TIDMETQ
RNS Number : 6523P
Energy Technique PLC
21 July 2010
Energy Technique Plc
("Energy Technique", "ETQ" or the "Company")
Preliminary Announcement 2010
21 July 2010
Chairman's statement
Headlines
· Weak market conditions with new commercial property construction
declining by over 50% compared with 2008
· Resulting sales fell to GBP6.54 million (2009: GBP7.75 million)
· Remained profitable through tight cost controls
· Cash absorbed by operations of GBP352,000 due to acquiring SIAS FM in
August 2009 (2009: cash generated of GBP457,000)
· Cash position at 31 March 2010 of GBP0.89 million (2009: GBP1.44 million)
· Strong net assets at 31 March 2010 of GBP2.50 million (2009: GBP2.47
million)
· Net assets equivalent to 7.5 pence per share
Introduction
The year ended 31 March 2010 was a most difficult trading period, characterised
by a more than 50% decline in the number of new commercial property construction
projects, resulting in much reduced demand for the Group's products and
services. Sales fell by 16% to GBP6.54m, but with tight cost control, I am
pleased to report the Group achieved a small profit before tax of GBP15,000.
The post acquisition integration of SIAS FM, the new maintenance business
acquired in August 2009, is complete and the business made a contribution to
Group operating profits.
Group trading performance
Group sales in the year ended 31 March 2010 fell to GBP6.54 million (2009:
GBP7.75 million) with a corresponding reduction in operating profit to GBP5,000
(2009: GBP243,000). After net finance income of GBP10,000 (2009: GBP12,000) the
Group profit before tax on Continuing Activities was GBP15,000 (2009:
GBP255,000). The Board regards this as a very acceptable trading result given
such a large decline in the markets the Group serves.
Diffusion Heating & Cooling ("Diffusion")
Diffusion is a market leader in the manufacture of premium quality fan coils and
commercial heating products to offices, hotels, banks and retail outlets.
Diffusion's unrivalled engineering and development expertise continues to
innovate highly energy efficient products offering sustainability and lower
capital costs. Products are distributed under both the Diffusion and Energy
Technique brand names and are recognised as highly engineered, quality products
providing leading edge performance and ultimate energy efficiency.
Diffusion has been particularly affected by the rapid decline in the number of
new commercial construction projects, with sales declining by 32% to GBP5.25
million. Whilst operating profit fell to GBP113,000 (2009: GBP413,000) the
impact of reduced sales was mitigated through a combination of tight cost
control and stable margins. Management reacted swiftly to the deteriorating
market conditions through a series of cost cutting measures, leading to a 19%
reduction in overheads compared with the previous year. The GBP300,000
investment in the new laser cutting machine is producing excellent returns by
maintaining stable selling margins in the face of raw material increases and
selling price pressure.
The largest project win was the supply of air handling units into the
prestigious One Hyde Park development in London. Diffusion now has the in house
technical skills to exploit this much larger UK air handling market estimated at
over GBP100m and it has secured follow on orders. Major fan coil projects
completed include City Inn Westminster, BBC London, St Pancras Chambers, Bank of
Tokyo, Queen Mary University, Ravensbourne College and Lockton Insurance. The
fan coil range has been broadened by a highly energy efficient and sustainable
270i unit using EC/DC motor technology, together with a competitively priced
Ambassador unit, offering sustainability for hotel applications.
Commercial heating products continued to be installed into sites operated by
blue chip customers including Marks & Spencer, Aldi, Primark, Arcadia Group,
Boots, Nike, Argos, Debenhams and Tesco. Diffusion was pleased to receive sole
national specification for the supply of air curtains, fan convectors and
ceiling ventilation units from Marks & Spencer and Aldi for projects in 2009/10.
