RNS Number:8141W
IndigoVision Group PLC
23 March 2004
INDIGOVISION GROUP PLC
Results for the six months to 31 January 2004
First half financial highlights:
* Revenues #0.7m
* Product revenues increased to 97% of revenue
* Gross profit margins 46.5%
* Headcount reduced to 40
* Loss before tax down to #1.6m from #3.0m
* Loss per share reduced 46% on a comparable basis
* Net cash of #4.2m
First half operational highlights:
* Completion of ASIC chip
* Continued focus on key markets - Europe, Middle East, Africa up 51%
* Japan office closed
* 100% restructure of N American business resulting in short term fall in
sales
* 8 US sales agents signed-up since November 2003 giving nationwide
coverage
* Canadian sales agency established October 2003
* Major new projects secured in the last six months include:
* St Lawrence Seaway
* First deployment for US Casino operator
* Fifth UK airport
* Saudi Arabian oil facility
* Madrid airport terminal transfer shuttle
* Two French city centres
Oliver Vellacott, Chief Executive Officer, said:
"We have the best IP Video product set on the market, and we're using that to
build strong relationships with the key systems integrators. The success we're
achieving together with them in key projects shows that the focus of the
business is starting to deliver."
ENQUIRES:
IndigoVision plc Oliver Vellacott (CEO) 0131 475 7200
Marcus Kneen (CFO)
INDIGOVISION GROUP PLC
Results for the six months to 31 January 2004
Chairman's Statement
The last six months has seen further concentration of focus for the Group and
the results for the period are encouraging. The market for video over IP
continues to grow and the quality of sales enquires is improving.
Results
Turnover for the six months to 31 January 2004 was maintained at #0.7m (2003
#0.7m). Gross margin reduced to 46.5% (200347.8%) as product revenueincreased
to 97% of turnover (200386%) and higher margin license revenue fell.
The geographical split of revenues was Europe, Middle East and Africa: 80% (2003
54%), N. America: 14% (2003 33%) and Asia: 6% (20033/4 13%). Europe, Middle East
and Africa achieved year on year growth of 51% while due to re-structuring, now
completed, N American revenues declined 70%.
Year on year operating costs were reduced by 45% to #2.0m (20033/4#3.7m), mainly
through a reduction in headcount. Since 2003 year-end head count has reduced
from 57 to 40 completing the restructuring program. Overheads for the six months
to July 2003 amounted to #2.7m, which after deduction of non-cash credits in
respect of UITF17 and reversal of prior accruals resulted in net overhead of
#1.2m. Total overheads for 2003 of #4.9m included non-cash credits of #0.8m in
respect of UITF17.
The net cash position at 31 January 2004 was #4.2m.
Product developments
The key milestone of the last six months has been the release to manufacture of
the ASIC MPEG4 chip. The ASIC MPEG4 chip has been incorporated into all
8000-range products. The chip delivers a guaranteed 30 frames per second of DVD
-quality MPEG4-encoded video. The whole IP Video market, including our
competition, is moving towards MPEG4 as the standard for all video encoding and
recording.
The 8000 range of products now includes a rack-mounted unit and the first
standalone Networked Video Recorder ('NVR') on the market. This offers
significantperformance and cost benefits compared to PC-based recording system.
The standalone NVR allows the recording of multiple simultaneous streams (or
cameras) of video on a single hardware platform. In contrast to existing storage
systems, the NVR is more flexible and allows low cost DVD quality recording. In
contrast to the most advanced DVR (Digital Video Recorder) solutions currently
available, NVRs can be placed anywhere on a worldwide corporate network, and can
be viewed simultaneously from workstations anywhere on a network. The NVR is
extremely efficient for recording video, making it an ideal solution for
companies with large storage requirements, such as town centers, airports,
railways, and government and public installations.
Application software has been significantly enhanced for both the 8000 and 6000
applications. Application software now provides the functionality of
sophisticated analogue management systems, plus features such as, global remote
viewing from anywhere to anywhere, multiple viewing of the same camera, motion
search, alarm management, user authentication, audit trail and secure camera
access at a fraction of the price of analogue systems. The design is recognized
by customers as "intuitive" for operators to use.
The 8000 range is fully MPEG4 compliant. IndigoVision is one of only two IP
Video product manufacturers offering full MPEG4 capability rather than an
adaptation of other formats as an attempt to synthesize such performance (see
www.mpegla.com for a definitive list of authorized MPEG4 manufacturers).
