RNS Number:4315M
Nipson Digital Printing Systems PLC
18 May 2005
NIPSON DIGITAL PRINTING SYSTEMS PLC
18 MAY 2005
RESULTS FOR THE THREE MONTHS TO 31 MARCH 2005
Nipson Digital Printing Systems PLC ("Nipson" or "the Company"), the
manufacturer and distributor of black & white digital printing systems and
related consumables, today announces its results for the three months to 31
March 2005.
--------- -------- --------- ---------
3 months to Change 3 months to Year to
31 March +/- % 31 March 31 December
2005 2004 2004
(unaudited) (unaudited) (Audited)
#'000 #'000 #'000
--------- -------- --------- ---------
Turnover 7,762 + 16.7 6,649 28,485
------------------- --------- -------- --------- ---------
Gross profit 2,770 + 28.5 2,156 9,453
------------------- --------- -------- --------- ---------
Operating profit/(loss) 138 (225) 23
------------------- --------- -------- --------- ---------
Profit/(loss) on ordinary
activities before taxation 55 (311) (961)
*Strong demand in final quarter of 2004 has continued into 2005.
*Equipment turnover for Q1 2005 up 62% with a strong performance from
VaryPress 400.
*Expansion in North America and Asia is already resulting in new sales.
*Sales growth and cost reduction and efficiency programmes are driving
profitability.
*Following share placing in March 2005, company has adequate funds for
future growth.
Commenting on the results, Rimon Ben-Shaoul, Chairman of Nipson said:
"Overall, the Board believes that Nipson is on track to achieve the growth in
sales and profits we expect for 2005 and beyond."
For further information, please contact:
Nipson Digital Printing Systems PLC
Alfons Buts, Managing Director
Tel: + 32 3 740 02 05
Bankside Consultants Ltd
Ian Seaton / Simon Bloomfield
Tel: 020 7444 4140
CHAIRMAN'S STATEMENT
Overview
So far in 2005, Nipson has continued to experience the strong demand for its
products seen in the final quarter of 2004. This positive start to the year is
reflected in growth in equipment sales, including strong sales of our high-end
products. In addition, as a result of our cost reduction and efficiency
programmes, the Company is now achieving higher gross margins, a trend which the
Board expects to continue as we expand the business.
Turnover for the 3 months ended 31 March 2005 was #7.8 million, an increase of
17% compared to the first quarter of 2004 (#6.7 million) on which profit before
tax was #0.1 million (2004: #0.3 million loss).
Equipment turnover for the normally weak first quarter of 2005 was #3.2 million,
an increase of 62% compared to the corresponding quarter of 2004, and was at a
similar level to the fourth quarter of 2004. This performance includes a strong
contribution from the VaryPress 400, the Company's new flagship product, which
included sales to MAR Graphics, a new customer in the US, and Schagen & Eschen,
an existing German customer.
Recurrent turnover for the first quarter of 2005 was #4.6 million, a decrease of
3% compared to the first quarter of 2004. Besides the seasonal effect of the
typically quiet first quarter, the weaker dollar negatively affected the
Company's recurrent revenues, while strong sales of equipment in the fourth
quarter of 2004 and the first quarter of 2005 will only begin to contribute to
the Company's recurrent turnover from the second quarter.
Gross margin for the period increased to 36%, compared to 32% in the first
quarter of 2004, with gross profit up 28% at #2.8 million. We expect gross
margin to increase further as we achieve more manufacturing and procurement
efficiencies while growing volumes.
Operating expenses for the first quarter of 2005 were #2.7 million, an increase
of 14% compared to the first quarter of 2004. Sales and marketing expenses were
higher than in the first quarter of 2004, with the aim of driving equipment
sales in 2005. We expect overall operating expenses for the year to stay within
the operating plan.
The operating profit for the first quarter was #0.1 million, compared to a loss
of #0.2 million in the corresponding quarter of 2004.
The net profit for the first quarter of 2005 was #0.1 million compared to a net
loss of #0.3 million in the corresponding quarter of 2004
Strategic developments
Our North American organisation completed the planned expansion of its sales and
marketing team in the first quarter of 2005. Over and above the distribution
agreement signed with Pitman in February 2005, which is generally targeted at
the growing packaging printing market, we are also actively pursuing
distribution agreements with key players in other target markets in North
America.
