RNS Number:8490P
Nipson Digital Printing Systems PLC
08 August 2005
NIPSON DIGITAL PRINTING SYSTEMS PLC
8 August 2005
RESULTS FOR THE SIX MONTHS TO 30 JUNE 2005
Nipson Digital Printing Systems PLC ("Nipson" or "the Company"), the
manufacturer and distributor of black & white digital printing systems and
consumables, today announces its results for the six months to 30 June 2005.
6 months to Change 6 months to Year to
30 June 2005 +/- % 30 June 2004 31 December 2004
(unaudited) (unaudited) (Audited)
#'000 #'000 #'000
----------------- --------- -------- ---------- ---------
Turnover 15,802 +18.9 13,293 28,485
----------------- --------- -------- ---------- ---------
Gross profit 5,319 +18.4 4,492 9,453
----------------- --------- -------- ---------- ---------
Operating
profit 146 (438) 23
----------------- --------- -------- ---------- ---------
Profit/(loss)
on ordinary
activities
before
taxation 88 (923) (961)
Highlights:
* Turnover increased by 19% to #15.8 million for the six months
* Equipment sales growth of 67% to #6.6 million with the new VaryPress 400
machine selling well
* Recurrent revenues flat with growth expected to resume in the last
quarter
* Cost reduction and efficiency programmes on track
* Substantial growth in North America
Commenting on the results, Rimon Ben-Shaoul, Chairman, said
" We believe that equipment sales for the second half and for the year will
achieve our targets, despite price competition in the mainstream market.
Although recurrent revenues were unexpectedly flat, we have reason to believe
they will resume growth from the fourth quarter of 2005. We will continue to
pursue our growth strategy, which should generate strong returns for our
shareholders. We expect to be able to demonstrate further progress during the
remainder of 2005."
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 7367 8888
CHAIRMAN'S STATEMENT
Overview
During the first half of 2005, Nipson continued to pursue its growth strategy
with success. We have experienced strong demand for the new "high end" VaryPress
400 and "mainstream" VaryPress 200 and have made significant progress in
building our position in key geographic markets, most notably North America.
This is reflected in strongly increased equipment revenues with new "high end"
machines selling well. At the same time, we are implementing our extensive cost
reduction and efficiency programmes as planned.
Expanding Nipson's installed equipment base, to increase recurrent revenues, is
a crucial element of our strategy and so it is encouraging that our new systems
have achieved strong sales growth.
However, it is taking customers longer than anticipated to integrate new Nipson
equipment into existing or new production workflows and to reach full-scale
production. Consequently, we expect recurrent revenues to start growing as from
the fourth quarter of this year, when new installed machines get into full-scale
production.
Turnover for the six months to 30 June 2005 was #15.8 million, an increase of
19% over the same period last year, with turnover in the second quarter of 2005
growing by 21% compared with the respective period of 2004 to #8.0 million.
Equipment turnover for the first six months grew 67% compared with the same
period of 2004 to #6.6 million. For the second quarter the equipment turnover
growth was 69% compared with the same period of 2004 to #3.4 million. Recurrent
revenues in the second quarter of 2005, which include the sale of toner, spares
and maintenance services, were flat at #4.6 million, with recurrent revenues for
the first 6 months of 2005 of #9.2 million being 1% down on the same period in
2004.
Gross profit for the six months to 30 June 2005 was #5.3 million, an increase of
18% over the same period last year. Gross margins remained stable at 34%
compared to the same period last year. Gross margins for the second quarter 2005
were 32% (36% in the first quarter 2005) due to price competition in the
"mainstream" market and increased exposure to the US dollar.
Operating profit for the six months to 30 June 2005 was #146,000, compared to an
operating loss of #438,000 for the same period last year (a profit of #23,000
for the full year 2004). Profit before tax for the first six months of 2005 was
#88,000 compared to a loss of #923,000 for the same period last year (a loss of
#961,000 for the full year 2004).
Review
Equipment turnover for the first six months of 2005 was #6.6 million,
representing growth of 67% over the comparative period of 2004, with similar
growth being achieved in the second quarter of 2005 over the same period last
year. The new VaryPress 400 "high end" machines have sold well, including a sale
in the UK to Biddles, who also upgraded their existing Nipson equipment to 600
dpi. Sales of "mainstream" market machines, including the new VaryPress 200
system, are increasing quarter by quarter.