SIAS FM
In August 2009, the Group purchased the nationwide building maintenance division
of SIAS Building Services LLP (in administration), now trading as SIAS FM, as a
supplier of heating and ventilation building maintenance services to hotels and
commercial buildings, with regional offices in Stoke-on-Trent, Keighley and
Basingstoke. SIAS FM provides both planned and reactive maintenance, together
with resulting small contract works. There is very little overlap of customers
with Diffusion and the Board believes this presents many cross selling
opportunities.
Sales from August 2009 to March 2010 were GBP1.29 million and the Board is
pleased the business produced an operating profit of GBP50,000. The Company has
invested heavily into SIAS FM with additional management, new offices in
Stoke-on-Trent and Keighley, replacing the vehicle fleet, together with engineer
development and training. A new state of the art maintenance IT platform from
TABS FM is currently being installed, so that SIAS FM has a strong
infrastructure to facilitate future growth. SIAS FM has a very experienced and
committed management team, who are eager to grow the SIAS FM brand.
Cash flow and capital expenditure
Cash outflow during the year amounted to GBP544,000, attributable to the costs
of acquiring SIAS FM and its subsequent working capital requirement, together
with the increased working capital needs of Diffusion. A planned increase in
stocks occurred at Diffusion, so that it could offer an advantage over
competitors of shorter delivery times. The Company retains healthy liquidity
with net cash balances at 31 March 2010 of GBP0.89 million (2009: GBP1.44m) and
a well funded balance sheet with net assets at 31 March 2010 of GBP2.50 million,
equivalent to 7.5 pence per share.
Dividends
The Board does not recommend payment of a dividend (2009: GBPnil). For the
present time, the Board believes it is in the Company's best interests to retain
its strong liquidity for future growth and expansion purposes.
Business strategy
The Board's strategy is to progressively reduce the dependence on fan coils and
commercial heating products by expanding the product range and having the more
secure recurring income streams enjoyed by property facilities management
companies. The addition of the air handling product range and the acquisition
of SIAS FM were the first steps in this strategy.
Current trading and prospects
Sales in the first quarter of the current financial year were below management's
expectations, but enquiry levels have started to improve. Notably, Diffusion
has just won an order for over GBP500,000 to supply its new range of energy
efficient fan coils into a leading edge "green" commercial building in Abu
Dhabi. Prospects for 2011 and beyond are improving following the recent project
releases from commercial property developers, but for the remainder of the
current financial year the Board expects a continuation of very challenging
trading conditions.
Walter K Goldsmith
Chairman
Contacts:
Walter Goldsmith, Chairman, Energy Technique Plc:
020 8783 0033
Rob Unsworth, Company Secretary, Energy Technique Plc:
020 8783 0033
Geoff Nash/Rose Herbert, finnCap Limited (Nominated Advisor):
020 7600 1658
Consolidated statement of comprehensive income
for the year ended 31 March 2010
+------------------------------------------+--------+---------+---------+
| | | 2010 | 2009 |
+------------------------------------------+--------+---------+---------+
| | Note | GBP000 | GBP000 |
+------------------------------------------+--------+---------+---------+
| CONTINUING OPERATIONS | | | |
+------------------------------------------+--------+---------+---------+
| Revenue | 4 | 6,540 | 7,750 |
+------------------------------------------+--------+---------+---------+
| Cost of sales | | (4,914) | (5,604) |
+------------------------------------------+--------+---------+---------+
| Gross profit | | 1,626 | 2,146 |
+------------------------------------------+--------+---------+---------+
| Distribution costs | | (1,202) | (1,480) |
+------------------------------------------+--------+---------+---------+
| Administration expenses | | (419) | (423) |
+------------------------------------------+--------+---------+---------+
| | | | |
+------------------------------------------+--------+---------+---------+
| Operating profit | | | |
+------------------------------------------+--------+---------+---------+
| Before exceptional items | | 5 | 305 |
+------------------------------------------+--------+---------+---------+
| Exceptional items | | - | (62) |
+------------------------------------------+--------+---------+---------+
| | | 5 | 243 |
