RNS Number:3693T
Future Internet Technologies PLC
21 March 2007
Embargoed for 7.00am, 21 March 2007
Future Internet Technologies Plc (the "Company" or "FIT")
Interim Results for the six months ended 31 December 2006 and
Appointment of Chief Executive
The Company is pleased to report results for the six months ended 31 December
2006, the appointment of a new Chief Executive and an update on the performance
of the business following the period end.
Highlights
* Results for the period in line with previously stated expectations
* Robert Marcus joins as Chief Executive with extensive international
technology sector experience
* Paul Gratton reverts to Executive Chairman role
* Continued strong performance from core Artilium business, post period-end
* International roll-out progressing with first sale achieved in US
Commenting, Paul Gratton, said:
"We are now entering a new phase of growth for the business.
We have continued to see strong performance from Artilium and our planned sales
expansion outside the company's core market of the Benelux region is on track,
as evidenced by our first sale achieved in the US.
We are also delighted by the appointment of Robert Marcus as Chief Executive.
His extensive experience in the technology sector, including most recently nine
years at Microsoft, specialising latterly in international M&A, as well as his
experience as a leader of emerging technology businesses, will bring real value
to FIT."
Enquiries:
Future Internet Technologies plc Via Financial Dynamics
Paul Gratton, Executive Chairman
Tony Lynch, Finance Director
Financial Dynamics Tel: 020 7831 3113
Harriet Keen/Matt Dixon
Future Internet Technologies Plc (the "Company" or "FIT")
Interim Results for the six months ended 31 December 2006 and
Appointment of Chief Executive
CHAIRMAN'S STATEMENT
Introduction
The results for the six months ended 31 December 2006 reflect a period of
significant transition for the Company to position our business to take
advantage of the growing demand for voice integration into multiple business
applications.
Today, our core business is focused on the emerging market of providing Shared
Service Delivery Platform services for the telecoms industry and internet
service providers. It supplies hardware and software as well as consultancy
services. It has considerable experience in this area and, in conjunction with
its partnership network, has already established installations in more than ten
countries across Europe.
Following the period end, the Company successfully completed a placing and
capital reorganisation and its shares were re-admitted to trading on AIM on 8
January 2007.
The results for the period are in line with our previously stated expectations.
Update on performance
Following the completion of our acquisition of the remaining 51% of Artilium
N.V. ("Artilium") on 8 January 2007, we have continued to see strong performance
from the business and our planned sales expansion outside the company's core
market of the Benelux region is on track.
We now have customers in Benelux, France, Germany, the UK and the US, among
others. Our new US channel continues to develop well and we have established
strong commercial relationships with industry partners there. We are also
progressing opportunities in new markets such as North Africa and Central
America.
We will continue to develop relationships with existing clients including a
number of Tier 1 telecommunications operators and new partnerships with global
system integration groups.
In addition, as announced in January 2007, we are planning to enter a new market
offering voice solutions through "Hosting Companies" as the "Software as a
Service" industry trend continues to gather pace. We believe this has the
potential to provide a significant, additional revenue opportunity from the
resale of voice minutes and are pleased to report that our plans in this area
are progressing well.
To this end, we will today complete the acquisition of a minority stake in the
Seattle based company, Chinook Hosting Corporation ("Chinook"). Chinook was
founded in 2006 by technology professionals with experience in developing,
deploying and hosting Microsoft technologies. Its vision is to create a Redmond
/Seattle-based hosting company that collaborates closely with Microsoft and
technology partners to bring a suite of products and services to market that are
easy to use, easy to sell, cutting edge and operationally stable. FIT paid
approximately #300,000 in cash for a 31% stake. In addition, FIT has the right
to acquire majority control of Chinook at a future date in certain prescribed
circumstances. As a result of the transaction, FIT will have representation on
the Chinook board.
This acquisition provides us with ready access to the US hosting market and
represents a major step ahead for our new voice solutions business. In
addition, Chinook will also provide a platform for further sales for Artilium in
the US.
We are entering a new phase of growth for the business and, assuming the current
trend continues, we remain confident that we will achieve our goal of growing
Artilium's revenue by over 50% to support the underlying growth in Artilium's
profitability for the year ending 30 June 2007.
Appointment of Chief Executive
As a significant step towards achieving that goal, we are delighted to announce
the appointment of Robert Harris Marcus, 45, as Chief Executive of FIT, with
immediate effect.
