TIDMCYAN
RNS Number : 6904D
Cyan Holdings Plc
28 March 2011
28 March 2011
Cyan Holdings plc
("Cyan or "the Company")
Preliminary Results
for the year ended 31 December 2010
Cyan Holdings plc (AIM: Cyan.L), the integrated system design
company delivering mesh based flexible wireless solutions for
lighting control, utility metering and industrial telemetry
announces its full year results for the twelve months ended 31(st)
December 2010.
Summary of key achievements
-- Substantial progress in adoption of Cyan lighting control
products made in Q4 of 2010
-- Initial order received for 10,000 units for our wireless
monitoring and control system for outdoor public lighting from
India
-- An initial order from China for 10,000 units for our wireless
monitoring and control system for outdoor public lighting, with an
initial project requirement of up to 200,000 units over the course
of the next 18 months
-- Memorandum of Understanding entered into to establish a
partnership with a large Indian business whose lighting division
has a contract to replace up to 375,000 street lights in one
City
-- Equity fundraisings of GBP2.7 million net demonstrating
significant investor confidence
Kenn Lamb, CEO of Cyan, commented:
"I am delighted with the progress that Cyan made in the final
quarter of 2010 and we have seen substantial momentum and upswing
in order enquiries in the first quarter of 2011. Despite a
difficult two years for the Group, I am now convinced that 2011
will be a major turning point for us. Our order book for lighting
control products is growing strongly, in particular from China and
India where we are increasingly well positioned with Utility
Companies and Government Departments considering our electricity
metering solutions.
For the first time in Cyan's trading history it is both mine and
the board's view that now is the right time and that we have the
right products and are engaged in the right markets. With each new
customer and with multiple new prospects engaging we are confident
that Cyan is now well positioned to deliver substantial shareholder
value."
www.cyantechnology.com
Enquiries:
Cyan Holdings plc Tel: +44 (0) 1954 234 400
Kenn Lamb, CEO Tel: +44 (0) 1954 234 400
Cyan Holdings plc
John Read, Chairman
Cenkos Securities plc Tel: +44 (0)20 7397 8900
Stephen Keys / Adrian Hargrave
Hansard Communications Ltd Tel: +44 (0)20 7245 1100
Adam Reynolds / Nicholas Nelson
Chairman's Statement
At the time of the last Annual Report, Cyan laid out its
strategic aim to become a major supplier of solutions for lighting
control, utility metering and industrial telemetry; and I am
pleased to report the company has taken great steps towards
reaching this goal in the first two of these markets in 2010.
Since that time the Company has shipped tens of thousands of
units to wireless utility metering customers around the world. Most
of these units were installed into large-scale trials. In the
second half of 2010 a number of customers indicated to the Company
that they were bidding for tenders of substantial quantity, and
already in 2011 Cyan is aware of two new tenders for wireless
electricity meters in excess of one million units each.
Cyan has developed technology and products that deliver cost
effective ready-to-deploy solutions. These allow established
lighting and utility metering manufacturers to easily enhance their
products to support remotely managed wireless networks of
street-lights or utility-meters. There is substantial growing
global demand for such wireless management networks and in recent
years Cyan has made significant investment and has gained extensive
expertise in designing, manufacturing and deploying such
networks.
Cyan has now evolved from developing and supplying just the
wireless communication components, to providing complete system
solutions, so much so that the Company is now better described as
an integrated system design company.
Cyan has recently succeeded in initiating a program of direct
engagement with a number of utility companies and government
departments, who are working to define the requirements for their
next generation wireless electricity meters. Cyan is supported in
this by a number of established meter manufacturers in that region
who have already committed to incorporate Cyan products into their
next generation wireless electricity meters, and wish to see Cyan's
mesh technology incorporated into any new national standard.
At the start of 2010 Cyan was well positioned having design-in
programs with a number of lighting manufacturers in several
countries. Now, at the beginning of 2011, we believe that Cyan's
position is considerably stronger with a number of leading
organisations specifying Cyan wireless lighting technology for
pilot programmes and production installations due in 2011. This is
in part the result of becoming a fully integrated system design
business and the efforts and increased reputation of the Company
within these regions.
The company announced an important initial order for wireless
monitoring and control of outdoor public lighting in China. The
initial order is for 10,000 modules, and installation has begun in
Q1 2011. The customer's initial project requires the eventual
replacement of 200,000 street lights in a single city and the
installation rate is expected to exceed 10,000 units per month by
Q4 2011. This customer is a large established Chinese lighting
manufacturer who has informed Cyan's management that it has already
won, or expects to win, contracts in three further cities.