China remains a key focus for Nipson in Asia. Syntax, our new distributor in
China and a very successful high-end digital colour printing distributor for HP/
Indigo, has now deployed a dedicated team to drive Nipson business, covering all
major industrial areas. This team has already achieved its first product sale.
In May we expanded the Nipson sales organisation for the Asia region with a
Chinese speaking sales manager who has extensive experience in the digital
printing field.
Share placing
On 31 March 2005, through Nipson's broker Teather & Greenwood, we completed a
placing of 6 million new ordinary shares of 1 pence each at 80 pence per share
to raise #4.8 million before expenses. Additionally all of the "A" warrants were
exercised raising an additional #1.1 million. As a result, Nipson now has the
funds necessary to finance its future expansion.
I am delighted with the support we have received from investors and, on behalf
of the Board, would like to welcome Nipson's new shareholders.
At the same time, our controlling shareholder, Koonras BV BVBA, and certain
other shareholders, together sold a total of 9,708,385 existing ordinary shares
of 1 pence each. Following the placing, Koonras BV BVBA holds 50.75% of the
enlarged issued share capital.
Senior executive appointments
Jean-Luc Michel will join Nipson as Finance Director as from June 1, 2005
replacing Wilfred Kopelowitz. Jean-Luc previously spent 8 years at the Pernod
Ricard group having served in various financial and accounting management
positions since qualifying with PriceWaterhouseCoopers.
Loys Rouvillois joined Nipson at the beginning of May as General Manager France,
in charge of all sales, marketing and customer service activities for the French
market. Loys brings over 15 years of management experience in sales and
marketing in the printing field, including 8 years at Oce.
Prospects
So far in the second quarter of 2005, equipment sales have continued to grow
with Nipson's high-end VaryPress 400 system continuing to experience strong
demand in all key geographical areas. In the mainstream market the VaryPress 200
has also been received very well by existing and potential customers.
As from the second quarter, we expect recurrent revenues to start to benefit
from equipment sold in the fourth quarter of 2004 and the first quarter of 2005.
Gross profit is expected to benefit not only from growing volumes but also from
the broad range of programs aimed at reducing the Company's cost of materials.
All these programs are expected to generate savings at least at the planned
level and within the planned timeframe.
Overall, the Board believes that Nipson is on track to achieve the growth in
sales and profits we expect for 2005 and beyond.
Rimon Ben-Shaoul
Chairman
Nipson Digital Printing Systems PLC
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the three months ended 31 March 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
---------- --------- ----------
3 months to 3 months to Year to
31 March 31 March 31 December
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
---------- --------- ----------
Turnover 7,762 6,649 28,485
Cost of Sales (4,992) (4,493) (19,032)
--------------------- ---------- --------- ----------
Gross profit 2,770 2,156 9,453
Administrative expenses (2,706) (2,376) (9,490)
Other operating income/(expenses) 74 (5) 60
--------------------- ---------- --------- ----------
Operating profit/(loss) 138 (225) 23
Exceptional item 0 (46) (569)
--------------------- ---------- --------- ----------
Profit/(loss) on ordinary activities
before interest 138 (271) (546)
Interest receivable/(payable) and
similar charges (83) (40) (415)
--------------------- ---------- --------- ----------
Profit/(loss) on ordinary activities
before taxation 55 (311) (961)
Taxation 0 0 0
--------------------- ---------- --------- ----------
Profit/(loss) on ordinary activities
after taxation 55 (311) (961)
Dividends payable 0 0 0
--------------------- ---------- --------- ----------
Retained profit/(deficit) for period 55 (311) (961)
--------------------- ---------- --------- ----------
Turnover and operating profit/(loss) all derive from continuing operations.
