Final Results
July 30 2001 - 3:00AM
UK Regulatory
RNS Number:6434H
Network Technology PLC
27 July 2001
Chairman's Statement to the final results ending 31st March 2001
Results
Further to my last report on the Group accompanying the interim results for
September 2000, the Group is still firmly on track for recovery and has
weathered considerably well the decline in business currently experienced by all
companies in the sector.
Our trading position has not significantly changed during this time and
therefore no updates to the market were given so as to not create any
expectations that the company would have difficulties delivering in the
current climate.
In the final accounts, as already presented in the interim accounts, we have
shown a marginal profit on operations before depreciation, factoring charges,
interest and CVA costs which is in line with our previous statements and the
Board's expectations. The loss for the period after depreciation was #1.2
million in the full year ended 31st March 2001, compared to #1.4 million in the
year ended 31st March 2000.
Dividends
Until the Group has completed its recovery phase the directors are unable to
recommend the payment of a dividend.
Review
The consolidation in the Group continued and the current employee count is 72
against a turnover of # 5.1 million compared to 122 employees with a turnover of
#9.4 million. Further restructuring of the Group and its individual companies in
Europe and the US led to improved efficiencies; however the gross margin reduced
to 50 % from 55 % in the previous period. The main reason was that the OEM print
server prices came under severe pressure from competition in Japan and Germany.
H. Bollmann Manufacturers Limited has completed most of the design work for the
products sold through the Ringdale brand and is now engaged on enhancing
existing product lines that are at the beginning of the bell-curve as well as
new contract designs for OEM customers.
A further update version of the Graphics Server program for charting and
graphing in Web Servers based on H. Bollmann Manufacturers(TM) software
technology will be released in the Autumn.
For the CD-R / DVD-R Near-Line Storage Server we are still registering increased
interest from our OEM customers as well as from our distribution partners for
our Ringdale brand.
N&R Circuits UK Limited has now been moved from Lancing to Burgess Hill,
increasing the efficiencies in the manufacturing of product. This move allowed
us to further streamline the administration as well as further modernizing the
plant. A significant number of new contracts and customers have resulted from
the move which should contribute to the bottom line in the current period. This
will balance with the investment and costs resulting from the move and
modernization of the plant. This move was necessary to make the HBM / N&R
contract manufacturing side of our business more attractive to potential
customers and investors.
Nextus Inc. was able to attract new customers as a result of a newly formed
sales team and the right balance of capabilities in today's environment where
smaller production runs are required.
Ringdale Inc. has built a new sales team which has proven to be much more
efficient using the groups OrgCenter CRM software. Sales of Access Control
devices and lock mechanisms are slowly increasing, which is normal at the bottom
of the bell-curve. A licensing agreement has been signed with San Antonio based
Facekey Corporation to exploit their fingerprint and face recognition
technologies in NT Group's products. Access Control products should contribute
to the bottom line within 12 months.
JRL Systems Inc. is further pursuing OEM business for its Magnum Controller
platform and Multi User Operating System in the biometrics field where high
processing power and low cost for mass production are a prime requirement.
I am confident that the market and product choices the Board have made are the
right ones. They are necessary to move the Company away from its exposure to the
Japanese market and its print server products. The new products will allow the
company to grow out of the current climate. We will continue to bring the new
technologies to market, which, the Board believes, will secure the Company's
future and yield the biggest rewards for NT's shareholders.
Klaus Bollmann
Chairman, Network Technology Plc
NETWORK TECHNOLOGY PLC
YEAR ENDED 31 MARCH 2001
PROFIT AND LOSS ACCOUNT
Unaudited Audited
2001 2000
#000 #000
Turnover 5,154 9,488
Cost of sales (2,544) (4,194)
Gross profit 2,610 5,294
Other operating expenses (3,805) (6,769)
Group operating loss (1,195) (1,475)
Profit on disposal of investments - 59
Interest receivable and similar income 4 7
Interest payable and similar charges (66) (122)
Loss on ordinary activities before taxation (1,257) (1,531)
Tax on loss on ordinary activities (9) (2)
Loss on ordinary activities after taxation (1,266) (1,533)
Loss per ordinary share (pence) (3.50) (4.24)
NETWORK TECHNOLOGY PLC
YEAR ENDED 31 MARCH 2001
BALANCE SHEET
Unaudited Audited
2001 2000
#000 #000 #000 #000
Fixed Assets
Tangible Assets 2,180 3,249
Intangible Assets 38 0
2,218 3,249
Current Assets
Stocks 4,725 4,830
Debtors 995 1,709
Cash 79 102
5,799 6,641
Creditors
Amounts falling due within one year (3,397) (3,842)
Net Current Assets 2,402 2,799
Total Assets less Current Liabilities 4,620 6,048
Creditors
Amounts falling due after more than one year (11) (27)
Net Assets 4,609 6,021
Capital and Reserves
Called up share capital 3,618 3,618
Share premium account 8,093 8,093
Capital redemption reserve 12 12
Profit and loss account (7,114) (5,702)
4,609 6,021
Note:
As disclosed in the accounts for the year ended 31st March 2000 some of the
Group's stock lines have become slow moving. The Directors have again reviewed
the Group's stocks and remain confident that they will be sold for at least
their full book value. Accordingly no provision has been made against their
carrying value. However,in view of the state of the market there must be a level
of uncertainty surrounding our ability to realize certain items of stock at
greater or equal to book value. Our auditors will refer to this in their audit
report as a fundamental uncertainty although their report will not be qualified
in this respect. The Directors engaged new auditors for the year ended 31st
March 2001 at the end of June.
NETWORK TECHNOLOGY PLC
YEAR ENDED 31 MARCH 2001
CASH FLOW STATEMENT
Unaudited Audited
2001 2000
#000 #000 #000 #000
Net Cash (outflow)/inflow from
operating activities (130) 67
Returns on investments and servicing
of finance
Interest received 4 7
Interest paid (64) (118)
Interest element of hire purchase payment (2) (4)
Net cash outflow from returns on
investments and servicing of finance (62) (115)
Taxation 0 (2)
Capital expenditure and financial investment
Payments to acquire tangible
fixed assets (95) (228)
Payments to acquire intangible assets (38) 0
Receipts from sales of investments 0 131
Receipts from sales of fixed assets 335 24
Net cash inflow/(outflow) for capital
expenditure and financial investment 202 (73)
Cash inflow/(outflow) before financing 10 (123)
Financing
Repayment of debt 0 (81)
Capital element of hire purchase (14) (4)
Net cash outflow from financing (14) (85)
Decrease In cash (4) (208)
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