+------------------------------------------+--------+---------+---------+
| Finance revenue | | 37 | 29 |
+------------------------------------------+--------+---------+---------+
| Finance costs | | (27) | (17) |
+------------------------------------------+--------+---------+---------+
| Profit before tax | | 15 | 255 |
+------------------------------------------+--------+---------+---------+
| Income tax charge | | - | (48) |
+------------------------------------------+--------+---------+---------+
| Profit for the year from Continuing | | 15 | 207 |
| Operations | | | |
+------------------------------------------+--------+---------+---------+
| | | | |
+------------------------------------------+--------+---------+---------+
| DISCONTINUED OPERATIONS | | | |
+------------------------------------------+--------+---------+---------+
| Loss for the year attributable to | | (12) | (36) |
| Discontinued Operations | | | |
+------------------------------------------+--------+---------+---------+
| | | | |
+------------------------------------------+--------+---------+---------+
| Total comprehensive income for the year | 4 | 3 | 171 |
+------------------------------------------+--------+---------+---------+
| | | | |
| Earnings per share: | | | |
+------------------------------------------+--------+---------+---------+
| Basic and diluted | 5 | 0.01p | 0.51p |
+------------------------------------------+--------+---------+---------+
| Basic and diluted from Continuing | 5 | 0.05p | 0.62p |
| Operations | | | |
+------------------------------------------+--------+---------+---------+
There are no other recognised gains or losses other than as recorded in the
consolidated statement of comprehensive income for the year.
Consolidated statement of financial position
at 31 March 2010
+------------------------------------------+--------+----------+----------+
| | | 2010 | 2009 |
+------------------------------------------+--------+----------+----------+
| | | GBP000 | GBP000 |
+------------------------------------------+--------+----------+----------+
| ASSETS | | | |
+------------------------------------------+--------+----------+----------+
| Non-current assets | | | |
+------------------------------------------+--------+----------+----------+
| Intangible assets | | 384 | - |
+------------------------------------------+--------+----------+----------+
| Plant and equipment | | 392 | 414 |
+------------------------------------------+--------+----------+----------+
| Deferred tax asset | | 305 | 305 |
+------------------------------------------+--------+----------+----------+
| Total non-current assets | | 1,081 | 719 |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| Current assets | | | |
+------------------------------------------+--------+----------+----------+
| Inventories | | 716 | 570 |
+------------------------------------------+--------+----------+----------+
| Trade and other receivables | | 1,428 | 1,003 |
+------------------------------------------+--------+----------+----------+
| Cash and cash equivalents | | 1,042 | 1,435 |
+------------------------------------------+--------+----------+----------+
| Total current assets | | 3,186 | 3,008 |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| Total assets | | 4,267 | 3,727 |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| LIABILITIES | | | |
+------------------------------------------+--------+----------+----------+
| Current liabilities | | | |
+------------------------------------------+--------+----------+----------+
| Trade and other payables | | (1,104) | (1,115) |
+------------------------------------------+--------+----------+----------+
| Current tax liabilities | | (313) | (142) |
+------------------------------------------+--------+----------+----------+
| Obligations under finance leases | | (91) | - |
+------------------------------------------+--------+----------+----------+
| Invoice discounting | | (151) | - |
+------------------------------------------+--------+----------+----------+
| Total current liabilities | | (1,659) | (1,257) |
+------------------------------------------+--------+----------+----------+
| Non-current liabilities | | | |
+------------------------------------------+--------+----------+----------+
| Obligations under finance leases | | (112) | - |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| Total liabilities | | (1,771) | (1,257) |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| Net assets | | 2,496 | 2,470 |
+------------------------------------------+--------+----------+----------+
| | | | |
+------------------------------------------+--------+----------+----------+
| EQUITY | | | |
