RNS Number:1545Q
Advanced Technology (UK) PLC
25 September 2003
Advanced Technology (UK) Plc
("ATL" or the "Company")
Interim Results for the six months ended 30 June 2003
Advanced Technology (UK) Plc, the provider of short-range low power
communications systems and technology, today announces results for the six
months ended 30 June 2003.
30 June 2003 30 June 2002
#000 #000
Turnover 2,824 4,067
Operating loss before goodwill impairment, (1,746) (1,219)
exceptional cost and amortisation of goodwill
Loss on ordinary activities before taxation (2,182) (1,762)
Loss per ordinary share (7.1)p (6.2)p
Loss per share excluding exceptional item (7.1)p (5.6)p
Operational
* The Group continues to make progress in consolidating its position as a
leading supplier of One-Way Mobile solutions to the US market
* New product launched - Electricity TranspondIT
* Strong order book
* Reduction in turnover and increased losses resulting from harsh winter
conditions in the US and a temporary disruption in manufacturing
* Reduction in overhead costs
* Major new European contract win - #0.5 million
Greg Morgan, Chairman of Advanced Technology (UK) plc, said:
"Considerable progress has been made in the first half. We have expanded our
product range, with the launch of the Electricity TranspondIT in the United
States where there has been a significant improvement in trading conditions. We
have also focused on re-establishing our European One-Way business, securing a
#0.5 million contract with a major international water metering company. Now
that manufacturing is returning to normal levels, the Group is confident of
securing additional revenues during the final quarter of 2003."
25 September 2003
ENQUIRIES:
Advanced Technology (UK) plc Tel: 01202 592000
John Howell, Chief Executive
David Collinson, Finance Director
College Hill Tel: 020 7457 2020
Matthew Smallwood
ADVANCED TECHNOLOGY (UK) PLC
Interim Results for the six months to 30 June 2003
Chairman's Statement
The period under review has seen the Group consolidate its position as a major
supplier of RF One-Way Mobile solutions to the United States Automatic Meter
Reading (AMR) market. The North American market has enjoyed fast growth
recently and this is forecast to continue. To capitalise on this growth
opportunity we continue to focus on expanding our product range. The latest
addition, just launched, being the Electricity TranspondIT.
The positive order intake for our Water TranspondIT in the first six months of
the year reflected the continued market growth. However, as we advised
shareholders in our preliminary statement in June, turnover actually reduced in
this period due to harsh winter conditions in the first three months and
manufacturing output being temporarily disrupted in the second quarter. The
latter resulted from material shortages as well as the implementation of
additional processes to enhance our new products.
More encouragingly, the Group is making a steady improvement in manufacturing,
where its widely publicised challenges have been resolved and US revenues are
again rising. The order book is at a high level, and overhead costs have been
substantially reduced. In addition, the Group has just gained a significant
European order.
Results
Turnover for the period to 30 June 2003 was #2.8 million compared with #4.1
million in 2002 reflecting harsh winter conditions which restricted
installations in the US, and was compounded by manufacturing component
shortages.
Reduced volumes and a temporary increase in unit costs as a consequence of
product changes resulting from last year's FCC audit increased the operating
loss before goodwill amortisation and exceptional costs to #1.7 million (2002:
#1.2 million)
#0.9 million (net of expenses) was successfully raised through the issue of
convertible loan notes with an equity alternative. #0.7 million of convertible
debt was converted to equity during the period, leaving #0.8 million convertible
debt outstanding.
Operations
As indicated in our last statement, the Group is placing greater emphasis on the
One-Way Mobile business by continuing to invest in the United States utilities
market. Various improvements were made to the performance of the water product.
Our new electricity product was launched in the spring of 2003 and is performing
exceptionally well in the field and has attracted considerable customer
interest. Further investment will be made to expand the portfolio of
electricity products to satisfy the diverse range of meter types required in
this huge market place. A new gas version is expected mid next year.
The Group is now re-establishing its European One-Way business and has secured a
#0.5 million contract with a major international water metering company.
Winning our first large European order for some years is exciting and as the
impact of European deregulation unfolds we can see several more opportunities to
grow our business. To date, Europe has not seen the level of growth compared
with the North American market because of differing metering and regulatory
requirements. This will change as deregulation opens up new markets.