In North America, demand for equipment has been strong following an upgrade of
Nipson's own sales organisation and new distribution arrangements being
established. Our new partner, Pitman, achieved its first order earlier than
expected in the second quarter of 2005 and has built a strong pipeline which is
expected to benefit the second half of this year. We have entered into an
agreement with Kodak to supply the VaryPress 400 as part of an integrated Kodak
solution for transactional printing. The Kodak Versamark system prints full
colour variable data with the Nipson VaryPress 400 printing the MICR characters
for customer cheques. The first unit has been installed at a major document
production outsourcer in the United States.
In Latin America, Nipson more than doubled equipment sales in the first half of
2005 compared to the same period of 2004, reflecting good further progress in
Mexico. We have just signed a second distribution agreement in Brazil with
International Printers Services, which has a particular strength in
transactional printing and government business, with the current distributor
Alphaprint remaining focused on the commercial print markets.
Our progress in expanding and upgrading distribution in Asia has been slower
than planned. As a result, sales performance in the first half of 2005 was below
target. We are establishing a sales and marketing hub in Singapore to drive
business development and to provide local support in Asia.
A wider geographic sales base has broadened the source of revenues and increased
the exposure of the company to dollar based revenues.
We continue to look for ways to reduce costs and improve operational efficiency
whilst maintaining the level of expenditure on marketing, sales and research and
development which are essential to Nipson's strategic development. Our R&D
efforts will result in a new product announcement for the mainstream market in
the autumn. The programme to reduce the cost of toner has been fully implemented
with full benefits expected as from the second half of 2005. The programme to
introduce a new writing head is on target with significant benefits expected for
gross margins in 2006.
Management
Robert Cahill will join Nipson on 12 September 2005 as finance director.
Although he is not joining the Board of the company, he will have full
responsibility for the financial management of the group. He joins from Bossard
Group, the Swiss fasteners distributor where he has been working since 1998,
most recently as Chief Executive Officer of its French subsidiary. Aged 46,
since qualifying as a Chartered Management Accountant in 1983, he has held
senior financial and management positions in a range of industrial organisations
including subsidiaries of Courtaulds and Hawker Siddeley.
Prospects
Demand for Nipson systems remains strong and this is reflected in the company's
sales pipeline. Performance in North America continues to be encouraging and we
expect sales in Asia to grow significantly in the second half of 2005.
Whilst price competition remains in the "mainstream" market which is affecting
our margins, we believe that equipment sales for the second half and the year
overall will achieve our targets.
Although recurrent revenues were unexpectedly flat, we have reason to believe
they will resume growth from the fourth quarter of 2005.
We will continue to pursue our growth strategy, which we are confident will
generate strong returns for our shareholders, and expect to be able to
demonstrate further progress during the remainder of 2005.
Rimon Ben-Shaoul
Chairman
Nipson Digital Printing Systems PLC
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
--------------------- ---------- ---------- ---------
6 months to 6 months to Year to
30 June 30 June 2004 (Unaudited) 31 December 2004
2005 #'000 (Audited)
(Unaudited) #'000
#'000
--------------------- ---------- ---------- ---------
Turnover 15,802 13,293 28,485
Cost of Sales (10,483) (8,801) (19,032)
--------------------- ---------- ---------- ---------
Gross profit 5,319 4,492 9,453
Administrative
expenses (5,318) (4,916) (9,490)
Other operating 145 (14) 60
income ---------- ---------- ---------
---------------------
Operating
profit/(loss) 146 (438) 23
Exceptional item - (321) (569)
--------------------- ---------- ---------- ---------
Profit/(loss) on
ordinary activities
before interest 146 (759) (546)
Interest
receivable/(payable)
and similar charges (58) (164) (415)
--------------------- ---------- ---------- ---------
Profit/(loss) on
ordinary activities
before taxation 88 (923) (961)
Taxation - 0
--------------------- ---------- ---------- ---------
Profit/(loss) on
ordinary activities
after taxation 88 (923) (961)
Dividends payable - 0
--------------------- ---------- ---------- ---------
Retained
profit/(deficit) for
period 88 (923) (961)
--------------------- ---------- ---------- ---------
Turnover and operating profit/(loss) all derive from continuing operations.
