth in New Transducers Ltd. has been over
200%, strongly supported by a major licence with 3M. Work on the 3M project
continues to run ahead of plan. Key developments in the year have been the
further strengthening of relationships with major corporations such as NEC, TDK
and Pioneer in Japan; 3M and Brookstone in North America; and, Philips in
Europe. NEC successfully launched the world's first SoundVu LCD monitors in
October 2002 and has expanded the range to 20 models. In June 2003 NEC announced
that it has developed mobile phone prototypes for the 3G market using NXT
SoundVu technology. Based on this and information from other licensees we
expect the world's first mobile phone using SoundVu technology to be introduced
this year, as we announced at the time of our interim results in February 2003.
This week at the International Motor Show in Frankfurt NXT licensee Johnson
Controls (JCI) has been demonstrating a General Motors Zafira automobile with
NXT direct drive loudspeakers powered by special exciters produced under licence
by Philips Sound Solutions. JCI has stated that its research shows a strong
consumer preference for NXT SurfaceSound speakers in the vehicle and it expects
to supply the product from model year 2007.
To some of our shareholders this may seem a long time to wait and it is worth
emphasising that while we are confident of increasing take-up of our technology,
the time to market can be slow, and the roll-out of new products gradual, as
companies gain confidence in our technology and learn to deal with all the
issues that arise from its adoption. However, when the technology is adopted on
an automotive platform the volumes are likely to be substantial and sustainable
for the long term. In any event, based on information from our licensees, we
still expect the first car using NXT technology to be produced in 2004.
20/20 Speech has maintained its previous levels of performance but remains at an
early stage in its commercial development and continues to operate in a
difficult market where a number of its competitors have failed to make an
impact. However, there has been a marked change in the profile of the company's
customer base as business with the Ministry of Defence declines and is replaced
by new commercial business. The most promising feature is the opportunity to
adapt our transcription software, first developed for use in broadcasting, to
new markets such as the legal deposition market in the US. It must be recognised
that whilst these new opportunities represent an exciting potential source of
new business, they are still in the very early stages of commercialisation. The
shareholders, NXT plc and QinetiQ, are therefore constantly mindful of the
appropriate structure for 20/20Speech and are keeping this under close review.
Cyrus Electronics has continued to perform well with sales growth of 7%,
supported by innovative product development and the introduction of products
into new markets.
Your Board and management are very conscious of the need to keep costs firmly
under control while still taking all the necessary actions to support customer
relationships and drive the business. The business is evolving from a
research-based operation to one that is highly customer focused. As a result
there has been about a 25% reduction in the headcount of the two technology
businesses. Many of these people contributed great service to the Company and I
take this opportunity to thank them for their efforts.
The remaining staff are highly motivated and know what they have to do to make
NXT successful. I am confident that under David Pearson's leadership the Company
will go on from strength to strength. All of us are committed to the creation of
long-term, profitable growth and shareholder value.
Gordon Owen CBE
Chairman
OPERATING REVIEW
Our business focus remains to support our key customers. Over the course of the
year we have continued to build our Customer Service team and to locate key
personnel where they can provide day-to-day support to our customers. We have
strengthened our operations in the USA, Hong Kong, Taiwan and Japan. This has
had a noticeable benefit in speeding the commercialisation process and we are
confident about the future pipeline of products that feature our technology.
However, we remain involved in a challenging venture as the inclusion of our
technologies in diverse applications and widespread geographies will take time
and dedication.
New Technologies
As announced in February, 3M has taken an exclusive worldwide licence to jointly
develop and commercialise one of our non-loudspeaker technologies. The licence
involved an upfront payment of $4 million, a further $750,000 if additional
functionality is achieved, continued support for further Research & Development,
and royalty payments for the life of the patents. The arrangements with 3M are
significant not just because of the income involved but because they clearly
evidence the benefits of long-term, deeply-built customer relationships. 3M has
not only signed the Group's largest contract to date but also, in the VikuitiTM
XRVS-120 rear projection screen, brought out one of the first SoundVu-enabled
products
Automotive
We remain confident that a vehicle featuring NXT technology will be on the
market by the close of 2004. Our route to market is two-fold: first, by use of
our SurfaceSound technology either in direct excitation of the trim or in
modular drive units; and, secondly, by the inclusion of our Audio Full Range
(AFR) drivers in place of conventional speakers. In both cases we have made
good progress.
