TIDMCYAN
RNS Number : 7191Z
Cyan Holdings Plc
28 September 2009
Embargoed Release: 07:00hrs, Monday 28 September 2009
Cyan Holdings Plc
("Cyan" or "the Group")
Half Year Report
for the six months ended 30 June 2009
Cyan Holdings plc (AIM:CYAN.L), a fabless semiconductor company providing
configurable application software and production ready modules based on feature
rich, low power, microcontroller chips announces its half year results for the
six months ended 30 June 2009.
Summary
* Partnerships in place with Micrel Inc, a global manufacturer of integrated
circuits, and Future Electronics Inc, a global electronics distributor operating
in 41 countries giving Cyan access to major distribution networks into the
global smart metering market.
* Good progress with a range of field trials underway and completed with metering
manufacturers.
* Raised GBP1.2 million, net of expenses, in a placing to provide additional
working capital.
* Tight management of costs.
Kenn Lamb, CEO of Cyan, commented:
"Cyan has now entered a phase where it has delivered what its potential
customers have asked for in terms of cost and performance. We have been pleased
that these customers have either confirmed, or are well into the process of
confirming, that Cyan's products meet their requirements. The prospects for 2010
are exciting particularly given the number of prospective companies where Cyan
is currently actively engaged in product evaluation."
Enquiries:
+--------------------------------------------------+--------------------------------------------------+
| Cyan Holdings plc | www.cyantechnology.com |
+--------------------------------------------------+--------------------------------------------------+
| Kenn Lamb, CEO | Tel: +44 (0) 1954 234 400 |
+--------------------------------------------------+--------------------------------------------------+
| Cenkos Securities plc | |
+--------------------------------------------------+--------------------------------------------------+
| Stephen Keys / Adrian Hargrave | Tel: +44 (0) 20 7397 8900 |
+--------------------------------------------------+--------------------------------------------------+
| Media - Hansard Group | |
+--------------------------------------------------+--------------------------------------------------+
| John Bick / Vikki Krause | Tel: +44(0) 20 7245 1100 |
+--------------------------------------------------+--------------------------------------------------+
Interim Statement
At our AGM on 27 May I reported that Cyan had taken the first steps to becoming
a major supplier to the global automated/smart metering market, the global
street lamp control market and to become a leading supplier of gateways (access
points) to a wide range of industrial wireless networks.
I am delighted to report that Cyan now has partnerships in place, including
Future Electronics and Micrel Inc. that provide a global network offering access
to worldwide markets through major established players. Cyan has already secured
working relationships with established suppliers of meters and street lamps
and has actively engaged in multiple field trials across a range of
applications. In addition, Cyan has in place contract manufacturing partners
capable of supporting a rapid increase in orders and shipments of our solutions.
One such trial has led to a performance breakthrough that has had profound
impact on the competitiveness of Cyan's wireless metering solutions. Cyan had
been asked to develop a battery operated mesh networking gas meter that uses
conventional AA batteries rather than the very expensive Lithium batteries that
until now have had to be fitted and replaced by the meter manufacturer.
Replacing a Lithium battery requires a visit to the residential property by an
engineer. Frequency of such visits could be minimised by increasing the size
(and cost) of the Lithium battery, but use of AA batteries fitted by the
resident would eliminate the requirement entirely, substantially reducing the
cost of the meter and the need and cost of engineer visits. Cyan was given a
requirement for 12 months operation on AA batteries, and we delivered over 100
of our existing meters for a test at the meter manufacturers premises in June.
Through a series of design modifications implemented in July and August the
battery life has been increased to 60 months with Western alkaline batteries
which comfortably exceeds the 12-month target even using the lower performance
and lower cost batteries available in China.
As a result of this latest innovation from our technical team we believe that we
now have the lowest power, wireless mesh networking, metering solution currently
available anywhere in the World. Low power operation is a common requirement
globally and the combination of lowest power, lowest cost and robust wireless
networking makes this a very competitive product.
In September Cyan demonstrated the first 470MHz version of this meter, based on
a new product from Micrel that completes coverage of all global metering bands.
This frequency has been specified as a future requirement for all meters in
China. Cyan now has a 470MHz product to address electricity metering
opportunities in China as well as gas and water meter opportunities in all
Chinese provinces. The availability of 470MHz versions approximately doubles the
size of the (already substantial) Chinese gas meter market for Cyan products,
and then more than doubles this again by providing access to the Chinese
Electricity meter market.