Applications
The Company's system integrator partners have achieved a number of significant
projects, which continue to demonstrate the value of our IP Video solutions:
St Lawrence Seaway
First deployment for a US casino operator
Fifth UK airport installation
Saudi Arabian oil facility
Madrid airport terminal transfer trains
Two French city centers
The Company's products are being included in an increasing number of system
integrator proposals supporting the Company's expectation of future turnover
growth.
Move to AIM
The move to the Alternative Investment Market ('AIM') was completed on 15
December 2003. The Group now reports results half-yearly.
Current trading and outlook
Turnover for the first half of our reporting year has been affected by the
restructuring of the N American business. Despite this restructuring half year
revenues year on year were maintained.
We expect turnover to grow as N American revenues are re-established, and grown.
Continued focus on cost control and elimination of non-core expenditure is
keeping the business on track for achieving targeted 2004 overheads of #4m
(2003: #4.9m). The introduction of newproducts and additional manufacturing
partners will enable margins to be improved.
The Board remains confident that IndigoVision is well placed with strong
technology to benefit from an increasing market shift from analogue to IP Video
products, and expects the Group to move closer to breakeven during the current
financial year.
HAMISH GROSSART
Chairman
22 March 2004
Consolidated profit and loss account
For the 6 months to 31 January 2004
Note 6 months to 6 months to Year to 31
31 January 31 January 31 July
2004 2003 2003
Unaudited Unaudited Audited
#000 #000 #000
Turnover 727 716 1,794
Cost of sales (389) (374) (1,129)
-------- -------- --------
Gross profit 338 342 665
Research and development
expenditure (728) (1,120) (2,057)
Other administrative expenses (1,312) (2,593) (2,841)
-------- -------- --------
Operating loss (1,702) (3,371) (4,233)
Interest receivable and
similar income 85 372 598
Interest payable and similar
charges (2) (5) (7)
-------- -------- --------
Loss on ordinary activities
before taxation (1,619) (3,004) (3,642)
Tax on loss on ordinary
activities 111 - -
-------- -------- --------
Retained loss for the period (1,508) (3,004) (3,642)
======== ======== ========
Loss per ordinary share 3
Basic loss per share (23.40p) (4.39p) (5.87p)
======== ======== ========
Diluted loss per share (22.52p) (4.39p) (5.87p)
======== ======== ========
Loss per share before
exceptional items (23.40p) (4.00p) (6.44p)
======== ======== ========
Consolidated statement of total recognised gains and losses
For the 6 months to 31 January 2004
6 months 6 months Year
to to to
31 January 31 January 31 July
2004 2003 2003
Unaudited Unaudited Audited
#000 #000 #000
Loss for the period (1,508) (3,004) (3,642)
Loss on foreign currency translation (41) (19) (3)
-------- -------- --------
Total recognised gains and losses relating to
the period (1,549)(3,023) (3,645)
======== ======== ========
Consolidated balance sheet
at 31 January 2004
As at As at As at
31 January 31 January 31 July
2004 2004 2003
Unaudited Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Fixed assets
Tangible assets 253 195 127
------- ------- -------
Current assets
Stocks474 713 406
Debtors 542 581 467
Cash at bank and
in hand 4,254 19,718 6,283
------ ------- -------
5,270 21,012 7,156
Creditors: amounts
falling due
within one year (680) (1,579) (871)
------ ------- -------
Net current assets 4,590 19,433 6,285
------- ------- -------
Total assets less
current
liabilities 4,843 19,628 6,412
Creditors: amounts
falling due after
more than one year (9) (46) (37)
Provisions for
liabilities
and charges (36) (64) (28)
------- ------- -------
Net assets 4,798 19,518 6,347
======= ======= =======
Capital and
reserves
Called up share
capital 69 6,849 69
Share premium
account 4 23,971 28,849 23,971
Other reserve 4 8,563 8,563 8,563
Profit and loss
account 4 (27,805) (24,743) (26,256)
------- ------- -------
Shareholders'
funds - equity 4,798 19,518 6,347
======= ======= =======
Consolidated cash flow statement
For the 6 months to 31 January 2004
6 months to 6 months to Year to
31 January 31 January 31 July
2004 2003 2003
Unaudited Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Cash flow
statement
Cash outflow from
operating
activities 5 (1,989) (4,199) (6,199)
Returns on
investments and
servicing of
finance
