TIDMKMK
RNS Number : 1376R
Kromek Group PLC
07 December 2016
7 December 2016
Kromek Group plc
("Kromek" or the "Group")
Interim Results
Kromek (AIM: KMK), a radiation detection technology company
focusing on the medical, security and nuclear markets, announces
its interim results for the six months ended 31 October 2016.
Financial Highlights
-- Revenue up 19% to GBP3.8m (H1 2015/16: GBP3.2m)
-- Gross margin was 53% (H1 2015/16: 53%)
-- Loss before tax reduced by 41% to GBP1.8m (H1 2015/16: GBP3.0m)
-- EBITDA was GBP0.7m loss (H1 2015/16: GBP2.3m loss)
-- Cash and cash equivalents at 31 October 2016 were GBP3.8m*
(30 April 2016: GBP3.9m; 31 October 2015: GBP7.5m*)
*Including GBP1.5m working capital draw down under the RCF
(GBP1.0m at 31 October 2015)
Operational Highlights
-- Product sales accounted for 74% of total revenue (H1 2015/16:
57%) as some of the R&D programmes moved to full
commercialisation phase
-- Medical Imaging
-- Commenced delivering on $12.6m five-year OEM contract to
develop and supply detectors for Bone Mineral Densitometry ("BMD")
diagnostics systems, which was won in H2 2015/16
-- Entered into two-year agreement, worth $560k, to supply
CZT-based gamma radiation detectors with an existing medical
customer
-- Post period, awarded repeat contracts worth $1.2m by three
current OEM customers, all worldwide producers and exporters of BMD
diagnostics systems, that were double the size of their previous
orders
-- Nuclear Detection
-- Completed delivery of initial 10,000 portable nuclear
radiation detector D3S units ("D3S") to the Defense Advanced
Research Projects Agency ("DARPA"), an agency of the U.S.
Department of Defense ("US DoD")
-- Received $1.6m award from Defense Threat Reduction Agency
("DTRA"), another agency of the US DoD, to develop a ruggedised
high performance isotope radiation detector capable of use in
military and other harsh environments
-- Other significant contracts awarded include; one with the UK
Ministry of Defence for the supply of nuclear radiation detection
products and another to extend the development and delivery of
nuclear radiation detection devices for a major civil nuclear
partner
-- Good progress made under three-year, collaborative R&D
programme with Canberra, an established provider and market leader
in nuclear instrumentation
-- Security Screening
-- Contract won from an Asian airport group, a new customer, for
delivery and installation of the Group's bottle scanners
-- Contract won for components for screening systems from an
existing customer
-- OEM customer that achieved US Transportation Security Agency
("TSA") certification for their screening system last year is
gearing up to move into full commercial deployment of its next
generation baggage screening product
-- Research and Development
-- 9 new patents granted and 5 new patent applications filed
during the period
Dr Arnab Basu, CEO of Kromek, said: "We are pleased to report
another period of strong operational progress, continuing the
momentum from the previous year as we executed on the significant
contracts won in all of our three markets of medical imaging,
nuclear detection and security screening. We saw high growth in the
number of products sold compared with the same period last year
and, equally important, a number of R&D programmes have moved
into full commercialisation phase.
"Looking ahead, we have entered the second half with significant
visibility over revenue in excess of 85% of full year market
expectations. Overall, our products continue to gain commercial
traction in all of our business segments with new customers as well
as deepening our relationships with existing customers. This
underpins the management team's belief in the sustained growth of
the business and commercial traction resulting from the increasing
adoption of CZT-based technology and other products. Consequently,
the Board looks to the future with confidence."
This announcement contains inside information
Enquiries
Kromek Group plc 01740 626 060
Arnab Basu, CEO
Derek Bulmer, CFO
Cenkos Securities plc 0207 397 8900
Bobbie Hilliam (NOMAD)
Julian Morse (Sales)
Luther Pendragon Ltd 0207 618 9100
Harry Chathli, Claire Norbury, Alexis
Gore
Arnab Basu, CEO, and Derek Bulmer, CFO, will be hosting a
presentation for analysts at 12.30pm GMT at the offices of Luther
Pendragon, Second Floor, 48 Gracechurch Street, London, EC3V
0EJ.