Johnson Controls (JCI) has this week demonstrated a General Motors Zafira car
with built-in, direct drive SurfaceSound panels at the Frankfurt International
Motor Show. This is a significant development by one of the automotive
industry's foremost Tier 1 suppliers and we are encouraged by its stated
intention to make the technology available from model year 2007, calendar year
2006. JCI has been drawn to NXT by the many benefits of NXT technology in the
automotive environment. Weight savings (one or two kilograms in their
estimate); improved acoustics thanks to the better interaction of NXT
loudspeakers with reflective surfaces and the wide directivity of the panels'
sound output; greater design freedom as a result of the ability to build NXT
panels into unconventional areas within a vehicle such as the head-liner and
pillars between the windows; the opportunity to use the space once occupied by
conventional speakers for other purposes such as for the integration of
electronic products; reduced exterior noise pollution due to the absence of
holes in the trim; and, the removal, thanks to the invisible nature of the
implementation, of enticing targets for thieves. More encouraging still is the
result of JCI's consumer research, which indicated that 75% of respondents had a
preference for a flat panel solution.
Integral to the JCI demonstration was the role of Philips Sound Solutions (PSS).
In July of last year we announced that PSS had signed a two year agreement to
develop, manufacture and market an exciter for automotive use. JCI are using
this exciter in their demonstrator and this confirms our dual approach of
establishing the supply chain and encouraging key industry players to adopt our
technology.
In addition to developments with JCI and PSS we have had a positive response to
our AFR technology. AFR is capable of delivering a frequency range of 60Hz to
20kHz by combining the efficient low radiation of a piston at low frequencies
with all the key acoustic advantages of a Distributed Mode Loudspeaker.
Because it is shaped like an existing conventional drive unit AFR represents a
drop-in solution, and as a result we do not have to wait for a re-design before
our technology can be included in a vehicle.
Commercial Audio
Penetration of our technology into the commercial and architectural audio market
is hampered by the fragmented nature of those markets and by the absence of any
dominant brands. Our approach of working with leading companies to introduce
our technology is therefore more difficult.
Armstrong, the world's largest provider of suspended ceilings has seen its
i-ceilings NXT-based ceiling tile installed across a number of high profile
sites in the UK including buildings belonging to Honda, H&M, Hard Rock Casinos,
ASDA and Holiday Inns as well as York, Loughborough and Edinburgh universities.
NXT technology was employed by Dimension Audio to turn perimeter advertising
hoardings into loudspeakers at last year's Commonwealth Games. Mission has
brought out a commercial version of its acclaimed fs2 home theatre system, the
fs2 PRO. First exhibited at PLASA 2002, the UK industry's show case event, the
fs2 PRO is now part of an audio system supplied by Mission to the new
development at the Birmingham Bullring. The practical benefit of the broader
coverage in intelligible sound provided by NXT solutions is one of cost saving
as the installer at the Bullring complex needed to use approximately 60% fewer
NXT-based speakers to deliver the same audio coverage as a system using
conventional speakers.
In Belgium long-term NXT licensee Deltavox has now completed its 100th
installation using NXT technology. Deltavox has created a successful business
out of pioneering NXT installations and has found a receptive market for the
technology thanks to the fact that NXT speakers can deliver uniform sound
distribution and good intelligibility without intruding on the aesthetics of any
particular venue.
The benefits of NXT technology are also relevant to the pro-audio market where
the life of the "roadie" can be much improved thanks to our recently developed
Bass panel and Mini-Pro system, the latter of which was recently demonstrated at
PLASA 2003 by Fane Acoustics Ltd. The combined system has power handling of
between 250 and 300 watts and will cover a bandwidth of between 45HZ and 20 kHz,
clear evidence that NXT technology can be both loud and deliver deep bass.