The causes of the restricted manufacturing output experienced over the last few
months have been eliminated. Further manufacturing capacity is now being
commissioned to enable the high order intake to be satisfied.
The Group has built up an array of Two-Way Fixed Network technology over the
last couple of years. Progress in South East Asia has been particularly slow
and as reported in our June statement, the project in Ghana was put back due to
changes in the private sector participation programme. This slow progress has
meant that we push ahead with our plans to build a sustainable business in the
fast growing One-Way market but we will also press on to secure our first major
two-way contract in Ghana and other selected markets.
The Group implemented several cost reduction programmes to help restore margins
following the excess product costs incurred in the first half of the year.
Significant overhead cost reductions were also implemented during August but the
full benefits will not be realised until the final quarter of 2003.
Outlook
Now that manufacturing is returning to normal levels, the Group is confident of
securing additional revenues during the final quarter of 2003. The funding
position remains tight and the key pressures on the Groups funding position are
shown in note 2 to the Interim Results. Overall, the Board is confident that the
recent lack of output will not disrupt future revenue. Our immediate goal is to
have a positive cash flow balance without relying on any revenue contribution
from the Two-Way Fixed Network business. To achieve this will be a huge
milestone in the Group's quest to rebuild shareholder value.
Greg Morgan 25 September 2003
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30 June 2003
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
TURNOVER 2,824 4,067 7,923
Cost of sales (2,170) (2,434) (5,196)
GROSS PROFIT 654 1,633 2,727
Administrative expenses (2,770) (3,393) (6,598)
OPERATING LOSS
Ongoing activities before the following items (1,746) (1,219) (2,681)
Amortisation of goodwill (370) (370) (740)
Exceptional items - (171) (450)
(2,116) (1,760) (3,871)
Interest receivable 3 6 8
Interest payable (69) (8) (35)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,182) (1,762) (3,898)
Tax credit on ordinary activities 134 172 312
RETAINED LOSS FOR THE PERIOD (2,048) (1,590) (3,586)
LOSS AND DILUTED LOSS PER SHARE (7.1)p (6.2)p (14.0)p
LOSS AND DILUTED LOSS PER SHARE EXCLUDING EXCEPTIONAL ITEMS (7.1)p (5.6)p (12.3)p
All amounts relate to continuing operations.
CONSOLIDATED BALANCE SHEET
At 30 June 2003
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
FIXED ASSETS
Intangible assets 3,841 4,587 4,222
Tangible assets 596 685 658
4,437 5,272 4,880
CURRENT ASSETS
Stocks 559 217 304
Debtors & prepayments 1,292 1,756 1,044
Cash at bank and in hand 192 259 568
2,043 2,232 1,916
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR (2,818) (1,696) (1,966)
NET CURRENT (LIABILITIES)/ASSETS (775) 536 (50)
TOTAL ASSETS LESS CURRENT LIABILITIES 3,662 5,808 4,830
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR -
Convertible loan notes (811) - (933)
PROVISIONS FOR LIABILITIES AND CHARGES (524) (471) (554)
NET ASSETS 2,327 5,337 3,343
CAPITAL AND RESERVES
Called up share capital 1,762 1,277 1,277
Share premium account 23,480 22,895 22,895
Profit and loss account (22,915) (18,835) (20,829)
EQUITY SHAREHOLDERS' FUNDS 2,327 5,337 3,343
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2003
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1,280) (865) (1,678)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
(13) (2) (17)
TAXATION 134 236 665
CAPITAL EXPENDITURE (74) (191) (324)
CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (1,233) (822) (1,354)
FINANCING 895 - 923
DECREASE IN CASH IN THE PERIOD (338) (822) (431)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
DECREASE IN CASH IN THE PERIOD (338) (822) (431)
Cash (inflow) from increase in debt financing (499) - (923)
Increase in funds on conversion of loan notes 674 - -
Currency translation differences (38) (74) (156)
Amortisation of financing costs (53) - (10)
MOVEMENT IN NET FUNDS IN THE PERIOD (254) (896) (1,520)
NET FUNDS AT 1 JANUARY (365) 1,155 1,155
NET FUNDS AT 30 JUNE / 31 DECEMBER (619) 259 (365)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the six months ended 30 June 2003
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
LOSS FOR THE FINANCIAL PERIOD (2,048) (1,590) (3,586)
New share capital subscribed 396 - -
Shares issued on conversion of Convertible loan notes 674 - -