About Kromek Group plc
Kromek Group plc is a UK technology Group (global HQ in County
Durham) and a leading developer of high performance radiation
detection products based on cadmium zinc telluride ("CZT") and
related technologies. Using its core CZT technology, Kromek designs
develops and produces x-ray and gamma ray imaging and radiation
detection products for the medical, security screening and nuclear
markets.
The Group's products provide high resolution information on
material composition and structure and are used in multiple
applications, ranging from the identification of cancerous tissues
to hazardous materials, such as explosives, and the analysis of
radioactive materials.
The Group's business model provides a vertically integrated
technology offering to customers, from the growth of CZT crystals
to finished products or detectors, including software, electronics
and application specific integrated circuits ("ASICs").
The Group has operations in the UK and US (California and
Pennsylvania), and is selling internationally through a combination
of distributors and direct OEM sales.
Currently, the Group has over one hundred full time employees
across its global operations. Further information on Kromek Group
is available at www.kromek.com.
Overview
Kromek had another half of strong operational progress
continuing the momentum of the previous year as it executed on the
significant contracts won in each of its three markets of Medical
Imaging, Nuclear Detection and Security Screening. In addition, it
continued to win multi-year contracts as the Group's customers
moved from their R&D phase to launching commercial products
into the market.
Revenue increased by 19% to GBP3.8m compared with the previous
interim period (H1 2015/16: GBP3.2m). Revenue generated from
product sales accounted for 74% of total sales compared with 57% in
the equivalent period last year. Gross margins were consistent at
53%. Kromek continued to maintain tight cost control on the fixed
cost base of the Group's administrative expenses (including
operating expenses).
In the first half of the year, the underlying sales growth was
driven by Medical Imaging and Nuclear Detection whilst Security
Screening added a new customer for its bottle scanners in Asia. In
Nuclear Detection, Kromek successfully delivered the first 10,000
D3S units to DARPA, and in Medical Imaging, the Group secured
multiple new contracts and commenced delivery on a large BMD
contract won towards the end of H2 2015/16.
Operational Review
Medical Imaging
Kromek made good progress in the Medical Imaging sector as it
commenced delivering on the $12.6m, five-year contract, it won in
H2 2015/16 with a long-standing OEM customer in the BMD market.
Kromek's detector modules, which are incorporated into the
customers' systems, produce some of the most accurate imaging to
diagnose the strength and health of bones. This allows clinicians
to accurately detect, monitor and treat osteoporosis in patients.
Post period, the Group was awarded repeat contracts by three of its
current OEM customers to supply its CZT-based detector modules.
These contracts were double in size compared with the customers'
previous orders.
During the period, the Group also entered an agreement for the
supply of CZT-based gamma radiation detectors with an existing
medical customer with a minimum value of $560k over the two-year
agreement.
The Group continued to make progress under its contract signed
in 2014 for the development and delivery of CZT-based SPECT modules
for an established manufacturer of x-ray diagnostics and analysis
equipment in China.
Nuclear Detection
In Nuclear Detection, Kromek successfully completed the delivery
of an initial 10,000 D3S units in support of DARPA's SIGMA
programme. The SIGMA programme is aimed at preventing attacks
involving radiological "dirty bombs" and other nuclear threats in
the US and globally.
DARPA conducted a demonstration at one of the Port Authority of
New York and New Jersey's major transportation hubs, which saw more
than a 100-fold increase in ability to locate and identify sources
of radiation compared with currently installed systems. Recently,
DARPA also successfully completed a large-scale test deployment of
detectors in Washington, D.C. As recently announced by DARPA, it is
planning to demonstrate SIGMA's full city and regional-scale,
continuous wide-area monitoring capability in 2017 and to
transition the operational system to local, state and federal
entities in 2018.
In further interaction with the US defence agencies, Kromek was
awarded a $1.6m two-year agreement by the DTRA, subject to final
contract, to build on, and further enhance, the Group's technology
platform to develop a ruggedised high performance isotope radiation
detector capable of use in military and other harsh
environments.
Other significant contracts won during the period included a
$430k contract with the UK Ministry of Defence for the supply of
nuclear radiation detection products. Further, there was an
extension to an existing contract to develop and deliver nuclear
radiation detection devices for a major civil nuclear partner
amounting to $278k.