+------------------------------------------+--------+----------+----------+
| Equity attributable to equity holders | | | |
+------------------------------------------+--------+----------+----------+
| Issued capital | | 7,773 | 7,750 |
+------------------------------------------+--------+----------+----------+
| Reserves | | 7,449 | 7,449 |
+------------------------------------------+--------+----------+----------+
| Retained earnings | | (12,726) | (12,729) |
+------------------------------------------+--------+----------+----------+
| Total equity | | 2,496 | 2,470 |
+------------------------------------------+--------+----------+----------+
Consolidated statement of changes in equity
for the year ended 31 March 2010
+-----------------------------+---------+---------+----------+----------+--------+
| | Share | Share | Reserves | Retained | Total |
| | capital | premium | | earnings | |
+-----------------------------+---------+---------+----------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------+---------+---------+----------+----------+--------+
| At 1 April 2008 | 4,351 | 3,399 | 7,449 | (12,885) | 2,314 |
+-----------------------------+---------+---------+----------+----------+--------+
| | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
| Comprehensive income | - | - | - | 171 | 171 |
+-----------------------------+---------+---------+----------+----------+--------+
| Treasury shares | - | - | - | (15) | (15) |
+-----------------------------+---------+---------+----------+----------+--------+
| Total comprehensive income | - | - | - | 156 | 156 |
+-----------------------------+---------+---------+----------+----------+--------+
| | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
| At 31 March 2009 | 4,351 | 3,399 | 7,449 | (12,729) | 2,470 |
+-----------------------------+---------+---------+----------+----------+--------+
| | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
| Comprehensive income | - | - | - | 3 | 3 |
+-----------------------------+---------+---------+----------+----------+--------+
| Recovery of previous share | - | 23 | - | - | 23 |
| issue expenses | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
| Total comprehensive income | - | 23 | - | 3 | 26 |
+-----------------------------+---------+---------+----------+----------+--------+
| | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
| At 31 March 2010 | 4,351 | 3,422 | 7,449 | (12,726) | 2,496 |
+-----------------------------+---------+---------+----------+----------+--------+
| | | | | | |
+-----------------------------+---------+---------+----------+----------+--------+
Consolidated cash flow statement
for the year ended 31 March 2010
+----------------------------------------------+-----+--------+---------+
| | | 2010 | 2009 |
| | | GBP000 | GBP000 |
+----------------------------------------------+-----+--------+---------+
| Cash flows from operating activities | | | |
+----------------------------------------------+-----+--------+---------+
| Profit before tax | | 3 | 219 |
+----------------------------------------------+-----+--------+---------+
| Net finance income | | (10) | (12) |
+----------------------------------------------+-----+--------+---------+
| Depreciation | | 75 | 59 |
+----------------------------------------------+-----+--------+---------+
| Operating income before changes in working | | 68 | 266 |
| capital | | | |
+----------------------------------------------+-----+--------+---------+
| | | | |
+----------------------------------------------+-----+--------+---------+
| (Increase)/decrease in inventories | | (136) | 244 |
+----------------------------------------------+-----+--------+---------+
| (Increase)/decrease in trade and other | | (425) | 354 |
| receivables | | | |
+----------------------------------------------+-----+--------+---------+
| Increase/(decrease) in trade and other | | 141 | (407) |
| payables | | | |
+----------------------------------------------+-----+--------+---------+
| Cash (absorbed by)/generated from operations | | (352) | 457 |
+----------------------------------------------+-----+--------+---------+
| | | | |
+----------------------------------------------+-----+--------+---------+
| Finance costs | | (27) | (17) |
+----------------------------------------------+-----+--------+---------+
| Net cash (absorbed by)/generated from | | (379) | 440 |
| operating activities | | | |
+----------------------------------------------+-----+--------+---------+
| | | | |
+----------------------------------------------+-----+--------+---------+
| Cash flows from investing activities | | | |
+----------------------------------------------+-----+--------+---------+
