Interim Results
December 24 2001 - 2:05AM
UK Regulatory
RNS Number:1767P
Network Technology PLC
21 December 2001
Network Technology Plc Interim Results
Financial Highlights for the six months to 30th September 2001
2001 2000
* Turnover # 1.82m # 2.8m
* Operating profit/(loss)
- excluding depreciation
- excluding restructuring #(0.05m) # 0.1m
* Operating loss # 0.63m # 0.4m
* Pre-tax loss # 0.64m # 0.5m
* Earnings per share #-1.81p # -1p
* Interim dividend nil nil
Chairman's Statement
Results
The company continues on the road of recovery. However, the recent events in USA
and the further downturn of almost all sectors had a negative impact on our
growth capabilities over the six months period from 1st April 2001 to 30th
September 2001, leaving us with a turnover of #l.8 million which shows that
despite the difficulties in the market, we were holding our position.
The analysis of sales now shows old product lines make 49% versus new product
lines now at 51%. The sales to OEM customers was unchanged at 23% compared to
the same period last year.
The unaudited operating loss after depreciation was # 0.63 million in the half-
year ended 30th September 2001 compared to 0.4 million in the half-year ended
30th September 2000. This figure includes a restructuring cost of #0.24 million
and financing cost of #0.06m and a depreciation of #0.35 million, accounting for
almost all of the losses.
The cash outflow in the half-year ended 30th September 2001 was #15,000 compared
to a cash inflow of #359,000 to the 31st March 2001.
The US business is doing well and contributed to 30% of the turnover. The
Company believes that the US markets are likely to recover first, currently
estimated in the latter part of 2002, whilst the Company expects the European
and Asian Markets to recover no sooner than 2003 to 2004.
Dividends
Whilst the Company is still in a recovery phase the Directors continue to be
unable to recommend the payment of an interim dividend.
Review
As a result of the restructuring and consolidation process, the remaining and
consolidated Group Companies, whilst being focused on their core activities, are
now all in a position to grow.
N&R Circuits UK Ltd. manufactures printed circuit boards and provides screen
printing services for Group Companies and outside customers. N&R has been moved
to the Burgess Hill Site. In the move all processes were upgraded to further
improve profitability and implement cleaner processes. N&R has seen a lot of
consolidation in its industry which, the company believes, will continue,
creating new opportunities for the Company in the final quarter.
Xerox UK has agreed with Ringdale UK to install the Xerox Docushare on
Ringdale's l9inch CD-R and DVD-R based Network Attached Storage Server providing
convenient Document Management, Storage and Retrieval. Three systems will be
made available in three Xerox showroom locations and Xerox will actively market
the product to its end-user customers through its network of concessionaires.
This further endorses the storage server technology from Ringdale as a system
with a low entry cost for convenient Document Archiving and Retrieval, ideal for
companies that need a robust long-term solution as well as the ability to vastly
increase the availability of large amounts of data in the future.
The FollowMe Printer Roaming and Q-Server System has also been adopted by a
number of OEM clients and will be exclusively shown with the most recent
biometric access control on C-Bit in Hannover at the Hewlett Packard booth.
HBM developed a number of derivatives of existing products as well as a new tone
dialler for web applications. The device connects on one side to a normal
telephone and on the other to the serial port of a desktop PC. A software is
supplied which resides on the Web-Server and gets downloaded automatically to
the Web-Browser and can dial a phone number direct from that web page.