Also in the first half, Kromek made good progress with its
three-year, collaborative R&D programme with Canberra, an
established provider and market leader in nuclear
instrumentation.
Security Screening
Kromek continued to build on the work carried out during the
previous years with global security groups for the supply of OEM
components for baggage screening products for aviation security.
One of Kromek's OEM customers that achieved TSA certification for
their screening system last year is gearing up to move into
commercial deployment of its next generation baggage screening
product.
The Group was also awarded a contract for bottle scanners from
an Asian airport group that is a new customer, and a second
contract for components for screening systems was won from an
existing customer.
Research and Development
Kromek continued to invest in R&D to maintain its position
as a market leader in the provision of advanced radiation detection
solutions. This investment was with regards to both technology
development and enhancements in addition to continuously innovating
to achieve attractive product price points for the target markets.
This approach ensures the Group can continue to attract and deliver
on accelerated customer programmes, such as DARPA's SIGMA programme
and, more recently, the DTRA programme. During the period, the
Group was granted 9 new patents and filed 5 new patent
applications.
Financial Review
During the six-month period to 31 October 2016 revenue increased
by 19% to GBP3.8m (H1 2015/16: GBP3.2m) with product sales across
Nuclear Detection and Medical Imaging being a key contributor to
the growth in the period.
The Group continued to develop its revenue streams derived from
product sales over the period as summarised in the table below:
Revenue H1 2016/17 H1 2015/16 Full year 2015/16
Mix
--------- ------------------ ------------------ --------------------
GBP'000 % share GBP'000 % share GBP'000 % share
---------
Product 2,782 74% 1,805 57% 5,432 65%
---------
R&D 991 26% 1,373 43% 2,910 35%
--------- -------- -------- ---------
Total 3,773 3,178 8,342
--------- -------- -------- -------- -------- --------- ---------
Gross margin was consistent with prior periods at 53%.
The Group's administrative expenses (including operating
expenses) decreased by GBP0.9m (20%) to GBP3.7m (H1 2015/16:
GBP4.6m) in the period. This decrease consisted of GBP0.6m due to
cost reduction exercises adopted by the Group (offset by an
increase in depreciation and amortisation of GBP0.4m), and GBP0.7m
foreign exchange gain due to favourable movements in the strength
of the USD as explained by the following table:
GBP'm
Balance sheet and working capital conversion 1.2
Impact on cost conversion on Kromek USA (0.5)
------
Net foreign exchange impact to 31 October
2016 0.7
------
The gain noted in the table above is the position at the half
year. This net gain could largely unwind in the second half, and
thus for the full year, should the value of the US dollar remain
strong against the pound.
The EBITDA loss reduced during the period to GBP0.7m (H1
2015/16: GBP2.3m loss), with the loss before tax at GBP1.8m (H1
2015/16: GBP3.0m loss). EBITDA is calculated as per the following
table:
H1 2016/17 Full Year 2015/16
H1 2015/16
(Unaudited) (Unaudited) (Audited)
--------------------- ------------ ------------ -----------------
GBP'000 GBP'000 GBP'000
--------------------- ------------ ------------ -----------------
Loss before tax (1,810) (3,044) (4,143)
--------------------- ------------ ------------ -----------------
Adjustments:-
--------------------- ------------ ------------ -----------------
Net interest 7 26 83
--------------------- ------------ ------------ -----------------
Depreciation 379 335 709
--------------------- ------------ ------------ -----------------
Amortisation 692 365 828
--------------------- ------------ ------------ -----------------
EBITDA (732) (2,318) (2,523)
--------------------- ------------ ------------ -----------------
Share-based payments 96 91 166
--------------------- ------------ ------------ -----------------
Other income - (5) (19)
--------------------- ------------ ------------ -----------------
Adjusted EBITDA (636) (2,232) (2,376)
--------------------- ------------ ------------ -----------------
The GBP1.6m improvement in EBITDA in H1 2016/17 compared with H1
2015/16 is summarised by:
-- GBP0.3m of additional gross profit generated from higher revenues;
-- GBP0.6m cost reductions; and
-- GBP0.7m net gains from naturally hedged foreign exchange on US operations.
