Final Results
July 30 2003 - 3:02AM
UK Regulatory
RNS Number:1133O
Network Technology PLC
29 July 2003
Network Technology Plc : Results for the year ended 31 March 2003
29 July 2003
Highlights
* Turnover down from #3.2m to #2.8m
* Average annual staff numbers down from 68 to 43
* Operating loss after restructuring costs decreased from #4.1m to #841k
* There is no dividend while Group remains in recovery phase
* All the remaining and consolidated Group companies are now in a position
to grow and sales of security devices are consistently increasing
Commenting on prospects Klaus Bollmann, Chairman and Chief Executive, says: "The
Board renews its confidence that the market and product choices we have made are
the right ones. Investment will ultimately return. At this point the new
products will enable the Company to grow out of its current difficulties and we
will continue to bring new technologies to market which, in the Board's view,
will secure the Company's future and bring the biggest rewards for our
shareholders."
Chairman's Statement
It is nothing new to report that the last period has been difficult. Our markets
have been declining in this period due to the lack of investment by the
corporate world. The top line has further reduced to #2.8 million from #3.2
million in the same period last year, a drop of 12.5% which is the lowest drop
in the last three years. However, the bottom line has drastically changed to a
pre-tax loss of #841k from #4,112k in the same period last year. The majority of
the loss comes from exceptional items. On operations the company was profitable
in the last six months and compensated for some of the loss incurred in the
first half of the year. The exceptional items are due to closure of
non-profitable divisions and Group companies. The return to profitability on
operations and the neutral cash flow for the period are due to draconian
restructuring measures whilst maintaining our technological and organizational
competitive advantages. Recently the Company closed its chemical processing
division making Printed Circuit Boards as it is more cost-effective now to
outsource. This will save the Company any further expense associated with this
part of the business.
The Company now consists of three core competencies: manufacture, market
research/design and sales of our Ringdale brand.
The legacy products during the period made only 50% of the Group's turnover and
50% are taken up by new products. Many of the product lines are in the markets
of security which is widely understood to have similar growth rates as the
networking market once had. The Company has significant core technology and is
in the process of exploiting this to OEM clients as well as through its Ringdale
brand.
The Company has been able to retain its core team and the team has reported to
me that they are confident that the technology developed over the last years
will lead to a significant market share in their respective markets.
The Company has also developed and recently released a homeland security product
for airports and airlines which is ready for rollout if relevant contracts can
be secured.
The management, which is a large shareholder, has shown continued restraint in
drawing no salaries for the Directors in the period and was only recompensed for
reasonable expenses. The shareholders have also provided us with their support
for which we are truly grateful, as we were not able to give any news for better
or for worse during the period. This was mainly that there was nothing of
significance to say; it was a time of survival rather than growth. Repeating our
optimism during the time would have undermined the management's credibility, as
it was a time where a longer-term view had to be taken.
Our guidance to the market is as follows:
The Company has dealt with most of the legacy of the collapse of the market and
does not expect further exceptional items of any significance for the next 12
months as a result of legacy issues, if any, then as a result of growth issues.
The new products are fully developed and further development can be covered by
cash generated within.
The Company has low borrowing from local banks both in the US and in the UK
totalling #330k (US$ 511k) which is mainly used to finance 1.5 months of sales.
The markets that the Company is selling into are multi billion dollar markets
with competitors who either do not have the technology or do not have the
stamina to be able to cash in.
The Company has currently a unique technological position as well as the ability
to manufacture as soon as this market takes off.
Network Technology Plc - Year ended 31st March 2003
Profit and Loss
2003 2002
#'000 #'000
Turnover 2,800 3,251
Cost of sales (1,265) (1,411)
Gross profit 1,535 1,840
Other operating expenses (1,668) (5,939)
Other operating income 2 7
Group operating loss (132) (4,092)
Exceptional item (688) 0
Interest receivable and similar income 0 0
Interest payable and similar charges (21) (20)
Loss on ordinary activities before taxation (841) (4,112)
Tax on loss on ordinary activities (1) 200
Loss on ordinary activities after taxation (842) (3,912)
Loss per ordinary share (pence) -2.28 -10.59
Network Technology Plc - Year ended 31st March 2003
Balance Sheet
2003 2002
#'000 #'000 #'000 #'000
Fixed Assets
Tangible Assets 473 1,129
Intangible Assets 0 26
473 1,155
Current Assets
Stocks 1,297 2,722
Debtors 496 825
Cash at Bank and in Hand 72 37
1,865 3,584
Creditors
Amounts falling due within (1,981) (3,765)
one year
Net Current Assets (116) (181)
Total Assets less Current 357 974
Liabilities
Creditors
Amounts falling due after (177) 0
more than one year
Net Assets 180 974
Capital and Reserves
Called up share capital 3,694 3,646
Share premium account 8,028 8,028
Capital redemption reserve 12 12
Profit and loss account (11,554) (10,712)
180 974
Network Technology Plc - Year ended 31st March 2003
Cashflow Statement
2003 2002
#'000 #'000 #'000 #'000
Operating Loss (132) (4,092)
Depreciation and Working Capital 429 3,681
Movements
Net Cash inflow/(outflow) from 297 (411)
operating activities
Returns on investments and servicing
of finance
Interest paid (19) (18)
Interest element of hire purchase (2) (2)
payment
Net cash outflow from returns on
investments and servicing of finance (21) (20)
Taxation 0 270
Capital expenditure and financial
investment
Payments to acquire tangible fixed (329) (94)
assets
Payments to acquire intangible assets 0 0
Receipts from sales of fixed assets 5 275
Net cash (outflow)/inflow from
capital expenditure
and financial investment (324) 181
Cash (outflow)/inflow before (49) 20
financing
Financing
Proceeds from share issues 47 23
Debt factoring 0 (237)
New debt 240 0
Repayment of debt (49) (12)
Capital element of hire purchase (13) (14)
Net cash inflow/(outflow) from 225 (240)
financing
Increase/(Decrease) in cash 177 (220)
Analysis of net funds and reconciliation of net cash outflow to movement in
net funds
Cash
At 1.4.02 Flow At 31.3.03
Cash at Bank and in Hand 37 35 72
Overdrafts (176) 142 (34)
UK Loan 0 (240) (240)
US Subsidiary Loan (144) 49 (95)
(283) (13) (296)
Debt factoring 0 0 0
HP contracts due after one year 0 0 0
HP contracts due within one year (13) 13 0
(13) 13 0
Total (296) (0) (296)
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UKRRROVRBUUR