RNS Number:4424J
Nipson Digital Printing Systems PLC
08 March 2005
News Release: Embargoed until 7am 8 March 2005
NIPSON DIGITAL PRINTING SYSTEMS PLC
8 MARCH 2005
PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2004
Nipson Digital Printing Systems PLC ("Nipson" or "the Company"), the
manufacturer and distributor of digital printing systems and consumables, today
announces its maiden preliminary results for the year ended 31 December 2004.
Rimon Ben-Shaoul, Chairman, commented:
"We are very proud of Nipson's performance in the fourth quarter of 2004 with
strong equipment sales and increasing profitability demonstrating that the
Company is well positioned to achieve strong growth in turnover and
profitability in 2005."
For further information, please contact:
Nipson Digital Printing Systems PLC
Alfons Buts, Managing Director
Tel: + 32 3 740 02 00
Bankside Consultants Ltd
Ian Seaton / Simon Bloomfield
Tel: 020 7444 4140 / 4157
CHAIRMAN'S STATEMENT
Nipson made substantial progress during the year ended 31 December 2004. Despite
a number of challenges, we were successful in achieving our strategic goals and
everyone at the Company should be congratulated on their performance.
At DRUPA, the printing industry's largest trade show held every four years and
most recently in May 2004, we launched two new machines which have been well
received by customers across the globe and which resulted in a strong sales
performance in the last quarter of 2004.
During the year we completed a major re-structuring of the business that will
result in lower costs, improved operating efficiency and increased
competitiveness in 2005 and beyond. While the introduction of new writing heads,
involving a change of suppliers, has been delayed, we are confident that this
will result in higher gross margins by the second half of 2005.
At the end of July 2004 we completed our flotation on AIM and raised net
proceeds of #8.9 million. This was an important milestone for Nipson and has
given the Company access to funds it will need to take advantage of
opportunities in the growing digital printing market.
Future prospects
Nipson is well positioned to take advantage of the strong demand for our new
products and of an increase in capital expenditure in the printing industry
after a slow period. Although we continue to look for operational efficiencies,
our cost structure allows us to be competitive whilst margins continue to
improve.
The strong equipment trading performance of the fourth quarter of 2004 has
continued into the normally weak first quarter of 2005.
We expect the increase in sales of high-end equipment, as demonstrated in the
fourth quarter of 2004, to expand our recurring revenue base and increase
profitability. We also anticipate that our operating margins will continue to
benefit from the restructuring programme completed last year and from the
continued growth in sales of VaryPress 200 and VaryPress 400.
Rimon Ben-Shaoul
Chairman
Nipson Digital Printing Systems PLC
MANAGING DIRECTOR'S OPERATIONAL REVIEW
Results for the year ended 31 December 2004 were in line with our operating
plan. Turnover for the fourth quarter of 2004 was #8.6 million, an increase of
26% compared to the fourth quarter of 2003.
Equipment turnover for the fourth quarter of 2004, including the first
deliveries of the new products, the VaryPress 200 and the VaryPress 400, grew to
#3.2 million, an increase of 107% compared to the corresponding quarter of 2003.
Recurrent turnover for the fourth quarter of 2004 grew to #5.4 million, an
increase of 2% compared to the corresponding quarter of 2003.
Turnover for the year ended 31 December 2004 was #28.5 million (2003: #29.8
million), while the geographic split was: Europe 55 %; USA 20 %; Asia 12% and
the rest of the world 13 %. The reduction in turnover is primarily attributable
to the continued weakness of the US dollar and delays in purchase decisions that
are typical in a DRUPA year.
Gross margin increased in the fourth quarter of 2004 to 34% compared to 31% in
the comparable quarter of 2003. One of the contributing factors to the increase
in gross margin was the procurement of the first commercial quantities of toner
from a new supplier. Gross margin for 2004 overall was stable, at around 33%,
compared to 2003. We expect gross margin to increase significantly during the
course of 2005, as we achieve further manufacturing and procurement efficiencies
while introducing new technologies and growing volumes.
Operating expenses for the year were down to #9.5 million (2003: #10.2 million),
but a large increase in marketing expenses, especially in the last quarter where
operating expenses were #2.5 million (fourth quarter 2003: #2.4 million),
masks the significant decrease in general expenses achieved as part of the cost
reduction plan. The benefit of these only began to be received in the second
half of 2004 because of a time lag under French law in implementing a redundancy
programme.
The operating profit for the fourth quarter was #0.4 million (fourth quarter
2003: loss of #0.3 million). Operating profit for 2004 overall was #0.02 million
(2003: operating loss of #0.06 million) after #0.3 million of costs relating to
DRUPA incurred during the first half.
The net profit for the fourth quarter was #0.4 million (fourth quarter 2003:
loss of #2.5 million, which included a one-off restructuring charge of #2.2
million relating to the restructuring programme). The net loss for the year was
#0.96 million (2003: loss of #3.3 million) and includes an exceptional charge of
#0.57 million (2003: #2.5 million), relating to the restructuring programme.