Investment in product development was GBP1.7m (H1 2015/16:
GBP1.3m) reflecting the commitment to invest for future growth of
the business, capture the market opportunity with new and enhanced
products, and to meet the demands of accelerated customer
programmes. The USD expenditure on product development has also
been impacted by a stronger USD during the period.
Cash and cash equivalents at 31 October 2016 were GBP3.8m (30
April 2016: GBP3.9m; 31 October 2015: GBP7.5m (net GBP6.5m)), which
included the utilisation of GBP1.5m from the revolving credit
facility (RCF) to support working capital movements towards the end
of the half-year period. The net decrease in cash and cash
equivalents excluding the GBP1.5m drawdown of the RCF in the six
months to 31 October 2016 was GBP1.6m. This consists largely of the
EBITDA loss of GBP0.7m, investment in development costs of GBP1.7m,
partly offset by the receipt of the R&D tax credit of GBP0.9m
(relating to the year ended 30 April 2016). The Group can draw up
to a maximum of GBP3m from the RCF based upon levels of inventory
and trade debtors.
Outlook
The Group is making good progress on the delivery of $35.5m of
new orders won over the past 18 months, which provides good revenue
visibility for the current financial year as well as the next. The
Group already has significant visibility over revenue accounting
for more than 85% of market expectations for full year 2016/17.
The management team expects to benefit from the increasing trend
amongst the Group's customers to launch next generation CZT-based
products into the market. The majority of anticipated sales in the
second half of the year are expected to be in Medical Imaging and
Nuclear Detection - with revenue from the BMD and SPECT contracts
signed over the past 12 months and further delivery on existing OEM
and DARPA contracts.
Overall, the Group's products continue to gain traction in all
its business segments with Kromek winning new customers as well as
strengthening its relationships with existing customers. The
momentum of contract wins provides significant visibility of
revenue. This underpins the management team's belief in the
sustained growth of the business and commercial traction resulting
from the increasing adoption of CZT-based technology and other
products. Consequently, the Board looks to the future with
confidence.
Kromek Group plc
Consolidated condensed income statement
For the six months ended 31 October 2016
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2016 2015 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Note
Continuing operations
Revenue 4 3,773 3,178 8,342
Cost of sales (1,786) (1,503) (3,913)
Gross profit 1,987 1,675 4,429
Other operating income - 5 19
Distribution costs (106) (84) (181)
Administrative expenses (including
operating expenses) (3,684) (4,614) (8,327)
Operating loss (1,803) (3,018) (4,060)
Finance income - 1 1
Finance costs (7) (27) (84)
Loss before tax (1,810) (3,044) (4,143)
Tax 5 317 662 1,992
Loss from continuing operations (1,493) (2,382) (2,151)
Losses per share
-basic and diluted (GBP) 7 (1.0p) (2.0p) (1.5p)
Kromek Group plc
Consolidated condensed statement of comprehensive income
For the six months ended 31 October 2016
Six months Year
Six months
ended 31 ended 31
October October ended
2016 2015 30 April 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (1,493) (2,382) (2,151)
------------- ------------- ---------------
Exchange (losses)/gains on translation
of foreign operations 770 (22) 156
Total comprehensive loss for the period (723) (2,404) (1,995)
------------- ------------- ---------------
Kromek Group plc
Consolidated condensed statement of financial position
For the six months ended 31 October 2016
31 October 31 October 30 April
2016 2015 2016
Note GBP'000 GBP'000 GBP'000
Non-current assets (Unaudited) (Unaudited) (Audited)
Goodwill 1,275 1,275 1,275
Other intangible assets 13,201 9,822 11,222
Property, plant and equipment 8 4,050 3,948 3,974
18,526 15,045 16,471
Current assets
Inventories 3,174 2,295 2,810
Trade and other receivables 3,868 4,046 5,159
Current tax assets 210 1,605 811
Cash and bank balances 3,803 7,485 3,857
11,055 15,431 12,637
