Interim Results
December 24 2002 - 2:00AM
UK Regulatory
RNS Number:5503F
Network Technology PLC
23 December 2002
Network Technology Plc Interim Results
Financial Highlights for the six months to 30th September 2002
2002 2001
Turnover # 1.63m # 1.82m
Operating profit/(loss)
- excluding depreciation
- excluding restructuring # 0.01m # (0.05m)
Operating (loss)/gain # (0.65m) # (0.63m)
Pre-tax loss # (0.65m) # (0.64m)
Earnings per share # -1.77p # -1.81p
Interim Dividend nil nil
Chairman's Statement
Results
The company continues on the road of recovery. A receding economy in the USA and
the further downturn of almost all sectors continued to have a negative impact
on our growth capabilities over the six months period from 1st April 2002 to
30th September 2002, leaving us with a turnover of #1.63 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 41% versus new product
lines now at 59%. The sales to OEM customers reduced to 20% compared to 23% in
the same period last year.
The unaudited operating loss after depreciation was #0.65 million in the half-
year ended 30th September 2002 compared to #0.63 million in the half year ended
30th September 2001. This figure includes a restructuring cost of #0.46 million,
a depreciation of #0.19 million and an interest charge of #0.02 million,
accounting for almost all of the losses.
The cash outflow in the half-year ended 30th September 2002 was #15,000 compared
to a cash outflow of #411,000 to the 31st March 2002.
The US business is doing well and contributed to 41% of the turnover. The
Company believes that the US markets are likely to recover first, currently
estimated to be delayed to the latter part of 2003, whilst the Company expects
the European and Asian Markets to recover no sooner than 2004 to 2005.
Page 1
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.
The operations of H. Bollmann Manufacturers Limited and N&R Circuits Limited
were discontinued in November 2002 and Nextus Limited was newly founded and has
been tasked to take on the responsibility of contract manufacturing for the
Group's Ringdale brand and other companies. This new company acquired certain
assets from the discontinued operations of H. Bollmann Manufacturers Limited and
N&R Circuits Limited and runs its operations from NT's UK headquarters in
Burgess Hill.
Nextus Inc. a technology company, specialising in the design and manufacturer of
an extensive range of hardware and software products, Biometric Access Control,
Plotter Controllers, Electro-Mechanical Locking Devices and DVD-R/CD-R based
networked Near Line Data Storage Systems. These products are suitable to be
marketed to the distribution channel through the Group's Ringdale brand or
directly to the leading Original Equipment Manufacturers (OEM's) throughout the
world.
The successful restructuring of the Group's portfolio away from its slowly
diminishing legacy markets has led to renewed focus towards new growth areas. In
addition to the manufacturing of Ringdale's new product ranges such as access
control, storage systems and FollowMe printing, Nextus's contract manufacturing
is also offered to a wider range of customers.
Nextus also has the function within the Group to provide printed circuit boards
to Nextus Inc. as well as an ever-growing number of external customers.
All Nextus' products are manufactured within an ISO 9000 Quality System and are
code compliant with European CE as well as US FCC emission standards.
The companies web-sites have been upgraded and show the latest of the companies
biometics technologies for Access Control and Printing Systems.
Klaus Bollmann
Chairman
23rd December 2002
Page 2
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2002
PROFIT AND LOSS ACCOUNT
6 months 6 months 12 months
to 30.9.02 to 30.9.01 to 31.3.02
Unaudited Unaudited Audited
#000 #000 #000
Turnover 1,628 1,816 3,251
Operating Costs (1,832) (2,450) (7,343)
Group operating loss (204) (634) (4,092)
Exceptional Item (436) 0 0
Interest (11) (5) (20)
Loss before taxation (650) (639) (4,112)
Tax on loss on ordinary activities (1) (16) 200
Loss after taxation (652) (655) (3,912)
Dividends - equity 0 0 0
Loss on ordinary activities after taxation (652) (655) (3,912)
Loss per share -1.77 -1.81 -11.55
Page 3
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2002
BALANCE SHEET
6 months 6 months 12 months
to 30.9.02 to 30.9.01 to 31.3.02
Unaudited Unaudited Audited
#000 #000 #000
Fixed Assets
Tangible Assets 198 1,632 1,129
Intangible Assets 0 38 26
198 1,670 1,155
Current Assets
Stocks 1,120 4,611 2,722
Debtors 333 1,032 825
Cash at Bank and in Hand 40 0 37
1,494 5,643 3,584
Creditors
Amounts falling due within one year (1,357) (3,193) (3,765)
Net Current Assets 137 2,450 (181)
Net Assets 335 4,120 974
Capital and Reserves
Called up share capital 3,693 3,618 3,646
Share premium account 8,028 8,029 8,028
Capital redemption reserve 12 12 12
Profit and loss account (11,398) (7,539) (10,712)
335 4,120 974
Page 4
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2002
CASH FLOW STATEMENT
6 months 6 months 12 months
to 30.9.02 to 30.9.01 to 31.3.02
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating loss (204) (634) (4,092)
Depreciation and amortisation 188 329 884
Working capital movements 0 290 2,797
Net Cash inflow/(outflow) from operating activities (15) (15) (411)
Returns on investments and servicing of finance
Interest paid (11) (5) (20)
Taxation (1) 0 270
Capital expenditure and financial investment (6) 137 181
Disposal of Subsidiaries 234 0 0
Equity dividends paid 0 0 0
Cash inflow before financing 200 117 20
Financing (35) (286) (240)
(Decrease)/Increase in cash 165 (169) (220)
Page 5
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 2002. 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 2002 have been extracted from
those financial statements.
2. Interim Dividend
The Directors continue to be unable to recommend the payment of a dividend for
the 6 months ended 30th September 2002.
3. Earnings per Share
Earnings per share have been calculated on a loss after taxation of #652,000
(2001: #655,000) and 36,934,243 ordinary shares (2001: 36,180,981 ordinary
shares).
4. 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.
5. Profit and loss account
6 months 6 months 12 months
to 30.9.02 to 30.9.01 to 31.3.02
Unaudited Unaudited Audited
#000 #000 #000
Opening balance (10,712) (6,800) (6,800)
Retained loss for the (652) (655) (3,912)
period
Exchange Differences (34) (34) (84) 0
(11,398) (7,539) (10,712)
6. Exceptional Item
The exceptional item comprises the write off of the net assets of H.Bollmann
Manufacturers Limited and N&R Circuits Limited as they were put into liquidation
in November 2002.
Page 6
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 2002.
The Parker Partnership
Chartered Accountants and Registered Auditors
Hove
23rd December 2002
Page 7
This information is provided by RNS
The company news service from the London Stock Exchange
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