In the intervening months since the AGM the breadth and range of customer
engagements has increased significantly. Some field trials have been
successfully completed and we are awaiting the first production orders, others
have delayed start dates, arising from issues unrelated to Cyan products. Some
customers have simply purchased Cyan products and are undertaking their own
trials without our support, and in one case detailed above; the customer
requirements were successfully exceeded during the trial.
We are confident that Cyan has very competitive pricing across its product range
and the technical performance continues to drive demand for field trials across
a number of large scale applications. Field trials require significant
commitment and expenditure by customers; our view is that the majority of such
trials are for performance confirmation and not for vendor selection.
Following the period end on 27 July the Company announced its agreement with
Future Electronics, one of the three largest electronics distributors in the
world, with 169 offices in 41 countries. The agreement provides Cyan with access
to a leading distributor with customer support and fulfilment organisation that
has a global presence and the ability to secure business that would not
otherwise be available to Cyan. Through this agreement, Cyan can supply its
range of wireless metering and lighting control products available to the global
market.
Financials
For the six months ended 30 June 2009 turnover was GBP42,575 (2008:GBP52,750).
The loss for the period was substantially reduced to GBP1,612,050
(2008:GBP2,263,788), primarily due to the restructuring of the business that was
undertaken last year, creating cost efficiencies in addition to a significant
reduction in research and development costs. Cash balances at the period end
were GBP1,504,783 (2008: GBP1,418,143).
In order to fund the growth of the business and its resulting additional working
capital requirements the Company on 27 May 2009 announced that it had secured a
further round of finance, successfully raising GBP1.2 million (net of expenses)
as a result of a placing of shares with [existing] shareholders and the Board
would like to take this opportunity to thank shareholders for their continuing
support.
Outlook
Cyan has now entered a phase where it has delivered what its potential customers
have asked for in terms of cost and performance. We have been pleased that these
customers have either confirmed, or are well into the process of confirming,
that Cyan's products meet their requirements. Every month more customers start
this process and we believe that we will start to see the fruits of our
endeavours with evidence of firm volume orders although the exact timing of such
remains difficult to predict.
As I reported previously, the rate at which customers can fund the purchase and
deployment of our products now determines how soon Cyan will achieve
profitability. We must recognise that in the current economic climate not even
our customers can predict timing with any certainty.
The prospects for 2010 are exciting particularly given the number of prospective
companies where Cyan is currently actively engaged in product evaluation and
since the Company's AGM statement made in May the number of such prospects has
increased and none have been lost.
Kenn Lamb
Chief Executive Officer
28 September 2009
Consolidated Income Statement
Six months ended 30 June 2009
+----------+--------+--------------------+--+--+--------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six | six | ended 31 |
| | | | | months | months | December |
| | | | | ended | ended | 2008 |
| | | | | 30 | 30 June | |
| | | | | June 2009 | 2008 | |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| | | | Notes | GBP | GBP | GBP |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| Continuing operations | | | |
+-------------------------------------------------------+-------------+-------------+-------------+
| Revenue | 42,575 | 52,750 | 145,627 |
+-------------------------------------------------------+-------------+-------------+-------------+
| Cost of sales | | | (27,313) | (30,217) | (86,321) |
+-------------------+--------------------------+--------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+--------------------------+--------+-------------+-------------+-------------+
| Gross Profit | | | 15,262 | 22,533 | 59,306 |
+-------------------+--------------------------+--------+-------------+-------------+-------------+
| | | | | |
+----------------------------------------------+--------+-------------+-------------+-------------+
| Operating costs | | (1,243,185) | (1,440,152) | (2,485,486) |
+----------------------------------------------+--------+-------------+-------------+-------------+
| Research and development costs | | (528,289) | (933,057) | (1,953,937) |
+----------------------------------------------+--------+-------------+-------------+-------------+
| Restructuring costs | | | | - | (177,800) | (177,800) |
+----------------------------------------+--+--+--------+-------------+-------------+-------------+