| Purchase of business and intellectual | | (390) | - |
| property | | | |
+----------------------------------------------+-----+--------+---------+
| Purchase of plant and equipment | | (53) | (340) |
+----------------------------------------------+-----+--------+---------+
| Capital expenditure financed after the year | | - | 275 |
| end with finance lease | | | |
+----------------------------------------------+-----+--------+---------+
| | | (443) | (65) |
+----------------------------------------------+-----+--------+---------+
| Disposal of plant and equipment | | 15 | 9 |
+----------------------------------------------+-----+--------+---------+
| Interest received | | 37 | 29 |
+----------------------------------------------+-----+--------+---------+
| Net cash used in investing activities | | (391) | (27) |
+----------------------------------------------+-----+--------+---------+
| | | | |
+----------------------------------------------+-----+--------+---------+
| Financing activities | | | |
+----------------------------------------------+-----+--------+---------+
| Treasury shares | | - | (15) |
+----------------------------------------------+-----+--------+---------+
| Recovery of previous share issue expenses | | 23 | - |
+----------------------------------------------+-----+--------+---------+
| Receipts under finance lease obligations | | 275 | - |
+----------------------------------------------+-----+--------+---------+
| Repayments under finance lease obligations | | (72) | - |
+----------------------------------------------+-----+--------+---------+
| Net cash received/(used) in financing | | 226 | (15) |
| activities | | | |
+----------------------------------------------+-----+--------+---------+
| | | | |
+----------------------------------------------+-----+--------+---------+
| Net (reduction)/increase in cash and cash | | (544) | 398 |
| equivalents | | | |
+----------------------------------------------+-----+--------+---------+
| Cash and cash equivalents at beginning of | | 1,435 | 1,037 |
| year | | | |
+----------------------------------------------+-----+--------+---------+
| Cash and cash equivalents at end of year | | 891 | 1,435 |
+----------------------------------------------+-----+--------+---------+
Notes
1. Adoption of new and revised standards
Standards and Interpretations effective in the current period
The following Standards were adopted by the Group:
· IAS 1 (Revised) 'Presentation of Financial Statements'
effective 1 January 2009, is effective for the year ended 31 March 2010. The
standard requires a change in the format and presentation of the Group's primary
statements but has no impact on reported profits or equity.
· IFRS 8 'Operating Segments' effective 1 January
2009, requires operating segments to be disclosed on the same basis as that used
for internal reporting. It has been implemented by the Group for the year ended
31 March 2010 and has had no impact on the results or net assets of the Group
but has resulted in revised disclosures.
The following Interpretations and Amendments to existing standards are effective
for the current year:
· IAS 32 and 'Financial Instruments: Presentation'
effective 1 January 2009
IAS 1 (Amendment)
· IAS 23 (Revised) 'Borrowing Costs' effective 1 January 2009
· IFRS 2 (Amendment) 'Share Based Payment' effective 1 January 2009
· IFRS 7 (Amendment) 'Financial Instruments: Disclosures' effective 1
January 2009
· IFRIC 13 'Customer Loyalty Programmes' effective 1
July 2008
· IFRIC 15 'Agreements for the Construction of Real
Estate' effective 1 January 2009
· IFRIC 16 'Hedges of a Net Investment in a Foreign
Operation' effective 1 October 2008
The adoption of these Interpretations has not led to any changes in the Group's
accounting policies.
Standards and Interpretations in issue not early adopted
At the date of authorisation of these financial statements, the following
Standards, Interpretations and Amendments to existing standards were in issue
but not yet effective for the reporting period of the Group:
· IFRS 3 (Revised) 'Business Combinations' effective 1 July 2009
· IAS 27 (Revised) 'Consolidated and Separate Financial
Statements' effective 1 July 2009
· IAS 32 (Amendment) 'Financial Instruments: Presentation' effective 1
February 2010
· IFRIC 17 'Distributions of Non-cash Assets to
Owners' effective 1 July 2009
· IFRIC 18 'Transfers of Assets from Customers'
effective 1 July 2009
The Directors anticipate that the adoption of these Standards, Interpretations
and Amendments to existing standards in future periods will have no material
impact on the financial statements of the Group.