Total assets 29,581 30,476 29,108
Current liabilities
Trade and other payables (4,028) (4,182) (4,445)
Finance lease liabilities - (20) (9)
Borrowings (1,500) (1,006) -
(5,528) (5,208) (4,454)
Net current assets 5,527 10,223 8,183
Non-current liabilities
Finance lease liabilities - - -
Deferred tax liabilities - (1,098) -
Total liabilities (5,528) (6,306) (4,454)
Net assets 24,053 24,170 24,654
Equity
Share capital 10 1,539 1,522 1,522
Share premium account 44,493 44,484 44,484
Capital redemption reserve 1,175 1,175 1,175
Translation reserve 842 (106) 72
Retained earnings (23,996) (22,905) (22,599)
Total equity 24,053 24,170 24,654
Kromek Group plc
Consolidated condensed statement of changes in equity
For the six months ended 31 October 2016
Equity attributable to equity holders of the
Group
Share Capital
Share Premium Redemption Translation Retained
Capital Account Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 May 2016 1,522 44,484 1,175 72 (22,599) 24,654
Loss for the period - - - - (1,493) (1,493)
Other comprehensive
income for the period - - - 770 - 770
Total comprehensive
loss for the period - - - 770 (1,493) (723)
Issue of share capital
net of expenses 17 - - - - 17
Premium on shares issued
less expenses - 9 - - - 9
Credit to equity for
equity-settled share
based payments - - - - 96 96
Balance at 31 October
2016 1,539 44,493 1,175 842 (23,996) 24,053
Balance at 1 May 2015 1,082 34,643 1,175 (84) (20,614) 16,202
Loss for the period - - - - (2,382) (2,382)
Other comprehensive
income for the period - - - (22) - (22)
Total comprehensive
loss for the period - - - (22) (2,382) (2,404)
Issue of share capital
net of expenses 440 - - - - 440
Premium on shares issued
less expenses - 9,841 - - - 9,841
Credit to equity for
equity-settled share
based payments - - - - 91 91
Balance at 31 October
2015 1,522 44,484 1,175 (106) (22,905) 24,170
Balance at 1 May 2015 1,082 34,643 1,175 (84) (20,614) 16,202
Loss for the year - - - - (2,151) (2,151)
Other comprehensive
income for the period - - - 156 - 156
Total comprehensive
loss for the year - - - 156 (2,151) (1,995)
Issue of share capital
net of expenses 440 9,841 - - - 10,281
Credit to equity for
equity-settled share
based payments - - - - 166 166
Balance at 30 April
2016 1,522 44,484 1,175 72 (22,599) 24,654
Kromek Group plc
Consolidated condensed statement of cash flows
For the six months ended 31 October 2016
Six months Year
ended 31 Six months ended
October ended 31 October 30 April
2016 2015 2016
Note GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Net cash generated from/(used in)
operating activities 9 799 (2,333) (2,845)
Investing activities
Interest received - 1 1
Purchases of property, plant and
equipment (128) (96) (444)
Purchases of patents and trademarks (115) (171) (320)
Capitalisation of research and development
costs (1,665) (1,296) (2,819)
Net cash used in investing activities (1,908) (1,562) (3,582)
Financing activities
Loans paid - - (1,003)
Loans received 1,500 - -
Proceeds on issue of shares 26 10,281 10,281
Payment of finance lease liabilities - (9) (9)
Interest paid (7) (28) (84)
Net cash generated from financing
activities 1,519 10,244 9,185
Net increase in cash and cash equivalents 410 6,349 2,758
Cash and cash equivalents at beginning
of period 3,857 1,183 1,183
Effect of foreign exchange rate
changes (464) (47) (84)
Cash and cash equivalents at end
of period 3,803 7,485 3,857
Kromek Group plc
Notes to the unaudited interim statements
For the six months ended 31 October 2016
1. Basis of preparation
This interim financial report does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. The
auditors reported on the Kromek Group plc financial statements for
the year ended 30 April 2016; their report was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under section 498(2) or (3) of the Companies
Act 2006. The Group's consolidated annual financial statements for
the year ended 30 April 2016 have been filed with the Registrar of
Companies and are available on the Group's website
www.kromek.com.
The accounting policies used in this interim financial report
are consistent with International Financial Reporting Standards.