Consumer Audio
One of the outstanding developments of the year was the launch by Pioneer, one
of the world's leading audiovisual companies, of two NXT-based systems. The 2.1
speaker package, which is sold bundled with a combined mini-disc, CD and DVD
system, is available in Japan and the 5.1 home theatre system is available both
in Japan and across Europe. These two systems are the first to use acrylic
plastic for the speaker panels, a true revolution in speaker design.
In the USA Brookstone has had tremendous success with the Wafer Thin CD system
which was one of its best selling items last Christmas, helped by the ringing
endorsement from Oprah Winfrey on her Holiday Season show watched by some 25
million people. Brookstone has launched a second product, a CD case with
built-in NXT speakers, with more products to follow this autumn.
The CD case concept has proven popular with other licensees too. TDK has
brought out two models, a single case mono version and a double case stereo
version, which are now being distributed in Asia, Australasia, Europe and the
USA. In the USA Savier, a subsidiary of Nike, has recently launched a backpack
called the Sonic Bag with integrated Sonic Impact SI5 speakers. These backpacks
along with separately available SI5 speakers are now available in the leading US
electronics chain, Best Buy, with other major retailers to follow in the run-up
to Christmas.
Multimedia and Computing
In July, Synaptics, a leader in touch pads and other human interface solutions
for mobile computing and communications devices, announced that it is to develop
integrated NXT-based audio solutions for laptops. Synaptics is a supplier of
touch pads to the world's leading laptop OEMs and its interface solutions are
used in 70% of laptops with touch pads. Synaptics intend to integrate NXT's
audio technology with their capacitive sensing technology to develop a touch pad
that doubles as a speaker. Demonstrations of prototype products will be made to
Synaptics' customers by the end of the year and we have high hopes of
penetrating the 40 million units per year laptop market. In the peripheral
multimedia loudspeaker market NXT technology is present in products available in
retail stores around the world thanks to the activities of brands such as
Philips, TDK, Maxell and Packard Bell.
Mobile Communications
With 5 out of the top 6 mobile phone manufacturers now licensing NXT technology
we remain optimistic of our ability to take a share of this huge market. NEC
subsidiary Authentic has already publicly shown PDA and mobile phone
demonstrators in Japan. These prototypes help demonstrate the superior sound
quality of NXT technology, particularly in hands-free mode, where the broader
dispersion pattern of the sound output ensures better intelligibility. In
addition the fact that the whole screen is the loudspeaker removes the need for
precise coupling to the ear, greatly enhancing the ease of use. Importantly
Authentic has confirmed that both demonstrators meet the required audio
standards for both GSM and 3G. It remains the case that, if the plans presented
to us by our licensees remain unaltered, we expect a mobile phone that uses our
technology to be in the market by the end of this year.
Key to our success in the mobile telephony market has been the development of
the supply chain. The NXT solution in mobile phones requires the excitation of
the viewing lens of the handset and to do this effectively in the space
available our patented Distributed Mode Actuator (DMA) is required. Great
effort has been made in establishing an effective supply of this and, to date,
ten separate companies have signed licenses to manufacture the DMA: four in each
of Taiwan and Japan and two in Korea.
Special Applications
The retail proposition for our SoundpaX loudspeakers did not deliver as
expected. Our experience suggests that whilst they provide excellent audio they
are, nonetheless, a difficult concept to market: cardboard has low value
associations; the market for a secondary pair of loudspeakers is small and
undeveloped; and, the retail floor space required was judged to be too much to
provide a valuable return. However, manufacturing has now been established in
China, greatly reducing cost, and new, smaller sized samples sent to prospective
customers and distributors and we remain hopeful that these initiatives will
generate revenue in the near future, particularly in the promotional market.
