Final Results
July 28 2005 - 10:59AM
UK Regulatory
RNS Number:4397P
Network Technology PLC
28 July 2005
28 July 2005
Network Technology plc
Preliminary results for the year ended 31 March 2005
Highlights
* Turnover stabilised at #2.2m, the same as the previous financial year
* Average annual staff numbers in period down from 32 to 29
* Operating profit before exceptional items of #168,000 versus a loss of
#203,000 in the previous year
* Profit of #112,000 versus a loss of #147,000 in the previous year
* Forward orders of #1.1 million, slightly less than this time last year
Commenting on the Company's position Klaus Bollmann, Chairman and Chief
Executive, says:
"The Board believes that the gradual recovery of our markets will continue with
the current financial year being similar to that being reported on today. We
have significant interest in our FollowMeTM product and currently have total
forward orders of #1.1 million. The Group will continue to bring new
technologies to market which, in the Board's view, will secure the Company's
future and bring rewards for our shareholders."
Chairman's Statement
I am pleased to announce our first annual profit after tax for 6 years of
#112,000. The 12 months to 31 March 2005 showed stability with the previous year
and sales remained at #2.2 million and operating costs also remained at #1.5
million.
As a result of the successful emergence of Ringdale from its CVA together with
the concluded liquidation of discontinued businesses, we have written off a
large amount of slow moving inventory as well as discounting all related
liabilities as disclosed in exceptional items A and B in the Group's profit and
loss account.
Our order book at the end of June 2005 showed a healthy #1.1 million slightly
down from last year, which we believe is mainly due to US and European elections
having delayed corporate investment programs.
The Group continues to have low bank borrowings totaling #194,000 (US$ 362,000),
and is mainly used to finance approximately 1.5 months of sales.
Dividends
Although the Company has become profitable again, the Directors are unable to
recommend the payment of a final dividend.
New Product Development
We have developed two new product lines that the directors believe are capable
of becoming world leading products:
* FollowMe (TM) Printing - is a Printer Access Control and Accounting
system which addresses issues like security, availability, print-data
encryption, access to colour printers, copier fax and email facilities on
Multi Function Printers as well as ordinary printers and copiers. The system
is an important element in protecting companies from breaches that might
violate Sarbanes Oxley a new law in the US affecting many large corporate
users based in or doing business with the US.
* Networked Access Control Systems and Time and Attendance Terminals -
seamlessly integrates almost all existing identification technologies such as
swipe cards, proximity cards, barcodes but also fingerprint and face
recognition. This product incorporates our own algorithms, which not only
make us independent of any particular reader or ID technology but also
ensures its efficiency when used with a larger number of people.
We also developed some unique devices and solutions that have their place in the
renewable energy field. However it is early days for these exciting products.
Corporate Activity
During the year we have been focussing on restructuring, refinancing and
reinventing the Group. For those shareholders who follow the RNS service of the
London Stock Exchange, you will know that our Ringdale brand has emerged from
the CVA and all of our Group Companies are now unencumbered again, leaving no
residual contingent liabilities from those companies.
We have been very active on the marketing, sales and product front, despite the
severe financial restrictions within which we have worked. However, we were able
to retain an excellent core-team of people.
During the year, we have significantly strengthened our sales teams in the US
and UK. We have recruited two sales professionals one in the US and one in the
UK (who will also be responsible for Europe) that have come from blue chip
companies and both of whom have successfully built sales teams from scratch.
We will keep shareholders informed of developments within the company. Market
sensitive data will be published through the RNS service of the London Stock
Exchange. Further information can be found at our website
www.network-technology.com which also provides a direct link to either LSE
market data for NTY or Yahoo market data.
Copies of the 2005 Report and Accounts will be sent to shareholders in due
course. Further copies will be available from the registered office of
Network Technology PLC, 26 Victoria Way, Burgess Hill, West Sussex, RH15 9NF.
Guidance to the Market
The Group currently has firm orders of #1.1million for delivery within the next
24 months.
The Group is now in a position to focus on the business at hand and the growth
of its market share in those markets for its products and services. The new
products are fully developed and further developments and improvements should be
covered by cash generated within the Group.
The Board is reviewing options to spin out business units or specific technology
from those products or technologies that the Group does not currently have the
resources to fully exploit itself.
The Board maintains its view that growth and performance in the US operations
will be higher than in our European operations. However, the year ended 31 March
2006 is not expected to be significantly different in performance to the year
ended 31 March 2005. We are expecting a significant improvement for the
company's US operations in the year ended 31 March 2007 assuming that there are
no extraordinary circumstances out of our control.
The markets into which the Group is selling are multi billion dollar markets. We
believe that we can compete effectively by exploiting our technologies and have
the flexibility to take advantage of opportunities when they arise. The Group
continues to have a unique technological position as well as the ability to
increase manufacturing when required.
