TIDMSCO
RNS Number : 0372M
Scotty Group SE
12 September 2012
12 September 2012
SCOTTY Group SE
("SCOTTY" or the "Company")
Half Yearly Report
CHAIRMAN'S STATEMENT
This statement reports the half-year results of SCOTTY Group SE
for the six months to 30 June 2012. During the period the Company
completed the change in the domicile and registered office of the
Company from the United Kingdom to Austria.
During the second half of 2011 we took the decision to change
our functional currency from pounds sterling to Euros, the currency
in which virtually all of our revenue and the majority of our costs
are denominated. Accordingly, the full year results for 2011 were
reported in Euros and these half-year results are also reported in
Euros. The comparative figures for the first half of 2011 were
originally reported in pounds sterling and have been converted into
Euros at appropriate exchange rates.
Results and cash flow
For the half-year ended 30 June 2012 the operating loss before
exceptional items was Euros 524,000 compared with a loss of Euros
56,000 (GBP49,000) in the half-year to 30 June 2011.
The pre-tax loss after interest and exceptional items was Euros
657,000, compared with Euros 77,000 in the equivalent period last
year.
Turnover for the half-year to 30 June 2012 was Euros 1,810,000,
compared with Euros 2,431,000 (GBP2,114,000) for the corresponding
period last year and gross profit in the period under review was
Euros 924,000 compared with Euros 1,552,000 (GBP1,350,000) in the
half-year to 30 June 2011. The reasons for this decrease are
described below.
Administration expenses for the half-year were Euros 1,622,000,
compared with Euros 1,935,000 (GBP1,683,000) in the six months to
30 June 2011. Other income, mainly representing rent from the
sub-lease on the Group's property in Bristol, showed a reduction
compared with 2011, reflecting the surrender of the Group's
head-lease of the Motion Media Technology Centre in Bristol, in
February 2012.
Following an impairment review carried out during the period, an
exceptional charge of Euros 112,000 was made against the value of
the Group's investment in an associated company, Aupix Limited,
previously valued at Euros 225,000.
After exceptional items, interest and taxation, the loss for the
year was Euros 601,000, compared with Euros 204,000 in the
equivalent period last year.
Cash balances at 30 June 2012 were Euros 241,000 compared with
Euros 686,000 at 31 December 2011 and Euros 586,000 (GBP504,000) at
30 June 2011. During the period, the Company received a loan of
GBP300,000 from Steierischer Technologie und Wachstumsfonds
Beteiligungs AG, an Austrian regional investment fund in which I
have a substantial shareholding and control a majority of the
shares. The purpose of the loan was to provide additional working
capital and to enable the Company to surrender the head-lease in
Bristol, for a payment of GBP150,000.
Since the period end, cash balances have fallen to Euros 146,000
as at 31 August 2012 and the Company has since announced its
intention to raise a minimum of Euros 350,000 on terms to be
determined, due for completion on 24 September 2012.
The Board are not recommending payment of a dividend.
Review of government aviation and military market
Turnover for the first half-year was down on the first half in
2011, as none of the contracted units for 2012 from the PV contract
with Eurocopter for aero-certified Beyond Line of Sight (BLOS)
communications systems was scheduled for delivery in the first half
of the year. Revenue for the half-year consisted of some Euros 1.3
million for land, mobile and maritime systems and Euros 0.5 million
from other aero systems customers.
The land, mobile and maritime revenue was derived partly from
ongoing upgrade and maintenance work for the German Armed Forces
and partly from the new Combat Camera Team reconnaissance vehicle
developed for a Western European government. The aero revenue
stemmed mainly from the initial delivery from a new border
surveillance contract worth some Euros 0.5 million with Diamond
Aircraft Systems for an African government, the first delivery for
AirScan in the USA, and some Personnel Location System (PLS) units
under the separate PLS contract for Eurocopter.
Corporate affairs
I am pleased to report that during the half-year period we
completed two of the major strategic changes identified in previous
reports.
Firstly, SCOTTY Group SE's change of domicile from the United
Kingdom became effective on 17 April 2012, when the Company's
registered office was transferred from the United Kingdom to
Eisenstadt, Austria.
The change of domicile to Austria meant that SCOTTY's shares
were no longer UK securities and could therefore no longer be
traded on the Alternative Investment Market (AIM) in their existing
form. Accordingly, trading in the Company's shares was temporarily
suspended on 17 April 2012. The shares were then converted into
CREST Depository Interests (CDI's), which are dematerialised
depository interests representing entitlement to ordinary shares
(and are also UK securities) and the CDI's were re-admitted to
trading on AIM on 11 May 2012.