2. Significant accounting policies
Statement of compliance
The financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union.
Basis of preparation
The financial statements have been prepared on the historic cost basis.
Basis of consolidation
The Group financial statements consolidate the accounts of the Company and all
its subsidiary undertakings, which are all made up to 31 March each year.
Goodwill
Goodwill represents the excess of the cost of acquisitions over the fair value
of the identifiable assets acquired (including intangible assets) of the
acquired business at the date of acquisition. Goodwill is recognized as an
asset and assessed for impairment at least annually. Any impairment is
recognised immediately in the statement of comprehensive income. The directors
consider that goodwill has an infinite useful life.
In accordance with the transitional rules of IFRS, goodwill that has been
written off to reserves cannot be restated or recycled, either on transition or
at any later date. On the subsequent disposal or termination of a previously
acquired business, the profit or loss on disposal or termination is calculated
after charging goodwill previously taken to reserves.
Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable. Revenue is reduced for estimated customer returns, rebates and
similar allowances.
Revenue from the sale of goods and services is recognised when all of the
following conditions are satisfied:
· the Group has transferred to the buyer the significant risks and rewards
of ownership;
· the Group retains neither continuing management involvement to the degree
usually associated with ownership, nor effective control over the goods and
services sold;
· the amount of revenue can be measured reliably;
· it is probable that the economic benefits associated with the transaction
will flow to the entity; and
· the costs incurred or to be incurred in respect of the transaction can be
measured reliably.
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable.
Operating leases
Payments under operating leases are charged to profits on a straight-line basis
over the life of the lease.
Research and development expenditure
Research expenditure is written off as incurred. Development expenditure is
generally written off as incurred unless it meets the recognition criteria of an
intangible asset, as defined in International Accounting Standard 38 (Intangible
Assets), in which case it would be recognised as an asset of the Group.
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the closing rate of exchange and differences taken to the
income statement. Transactions in foreign currencies are recorded using the
rate of exchange ruling at the date of the transaction.
Borrowing costs
Borrowing costs are recognised in the income statement in the period in which
they are incurred.
Retirement benefit costs
A number of the Group's permanent employees are members of Energy Technique's
Group Personal Pension Scheme, which is a defined contribution scheme (money
purchase). Contributions to this scheme are recognised as an expense when
employees have rendered service entitling them to the contributions.
Taxation
No corporation tax arises on the results for the year because of the
availability of losses brought forward.
Full provision is made for deferred taxation, using the liability method without
discounting, to take account of the temporary differences between the incidence
of income and expenditure for taxation and accounting purposes. Deferred tax
assets are recognised to the extent that they are considered recoverable in the
foreseeable future.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and
impairment charges.
Depreciation is provided on the cost of fixed assets on a straight-line basis in
order to write them down to estimated realisable value over their estimated
useful lives as follows:
Rate
Plant and equipment between 10% and 33% per annum
Inventories
Inventories have been valued at the lower of cost and net realisable value,
using the First In First Out (FIFO) cost basis, with due allowance made for
obsolete and slow moving items. For work in progress and finished stocks, cost
consists of direct materials, labour and appropriate works overheads.
Provisions
Obligations arising under onerous contracts are recognised and measured as
provisions. An onerous contract is considered to exist where the Group has a
contract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it.
Financial assets
Trade receivables and other receivables that have fixed or determinable payments
that are not quoted in an active market are classified as receivables, which are
measured at amortised cost using the effective interest method, less any
impairment. Interest income is recognised by applying the effective interest
rate, except for short term receivables when the recognition of interest would
be immaterial.
Financial liabilities and equity instruments issued by the Group
Debt and equity instruments are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangement.
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received, net of direct issue
costs.