Following this contract win and the satisfactory results of the
trial, the customer now plans to market Cyan controlled HID (High
Intensity Discharge) products across the whole of China through its
network of over 2,000 agents. Cyan is currently in negotiation with
the customer to further develop their HID lighting product by
tightening the integration between Cyan lighting control and the
other elements of the HID light to create a highly integrated and
lower total cost HID lighting solution.
As previously announced, the Company has also entered into a
partnership with a large lighting manufacturer in India, to replace
375,000 street lights. The partnership agreement gives the customer
access to Cyan server technology on condition of use of Cyan
lighting control products and the active marketing of the combined
solution to other cities. An initial order of 1,000 units has been
received to set up a demonstration facility of the combined
lighting control system. Cyan is also engaged with a range of other
customers primarily in India and China but also in Africa, Europe
and the USA that have completed or undertaken further trials during
the year.
Cyan is building on its key partnerships, particularly with
Future Electronics Inc, a top three worldwide electronic component
distributor with divisions focussed on metering and lighting
products. Future Electronics provides a global distribution network
for all Cyan products. During the year we have jointly participated
in a number of exhibitions and trade shows and Cyan has trained
many of their sales people with our products.
The board believes that the company is now well positioned to
capitalise on its focus in lighting and metering markets and that
2011 will see a significant upturn in order intake, which will
result in a substantial increase in revenues.
In September, the company successfully raised GBP1.8m net at
0.75p per share to provide working capital in this time of
strategic positioning. In addition to this, since year end, in
January 2011 the Company raised a further GBP895,000 net at 1.25p
per share for the same purpose.
For the year ended 31 December 2010 both operating costs and
R&D Costs were kept at a low level resulting in an operating
loss of GBP2, 954,055 (2009: GBP3,133, 135). The loss for the year
also remained constant at GBP2,648,116 (2009: GBP2, 652, 260). Cash
at year end was GBP1,484,437 (2009: GBP1,968,072).
John Read
Chairman
28(th) March 2011
Chief Executive's Statement
Kenn Lamb, CEO of Cyan, commented:
I am delighted with the progress that Cyan made in the final
quarter of 2010 and we have seen substantial momentum and upswing
in order enquiries in the first quarter of 2011. Despite a
difficult two years for the Group, I am now convinced that 2011
will be a major turning point for us.
Our business has two principal product groups:
-- Lighting control and monitoring
-- Utility meter monitoring and control
Lighting control and monitoring (CyLux)
Cyan has developed a fully integrated wireless end-to-end system
for public lighting such as; street lights, tunnels, highways,
industrial parks and public locations, which is capable of dimming
three different types of light; HPS, HID and LED. We are confident
that the combination of features in our system makes a unique
system solution, and we already have manufacturers of the
electronic drivers for these lights producing prototype versions
incorporating Cyan wireless control; 'Cyan Inside'. CyLux allows
city authorities to remotely set lighting profiles: turning on /
off and dimming at preset times for optimised lighting intensity
through evening, late night and morning to maximise power saving.
Actual power saving is measured and reported by Cyan's system, a
very popular feature with customers as many of them are financially
incentivised based on the actual energy saving delivered. In
addition to the above functionality CyLux can accurately monitor
lamp status and proactively identify maintenance or lamp repair
requirements with interactive maps showing lamp locations and
status.
The increasing cost of energy and limitations in generating
capacity within the developing world are significant factors
restraining the potential levels of future economic growth in these
countries. Accordingly, energy efficiency has become a major focus
for the governments of developing nations. As a result of this
Governmental pressure we are experiencing a substantial increase in
enquiries from both China and India. This began towards the end of
2010 and the momentum has increased substantially during the first
quarter of 2011. Not only has our order book increased
dramatically, we are also awaiting the results of a number of
tenders that our customers and prospective customers are involved
in.
Electricity and gas meter reading (CyLec & CyGas)
Over the past three years Cyan has been at the forefront of the
development of wireless mesh network solutions for electricity and
gas metering. Cyan has chosen to utilise radio frequencies suited
for these applications which will penetrate buildings and in the
case of India and China have been specifically allocated for this
purpose. Gas metering solutions require battery operation and Cyan
has established a USP with wireless mesh networking meters
operating for years from AA batteries, a technology that is also
directly applicable to water metering. We are now seeing a
substantial increase in enquiries and new tender requirements for
these products within India and China. Multiple meter manufacturers
have adopted Cyan wireless meter solutions and Cyan's integrated
mesh metering solution is now well positioned influential
electricity boards.