| | | | | | | |
+----------------------------------------+--+--+--------+-------------+-------------+-------------+
| | | | | (1,771,474) | (2,551,009) | (4,617,223) |
+----------------------------------------+--+--+--------+-------------+-------------+-------------+
| | | | | | | |
+----------------------------------------+--+--+--------+-------------+-------------+-------------+
| Operating loss | (1,756,212) | (2,528,476) | (4,557,917) |
+-------------------------------------------------------+-------------+-------------+-------------+
| Investment | | | 1,085 | 139,239 | 92,885 |
| revenue | | | | | |
+-------------------+-----------------------+-----------+-------------+-------------+-------------+
| Finance costs | | | (11) | (51,340) | (1) |
+-------------------+-----------------------+-----------+-------------+-------------+-------------+
| Loss before tax | (1,755,138) | (2,440,577) | (4,465,033) |
+-------------------------------------------------------+-------------+-------------+-------------+
| Tax | 143,088 | 176,789 | 465,707 |
+-------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| Loss for the period | | (1,612,050) | (2,263,788) | (3,999,326) |
+-------------------------------------------+-----------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| Loss per share (pence) | | | | |
+-------------------------------------------+-----------+-------------+-------------+-------------+
| Basic and diluted | | 2 | (0.3) | (1.6) | (1.7) |
+-------------------+-----------------------+-----------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+-----------------------+-----------+-------------+-------------+-------------+
| | | | | | | |
+----------+--------+--------------------+--+--+--------+-------------+-------------+-------------+
Consolidated Balance Sheet
At 30 June 2009
+-------------+-----------+-------------------------+--+--+--------------+--------------+--------------+
| | | | | Unaudited | Unaudited | 31 |
| | | | | | 30 June | December |
| | | | | 30 | 2008 | 2008 |
| | | | | June 2009 | | |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| | | | | GBP | GBP | GBP |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Non-current assets | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Intangible assets | | | - | 14,396 | - |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Property, plant and equipment | | 48,680 | 109,103 | 99,769 |
+------------------------------------------------------+--+--------------+--------------+--------------+
| | | | | | | |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| | | | | 48,680 | 123,499 | 99,769 |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Current Assets | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Inventories | | | | 902,658 | 916,274 | 847,351 |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Trade and other receivables | | 242,840 | 318,195 | 617,636 |
+------------------------------------------------------+--+--------------+--------------+--------------+
| Cash and cash equivalents | | 1,504,783 | 1,418,143 | 1,356,886 |
+------------------------------------------------------+--+--------------+--------------+--------------+
| | | | | 2,650,281 | 2,652,612 | 2,821,873 |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Total assets | | | 2,698,961 | 2,776,111 | 2,921,642 |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Current liabilities | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Trade and other | | | 331,937 | 859,298 | 274,695 |
| payables | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| | | | 331,937 | 859,298 | 274,695 |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Non-current | | | - | - | - |
| liabilities | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Total liabilities | | | 331,937 | 859,298 | 274,695 |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Net assets | | | 2,367,024 | 1,916,813 | 2,646,947 |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| | | | | | | |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Equity | | | | | | |
+-------------+-----------+----------------------------+--+--------------+--------------+--------------+
| Share capital | | | 1,118,259 | 299,653 | 954,259 |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Share premium account | | 17,353,068 | 14,102,640 | 16,391,994 |
+------------------------------------------------------+--+--------------+--------------+--------------+
| Own shares held | | | (690,191) | (522,750) | (690,191) |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Share option | | | 316,537 | 235,587 | 268,852 |
| reserve | | | | | |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Translation reserve | | | (214,580) | - | (373,948) |
+-------------------------+----------------------------+--+--------------+--------------+--------------+
| Retained loss | | (15,516,069) | (12,198,317) | (13,904,019) |
+------------------------------------------------------+--+--------------+--------------+--------------+
| | | | | | | |
+-------------+-------------------------------------+--+--+--------------+--------------+--------------+