3. Basis of preparation of financial statements
The financial information set out above does not constitute statutory financial
statements for the year ended 31 March 2010 or 2009 but is derived from those
financial statements. Statutory financial statements for the year ended 31
March 2009 have been delivered to the Registrar of Companies. Statutory
financial statements for the year ended 31 March 2010 were approved by the Board
of Directors on 20 July 2010, are audited and will be delivered to the Registrar
of Companies following the Annual General Meeting on 15 September 2010.
The Company's auditors, Milsted Langdon LLP, have reported on the 2010 and 2009
financial statements and those reports were:
(i) Not qualified,
(ii) Did not include a reference to any matters to which the auditors drew
attention to by way of emphasis without qualifying their report, and
(iii) Did not contain a statement under section 237(2) or 237(3) of the
Companies Act 1985 in respect of the financial statements for 2009, nor a
statement under Section 498(2) and 498(3) of the Companies Act 2006 in respect
of the financial statements for the year ended 31 March 2010.
4. Segmental analysis
4.1. Segment revenue and segment result
+--------------------------------+---------+--------+--------+--------+
| | Segment revenue | Segment result |
+--------------------------------+------------------+-----------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------------------------+---------+--------+--------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+---------+--------+--------+--------+
| CONTINUING OPERATIONS | | | | |
+--------------------------------+---------+--------+--------+--------+
| Diffusion before exceptional | 5,250 | 7,750 | 113 | 475 |
| items | | | | |
+--------------------------------+---------+--------+--------+--------+
| Exceptional items | - | - | - | (62) |
+--------------------------------+---------+--------+--------+--------+
| Diffusion after exceptional | 5,250 | 7,750 | 113 | 413 |
| items | | | | |
+--------------------------------+---------+--------+--------+--------+
| SIAS FM | 1,290 | - | 50 | - |
+--------------------------------+---------+--------+--------+--------+
| Central costs | - | - | (158) | (170) |
+--------------------------------+---------+--------+--------+--------+
| Revenue and operating profit | 6,540 | 7,750 | 5 | 243 |
+--------------------------------+---------+--------+--------+--------+
| Interest (net) | | | 10 | 12 |
+--------------------------------+---------+--------+--------+--------+
| Profit before tax | | | 15 | 255 |
+--------------------------------+---------+--------+--------+--------+
| Income tax charge | | | - | (48) |
+--------------------------------+---------+--------+--------+--------+
| Profit for the year Continuing | | | 15 | 207 |
| Operations | | | | |
+--------------------------------+---------+--------+--------+--------+
| DISCONTINUED OPERATIONS | | | | |
+--------------------------------+---------+--------+--------+--------+
| Packaged air conditioning and | - | - | (12) | (36) |
| Lifebreath | | | | |
+--------------------------------+---------+--------+--------+--------+
| Revenue and operating loss | - | - | (12) | (36) |
+--------------------------------+---------+--------+--------+--------+
| Interest | | | - | - |
+--------------------------------+---------+--------+--------+--------+
| Loss before tax | | | (12) | (36) |
+--------------------------------+---------+--------+--------+--------+
| Income tax charge | | | - | - |
+--------------------------------+---------+--------+--------+--------+
| Loss for the year Discontinued | | | (12) | (36) |
| Operations | | | | |
+--------------------------------+---------+--------+--------+--------+
| | | | | |
+--------------------------------+---------+--------+--------+--------+
| Consolidated revenue and | 6,540 | 7,750 | 3 | 171 |
| profit for the year | | | | |
+--------------------------------+---------+--------+--------+--------+
Revenue reported above represents revenue generated from external customers.
Inter-segment sales in the year amounted to GBP2,000 (2009: GBPnil). The Group
has one customer with revenue in excess of 10%. This customer, in the Diffusion
business segment, had revenue of GBP690,000 (2009: GBP254,000).
The net interest of GBP10,000 (2009: 12,000) comprises interest received of
GBP37,000 (2009: GBP29,000) from Central costs and interest paid of GBP27,000
(2009: GBP17,000) from Diffusion.