Senior executive appointments
In line with the growth of the business and in order to strengthen the
management skills necessary to realise our expansion plans, we have made a
number of senior executive appointments.
Robert Stabler was appointed President of Nipson America at the beginning of
2005. Robert previously led Agfa's printing business in North America and
Mexico, where he spear-headed Agfa's move into the digital arena.
Tim Weeldreyer has been appointed Vice President Sales, North America and is
leading a team of six regional managers, each with 20 years of experience in the
printing field.
Avi Naor has been appointed Chief Operating Officer. Avi has 20 years experience
in manufacturing and engineering, including 8 years in printing equipment. Avi
has a strong track record in on-time and low cost manufacturing of equipment.
Alain Flament, formerly President of Nipson America, has moved to a newly
created position of Global Marketing Officer, which includes responsibility for
business development.
Strategic developments
In North America and Asia, two major target markets for Nipson but where the
Company has historically been under-represented, we have recently taken a number
of steps to boost our performance in addition to making new appointments.
In February 2005 the Company signed a distribution agreement with Pitman, the
largest independent graphic arts distributor in North America. The Company is
also in discussion with Pitney Bowes to extend its maintenance coverage in the
USA.
Early in 2005, Syntax, the high-end colour digital printing distributor for HP/
Indigo, started to distribute Nipson machines in China. We are currently
expanding and upgrading our network in India and expect to add to our team in
Asia over the course of the current year.
In February 2005 the Company introduced the Nipson 1865, a new entry-level
product aimed at the lower volume market.
Alfons Buts
Managing Director
Nipson Digital Printing Systems PLC
NIPSON DIGITAL PRINTING SYSTEMS PLC
Preliminary results for the year ended 31 December 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended Year ended 3 months 3 months
31 31 ended 31 ended 31
December December December December
2004 2003 2004 2003
(proforma)
#'000 #'000 #'000 #'000
--------- -------- -------- --------
Turnover 28,485 29,757 8,632 6,831
Cost of sales (19,032) (19,772) (5,724) (4,688)
--------- -------- -------- --------
Gross profit 9,453 9,985 2,908 2,143
Administrative
expenses (9,490) (10,214) (2,491) (2,450)
Other
operating
income 60 166 4 12
--------- -------- -------- --------
Operating
profit/(loss) 23 (63) 421 (295)
Exceptional
restructuring
costs (569) (2,467) 98 (2,245)
--------- -------- -------- --------
Profit/(loss)
on ordinary
activities
before
interest (546) (2,530) 519 (2,540)
Interest
payable and
similar
charges (415) (748) (104) (24)
--------- -------- -------- --------
Profit/(loss)
on ordinary
activities
before
taxation (961) (3,278) 415 (2,564)
Taxation - -- -
--------- -------- -------- --------
Profit/(loss)
on ordinary
activities
after taxation (961) (3,278) 415 (2,564)
Dividends payable - - -
--------- -------- -------- --------
Retained
earnings/(defi
cit) for
period (961) (3,278) 415 (2,564)
Earnings per
ordinary share (3.3p) (10.9p) 0.9p (8.5p)
--------- -------- -------- --------
Turnover and operating profit/(loss) all derive from continuing operations.
NIPSON DIGITAL PRINTING SYSTEMS PLC
Preliminary results for the year ended 31 December 2004
CONSOLIDATED BALANCE SHEET
As at 31 As at 31
December 2004 December 2003
(proforma)
#'000 #'000
----------- -----------
Fixed assets
Intangible assets 733 518
Tangible assets 4,643 4,780
----------- -----------
5,376 5,298
----------- -----------
Stock 7,692 7,515
Debtors 6,736 5,925
Cash at bank 4,595 982
----------- -----------
19,023 14,422
Creditors amounts falling due within one
year (8,769) (15,552)
----------- -----------
Net current assets/(liabilities) 10,254 (1,130)
Total assets less current liabilities 15,630 4,168
----------- -----------
Creditors amounts falling due after more
than one year (6,414) (2,617)
Provisions for liabilities and charges (609) (698)
----------- -----------
Net assets 8,607 853
----------- -----------
Capital and reserves
Called up share capital 3,763 3,357
Other Reserves 4,844 (2,504)
----------- -----------
Shareholders equity funds 8,607 853
----------- -----------
NIPSON DIGITAL PRINTING SYSTEMS PLC
Preliminary results for the year ended 31 December 2004
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended 31
31 December December
2004 2003
#'000 #'000
---------- ----------
Net cash (outflow) from operating
activities (4,686) (2,771)
Returns on investments and servicing of finance
Interest paid (414) (748)
---------- ----------
Net cash flow for returns on
investments and servicing of
finance (5,100) (3,519)
---------- ----------
Taxation - -
Capital expenditure and financial investment
Purchase of tangible fixed assets (232) (240)
Proceeds from disposal of fixed
assets - 146
---------- ----------
Net cash flow for capital
expenditure (232) (94)
Cash acquired on acquisition 8 -
---------- ----------
Cash (outflow) before use of liquid
resources and financing (5,324) (3,613)
Financing
New loans (including bank notes
payable) 2,821 2,108
(Decrease)/increase in loan from
parent undertaking (1,786) 618
Loan repayments (697) (951)
Capital repayments on finance