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the three months ended 31 March 2005
CONSOLIDATED BALANCE SHEET
---------- ---------
As at As at 31
31 March December
2005 2004
(Unaudited) (Audited)
#'000 #'000
---------- ---------
Fixed assets
Intangible assets 693 733
Tangible assets 4,448 4,643
----------------------- ---------- ---------
5,141 5,376
----------------------- ---------- ---------
Stock 8,184 7,692
Debtors 8,183 6,736
Cash at bank 8,325 4,595
----------------------- ---------- ---------
24,692 19,023
----------------------- ---------- ---------
Creditors: (10,027) (8,769)
amounts falling due within one year
----------------------- ---------- ---------
Net current assets 14,665 10,254
Total assets less current liabilities 19,806 15,630
----------------------- ---------- ---------
Creditors: amounts falling due after more then one
year (5,127) (6,414)
Provisions for liabilities and charges (591) (609)
----------------------- ---------- ---------
Net assets 14,088 8,607
----------------------- ---------- ---------
Capital and reserves
Called up share capital 3,580 3,500
Other Reserves 10,508 5,107
----------------------- ---------- ---------
Shareholders equity funds 14,088 8,607
----------------------- ---------- ---------
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the three months ended 31 March 2005
CONSOLIDATED CASH FLOW STATEMENT
3 months to Year to 31
31March December
2005 2004
(Unaudited) (Audited)
#'000 #'000
Net cash (outflow) from operating activities (1,540) (4,435)
Returns on investments and servicing of finance
Interest paid (83) (414)
---------- ---------
Net cash flow for returns on investments and
servicing of finance (1,623) (4,849)
---------- ---------
Taxation - -
Capital expenditure and financial investment
Purchase of tangible fixed assets (40) (225)
-
---------- ---------
Net cash flow for capital expenditure (40) (225)
---------- ---------
Cash (outflow) before use of liquid resources and
financing (1,663) (5,074)
Financing
New debt 416 1,912
Loan repayments (128 ) (1,375)
Capital repayments on finance leases (155 ) (438)
Proceeds of share issue 5,557 8,588
Translation adjustments (297) -
---------- ---------
Net cash inflow for financing 5,393 8,687
---------- ---------
Increase/(decrease) in cash in period 3,730 3,613
========== =========
Reconciliation of net cash flow to movement in net
debt
Increase in cash in period 3,730 3,613
(Increase) in debt and lease financing 38 (109)
---------- ---------
Change in net debt resulting from cashflows 3,768 3,504
Translation difference - 553
Movement in (debt) in period 3,692 4,057
Opening net debt (4,992) (9,049)
---------- ---------
Closing net debt (1,224) (4,992)
========== =========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the three months ended 31 March 2005
RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
3 months to Year to 31
31 March December
2005 2004
(Unaudited) (Audited)
#'000 #'000
Retained profit/(deficit) for the period 55 (961)
Translation adjustments on foreign currency net
investments (74) 127
Proceeds of share capital issued 80 143
Premium on shares issued in the year 5,420 8,445
---------- ---------
Net increase in shareholder funds 5,481 7,754
Equity shareholder funds at start of period 8,607 853
---------- ---------
Equity shareholder funds at 31 March 2005 14,088 8,607
========== =========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the three months ended 31 March 2005
NOTES
1. Nature of financial information
The financial information contained within this interim report has been
prepared in accordance with UK GAAP and is unaudited. It does not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. No audited consolidated financial statements for Nipson
Digital Printing Systems Plc have previously been prepared, the
comparatives being prepared for the purposes of this statement
2. Share capital
At the end of March 2005, the Company completed a placing of 6 million
ordinary shares at 80 pence each, to raise #4.8 million before expenses.
Also at the end of March 2005, 2,017,867 'A' warrants were exercised at 56
pence per share, thus the Company raised an additional #1.1 million.
At the same time the majority shareholder Koonras BV BVBA and certain other
shareholders sold 9,708,385 existing shares.
Following this placing, Koonras BV BVBA holds 50.75% of the Company's
issued share capital.
3. Contingent liabilities
Certain entities within the Nipson Digital Printing Systems Group were sued
before the German courts for alleged infringement of six patents. Following
a hearing before the court of first instance the court held in favour of
the Group in regard to three patents and in favour of the plaintiff in
regard to three other patents, one of which had expired during December
2004. Both the Group and the plaintiff are expected to file respective
appeals by July 2005. In parallel, a complaint seeking to annul one of the
two patents decided by the lower court in favour of the plaintiff and which
had not expired has been filed by the Group before another German court
with a hearing expected during 2006. Other annulment actions are in the
process of being filed by the Group. Successful prosecution of the
annulment proceedings would invalidate the lower court decisions in favour
of the plaintiff.
While the outcome of such proceedings cannot be predicted, the Group and
its outside intellectual property counsel believe that the Group has a
reasonable basis to believe that it should be successful in the
proceedings.
SD Partners LLC filed suit in a New York court claiming #600k and warrants
as commission for amounts raised by the Company and shares of the Company
sold by various shareholders during March 2005. The Company denies the
material aspects of the claim and intends to contest vigorously the claims
asserted.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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