Unrealised loss on translation of foreign currency net investment (38) (74) (72)
NET (REDUCTION IN) SHAREHOLDERS' FUNDS (1,016) (1,664) (3,658)
Opening shareholders' funds 3,343 7,001 7,001
CLOSING SHAREHOLDERS' FUNDS 2,327 5,337 3,343
CONSOLIDATED STATEMENT OF
TOTAL RECOGNISED GAINS AND LOSSES
For the six months ended 30 June 2003
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
LOSS FOR THE FINANCIAL PERIOD (2,048) (1,590) (3,586)
Gross exchange differences on the retranslation of net
investments and related borrowings (38) (74) (72)
TOTAL GAINS AND LOSSES RECOGNISED IN THE PERIOD (2,086) (1,664) (3,658)
NOTES
1. Reconciliation of operating loss to net cash outflow from operating
activities
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
Operating loss (2,116) (1,760) (3,871)
Depreciation and amortisation charges 517 512 1,033
(Increase)/Decrease in Stocks (255) 449 349
(Increase)/Decrease in Debtors (248) (55) 339
Increase/(Decrease) in Creditors 852 (23) 339
Increase /(Decrease) in Warranty Provision (30) 12 133
Net cash outflow from operating activities (1,280) (865) (1,678)
2. Basis of preparation
The interim accounts have been prepared in accordance with applicable accounting
standards and under the historical cost accounting rules.
The interim accounts have been prepared on a going concern basis, which the
directors believe to be appropriate for the following reasons. Cash flow
projections indicate that the group is expected to have a positive cash balance
for the foreseeable future even without a revenue contribution from the Two-Way
fixed network activity. Included within the cash-flow projections are the
proceeds of #540,000 from the exercise of warrants or equivalent. However, the
headroom is particularly tight in the short term. The Group remains dependant
upon the continued support of its key supplier together with a debt factoring
facility that has already been agreed with an institution. In preparing these
interim accounts, the directors have given consideration to the cash flow
projections and the key assumptions within them, including the timing of future
orders, the continued support of the Group's key supplier, the adequacy of the
agreed debt factoring facility and the amount and timing of receipts from the
exercise of warrants. The directors have concluded that although there is
significant uncertainty in relation to these matters, it is appropriate to
prepare these accounts on a going concern basis.
The interim accounts do not include any adjustment that might be necessary were
this basis to cease to be appropriate.
3. Comparatives
The comparative figures for the financial year ended 31 December 2002 are not
the Group's statutory accounts for that financial year within the meaning of
section 240 of the Companies Act 1985. Those accounts have been reported on by
the Group's auditors and delivered to the registrar of companies. The report of
the auditors was unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 1985.
4. The exceptional charge of #171,000 for the six months
ended 30 June 2002 was incurred in connection with the FCC audit of the Group's
licences in USA. The exceptional charge incurred in the year to 31 December 2002
consists of #326,000 in respect of the FCC audit, and #124,000 resulting from
the intended fundraising which was aborted following Central Millenium's
acquisition of a significant interest in the share capital and voting rights of
the company.
5. Loss per share and diluted loss per share have been
calculated on the basis of the loss after taxation and the weighed average
number of ordinary shares in issue for the period. The loss and diluted loss per
share excluding exceptional items has been calculated after adjusting the loss
after taxation for the exceptional items. The loss and diluted loss per share
excluding exceptional items is shown to allow a comparison of earnings per share
on a recurring basis.
Six months ended Year ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
Loss after taxation #(2,048,000) #(1,590,000) #(3,586,000)
Exceptional items - #171,000 #450,000
Weighted average number of shares in issue 28,683,598 25,536,033 25,536,033
6. Further copies of the Interim Report are available from:
the Company's registered office at 7 Enterprise Way, Aviation Park, Bournemouth
International Airport, Christchurch, Dorset, BH23 6HB; the Company's website
www.atr-group.com; and the Company's registrars, Capita IRG plc, The Registry,
34 Beckenham Road, Beckenham, Kent, BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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