In the toy industry there has been a positive response to NXT technology thanks
to its acoustic advantages, design flexibility and ability to dispense with
grilles, a weakness in the toy's defences against destructive children. This is
a significant market with a requirement for tens of millions of speakers each
year. However, the prices paid for loudspeakers by the toy companies can be
very low. NXT is at the beginning of its commercialisation process and the
price of our components reflects this. Progress, however, is being made in
reducing the cost of our solutions and the toy industry could one day be a
valuable market for NXT.
TV and Display
In October of last year SoundVu technology became a practical reality with the
launch by NEC of its Valuestar T desktop computer complete with a SoundVu
enabled 17" LCD monitor. Since then NEC has added more than 20 additional
models in the range. The Valuestar range has been a great success for NEC and
has helped the company regain market leadership in Japan. The SoundVu
implementation uses two exciters placed on either side of the screen to turn the
protective acrylic screen into the Distributed Mode Loudspeaker. The results
are stunning, with clear, crisp sound coming direct from the screen. NEC's
successful implementation has done much to stimulate interest in the market.
3M announced in June of this year the launch of a rear projection screen using
SoundVu technology. Known as the VikuitiTM XRVS-120 eXtended Resolution Video
Screen with Sound Enhancement, the product is part of 3M Optical Systems
Division's suite of Vikuiti display enhancement products for the professional
rear projection screen market. In addition, we are currently engaged in
discussions with all the major plasma and LCD TV brands and have made great
progress in scaling up SoundVu technology for use in larger screen sizes, thanks
in large part to extra power delivered by second generation exciters. SoundVu
requires an additional transparent panel, already available in all plasma
screens and increasingly in LCD monitors which have extra panels for the
enhancement of brilliance, or for privacy.
Where such panels are not available SurfaceSound can be a solution. Indeed, we
are encouraged by the response of the key manufacturers to the advances we have
made with our SurfaceSound technology for this market. These new developments
offer design advantages, not least the removal of the speaker grille in addition
to our established acoustic benefits. If the customer plans we have seen
remain unchanged we are confident that a major brand will launch a mass market
TV with integrated SurfaceSound technology by the end of the next financial
year.
20/20 Speech
20/20 Speech remains at an early stage of its commercial development and
continues to operate in a difficult market. However, the year has seen an
important shift in 20/20 Speech's reliance on revenues from the Ministry of
Defence to new, commercial sources. By the last quarter of the year revenues
from the MoD had fallen from 98% of total income in the first quarter to just
12%. Our success in this respect has come from the deployment of new products
in new markets. A significant breakthrough for the business has been the
development of automatic text and video synchronisation for the US legal market.
The US legal market relies heavily on pre-trial recorded interviews, known as
depositions. It is estimated that 10,000 depositions are taken a day in the US,
with an increasing number being "videoed" for post interview analysis and
presentation. 20/20 Speech's technology enables the text to be automatically
aligned to the video, at a fraction of real-time, and hence provide an index for
searching the video content. 20/20 Speech has signed a number of US resellers
and is experiencing significant growth in the number of hours processed.
Elsewhere, 20/20 Speech has built upon its success in the subtitling sector, by
developing a product that further increases the efficiency of subtitling
production. Screen Subtitling Systems, the largest and most experienced supplier
of subtitling systems in the world, is amongst the first companies to utilise
the new technology.
In the "people on the move" mobile workforce sector, 20/20 Speech has launched
its Activator product through retail outlets, including Dixons and Argos as well
as through various e-commerce websites. 20/20 Speech has extended its presence
in the professional market through agreements with Unitec and Codeway to utilise
the Activator product in the logistics sector. This is used for voice controlled
data capture and for alerting mobile workers to contents of e-mails and SMS
messages.