He brings to the position a strong record of corporate leadership and strategic
thinking, particularly in the field of unified communications. Robert is a
seasoned leader of emerging technology businesses. He joins FIT after nine years
at Microsoft, where he served most recently as a director on the company's elite
mergers and acquisitions team. Robert is a thought-leader in unified
communications and voice-data convergence and was responsible for both areas at
Microsoft. As a Solution CEO at Microsoft, he was responsible for a portfolio of
communications and collaborations solutions, including the highly successful
Intranet Solution that generated an estimated $100 million worldwide. He served
as Director of Strategic Business Development and Communications in Microsoft's
worldwide partner group (the division responsible for 97% of company revenue),
and led a specialist sales organisation 500+ strong in the same division.
Before joining Microsoft Robert was Chief Executive of ConnectSoft, a pioneer in
unified communications; General Manager of PICIS, an innovator in critical-care
software and the Microsoft go-to partner that helped break UNIX dominance in
healthcare; President of IMT, an emergency medical device company he founded;
and European Director of ADL a medical laser systems company.
There are no further details to be disclosed under Rule 17 Schedule Two
paragraph (g) of the AIM Rules in relation to Robert Marcus.
Board
Executive Director Tom Casaer steps down from the Board with immediate effect
but will continue to serve as a key member of the management team as Chief
Marketing Officer for the Company.
Richard Armstrong has resigned as non-Executive Director of FIT and leaves the
Company with immediate effect. We are very grateful to Richard for his hard
work over the last number of years and wish him every success for the future.
The board is currently undertaking a search to appoint two new Non-Executive
Directors as soon as possible.
Financial Results
As anticipated, the Company reported a loss from continuing operations for the
six month period ended 31 December 2006 of #1.4 million (six months ended 31
December 2005: loss of #452,000). After stripping out non-recurring corporate
activity costs of #0.5 million, the company's underlying operating loss for the
period was #0.9 million.
The Company also reported a loss of a further #1.33 million for discontinued
operations related to the operating costs prior to disposal and the loss on
disposal of the consumer branded "Unified Communication Service" business,
which, as previously announced, was sold on 11 September 2006.
We are encouraged by the progress that we have seen in the third quarter and
expect that FIT (as enlarged by the Artilium acquisition) will, consistent with
our previously stated expectations, incur a small overall loss for the year.
This loss will be prior to what we estimate will total #2 million of one-off
costs for the full year due principally to the discontinued businesses and
professional fees relating to corporate transactions incurred in the first half,
described above.
Paul Gratton
Chairman
FUTURE INTERNET TECHNOLOGIES PLC
INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
CONSOLIDATED INCOME STATEMENT
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2006 2005 2006
(Restated)
Unaudited Unaudited Audited
#'000 #'000 #'000
Continuing operations
Revenue 1,712 - 612
Cost of sales (900) - (56)
-------------- ------------ ------------
Gross profit 812 - 556
Administrative expenses (2,339) (489) (2,428)
Other operating expenses - - (6)
-------------- ------------ ------------
Operating loss (1,527) (489) (1,878)
Investment revenues 45 37 135
Other gains and losses - - (698)
Finance costs (5) (349)
-------------- ------------ ------------
Loss before tax (1,487) (452) (2,790)
Tax 44 - (152)
-------------- ------------ ------------
Loss for the period from continuing
operations (1,443) (452) (2,942)
============== ============ ============
Discontinued operations
Loss for the period from discontinued
operations (1,337) - (981)
-------------- ------------ ------------
Loss for the period (2,780) (452) (3,923)
============== ============ ============
Attributable to:
Equity holders of parent (2,641) (452) (3,159)
Minority Interest (139) - (764)
-------------- ------------ ------------
(2,780) (452) (3,923)
============== ============ ============
CONSOLIDATED INCOME STATEMENT (continued)
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
Note 2006 2005 2006
(Restated)
Loss per share in pence from
continuing operations (3) (0.67) (0.92) (1.98)
============== ============ ============
Loss per share in pence from
discontinued operations (3) (0.69) - (0.88)
============== ============ ============
Total Loss per share in pence (3) (1.36) (0.92) (2.86)
============== ============ ============
FUTURE INTERNET TECHNOLOGIES PLC
INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
CONSOLIDATED BALANCE SHEET
31 Dec 31 Dec 30 June
2006 2005 2006
Unaudited Unaudited Audited
Note #'000 #'000 #'000
Non-current assets
Goodwill 2,697 - 2,697
Intangible assets 808 - 837
Property, plant and equipment 496 - 170
Deferred tax asset 161 - 119
Investments - 18 -
-------------- ------------ ------------
4,162 18 3,823
-------------- ------------ ------------
Current assets
Inventories 21 - 118
Trade and other receivables 7,395 53 1,925
Cash at bank and in hand 1,075 8,329 1,911
-------------- ------------ ------------
8,491 8,382 3,954
Total assets 12,653 8,400 7,777
============== ============ ============
Current liabilities
Trade and other payables 2,486 13 2,849
Obligations under finance leases - - 4
Provisions 410 - 425
-------------- ------------ ------------
2,896 13 3,278
-------------- ------------ ------------
Non-current liabilities
Deferred tax liabilities 140 - 180
-------------- ------------ ------------
Total liabilities 3,036 13 3,458
============== ============ ============
Net assets 9,617 8,387 4,319
============== ============ ============
CONSOLIDATED BALANCE SHEET (continued)
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
Note
Equity
Called up share capital (4) 2,452 1,761 1,769
Share premium account 16,385 8,940 9,033
Capital redemption reserve 4,493 4,493 4,493
Option to acquire minority interest (1,611) - (1,611)
Translation Reserve 249 - 2
Share warrant reserve 336 336 336
Profit and loss account (12,629) (7,143) (9,849)
-------------- ------------ ------------
Equity attributable to equity holders
of parent 9,675 8,387 4,173
Minority Interest (58) - 146
Total equity 9,617 8,387 4,319
============== ============ ============
Total liabilities and equity 12,653 8,400 7,777
============== ============ ============
FUTURE INTERNET TECHNOLOGIES PLC
INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2006 2005 2006
Unaudited Unaudited Audited
Notes #'000 #'000 #'000
Net cash used in operating activities (5) (8,286) (204) (1,732)
Investing activities
Interest received 44 37 135
Sale of investments - - 21
Purchases of property, plant and equipment (541) - (34)
Purchase of investments - - (691)
Acquisition of subsidiary - - (4,370)
---------- ---------- ----------
Net cash (used in)/from investing
Activities (497) 37 (4,939)
---------- ---------- ----------
Financing activities
Repayments of obligations under
finance lease - - (5)
Proceeds on issue of shares 8,035 7,944 8,046
---------- ---------- ----------
Net cash from financing activities 8,035 7,944 8,041
---------- ---------- ----------
Net increase in cash and cash
equivalents (748) 7,777 1,370
Cash and cash equivalents at
beginning of period 1,911 552 552
Effect of foreign exchange rate changes (88) - (11)
---------- ---------- ----------
Cash and cash equivalents at
end of period 1,075 8,329 1,911
============== ============ ============
FUTURE INTERNET TECHNOLOGIES PLC
INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
NOTES TO THE CONSOLIDATED ACCOUNTS
1. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs).
The financial statements have also been prepared in accordance with IFRSs
adopted by the European Union and therefore comply with Article 4 of the EU IAS
Regulation.
The financial statements have been prepared on the historical cost basis.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and the entity controlled by the Company (its subsidiary being
Artilium). Control is achieved where the Company has the power to govern the
financial and operating policies of an investee entity so as to obtain benefits
from its activities.
Minority interests in the net assets of consolidated subsidiaries are identified
separately from the Group's equity therein. Minority interests consist of the
amount of those interests at the date of the original business combination and
the minority's share of changes in equity since the date of the combination.
Losses applicable to the minority in excess of the minority's interest in the
subsidiary's equity are allocated against the interests of the Group except to
the extent that the minority has a binding obligation and is able to make an
additional investment to cover the losses.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
2. Discontinued Activities
During the period, the Company disposed of its retail unified communication
operation. Trading activity and cashflows relating to this discontinued
operation have been separately disclosed on the face of the Income Statement and
notes to the Cashflow Statement for the six months ended 31 December 2006.
Comparatives have also been restated to reflect the discontinued operation.
3. Loss per share
The company is currently loss making and therefore the effect of the warrants on
issue is anti-dilutive. As a result, diluted earnings per share is the same as
basic earnings per share.