Interest received 85 372 598
Interest paid (2) (5) (7)
------- ------- ------
83 367 591
Taxation 111 - -
Capital expenditure
and financial
investment
Purchase of
tangible fixed
assets (174) - (2)
Disposal of
tangible fixed
assets - - 3
------- ------- ------
(174) - 1
------- -------- -------
Cash outflow before
management of
liquid
resources and
financing (1,969) (3,832) (5,607)
Financing
Repayment of loans (19) (19) (37)
Issue of share
capital - - 35
Reduction in share
capital - - (11,693)
------- ------- ------
(19) (19) (11,695)
------- -------- -------
(Decrease)/increase
in cash in the
period (1,988) (3,851) (17,302)
======= ======== =======
Reconciliation of
net cash flow to
movement in
net funds 6
(Decrease)/increase
in cash in the
period (1,988) (3,851) (17,302)
Cash inflow/
(outflow) from
increase/(decrease)
in debt and lease
financing 19 19 37
Translation
adjustment (41) (19) (3)
------- -------- -------
Movement in net
funds in the period (2,010) (3,851) (17,268)
Net funds at the
start of the period 6,218 23,486 23,486
------- -------- -------
Net funds at the
end of the
period 4,208 19,635 6,218
======= ======== =======
Notes to the accounts:
1. The interim financial information has been prepared on the basis of
accounting policies consistent with those applied in the accounts for the year
ended 31 July 2003. The information is unaudited and does not comprise the
statutory accounts of the group. The statutory accounts of IndigoVision Group
plc for the year ended 31 July 2003 have been filed with the registrar of
companies. KPMG Audit Plc have reported on the statutory accounts;their report
was unqualified and did not contain any statement under section 237 of the
Companies Act 1985.
2. This report was approved by the board of directors on 22 March 2004.
3. Loss per share
Loss per share is calculated asfollows:
Six months to Six months to Year to
31 January 31 January 31 July
2004 2003 2003
#000 #000 #000
Loss for the period (1,619) (3,004) (3,642)
Exceptional items - 266 321
Loss for the period (1,619) (2,738) (3,321)
======== ======== =========
Number Number Number
Weighted average number of
shares
Basic weighted average shares
in issue 6,919,976 68,493,520 56,585,857
Potential ordinary shares on
share option 268,000 - -
-------- -------- ---------
7,187,976 68,493,520 56,585,857
======== ======== =========
Basic loss per share (23.40p) (4.39p) (5.87p)
======== ======== =========
Diluted loss per share (22.52p) (4.39p) (5.87p)
======== ======== =========
Loss per share before
exceptional items (23.40p) (4.00p) (6.44p)
======== ======== =========
In May 2003 every 10 issued ordinary shares of 0.1pence resulting from the share
capital reduction was consolidated into an ordinary share of 1pence. Following
the consolidation listing was applied and granted for 6,919,976 ordinary shares
of 1pence each. After the share reduction the comparable basic loss per share
for prior periods on the basis of 6,919,976 shares is; six months to 31 January
2003: - 43.41pence, and for the year to 31 July 2003: - 47.99pence.
4. Share premium and reserves
Share Other Profit & Loss
Premium reserve Account
Account
#000 #000 #000
At beginning
of period 23,971 8,563 (26,256)
Retained loss
for period - - (1,508)
Currency
exchange
movements - - (41)
--------- -------- ---------
At end of
period 23,971 8,563 (27,805)
========= ======== =========
5. Reconciliation of operating loss to operating cash flows
Six months Six months Year
to to to
31 January 31 January 31 July
2004 2003 2003
#000 #000 #000
Operating loss (1,702) (3,371) (4,233)
Depreciation 48 81 148
(Increase)/decrease in stocks (68) 78 385
(Increase)/decrease in debtors (75) 335 449
(Decrease)/increase in creditors (200) (291) (990)
Share option charges 99 (792)
Payment of restructuring costs - - (1,124)
Movement in warranty provisions 8 (1,130) (42)
--------- -------- ---------
Net cash (outflow)/inflow from
operating activities (1,989) (4,199) (6,199)
========= ======== =========
6. Analysis of net funds
At 1 August Cash Other non At 31
2003 flow cash January
changes 2004
#000 #000 #000 #000
Cash in hand
and at bank 6,283 (2,029) - 4,254
Debt due after
one year (28) - 19 (9)
Debt due
within one year (37) 19 (19) (37)
-------- ------- ------- --------
Total 6,218 (2,010) - 4,208
======== ======= ======= ========
This information is provided by RNS
The company news service from the London Stock Exchange
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