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the 6 months ended 30 June 2005
CONSOLIDATED BALANCE SHEET
----------------------- ---------- ---------
As at As at 31 December 2004
30 June (Audited)
2005 #'000
(Unaudited)
#'000
----------------------- ---------- ---------
Fixed assets
Intangible assets 825 733
Tangible assets 4,396 4,643
----------------------- ---------- ---------
5,221 5,376
----------------------- ---------- ---------
Stock 10,030 7,692
Debtors 9,276 6,736
Cash at bank 4,740 4,595
----------------------- ---------- ---------
24,046 19,023
Creditors: amounts falling due
within one year (10,097) (8,769)
----------------------- ---------- ---------
Net current assets 13,949 10,254
Total assets less current
liabilities 19,170 15,630
----------------------- ---------- ---------
Creditors: amounts falling due
after more than one year (4,760) (6,414)
Provisions for liabilities and
charges (581) (609)
----------------------- ---------- ---------
Net assets 13,829 8,607
----------------------- ---------- ---------
Capital and reserves
Called up share capital 3,580 3,500
Other Reserves 10,249 5,107
----------------------- ---------- ---------
Shareholders equity funds 13,829 8,607
----------------------- ---------- ---------
Approval by the Board of Directors on Monday, 8 of August 2005.
Alfons BUTS Ken LALO
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2005
CONSOLIDATED CASH FLOW STATEMENT
6 months to Year to 31
30 June December
2005 2004
(Unaudited) (Audited)
#'000 #'000
Net cash (outflow) from operating activities (3,772) (4,435)
Returns on investments and servicing of finance
Interest paid (58) (414)
Taxation - -
Capital expenditure and financial investment
Purchase of tangible fixed assets (160) (225)
---------- ---------
Cash (outflow) before use of liquid resources and
financing (3,990) (5,074)
Financing
New debt 188 1,912
Loan repayments (866) (1,375)
Capital repayments on finance leases (284) (438)
Proceeds of share issue 5,423 8,588
Translation adjustments (326) -
---------- ---------
Net cash inflow for financing 4,135 8,687
---------- ---------
Increase/(decrease) in cash in period 145 3,613
========== =========
Reconciliation of net cash flow to movement in net
debt
Increase in cash in period 145 3,613
(Increase) in debt and lease financing 1,198 (109)
---------- ---------
Change in net debt resulting from cashflows 1,343 3,504
Translation difference 553
Movement in (debt) in period 1,343 4,057
Opening net debt (4,992) (9,049)
---------- ---------
Closing net debt (3,649) (4,992)
========== =========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2005
RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
6 months to Year to 31 December
30 June 2004
2005 (Audited)
(Unaudited) #'000
#'000
Retained profit/(deficit) for the period 88 (961)
Translation adjustments on foreign
currency net investments (239) 127
Proceeds of share capital issued 80 143
Premium on shares issued in the year 5,293 8,445
---------- ---------
Net increase in shareholder funds 5,222 7,754
Equity shareholder funds at start of
period 8,607 853
---------- ---------
Equity shareholder funds at 31 March 2005 13,829 8,607
========== =========
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 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. The
interim results have been prepared in accordance with the accounting policies
adopted for the last audited accounts, being the financial statements to 31st
December 2004.
2. 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 filed respective appeals. In parallel, complaints seeking to annul
the two patents decided by the lower court in favour of the plaintiff and which
had not expired have been filed by the Group before another German court with
hearings expected during 2006.
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.
The complaint filed by SD Partners LLC claiming approximately #600,000 and
warrants as commission for amounts raised by the Company and shares of the
Company sold by various shareholders during March 2005 was settled. As a result
of the settlement all proceedings and agreements between the parties shall
terminate. The Company has paid SD Partners LLC a total amount of #250,000 (the
major portion of which has already been provided for in the March 31 2005
interim results); no additional warrants shall be issued.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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