4.2. Segment assets and liabilities
+--------------------------------+---------+--------+--------+--------+
| | Assets | Liabilities |
+--------------------------------+------------------+-----------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------------------------+---------+--------+--------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+---------+--------+--------+--------+
| Diffusion | 2,488 | 2,303 | 1,396 | 1,226 |
+--------------------------------+---------+--------+--------+--------+
| SIAS FM | 907 | - | 340 | - |
+--------------------------------+---------+--------+--------+--------+
| Central costs | 872 | 1,424 | 35 | 31 |
+--------------------------------+---------+--------+--------+--------+
| | 4,267 | 3,727 | 1,771 | 1,257 |
+--------------------------------+---------+--------+--------+--------+
4.3. Other segment information
+--------------------------------+---------+--------+--------+--------+
| | | Additions to |
| | Depreciation | non-current |
| | | assets |
+--------------------------------+------------------+-----------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------------------------+---------+--------+--------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+---------+--------+--------+--------+
| Diffusion | 74 | 68 | 55 | 340 |
+--------------------------------+---------+--------+--------+--------+
| SIAS FM | 1 | - | 380 | - |
+--------------------------------+---------+--------+--------+--------+
| Central costs | - | - | 2 | - |
+--------------------------------+---------+--------+--------+--------+
| | 75 | 68 | 437 | 340 |
+--------------------------------+---------+--------+--------+--------+
4.4. Geographical segments
+------------------------+--------+--------+--------+--------+--------+--------+
| | | | Acquisition |
| | Revenue | Segment | of segment |
| | | assets | assets |
+------------------------+-----------------+-----------------+-----------------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+------------------------+--------+--------+--------+--------+--------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------+--------+--------+--------+--------+--------+--------+
| United Kingdom | 6,457 | 7,379 | 4,267 | 3,727 | 437 | 340 |
+------------------------+--------+--------+--------+--------+--------+--------+
| Rest of Europe | 83 | 371 | - | - | - | - |
+------------------------+--------+--------+--------+--------+--------+--------+
| | 6,540 | 7,750 | 4,267 | 3,727 | 437 | 340 |
+------------------------+--------+--------+--------+--------+--------+--------+
5. Earnings per share
+----------------------------------------------------+------------+------------+
| | 2010 | 2009 |
+----------------------------------------------------+------------+------------+
| | Pence | Pence |
+----------------------------------------------------+------------+------------+
| Basic and diluted earnings per share | | |
+----------------------------------------------------+------------+------------+
| Continuing Operations | 0.05 | 0.62 |
+----------------------------------------------------+------------+------------+
| Discontinued Operations | (0.04) | (0.11) |
+----------------------------------------------------+------------+------------+
| | 0.01 | 0.51 |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| The earnings and weighted average number of ordinary shares used in |
| the calculation of basic and diluted earnings per share are as |
| follows: |
+------------------------------------------------------------------------------+
| | GBP000 | GBP000 |
+----------------------------------------------------+------------+------------+
| Earnings used in the calculation of basic and | 3 | 171 |
| diluted earnings per share | | |
+----------------------------------------------------+------------+------------+
| Loss from Discontinued Operations | 12 | 36 |
+----------------------------------------------------+------------+------------+
| Earnings from Continuing Operations | 15 | 207 |
+----------------------------------------------------+------------+------------+
| | | |
+----------------------------------------------------+------------+------------+
| | No. | No. |
+----------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares in | 33,120,160 | 33,281,122 |
| issue | | |
+----------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares on a | 33,120,160 | 33,281,122 |
| diluted basis | | |
+----------------------------------------------------+------------+------------+
6. Posting of Annual Report and Financial Statements
The 2010 Annual Report and Financial Statements will be posted to shareholders
on 23 July 2010 and will be available to view at the Company's website
www.diffusion-group.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXXEAAPEEFF
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