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2006 2005 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Loss
Loss for the purposes of basic loss per share
being net loss attributable to equity holders of
the parent (2,641) (452) (3,159)
============== ============ ============
Number Number Number
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per share 193,942,290 49,093,485 110,552,747
============== ============ ============
4 Share capital
31 December 31 December Year ended
2006 2005 30 June 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Fully paid ordinary shares:
Authorised:
1,050,676,947 (2005: 1,050,676,947) ordinary
shares of 1 pence each 10,507 10,507 10,507
============== ============ ============
Issued and fully paid:
245,249,000 (2005: 176,050,006) ordinary
shares of 1 pence each 2,452 1,761 1,769
============== ============ ============
31 December 2006 31 December 2005 30 June 2006
Unaudited Unaudited Audited
No. '000 #'000 #'000 No. '000 #'000 No. '000
Fully paid ordinary shares:
Balance at beginning of period: 176,900 1,769 161 16,050 16,050 161
Shares issued by placement - - 1,600 160,000 160,000 1,600
Shares issued by warrant conversion 68,349 683 - - 850 8
---------------------------------------------------------------------
Issued and fully paid at end
of period: 245,249 2,452 1,761 176,050 176,900 1,769
=====================================================================
Fully paid ordinary shares carry one vote per share and carry the rights to
dividends.
5 Notes to the consolidated cash flow statement
Six months Six months Year
ended ended ended
31 December 31 December 30 June 2006
2006 2005 Restated
Unaudited Unaudited Audited
#'000 #'000 #'000
Loss from continuing operations (1,443) (452) (2,942)
Loss from discontinued operations (1,337) - (981)
Adjustments for:
Investment revenues (44) (37) (135)
Impairment of investment - - 698
Tax - - 152
Depreciation of property, plant and equipment 156 - 31
Amortisation of intangible assets 90 - 60
Share based payment expense - 336 336
Gain on disposal of property, plant and equipment - - (14)
Increase / (decrease) in provisions (15) - 425
--------------- ------------ ------------
Operating cash flows before movements in
working capital (2,593) (153) (2,370)
Decrease in inventories 97 - (34)
Increase in receivables - continuing operations (6,337) (48) (316)
Decrease/(Increase) in receivables - discontinued
operations 825 - (825)
Increase/(Decrease) in payables - continuing
operations 409 (3) 1,475
(Decrease)/Increase in payables - discontinued
operations (687) - 687
Cash used in operations (8,286) (204) (1,380)
Income taxes paid - - (352)
--------------- ------------ ------------
Net cash used in operating activities (8,286) (204) 1,732
=============== ============ ============
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 a maturity of three months or less.
6 Events after the balance sheet date
Completion of the acquisition of Artilium N.V. and the placing of 3,000,000 new
ordinary shares took place upon re-admission of the Company's shares for trading
on AIM on 8 January 2007.
In addition, a consolidation of 5 shares of 1 pence each into one share of 5
pence each was completed. The ordinary shares accordingly now have a par value
of 5 pence. The outstanding series 2 warrants of the Company were also
adjusted for the consolidation with the number being reduced by a factor of 5
and the exercise price increasing from 15p to 75p.
7 Related party transactions
The Company disposed of its consumer branded "Unified Communication Service"
business, on 11 September 2006 to Flasktent Limited. Flasktent Limited is
controlled by Robert Bonnier, through Cold Investments Limited, a significant
shareholder of FIT at 31 December 2006.
Revenue for the year included sales of IT hardware for #160,000 to Flasktent
Limited. A profit of #14,000was earned on these transactions.
8 Status of these accounts
The interim accounts for the six months ended 31 December 2006 are unaudited.
The financial information set out in this statement does not constitute
statutory accounts within the meaning of the Companies Act 1985. The comparative
figures for the year ended 30 June 2006 are not the statutory accounts for that
year but are abridged from those accounts which have been reported on by the
Company's auditors and delivered to the registrar of Companies. The report of
the former auditors was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985. The comparative figures have
been represented in an IFRS format, however, are not in compliance with IAS 34 '
Interim Financial Reporting'.
9 Further Copies
Copies of the interim results are available from the Company's registered office
at 7th Floor, City Point, One Ropemaker Street, London, EC2Y 9AW.
INDEPENDENT REVIEW REPORT TO FUTURE INTERNET TECHNOLOGIES PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 December 2006 which comprises the profit and loss
account, the balance sheet, the cash flow statement and related notes 1 to 9.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company, in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2006.
Deloitte & Touche LLP
Chartered Accountants London
21 March 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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