In terms of new software development, 20/20 Speech is building upon its
expertise in paralinguistic software to develop "audio mining" technology, which
is capable of analysing and retrieving information from on-line and off-line
video and audio files. The on-line technology allows real-time validation of
voice in areas such as call centres and radio and also aids quality assurance
processes, such as ensuring that certain phrases are stated to customers. The
off-line technology enables the analysis of recorded video and audio to retrieve
all occurrences of particular phrases or sounds. 20/20 Speech has signed a
Non-Disclosure Agreement with a major content provider to assist them in the
analysis and retrieval of specific types of audio and video from very large
volumes of stored information.
Cyrus
Cyrus has had another good year, buoyed by strong growth in the UK and by robust
maintenance of its margins. The year 2002/03 saw the launch of a range of new
products including the entry level 6 series; the 8 series which replaces the 7
series and now constitutes our main range of home entertainment products; and,
the X series, Cyrus' most technically advanced and highest performing product
range to date.
In addition we have taken important new steps to enter the custom home
installation market. The new Cyruslink system combines the latest in wireless
and digital media storage and now offers very high quality audio along with the
convenience of a central library of music that can be accessed from anywhere in
the user's home. Progress in the core technology has been matched by progress
in growing distribution channels and we have established new partners in Italy,
Spain, Korea and Canada.
IP
Eleven of NXT's earliest patent applications filed in the European Patent Office
in 1996, have now been granted. A German trade association had originally
opposed the eleven but opposition was withdrawn in early 2003 following robust
counter arguments from NXT. The European Patent Office (EPO) has reviewed the
inventions again and accepted that ten of the patents required no changes to
their claims. The eleventh, the fundamental and very broad Base Case required
some very minor changes to the wording in a small proportion of the device
claims and, we believe, should soon be accepted by the EPO. This again is
evidence that NXT's intellectual property claims can stand up to the high
standards of scrutiny set by the EPO. Further good news is that the basic
patent for SoundVu technology has been granted in Europe.
In line with our strategy of rationalising our patent portfolio to maintain
coverage of key inventions as they go to grant whilst dropping peripheral
applications in unimportant markets, we have, during the last financial year,
reduced the number of patent applications from 930 to 361 and the number of
granted patents from 663 to 379. Patent protection in key markets, a core part
of our strategy, has improved, however, and we now have three patents in China,
21 in Hong Kong and 19 in Taiwan in addition to which granted patents in the USA
have increased from 47 to 57.
The year ending June 2003 has been one of enormous challenge for the Company as
we have simultaneously sought to build our customer base and re-organise the
Company to support that process. In the course of events we have lost a number
of people who over time have made a valuable contribution to the Company's
business and I want to join the Chairman in thanking them for their efforts.
The remaining team at NXT, 20/20 Speech and Cyrus is highly motivated and
focussed on supporting the commercialisation of our technologies amongst our
customers. I believe we have the right people, strategy and technology and
remain confident about the long-term future of NXT.
David Pearson
Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2003
Total Total
2003 2002
#'000 #'000
Turnover
Continuing operations 7,989 5,010
Cost of sales (2,051) (1,959)
Gross profit 5,938 3,051
Net operating expenses - NXT (12,910) (13,840)
Net operating expenses - 20/20 Speech (2,570) (2,496)
Net operating expenses - Cyrus (1,167) (1,050)
Net operating expenses - exceptional 168 504
Operating loss
NXT (8,809) (12,542)
20/20 Speech (1,987) (1,879)
Cyrus 87 86
Exceptional 168 504
(10,541) (13,831)
Interest receivable 367 771
Interest payable (45) (86)
Loss on ordinary activities before taxation (10,219) (13,146)
Taxation 811 1,459
Loss on ordinary activities after taxation (9,408) (11,687)
Equity minority interests 75 848
Retained loss for the financial year (9,333) (10,839)
Basic and fully diluted loss per share (12.6)p (14.8)p