Except for the amortisation of capitalised development expenditure,
the same accounting policies, presentation and methods of
computation are followed in this condensed set of financial
statements as applied in the Group's latest annual audited
financial statements other than standards, amendments and
interpretations which became effective after 1 May 2016 and were
adopted by the Group. These have had no significant impact on the
Group's result for the period or its equity.
Following the Amended Clarification of Acceptable Methods of
Amortisation effective for annual accounting periods beginning on
or after 1 January 2016, the Group now amortise the capitalised
development costs on a straight-line basis over a period 3-15 years
rather than against product sales directly relating to the
development expenditure. Provision is made for any impairment.
The condensed set of financial statements included in this
interim report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
This interim report for the period ending 31 October 2016 was
approved by the Board of Directors on 6 December 2016.
2. Going concern
The directors are satisfied that the Group has sufficient
resources and facilities to continue in operation for the
foreseeable future, a period of not less than 12 months from the
date of this report. Accordingly, they continue to adopt the going
concern basis in preparing the interim financial statements.
3. Interim report
This interim financial report will be available from the Group's
website at www.kromek.com.
4. Business and geographical segments
Products and services from which reportable segments derive
their revenues
For management purposes, the Group is organised into two
business units (UK and USA) and it is on these operating segments
that the Group is providing disclosure.
The chief operating decision maker is the Board of Directors who
assess performance of the segments using the following key
performance indicators; revenues, gross profit and operating
profit. The amounts provided to the Board with respect to assets
and liabilities are measured in a way consistent with the Financial
Statements.
The turnover, profit on ordinary activities and net assets of
the Group are attributable to one business segment, i.e. the
development of digital colour x-ray imaging enabling direct
materials identification, as well as developing a number of
detection products in the industrial and consumer markets.
Analysis by geographical area
A geographical analysis of the Group's revenue by destination is
as follows:
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2016 2015 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
United Kingdom 425 201 688
North America 2,202 2,379 5,468
Asia 991 447 1,940
Europe 144 151 246
Australasia 11 - -
Total revenue 3,773 3,178 8,342
4. Business and geographical segments (continued)
A geographical analysis of the Group's revenue by origin is as
follows:
Six months ended 31 October 2016
UK Operations USA Operations Total for
GBP'000 GBP'000 Group
GBP'000
Revenue from sales
Revenue by segment:
-Sale of goods and services 2,611 1,288 3,899
-Revenue from grants 80 - 80
-Revenue from contract customers 32 530 562
Total sales by segment 2,723 1,818 4,541
Removal of inter-segment sales (299) (469) (768)
-------------- --------------- ----------
Total external sales 2,424 1,349 3,773
-------------- --------------- ----------
Segment result - operating loss (505) (1,298) (1,803)
Net interest (7) - (7)
Loss before tax (512) (1,298) (1,810)
Tax credit 317 - 317
-------------- --------------- ----------
Loss for the year (195) (1,298) (1,493)
-------------- --------------- ----------
Other information
Property, plant and equipment additions 74 55 128
Depreciation of property, plant and
equipment 162 217 379
Intangible asset additions 787 993 1,780
Amortisation of intangible assets 448 244 692
-------------- --------------- ----------
Balance Sheet
Total assets 19,197 10,384 29,581
-------------- --------------- ----------
Total liabilities (5,348) (180) (5,528)
-------------- --------------- ----------
Inter-segment sales are charged at prevailing market prices.
No impairment losses were recognised in respect of property,
plant and equipment and goodwill.
4. Business and geographical segments (continued)
Six months ended 31 October 2015
UK Operations USA Operations Total for
GBP'000 GBP'000 Group
GBP'000
Revenue from sales
Revenue by segment:
-Sale of goods and services 1,817 884 2,701
-Revenue from grants 148 - 148
-Revenue from contract customers 357 213 570
Total sales by segment 2,322 1,097 3,419
Removal of inter-segment sales (151) (90) (241)
-------------- --------------- ----------
Total external sales 2,171 1,007 3,178
-------------- --------------- ----------
Segment result - operating loss (1,221) (1,797) (3,018)
Net interest (25) (1) (26)
Loss before tax (1,246) (1,798) (3,044)
Tax credit 662 - 662
-------------- --------------- ----------
Loss for the period (584) (1,798) (2,382)
-------------- --------------- ----------
Other information
Property, plant and equipment additions 122 14 136
Depreciation of property, plant and
equipment 148 187 335
Intangible asset additions 860 602 1,462
Amortisation of intangible assets 187 178 365
-------------- --------------- ----------
Balance Sheet
Total assets 24,214 6,262 30,476
-------------- --------------- ----------
Total liabilities (3,984) (2,322) (6,306)
-------------- --------------- ----------
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment without allocation of the share of
profits of associates, central administration costs including
directors' salaries, investment revenue and finance costs, and
income tax expense. This is the measure reported to the Group's
Chief Executive for the purpose of resource allocation and
assessment of segment performance.