Klaus Bollmann
Chairman
21st December 2001
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2001
PROFIT AND LOSS ACCOUNT
6 months 6 months 12 months
to 30.9.01 to 30.9.00 to 31.3.01
#000 #000 #000
Turnover 1,816 2,834 5,154
Operating Costs -2,450 -3,187 -6,419
Group operating loss -634 -353 -1,265
Interest -5 -98 -91
Loss before taxation -639 -451 -1,356
Taxation -16 0 303
Loss after taxation -655 -451 -1,053
Dividends - equity 0 0 0
Retained loss for the period -655 -451 -1,053
Loss per share -1.81 -1.25 -2.91
NETWORK TECHNOLOGY PLC
30 SEPTEMBER 2001
BALANCE SHEET
6 months 6 months 12 months
to 30.9.01 to 30.9.00 to 31.3.01
#000 #000 #000
Fixed Assets
Tangible Assets 1,632 2,876 2,180
Intangible Assets 38 0 39
1,670 2,876 2,219
Current Assets
Stocks 4,611 4,657 4,736
Debtors 1,032 1,359 1,184
Cash at Bank and in Hand 0 34 81
5,643 6,050 6,001
Creditors
Amounts falling due
within one year -3,193 -3,232 2,650
Net Current Assets 2,449 2,818 2,650
Total Assets less
Current Liabilities 4,120 5,694 4,869
Creditors
Amounts falling due after
more than one year 0 -20 -11
Net Assets 4,120 5,674 4,858
Capital and Reserves
Called up share capital 3,618 3,618 3,618
Share premium account 8,029 8,092 8,028
Capital redemption reserve 12 12 12
Profit and loss account -7,539 -6,048 -6,800
4,120 5,674 4,858
NETWORK TECHNOLOGY PLC
YEAR ENDED 30 SEPTEMBER 2001
CASH PLOW STATEMENT
6 months 6 months 12 months
to 30.9.01 to 30.9.00 to 31.3.01
#000 #000 #000
Operating loss -634 -353 -1,265
Depreciation and amortisation 329 521 921
Working capital movements 290 -24 703
Not Cash inflow/(outflow)
from operating activities -15 144 359
Returns on investments and
servicing of finance
interest paid -5 -98 -92
Taxation 0 -9 0
Capital expenditure and
financial investment 137 -76 201
Equity dividends paid 0 0 0
Cash inflow before financing 117 -39 468
Financing -286 -7 -467
Decrease in cash and
cash equivalents -169 -46 1
Notes to the Interim Statement
1. Basis of Preparation
The interim financial statements have been prepared in accordance with the
accounting policies as set out in the Group financial statements for the 12
months ended 31st March 2001. The statements do not comprise of full financial
statement within the meaning of section 240 of the Companies Act 1985. The
statements are unaudited but have been reviewed by Parker Partnership chartered
accountants and their report is set out on page 7.
The figures for the 12 months ended 31st March 2001 have been extracted from the
financial statements filed with the Registrar of Companies on which the Auditors
gave an unqualified report.
2. Taxation
No credit has been taken for any research and development tax credit due for the
6 months ended 30th September 2001. The tax refund for the year ended 31st March
2001 has now been processed and offset against the UK PAYE liabilities.
3. Interim Dividend
The Directors continue to be unable to recommend the payment of a dividend for
the 6 months ended 30th September 2001.
4. Earnings per Share
Earnings per share have been calculated on a loss after taxation of #655,000
(2000: #451,000) and 36,180,981 ordinary shares (2000: 36,180,981 ordinary
shares).
5. Stock
The Directors have reviewed the Group's stocks and remain confident that they
will all be sold for at least their book value. However, in view of the current
state of the market there must be a level of uncertainty surrounding the ability
to realise certain items of stock at greater than or equal to book value.
6. Profit and loss account
6 months 6 months 12 months
to 30.9.01 to 30.9.00 to 31.3.01
Unaudited Unaudited Audited
#000 #000 #000
Opening balance (6,800) (5,702) (5,862)
Retained loss for the period (655) (451) (1,053)
Exchange Differences (84) 105 115
(7,539) (6,048) (6,800)
Independent Review Report to Network Technology Plc
Introduction
We have been instructed by the Company to review the financial information set
out on pages 3 to 7 and we have read the other information contained in the
interim report and considered whether it contains any apparent inconsistencies
with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and based thereon, assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with Auditing Standards and therefore provides a
lower level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Fundamental uncertainty
In arriving at our review conclusion, we have considered the adequacy of
disclosures made in the financial information concerning the uncertainty as to
the ability of the group to sell its stocks for at least their carrying value.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th September 2001.
The Parker Partnership
Chartered Accountants and Registered Auditors
Hove
21st December 2001
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