Secondly, the Group completed the surrender of its head-lease of
the Motion Media Technology Centre in Bristol, with the result that
it has no further commitments under that lease, which had an expiry
date of March 2022.
Outlook
Whilst the first half-year's result was undoubtedly
disappointing, we expect the second half to show an improvement,
owing to several encouraging developments. This would be consistent
with the trend we have witnessed in recent years, for the second
half of the year to be stronger than the first.
After the delays during the first half, we have now finalised
with Eurocopter the schedule of delivery of PV systems for 2012 and
the contribution of revenue from this source is expected to play a
significant part in a second-half improvement. Deliveries under the
African contract for Diamond are expected to continue, another
example of a turnaround of only a few weeks between order and the
start of deliveries; meanwhile, negotiations are ongoing for other
aero-surveillance contracts for Diamond and other customers, the
timing of which continues to be hard to predict.
Revenue from our aero-systems continues to be supported by the
revenue stream derived from our land, mobile and maritime upgrade
and maintenance work for the German armed forces.
In May 2012, we announced the reorganisation of our US
operations, under the new name of SCOTTY Satcom Technologies, Inc
("SSTI"), with a new US headquarters and systems integration
facility at the AirScan Center of Excellence on Space Coast
Regional Airport in Titusville, Florida. SSTI will be responsible
for all sales and support for the Americas as well as concentrating
on serving the military aviation community with innovative C4ISR
(Command, Control, Communications and Computers in Intelligence,
Surveillance and Reconnaissance) systems and engineering for manned
and unmanned aircraft. AirScan is an Airborne ISR company with 24
years of worldwide operational experience and this new relationship
will strengthen SCOTTY's offerings around the world. The opening of
the new headquarters at Titusville took place on 7 August 2012 and
some initial revenue from this relationship has already benefited
the first half-year, as reported above.
On the technical front our drive to reduce the size and weight
of our equipment is a major part of our strategy and we are in the
process of developing a new codec to further improve the quality of
our airborne systems transmission of video and data. As mentioned
in previous reports, we are also investigating parallel markets to
exploit our technology across a wider revenue base, whilst
maintaining the common thread of satellite-based audio, video and
data transmission. Now that SCOTTY Group SE is an Austrian
registered company, these projects offer attractive possibilities
for Austrian national and regional funding and we are actively
pursuing opportunities to secure funding at both levels. Widening
the Company's revenue base is also a key part of the Board's
strategy of reducing the Company's dependence on single large
contracts and the disproportionate effect that delays in these
contracts can have on the Group's trading and finances.
The delays in the timing of 2012 revenue mentioned above have
put pressure on the Group's working capital. We are therefore
planning a capital increase to provide additional working capital
and to fund the further development of SCOTTY's video
communications technology, as described above.
The Company's Austrian Statutes require the Company to offer to
all shareholders the right to participate pro-rata to their
existing shareholdings, but this requirement can be waived in
certain circumstances, for example where a company has an urgent
need for further working capital. The Board explored the
possibility of raising this funding by way of a rights issue but
concluded that, in view of the time and costs involved, it would be
in the best interests of the Company for shareholders' rights to be
disapplied on this occasion.
In cases where pre-emption rights are to be disapplied, Austrian
law requires a notice to be published in the Wiener Zeitung at
least 14 days before the fundraising takes place. We therefore
published this notice on 7 September 2012 and announced it to the
market the same day. The intention is to close the fundraising on
21 September 2012 and complete it on 24 September 2012.
The Board intends to issue a minimum of 350,000 shares and a
maximum of 484,820 shares, under the authority approved at the
General Meeting on 30 December 2011. The terms of the placement are
currently being negotiated with directors and related parties,
based on a subscription price of between 1.00 and 1.20 Euros per
share.
I would also like to remind shareholders that the Annual General
Meeting of SCOTTY Group SE will be held at the Company's registered
office, Robert Graf Platz 1/WE 02-04, 7000 Eisenstadt, Austria at
14:00 CET on Thursday 27 September 2012. The notice of the Annual
General Meeting was sent to shareholders on 28 August 2012 and
further details of the resolutions to be put to shareholders at the
meeting were published on the Company's website at
www.scottygroup.com on 6 September 2012.