A primary driver for wide deployment of remotely monitored and
managed metering systems with prepayment and tamper alert
capability is to address the problem that within the developing
world it has become very difficult to accurately check usage and
enforce payment. Cyan's metering solutions branded CyLec and CyGas
have been developed over the last two years to directly address
these problems, and contain many features developed and proven in
field trials in collaboration with meter manufacturers. As utility
companies become increasingly aware of the new capabilities of
Cyan's metering solutions we expect, and are already seeing, new
tender requirements reflecting these features. We are currently in
discussions at high levels and are aware of tender proposals within
a number of substantial electricity and gas utility companies in
India and China and I am confident that during the next twelve
months we will receive significant orders for Cyan metering
solutions.
For the first time in Cyan's trading history it is my and the
board's view that now is the right time for Cyan, that we have
chosen the right markets, and that we have developed the right
products. The level of customer orders and positive feedback makes
us confident that we are well positioned to deliver substantial
shareholder value as our revenues track the pace of growth of these
markets. The business is now very well positioned to grow
substantially and I would like to take this opportunity to thank
all of our staff and my board for their efforts and diligence, and
our shareholders for their patience and support in making Cyan a
business that we will all be proud of.
Kenn Lamb
Chief Executive Officer
28(th) March 2011
Consolidated income statement
For the year ended 31 December 2010
2010 2009
-------------------------------- ------------- ------------
GBP GBP
-------------------------------- ------------- ------------
Continuing operations
-------------------------------- ------------- ------------
Revenue 139,047 95,569
-------------------------------- ------------- ------------
Cost of sales (96,326) (62,897)
-------------------------------- ------------- ------------
Gross profit 42,721 32,672
-------------------------------- ------------- ------------
Operating costs (1,259,073) (1,633,138)
-------------------------------- ------------- ------------
Research and development costs (1, 737,703) (1,532,669)
-------------------------------- ------------- ------------
Operating loss (2,954,055) (3,133,135)
-------------------------------- ------------- ------------
Investment revenue 1,487 1,639
--------------------------------
Finance costs (85) (11)
-------------------------------- ------------- ------------
Loss before tax (2,952,653) (3,131,507)
-------------------------------- ------------- ------------
Tax 304,537 479,247
-------------------------------- ------------- ------------
Loss for the year (2,648,116) (2,652,260)
-------------------------------- ============= ============
Loss per share (pence)
--------------------------------
Basic (0.4) (0.5)
-------------------------------- ============= ============
Diluted (0.4) (0.5)
-------------------------------- ============= ============
Consolidated Statement of Comprehensive
Income For the year ended
31 December 2010 2010 2009
-------------------- ------------ ------------
GBP GBP
-------------------- ------------ ------------
Exchange
differences on
translation of
foreign
operations (66,140) 145,834
-------------------- ------------ ------------
Loss for the year (2,648,116) (2,652,260)
-------------------- ------------ ------------
Total comprehensive
income for the
period (2,714,256) (2,506,426)
-------------------- ============ ============
--------------------------------------------------
Consolidated balance sheet
At 31 December 2010
2010 2009
GBP GBP
---------------------------------------- ------------- -------------
Non-current assets
----------------------------------------
Property, plant and equipment 29,114 39,729
----------------------------------------
Current assets
---------------------------------------- ------------- -------------
Inventories 872,923 893,087
---------------------------------------- ------------- -------------
Trade and other receivables 411,848 569,601
---------------------------------------- ------------- -------------
Cash and cash equivalents 1,484,437 1,968,072
---------------------------------------- ------------- -------------
2,769,208 3,430,760
---------------------------------------- ------------- -------------
Total assets 2,798,322 3,470,489
---------------------------------------- ============= =============
Current liabilities
---------------------------------------- ------------- -------------
Trade and other payables 283,872 229,332
---------------------------------------- ------------- -------------
283,872 229,332
---------------------------------------- ------------- -------------
Total liabilities 283,872 229,332
---------------------------------------- ------------- -------------
Net assets 2,514,450 3,241,157
---------------------------------------- ============= =============
Equity
---------------------------------------- ------------- -------------
Share capital 1,847,666 1,309,565
---------------------------------------- ------------- -------------
Share premium account 20,378,625 19,026,290
---------------------------------------- ------------- -------------