Klaus Bollmann
Chairman
NETWORK TECHNOLOGY PLC
------------------------
YEAR ENDED 31 MARCH 2005
------------------------
PROFIT AND LOSS ACCOUNT
------------------------
Year ended Year ended
31.03.05 31.03.04
#'000 #'000 #'000
Turnover 2,230 2,259
Ordinary Cost of Sales (543)
Exceptional Cost of Sales A (377)
-------
Cost of Sales (920) (947)
--------------- -----------
Gross Profit 1,310 1,312
Other operating expenses (1,519) (1,515)
Other operating income 0 0
------------ -----------
Group operating loss (209) (203)
Exceptional item B 273 0
Interest Receivable and similar income 0 0
Interest Payable and similar charges (24) (25)
------------ -----------
Profit / (Loss) before taxation 40 (228)
Tax on Profit / (Loss)on ordinary activities 72 81
------------ -----------
Profit / (Loss) after taxation 112 (147)
============ ===========
Profit / (Loss) per ordinary share in pence
Basic 5.4 (7.9)
Normalized 11.3 (7.9)
NETWORK TECHNOLOGY PLC
------------------------
YEAR ENDED 31 MARCH 2005
--------------------------
BALANCE SHEET
---------------
31 March 2005 31 March 2004
#'000 #'000 #'000 #'000
Fixed Assets
Tangible Assets 391 259
Current Assets
Stocks 806 1,168
Debtors 510 624
Cash at Bank and in Hand 30 56
------- -------
1,346 1,848
Creditors
Amounts falling due within one year (1,134) (1,913)
------- -------
Net Current Assets 212 (65)
------- -------
Total Assets less Current Liabilities 603 194
Creditors
Amounts falling due after more than
one year (146) (176)
------- -------
Net Assets 457 18
======= =======
Capital and Reserves
Called up share capital 4,112 3,764
Share premium account 8,028 8,028
Capital redemption reserve 12 12
Profit and loss account (11,695) (11,786)
------- -------
457 18
======= =======
YEAR ENDED 31 MARCH 2005
--------------------------
CASH FLOW STATEMENT
---------------------
2005 2004
#'000 #'000 #'000 #'000
Operating Loss (209) (203)
Depreciation and Working Capital
Movements 118 135
------- -------
Net Cash outflow from operating
activities (91) (68)
Returns on investments and servicing of
finance
Interest paid (24) (25)
Interest element of hire purchase
payment 0 0
------- -------
Net cash outflow from returns
on investments and servicing of finance (24) (25)
Taxation (12) 70
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (185) (7)
Receipts from sales of fixed assets 0 24
------- -------
Net cash inflow/(outflow) from capital
expenditure and financial investment (185) 17
Liquidation of subsidiaries 0 0
------- -------
Cash outflow before financing (312) (6)
Financing
Proceeds from share issues 348 70
New debt 0 0
Repayment of debt (45) (95)
Capital element of hire purchase 0 0
------- -------
Net cash inflow / (outflow) from
financing 303 (25)
------- -------
(Decrease)/Increase in cash (9) (31)
======= =======
NOTES
1. Basis of Preparation
The comparative figures for the year to 31 March 2004 do not constitute full
accounts within the meaning of Section 240 of the Companies Act 1985. Full
accounts for that period, which received a qualified audit report containing a
statement under Section 237(3) of the Companies Act 1985, have been delivered
to the Registrar of Companies. The financial information set out in the
preliminary statement of results for the year ended 31 March 2005 does not
constitute statutory accounts within Section 240 of the Companies Act 1985.
The audit report to the statutory accounts will contain a qualified opinion
arising from a limitation in scope in the realisable value of inventory at 31st
March 2004 as a consequence of the audit report attached to the statutory
accounts of that year which contained a statement under Section 237(2) or
Section 237(3) of the Companies Act 1985.
2. Profit / (Loss) per Share
The calculation of basic earnings per ordinary share is based on the profit for
the year after tax
of #112,000 (year to 31 March 2004: loss of #147,000). Normalised earnings per
share is calculated after adjusting profit after tax for the effect of #104,000
(2004 # nil ) exceptional items and in the directors' opinion is more indicative
of underlying performance.
Profit / (Loss) per share has been calculated using the weighted average number
of ordinary shares in issue during the year. The weighted average number of
equity shares in issue is 1,911,000 (2004: 1,864,500).
The Diluted Profit/(Loss) per share is not given as the effect of all potential
ordinary shares is anti-dilutive.
3. Exceptional Items
A) Exceptional write-off of obsolete inventory.
B) Writing back of creditors of a subsidiary company following
the successful completion of the corporate voluntary arrangement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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