leases (421) (133)
Net proceeds from issue of shares 8,851 2,111
Translation adjustments 170 294
---------- ----------
Net cash inflow for financing 8,938 4,047
---------- ----------
Increase in cash in period 3,614 434
========== ==========
Reconciliation of net cash flow to movement in net
debt
Increase in cash in period 3,614 434
Decrease / (Increase) in debt and
lease financing 445 (2,337)
---------- ----------
Movement in (debt) in period 4,059 (1,903)
Opening net debt (9,049) (7,146)
---------- ----------
Closing net debt (4,990) (9,049)
========== ==========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Preliminary results for the year ended 31 December 2004
RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
Year ended Year ended
31 December 31 December
2004 2003
(proforma)
#'000 #'000
Retained loss for the year (961) (3,278)
Translation adjustments on foreign currency net
investments (136) 95
Proceeds of share capital issued 406 2,111
Share Premium 8,445 0
---------- ----------
Net increase/(decrease) in shareholder funds 7,754 (1,072)
Equity shareholder funds at start of year 853 1,925
---------- ----------
Equity shareholder funds at 31 December 8,607 853
========== ==========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Preliminary results for the year ended 31 December 2004
NOTES
1. Nature of financial information
The financial information in this announcement does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. The auditors
have indicated that they intend to give an unqualified report, and will not
contain any statement under section 237(2) or (3) of the Companies Act 1985,
on these statutory accounts. Copies of the Company's Report and Accounts
will be sent to shareholders shortly and will be available at the registered
office of the Company: 110 Cannon Street, London, EC4N 6AR.
2. Exceptional item
The exceptional item relates to costs of a major restructuring programme for
which implementation commenced during 2003 and that was completed during 2004
3 Dividends
The directors do not recommend the payment of a final dividend (2003: Nil).
4 Acquisition
On 29 June 2004 Nipson acquired all the assets and liabilities of Koonras
B.V. BVBA (including the entire issued share capital of Nipson SAS) ("the
Acquisition"). The consideration was satisfied by the issue of 29,999,800
ordinary shares of 1 pence each to Koonras B.V. BVBA. The Acquisition has
been accounted for using the Reverse Acquisition method and this is in
accordance with FRS 6 (Acquisitions and Mergers) and IFRS 3 (Accounting for
Business Combinations
The comparative results for the year ended 31 December 2003 have been
presented as if the Acquisition had already taken place at that balance
sheet date. The comparative results are therefore presented as proforma
results.
On 1 July 2004 an ordinary resolution was passed to increase the authorised
share capital of the Company to #600,000 consisting of 60,000,000 ordinary
shares of 1 pence each.
On 30 July the Company completed a placing of 14,285,714 Ordinary Shares of
1 pence each at an issue price of 70 pence per share ("the Placing"). On 30
July 2004 the Company's shares were admitted to trading on the AIM ("the
Admission").
Pursuant to a warrant instrument adopted by the Company on 29 July 2004 the
Company is authorised to issue up to 2,017,867 "A" warrants. The Company has
issued 2,017,867 "A" warrants to Great Court Capital, LLC as partial
consideration for bridge funding provided by them in the period leading up
to Admission. Each "A" warrant is transferable by Great Court Capital, LLC
to each bridge funder or their affiliates. Each "A" warrant will entitle the
warrant holder to subscribe for one Ordinary Share at 80 per cent. of the
Placing Price. The Ordinary Shares issued pursuant to the exercise of the
"A" warrants will rank equally in every respect with the existing Ordinary
Shares. The "A" warrants are exercisable for a period of 3 years from
Admission.
Pursuant to a second warrant instrument adopted by the Company on 29 July
2004 the Company is authorised to issue up to 630,358 "B" warrants. Each "B"
warrant will entitle the warrant holder to subscribe for one Ordinary Share
at the Placing Price. The Ordinary Shares issued pursuant to the exercise of
the "B" warrants will rank equally in every respect with the existing
Ordinary Shares. The "B" warrants are exercisable for a period of 5 years
from Admission. 425,571 "B" warrants have been issued to SD Partners, LLC
relating to the monies raised under the Placing and 201,787 "B" warrants to
Great Court Capital, LLC being equal to 5 per cent of the US$5.15m raised
for the bridge funding.
5. Earnings/loss per ordinary share
Earnings/loss per ordinary share is calculated on the weighted average
number of ordinary shares in issue during the year of 29,135,202 (2003:
29,999,800). Under reverse acquisition accounting (see note 4), the amount
of the called up share capital in the consolidated balance sheet represents
the ordinary share capital of Nipson SAS together with the nominal value of
the Placing shares. Fully diluted earnings/loss per ordinary share is equal
to the basic earnings/loss per ordinary share as there were no share options
in issue for either period and the warrants do not give rise to any
dilution.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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