Own shares held (690,191) (690,191)
---------------------------------------- ------------- -------------
Share option reserve 476,999 379,886
---------------------------------------- ------------- -------------
Translation reserve (294,254) (228,114)
---------------------------------------- ------------- -------------
Retained earnings (19,204,395) (16,556,279)
---------------------------------------- ------------- -------------
Total equity being equity attributable
to equity holders of the parent 2,514,450 3,241,157
---------------------------------------- ============= =============
Consolidated statement of changes in equity
at 31 December 2010
Share
Share Share Own Option Translation Retained
Capital Premium shares Reserve Reserve Losses Total
GBP GBP held GBP GBP GBP GBP Equity GBP
Bal at 31
December 2008 954,259 16,391,994 (690,191) 268,852 (373,948) (13,904,019) 2,646,947
---------- ----------- ---------- -------- ------------ ------------- ------------
Loss for the
year - - - - - (2,652,260) (2,652,260)
Other
comprehensive
income for the
year - - - - 145,834 - 145,834
---------- ----------- ---------- -------- ------------ ------------- ------------
Total
comprehensive
income for the
year - - - - 145,834 (2,652,260) (2,506,426)
Issue of share
capital 355,306 2,634,296 - - - - 2,989,602
Credit to
equity for
share options - - - 111,034 - - 111,034
---------- ----------- ---------- -------- ------------ ------------- ------------
Bal at 31
December 2009 1,309,565 19,026,290 (690,191) 379,886 (228,114) (16,556,280) 3,241,157
---------- ----------- ---------- -------- ------------ ------------- ------------
Loss for the
year - - - - - (2,648,116) (2,648,116)
Other
comprehensive
income for the
year - - - - (66,140) - (66,140)
---------- ----------- ---------- -------- ------------ ------------- ------------
Total
comprehensive
income for the
year (66,140) (2,648,116) (2,714,256)
Issue of share
capital 538,101 1,352,335 - - - - 1,890,436
Credit to
equity for
share options - - - 97,113 - - 97,113
---------- ----------- ---------- -------- ------------ ------------- ------------
Bal at 31
December 2010 1,847,666 20,378,625 (690,191) 476,999 (294,254) (19,204,395) 2,514,450
---------- ----------- ---------- -------- ------------ ------------- ------------
Consolidated cash flow statement
For the year ended 31 December 2010
2010 2009
-------------------------------------------- ------------ ------------
GBP GBP
-------------------------------------------- ------------ ------------
Net cash from operating activities (2,293,931) (2,400,080)
-------------------------------------------- ------------ ------------
Investing activities
-------------------------------------------- ------------ ------------
Interest received 1,487 1,639
-------------------------------------------- ------------ ------------
Purchases of property, plant and equipment (15,126) (10,927)
-------------------------------------------- ------------ ------------
Net cash from investing activities (13,639) (9,288)
-------------------------------------------- ------------ ------------
Financing activities
-------------------------------------------- ------------ ------------
Interest paid (85) (11)
-------------------------------------------- ------------ ------------
Proceeds on issue of shares 2,035,913 3,207,633
-------------------------------------------- ------------ ------------
Share issue costs (145,477) (218,031)
-------------------------------------------- ------------ ------------
Net cash from financing activities 1,890,351 2, 989,591
-------------------------------------------- ------------ ------------
Net (decrease)/increase in cash and
cash equivalents (417,219) 580,223
-------------------------------------------- ------------ ------------
Cash and cash equivalents at beginning
of year 1,968,072 1,356,886
--------------------------------------------
Effect of foreign exchange rate changes (66,416) 30,963
--------------------------------------------
Cash and cash equivalents at end of
year 1, 484,437 1,968,072
-------------------------------------------- ============ ============
Notes to the Financial Information
For the year ended 31 December 2010
1. General information
Cyan Holdings plc is a company incorporated in the England and
Wales under the Companies Act 2006. The address of the registered
office is Cyan Holdings plc, Buckingway Business Park, Swavesey
CB24 4UQ.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 December 2010
or 2009, but is derived from those accounts. Statutory accounts for
2009 have been delivered to the Registrar of Companies and those
for 2010 will be delivered following the company's annual general
meeting. The auditors have reported on those accounts: their
reports were unqualified and did not contain statements under s498
(2) or (3) Companies Act 2006 or equivalent preceding legislation
but did contain an emphasis of matter concerning the uncertainties
around the Group's ability to continue as a going concern. While
the financial information included in this preliminary announcement
has been computed in accordance with International Financial
Accounting Standards (IFRS), this announcement itself does not
contain sufficient information to comply with IFRS. The company
expects to publish full financial statements that comply with IFRS,
a copy of which will be posted to the shareholders.