Once again I am most grateful to our shareholders, strategic
partners and suppliers for their continuing support and to our
employees for their professionalism and hard work in a difficult
trading environment. The first half has certainly been challenging,
but I believe the trends I have described indicate that the outlook
for SCOTTY is improving and we can face the future with increasing
confidence.
Dr Ernst Wustinger
Chairman
12 September 2012
CONSOLIDATED INCOME STATEMENT Half year Half year Year
for the half-year ended 30
June 2012 ended ended ended
31 December
30 June 2012 30 June 2011 2011
(unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
Revenue 1,810 2,431 5,988
Cost of sales (886) (879) (2,480)
Gross profit 924 1,552 3,508
Administration expenses (1,622) (1,935) (3,901)
Other operating income 174 327 742
Operating (loss)/profit (524) (56) 349
Other gains and losses (112) - (558)
Finance costs (21) (21) (31)
Loss before tax (657) (77) (240)
Income tax credit/(charge) 56 (127) 344
(Loss)/profit for the period (601) (204) 104
============= ============= ============
(Loss) / Earnings per share (Note
(basic and diluted) 2) (EUR0.62) (EUR0.21) EUR0.11
The above results all derive from
continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED INCOME AND
EXPENSE
for the half-year ended 30 June
2012
Half year Half year Year
ended ended ended
31 December
30 June 2012 30 June 2011 2011
(unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
Exchange differences on translation
of foreign operations (271) (164) (129)
(Loss)/profit for the period (601) (204) 104
Total comprehensive income for
the period (872) (368) (25)
============= ============= ============
31 December
CONSOLIDATED BALANCE SHEET 30 June 2012 30 June 2011 2011
at 30 June 2012 (unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
Non-current assets
Goodwill 4,085 4,070 4,085
Other intangible assets 1,875 1,832 1,866
Property, plant and equipment 250 206 256
Investments 113 219 225
Deferred tax asset 397 - 358
6,720 6,327 6,790
------------- ------------- ------------
Current assets
Inventories 691 892 593
Trade and other receivables 686 1,156 930
Cash and cash equivalents 241 586 686
1,618 2,634 2,209
------------- ------------- ------------
Total assets 8,338 8,961 8,999
------------- ------------- ------------
Current liabilities
Trade and other payables (1,319) (1,896) (1,559)
Current tax liabilities (282) (9) (140)
Obligations under finance leases (39) (35) (37)
Borrowings (305) (319) (280)
Other loans (388) - -
(2,333) (2,259) (2,016)
------------- ------------- ------------
Net current (liabilities)/assets (715) 375 193
------------- ------------- ------------
Non-current liabilities
Deferred tax liabilities - (149) -
Long term provisions (120) (122) (127)
Obligations under finance leases (76) (29) (64)
(196) (300) (191)
------------- ------------- ------------
Total liabilities (2,529) (2,559) (2,207)
------------- ------------- ------------
Net assets 5,809 6,402 6,792
============= ============= ============
Capital and reserves
Called up share capital 970 11,930 970
Share premium account - 41,542 -
Capital redemption reserve - 203 -
Share option valuation reserve - 111 111
Capital reduction special reserve 154 - 154
Retained earnings 4,685 (47,384) 5,557
Total shareholders' funds 5,809 6,402 6,792
============= ============= ============
CONSOLIDATED CASH FLOW STATEMENT Half year Half year Year
for the half-year ended 30 June
2012 ended ended ended
31 December
30 June 2012 30 June 2011 2011
(unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
Cash flow from operating activities
Net cash from operations (145) (115) (44)
Interest paid (21) (21) (31)
Income tax paid - (12) (12)
Net cash used in operating activities (166) (148) (87)
------------- ------------- ------------
Purchase of property, plant and
equipment (43) (94) (174)
Proceeds on disposal of property,
plant and equipment 21 - -
Net cash used in investing activities (22) (94) (174)
------------- ------------- ------------
Share placing - 700 700
Share capital restructuring - - 47
Other financing cash flows (net) 14 26 63
Net cash from financing activities 14 726 810
------------- ------------- ------------
Net (decrease)/increase in cash
and cash equivalents (174) 484 549
Cash and cash equivalents at start
of period 686 266 266
Effect of foreign exchange rate
changes (271) (164) (129)
Cash and cash equivalents at end
of period 241 586 686
============= ============= ============
Half year Half year Year
ended ended ended
Reconciliation of loss for the 31 December
period 30 June 2012 30 June 2011 2011
to net cash from operating activities (unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
Loss before interest and tax (636) (56) (209)
Additions to intangible assets (134) (451) (761)
Investment impairment charge 112 - -