5. Tax
The Group has recognised R&D tax credits of GBP210k (six
months ended 31 October 2015: GBP603k) for the six months ended 31
October 2016.
Deferred tax liabilities were GBPnil (six months ended 31
October 2015: GBP59k) for the six months ended 31 October 2016.
6. Dividends
The directors do not recommend the payment of a dividend (six
months ended 31 October 2015: GBPnil).
7. Losses per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Losses
Six months Six months
ended 31 ended 31 Year
October October ended
2016 2015 30 April 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Losses for the purposes of basic earnings
per share being net profit attributable
to owners of the Group (1,493) (2,382) (2,151)
Six months Six months
ended 31 ended 31 Year
October October ended
2016 2015 30 April 2016
'000 '000 '000
(Unaudited) (Unaudited) (Audited)
Number of shares
Weighted average number of ordinary shares
for the purposes of basic losses per share 153,285 125,525 141,337
Effect of dilutive potential ordinary shares:
Share options and warrants 3,746 5,489 6,249
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 157,031 131,014 147,586
Basic and diluted (GBP) (1.0p) (2.0p) (1.5p)
Due to the Group having losses in each of the periods, the fully
diluted loss per share for disclosure purposes, as shown in the
income statement, is the same as for the basic loss per share.
8. Property, plant and equipment
During the six months ended 31 October 2016, the Group acquired
property, plant and equipment with a cost of GBP128k (six months
ended 31 October 2015: GBP136k).
9. Notes to the cash flow statement
Year
Six months Six months ended
ended 31 October ended 31 October 30 April
2016 2015 2016
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (1,493) (2,382) (2,151)
Adjustments for:
Finance income - (1) (1)
Finance costs 7 27 84
Income tax credit (317) (662) (1,992)
Government grants credit - - (15)
Depreciation of property, plant and
equipment 379 335 709
Amortisation of intangible assets 692 365 828
Share-based payment expense 96 91 166
Operating cash flows before movements
in working capital (636) (2,227) (2,372)
Increase in inventories (364) (192) (707)
Decrease/(increase) in receivables 1,291 43 (1,070)
(Decrease)/increase in payables (417) 43 302
Cash used in operations (126) (2,333) (3,847)
Income taxes received 925 - 1,002
Net cash generated from/(used in) operating
activities 799 (2,333) (2,845)
10. Share capital
During the six-month period to 31 October 2015, 44,012,792
ordinary shares were issued because of the successful placing
agreement of 36,000,000 new ordinary shares, and open offer of
8,012,792 new ordinary shares, which raised GBP10.3m net proceeds.
No such transaction has taken place in the six-month period to 31
October 2016.
During the period, 1,675,000 ordinary shares (six months ended
31 October 2015: nil) were issued because of the exercise of
employee share options.
11. Related party transactions
During the period M Robinson, a former director, charged the
Group GBP44k (six months ended 31 October 2015: GBP44k) for
consultancy fees. At the period end the Group owed M Robinson GBP7k
(six months ended 31 October 2015: GBP7k). This amount was included
within trade payables at the period end.
11. Related party transactions (continued)
During the period Arnab Basu, a director, purchased 800,000 (six
months ended 31 October 2015: nil) ordinary shares of the Group in
the open market.
During the period Derek Bulmer, a director, purchased nil (six
months ended 31 October 2015: 40,000) ordinary shares of the Group
in the open market.
12. Events after the balance sheet date
There are no significant or disclosable post-balance sheet
events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UNORRNBAURUA
(END) Dow Jones Newswires
December 07, 2016 02:00 ET (07:00 GMT)
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