The financial statements were approved by the Board of Directors
on 25 March 2011 and authorised for issue. The Group's specific
IFRS accounting policies can be found in the 2009 annual
report.
Going concern
The directors have prepared a business plan and cash flow
forecast for the period to 31 December 2012. The forecast contains
certain assumptions about the level of future sales and the level
of gross margins and also identified the need for additional
finance to fund working capital within the next six months. These
assumptions are the directors' best estimate of the future
development of the business.
The directors acknowledge that the Group is trading in a
difficult economic environment and in markets that are new to the
Group. This may impact both the Group's ability to generate
positive cashflow and to raise new finance. There is a significant
risk that the level of sales achieved is materially lower than the
level forecast or at materially lower margins. The directors have
taken steps to satisfy themselves about the robustness of sales
forecasts but acknowledge that the timing of customer orders in the
Group's target markets is inherently uncertain. In addition, the
directors have been in communication with a number of potential
investors, including current shareholders, who have expressed
interest in providing the necessary funding upon evidence of firm
sales orders. There does remain a significant risk that the
required level of funding will not be received in the necessary
timescales or at all. The directors are of the opinion that this
business plan is achievable. On this basis, the directors have
assumed that the company is a going concern.
There is a material uncertainty related to the assumptions
described above which may cast significant doubt on the Group's
ability to continue as a going concern and, therefore, it may be
unable to realise its assets and discharge its liabilities in the
normal course of business. The financial statements do not include
the adjustments that would result if the Group was unable to
continue as a going concern. In the event the Group ceased to be a
going concern, the adjustments would include writing down the
carrying value of assets, including inventories, to their
recoverable amount and providing for any further liabilities that
might arise.
2. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings
2010 2009
------------------------------------------------- -------- -------------
GBP GBP
------------------------------------------------- -------- -------------
Earnings for the purposes of basic
earnings per share being net loss
attributable to equity holders of
the parent
-------------------------------------------- ----
2,648,116 2,652,260
------------------------------------------- ============== =============
Number of shares
2010 2009
------------------- ------------------ ------------
No. No.
------------------- ------------------ ------------
Weighted average number of ordinary
shares for the purposes of basic
and diluted earnings per share 751,804,821 528,453,250
------------------------------------ -------------- ============ ============
3. Share capital
2010 2009
------------------------------------------ -------------- ------------
number number
------------------------------------------
Authorised:
------------------------------------------
Ordinary shares of 0.2 pence each 1,500,000,000 800,000,000
------------------------------------------ ============== ============
2010 2009
------------------------------------------
GBP GBP
------------------------------------------
Issued and fully paid:
------------------------------------------
923,832,983 (2009: 654,782,659) ordinary
shares of 0.2 pence each 1,847,666 1,309,565
------------------------------------------ ============== ============
4. Notes to the consolidated cash flow statement
2010 2009
----------------------------------------------- ------------ ------------
GBP GBP
--------------------------------------------- ------------ ------------
Operating loss for the year (2,954,055) (3,133,135)
--------------------------------------------- ------------ ------------
Adjustments for:
--------------------------------------------- ------------ ------------
Depreciation of property, plant and
equipment 26,017 62,232
--------------------------------------------- ------------ ------------
Share-based payment expense 97,113 111,034
--------------------------------------------- ------------
Operating cash flows before movements in
working capital (2,830,925) (2,959,869)
--------------------------------------------- ------------ ------------
(Increase)/decrease in inventories 20,164 (45,734)
--------------------------------------------- ------------ ------------
(Increase)/decrease in receivables (17,038) 48,035
---------------------------------------------
Increase/(decrease) in payables 54,540 (45,363)
--------------------------------------------- ------------ ------------
Cash reduced by operations (2,773,259) (3,002,931)
--------------------------------------------- ------------ ------------
Income taxes received 479,328 602,851
---------------------------------------------
Net cash outflow from operating activities (2,293,931) (2,400,080)
--------------------------------------------- ------------ ------------
Cash and cash equivalents (which are presented as a single class
of assets on the face of the balance sheet) comprise cash at bank
and other short-term highly liquid investments with maturity of
three months or less.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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