| Total equity being attributable to equity | | | 2,367,024 | 1,916,813 | 2,646,947 |
| holders of the parent | | | | | |
+-------------+-----------+-------------------------+--+--+--------------+--------------+--------------+
Consolidated Statement of Recognised Income and Expense
Six months ended 30 June 2009
+--------+--------+-------------------------+--+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six | six | ended 31 |
| | | | | months | months | December |
| | | | | ended | ended | 2008 |
| | | | | 30 June | 30 June | |
| | | | | 2009 | 2008 | |
+--------+--------+-------------------------+--+-------------+-------------+-------------+
| | | | | GBP | GBP | GBP |
+--------+--------+-------------------------+--+-------------+-------------+-------------+
| | | | | |
+-------------------------------------------+--+-------------+-------------+-------------+
| Exchange differences on translation of | | 159,368 | (29,386) | (373,948) |
| foreign operations | | | | |
+-------------------------------------------+--+-------------+-------------+-------------+
| Net income (expense) recognised directly | | 159,368 | (29,386) | (373,948) |
| in equity | | | | |
+-------------------------------------------+--+-------------+-------------+-------------+
| Loss for period | | | (1,612,050) | (2,263,788) | (3,999,326) |
+-----------------+-------------------------+--+-------------+-------------+-------------+
| Total recognised income and expense for | | | | |
| the period | | | | |
+-------------------------------------------+--+-------------+-------------+-------------+
| attributable to equity holders of the | | (1,452,682) | (2,293,174) | (4,373,274) |
| parent | | | | |
+--------+--------+-------------------------+--+-------------+-------------+-------------+
Consolidated Cash Flow Statement
Six months ended 30 June 2009
+--------+--------+-----+-----------+------+------+--+--+---+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six | six | ended 31 |
| | | | | months | months | December |
| | | | | ended | ended | 2008 |
| | | | | 30 June | 30 June | |
| | | | | 2009 | 2008 | |
+--------+--------+------------------------+----------------+-------------+-------------+-------------+
| | | | Notes | GBP | GBP | GBP |
+--------+--------+------------------------+----------------+-------------+-------------+-------------+
| Net cash outflow from operating | 3 | (1,287,671) | (2,676,313) | (5,609,327) |
| activities | | | | |
+------------------------------------------+----------------+-------------+-------------+-------------+
| Investing | | 4 | (1,200) | 44,758 | 62,877 |
| activities | | | | | |
+-----------------+------------------------+----------------+-------------+-------------+-------------+
| Financing | | | 4 | 1,125,062 | - | 2,776,518 |
| activities | | | | | | |
+-----------------+-----+-----------+-----------------------+-------------+-------------+-------------+
| Net (decrease)/increase in cash and cash equivalents | (163,809) | (2,631,555) | (2,769,932) |
+-----------------------------------------------------------+-------------+-------------+-------------+
| Cash and cash equivalents at beginning of period | | 1,356,886 | 4,079,534 | 4,079,534 |
+-------------------------------------------------------+---+-------------+-------------+-------------+
| Effect of foreign exchange rate changes | | | | 311,706 | (29,836) | 47,284 |
+-------------------------------------------------+--+--+---+-------------+-------------+-------------+
| Cash and cash equivalents at end of period | 1,504,783 | 1,418,143 | 1,356,886 |
+-----------------------------------------------------------+-------------+-------------+-------------+
| | | | | | | |
+--------+--------+-----+-----------+------+------+--+--+---+-------------+-------------+-------------+
Notes to Accounts
Six months ended 30 June 2009
1. Basis of preparation
The interim financial information has been prepared in accordance with the
IFRS accounting policies used in the statutory financial statements for the year
ended 31 December 2008.
These interim financial statements do not constitute statutory financial
statements within the meaning of section 435 of the Companies Act 2006. Results
for the six month periods ending 30 June 2009 and 30 June 2008 have not been
audited. The results for the year ended 31 December 2008 have been extracted
from the statutory financial statements of Cyan Holdings plc.
Statutory financial statements for the year ended 31 December 2008 are available
on the Company's website www.cyantechnology.com and have been filed with the
Registrar of Companies. The Company's auditors issued a report on those
financial statements that was unqualified and did not contain a statement under
section 498(2) or section 498(3) of the Companies Act 2006; however the
auditor's report was modified to emphasise the uncertainty around the company's
ability to continue as a going concern.
2.Loss per share
Basic and diluted loss per ordinary share has been calculated by dividing the
loss after taxation for the periods as shown in the table below.