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2003
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Fixed assets
Intangible assets 6,784 8,001
Goodwill 1,633 1,732
Tangible assets 1,351 1,755
Investments 253 298
10,021 11,786
Current assets
Stocks 420 547
Debtors 3,039 4,357
Cash at bank and in hand 5,963 12,193
9,422 17,097
Creditors
Amounts falling due within one year (2,114) (2,286)
Net current assets 7,308 14,811
Total assets less current liabilities 17,329 26,597
Creditors
Amounts falling due after more than one year (716) (143)
Provisions for liabilities and charges (855) (1,200)
Net assets 15,758 25,254
Capital and reserves
Called up share capital 18,566 18,523
Share premium account 76,600 76,561
Shares to be issued 1,834 2,002
Profit and loss account (81,242) (71,907)
Shareholders' funds 15,758 25,179
Minority interests - 75
15,758 25,254
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2003
2003 2002
#'000 #'000
Net cash outflow from operating activities (8,605) (13,209)
Returns on investments and servicing of finance
Interest paid (26) (66)
Interest element of finance lease rental payments (19) (20)
Interest received 367 771
Net cash inflow from returns on investments and servicing of
finance 322 685
Taxation 1,780 (31)
Capital expenditure and financial investment
Purchase of tangible fixed assets (147) (171)
Sale of investments - 635
Sale of assets 8 2,710
Net cash (outflow) inflow from capital expenditure and financial
investment (139) 3,174
Acquisitions and disposals
Sale of business - 38
Net cash inflow from acquisitions and disposals - 38
Management of liquid resources
Decrease in cash on short term deposit 5,789 10,562
Net cash inflow from management of liquid resources 5,789 10,562
Net cash (outflow) inflow before financing (853) 1,219
Financing
Issue of ordinary share capital - 1,097
Payment of share issue expenses - (30)
Capital element of finance lease rental payments (238) (197)
New loans 650 -
Repayments of bank and other loans - (2,045)
Net cash inflow (outflow) from financing 412 (1,175)
(Decrease) increase in cash (441) 44
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
Reconciliation of operating loss to net cash outflow from operating activities
2003 2002
#'000 #'000
Operating loss (10,541) (13,831)
Depreciation charges 1,862 1,991
Profit on sale of tangible assets (3) (39)
Decrease (increase) in stock 127 (58)
Decrease in debtors 349 1,209
Decrease in creditors (11) (1,155)
Foreign currency translation (2) 2
Shares to be issued (168) (3,398)
Provision against investment 45 860
(Decrease) increase in provision (345) 1,152
Shares issued for non-cash consideration 82 58
Net cash outflow from operating activities (8,605) (13,209)
Reconciliation of net cash flow to movement in net funds
2003 2002
#'000 #'000
(Decrease) increase in cash during the year (441) 44
Cash outflow from decrease in liquid resources (5,789) (10,562)
Cash outflow from decrease in debt and lease financing 238 2,242
Change in net funds resulting from cash flows (5,992) (8,276)
New loans and finance leases (650) (226)
Movement in net funds during year (6,642) (8,502)
Net funds at beginning of year 11,813 20,315
Net funds at end of year 5,171 11,813
FINANCIAL REVIEW NOTES
FOR THE YEAR ENDED 30 JUNE 2003
1. The financial information contained in this document does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The figures for the year ended 30 June 2003 have been extracted from the annual
accounts on which the auditors have issued an unqualified report. A copy of the
annual report and accounts will be posted to shareholders shortly.
2. The directors do not recommend the payment of a final dividend.
3. Basic and fully diluted earnings per share have been calculated on the
Group loss for the financial year and on the weighted average number of ordinary
shares in issue for the year, which was 74,174,036 (2002 - 73,219,485) ordinary
shares. Whilst unexercised share options and warrants in the Company would
increase the weighted average number of potential shares in the year, due to the
losses of the Group in the year they are not considered to be dilutive.
4. The exceptional item of #168,000 is a credit from the Group's Shares To
Be Issued reserve which relates to a discount on share options issued in 2000
which have now lapsed.
5. On 8th and 9th September 2003, the Company issued an aggregate of
14,850,425 ordinary shares of 25p each for a net cash consideration of
#9,500,000 after expenses as a result of the 1 for 5 rights issue approved by
shareholders at the EGM on 14 August 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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