Amortisation of intangible assets 126 124 410
Depreciation of property, plant
and equipment 48 73 105
Profit on disposal of property,
plant and equipment (21) - -
Reversal of share-based payments
reserve (111) - -
(Increase)/decrease in inventories (98) (78) 226
Decrease in trade and other receivables 244 1,351 1,565
Decrease in trade and other payables (88) (1,005) (1,268)
Increase/decrease in bank borrowings 25 (73) (112)
Increase in other loans 388 - -
Net cash from operating activities (145) (115) (44)
============= ============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half-year ended
30 June 2012
Half year ended 30 June Half
2012 (unaudited) year Year
ended ended
30 June 31 December
2011 2011
Capital
Called Share option reduction
up share valuation special Retained
capital reserve reserve earnings Total (unaudited) (audited)
Euros Euros Euros Euros Euros Euros
000 Euros 000 000 000 000 000 000
At start of period 970 111 154 5,557 6,792 6,070 6,070
Exchange losses - - - (271) (271) (164) (129)
Loss for the period - - - (601) (601) (204) 104
Total comprehensive income - - - (872) (872) (368) (25)
Proceeds of share issue - - - - - 700 700
Reversal of share based
payments reserve - (111) - - (111) - -
Share capital reduction
and reorganisation - - - - - - 47
At end of period 970 - 154 4,685 5,809 6,402 6,792
========== ============= =========== ========== ====== ============= ============
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the half-year ended 30 June 2012
1. Basis of preparation
These financial statements, which are neither audited nor
reviewed, have been prepared under accounting policies consistent
with International Financial Reporting Standards ("IFRS"), as set
out in the Group's Annual Report for the year ended 31 December
2011.
The financial information in this statement does not constitute
statutory accounts as defined in Austrian law.
The Directors have formed a judgement, at the time of approving
the interim financial statements, that the Group has adequate
resources to continue in operational existence for the foreseeable
future. For this reason the Directors continue to adopt the going
concern basis in preparing the financial statements.
The financial statements of foreign subsidiaries are translated
into Euros at the closing rate of exchange and the differences
arising on the opening net investment and on inter-company loans,
at the closing rate, are taken directly to reserves.
The comparative figures for the year ended 31 December 2011 are
an abridged version of the Group's published financial statements
which were prepared in accordance with IFRS. They received an
unqualified audit report and did not contain reference to matters
to which the auditors drew attention by way of emphasis without
qualifying the report.
The comparative figures for the half-year ended 30 June 2011 are
taken from the Company's Interim Report for 2011. Those figures
were originally reported in pounds sterling and have been converted
to Euros at appropriate exchange rates for the purposes of this
report.
2. Earnings / loss per share
The calculation of basic earnings / loss per share is based on
the profit or loss after taxation for the period and the weighted
average number of shares in issue during the period.
None of the share options give rise to a dilution in the
earnings / loss per share due to the current level of the Company's
share price. As a result, the basic and diluted earnings / loss per
share are the same.
The loss for the period and the number of shares used in the
calculations are set out below:
Half year Half year Year
ended ended ended
30 June 30 June 31 December
2012 2011 2011
(unaudited) (unaudited) (audited)
Euros 000 Euros 000 Euros 000
(Loss) / profit attributable
to ordinary shareholders (601) (204) 104
Number Number Number
(see
Weighted average number note
of shares below) 969,640 969,640 969,640
(Loss) / earnings per
share (Euros) (EUR0.62) (EUR0.21) EUR0.11
------------ ------------ ------------
For comparison purposes, the number of shares and loss per share
for the half year ended 30 June 2011 have been adjusted to reflect
the share capital reorganisation in 2011. Following this
reorganisation, the issued share capital consisted of 969,640
shares of 1 Euro each at 31 December 2011 and at 30 June 2012.
3. Distribution of Interim Report
Copies of this Interim Report are available from the Company's
website at www.scottygroup.com.
Enquiries:
SCOTTY Group SE
Kurt Kerschat, CEO +43 316 409 426
Nominated Adviser
Cairn Financial Advisers LLP
Tony Rawlinson / Avi Robinson +44 20 7148 7900
Broker
Northland Capital Partners Limited
John Howes +44 20 7796 8800
This information is provided by RNS
The company news service from the London Stock Exchange
END
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