+--------+--------+----------------+--------+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six months | | ended |
| | | | | ended | six | 31 |
| | | | | 30 June | months | December |
| | | | | 2009 | ended | 2008 |
| | | | | | 30 June | |
| | | | | | 2008 | |
+--------+--------+----------------+--------+-------------+-------------+-------------+
| | | | | GBP | GBP | GBP |
+--------+--------+----------------+--------+-------------+-------------+-------------+
| | | | | | | |
+--------+--------+----------------+--------+-------------+-------------+-------------+
| Losses (GBP) | | | 1,612,050 | 2,263,788 | 3,999,326 |
+-----------------+----------------+--------+-------------+-------------+-------------+
| Weighted average number of | | 597,095,436 | 139,626,315 | 239,626,314 |
| shares | | | | |
+----------------------------------+--------+-------------+-------------+-------------+
| |
| IAS33 "Earnings per share" requires presentation of diluted EPS when a company |
| could be called upon to issue shares that would decrease net profit or |
| increase net loss per share. For a loss making company with outstanding share |
| options, net loss per share would only be increased by the exercise of out of |
| the money options. Since it seems inappropriate to assume that option holders |
| would act irrationally and there are no other diluting future share issues, |
| diluted EPS equals basic EPS. |
+-------------------------------------------------------------------------------------+
| | | | | | | |
+--------+--------+----------------+--------+-------------+-------------+-------------+
3.Reconciliation of operating loss to operating cash flows
+---------+--------+----------------+--------------+--+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six | six | ended |
| | | | | months | months | 31 |
| | | | | ended | ended | December |
| | | | | 30 June | 30 June | 2008 |
| | | | | 2009 | 2008 | |
+---------+--------+-------------------------------+--+-------------+-------------+-------------+
| | | | | GBP | GBP | GBP |
+---------+--------+-------------------------------+--+-------------+-------------+-------------+
| Operating loss | | | (1,756,212) | (2,528,476) | (4,557,917) |
+------------------+-------------------------------+--+-------------+-------------+-------------+
| Adjustments for: | | | | | |
+------------------+-------------------------------+--+-------------+-------------+-------------+
| Depreciation of property, plant and equipment | | 44,520 | 30,718 | 67,100 |
+--------------------------------------------------+--+-------------+-------------+-------------+
| Amortisation of intangible assets | | - | 14,396 | 28,793 |
+--------------------------------------------------+--+-------------+-------------+-------------+
| Share-based payment expense | | 47,685 | 26,189 | 59,454 |
+--------------------------------------------------+--+-------------+-------------+-------------+
| Operating cash flows before movements in working | | (1,664,007) | (2,457,173) | (4,402,570) |
| capital | | | | |
+--------------------------------------------------+--+-------------+-------------+-------------+
| Increase in inventories | | (55,308) | (736,034) | (667,111) |
+--------------------------------------------------+--+-------------+-------------+-------------+
| Decrease/ (increase) in trade and other receivables | 374,734 | 185,030 | (114,411) |
+-----------------------------------------------------+-------------+-------------+-------------+
| Increase/ (decrease) in payables | | 56,921 | 155,075 | (429,528) |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Cash reduced by operations | | (1,287,660) | (2,853,102) | (5,613,620) |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Income taxes refunded | | - | 176,789 | 4,293 |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Interest paid | | (11) | - | - |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Net cash outflow from operating | | (1,287,671) | (2,676,313) | (5,609,327 |
| activities | | | | |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| | | | | | | |
+---------+--------+----------------+-----------------+-------------+-------------+-------------+
| | | | | | | |
+---------+--------+----------------+-----------------+-------------+-------------+-------------+
| 4.Analysis of cash flows | | | | |
| | | | | |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| | | | | Unaudited | Unaudited | Year |
| | | | | six | six | ended |
| | | | | months | months | 31 |
| | | | | ended | ended | December |
| | | | | 30 June | 30 June | 2008 |
| | | | | 2009 | 2008 | |
+---------+--------+----------------+-----------------+-------------+-------------+-------------+
| | | | | GBP | GBP | GBP |
+---------+--------+----------------+-----------------+-------------+-------------+-------------+
| Investing | | | | | |
| activities | | | | | |
+------------------+----------------+-----------------+-------------+-------------+-------------+
| Interest receivable and similar | | 1,085 | 139,239 | 92,885 |
| income | | | | |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Purchase of property, plant and | | (2,285) | (43,141) | (30,008) |
| equipment | | | | |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Net cash (outflow)/inflow | | (1,200) | 96,098 | 62,877 |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Financing | | | | | |
| activities | | | | | |
+------------------+----------------+-----------------+-------------+-------------+-------------+
| Proceeds on issue of shares | | 1,125,073 | - | 2,776,519 |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Interest paid | | (11) | (51,340) | (1) |
+-----------------------------------+-----------------+-------------+-------------+-------------+
| Net cash inflow | | | 1,125,062 | (51,340) | 2,776,518 |
+---------+--------+----------------+--------------+--+-------------+-------------+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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