TIDMSDI
RNS Number : 8972U
Scientific Digital Imaging Plc
24 January 2017
Scientific Digital Imaging plc
("SDI", the "Company" or the "Group")
(AIM: SDI)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER
2016
The Board of Scientific Digital Imaging plc, the AIM quoted
group focused on the design and manufacture of scientific and
technology products for use by the life science, healthcare,
astronomy, consumer manufacturing and art conservation markets, is
pleased to announce its unaudited interim results for the six
months ended 31 October 2016.
Highlights
-- Revenue increased by 33% to GBP4,902,000 (2015: GBP3,671,000)
-- Profit before taxation for the period increased to GBP410,000 (2015: GBP13,000)
-- Adjusted profit before taxation* for the period increased to GBP421,000 (2015: GBP173,000)
-- Gross margin increased to 63.6% (2015: 58.0%)
-- Sentek continued to contribute strong sales growth and profitability
-- Post period event - the acquisition of a manufacturer and
supplier of chemical dosing and control systems, Astles Control
Systems Limited on 12 January 2017 for an initial consideration of
GBP3.446 million. At the same time, SDI announced an equity
fundraising of GBP3.1 million before expenses.
* before acquisition costs, costs of reorganisation, and share
based payments
Ken Ford, Chairman of SDI, commented:
"It has been a positive performance in the first half of the
year, and the outlook for the full year is strong. SDI now has a
growing portfolio of profitable businesses which are providing the
Group with increased and sustained profitability. We have been
particularly pleased with the performance of Sentek, the
manufacturer of electrochemical sensors that we acquired in October
2015, and we will continue to grow as we seek to diversify our
existing product range and widen our addressable market.'
Enquiries
Scientific Digital Imaging plc 01223 727144
Ken Ford, Chairman
Mike Creedon, CEO
www.scientificdigitalimaging.com
finnCap Ltd 020 7220 0500
Ed Frisby/Simon Hicks - Corporate Finance
Mia Gardner- Corporate Broking
JW Communications 07818 430877
Julia Wilson - Investor & Public Relations
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Copies of the interim report are being sent to shareholders and
can also be viewed on the Company's website:
www.scientificdigitalimaging.com
About SDI:
Scientific Digital Imaging plc designs and manufactures
scientific and technology products for use in applications
including life sciences, healthcare, astronomy, consumer
manufacturing and art conservation. SDI intends to continue to grow
through its own technology advancements as well as strategic,
complementary acquisitions.
SDI operates through four main brands:
Synoptics
Synoptics designs and manufactures innovative systems for use in
the life science and clinical markets. The Company exploits digital
imaging technologies for a range of applications and offers its
products through three brands:
-- Syngene - manufactures equipment for life scientists to image
and analyse gels and blots used for DNA and protein analysis
-- Synbiosis - produces equipment for microbiologists to
automate microbial colony counting and inhibition zone analysis
-- Synoptics Health - focuses on imaging proteins on surgical
instruments in the hospital and clinical environments using the
ProReveal system.
Artemis CCD
Artemis designs and manufactures sensitive cameras for deep-sky
astronomical and life science imaging applications under the Atik
brand.
Opus Instruments
Opus designs and manufactures Osiris, an infrared camera, which
is used to examine and authenticate works of art.
Sentek
Sentek manufactures and sells both reusable and single-use
electrodes for the measurement of pH and conductivity of aqueous
solutions. Applications range from laboratory use, to monitoring
food, beverage and biologics-based pharmaceuticals manufacturing,
as well as personal care and leisure applications.
Chairman's statement
OVERVIEW
In the six-month period ended 31 October 2016, SDI has continued
to successfully increase the profitability of the business.
Total revenue for the period increased by over 33% to
GBP4,902,000 in the six months to 31 October 2016 (an increase of
GBP1,231,000, relative to revenue of GBP3,671,000 for the six
months to 31 October 2015). This increase predominantly came from
Atik, Opus Instruments and Sentek with the latter becoming an
important stream of revenue and profitability since being acquired
in October 2015 fulfilling the Board's predicted positive impact on
Group trading.
To ensure that Synoptics continues to thrive, we have appointed
Dr Brian Stammers, an experienced life science expert, as CEO for
Synoptics. Having worked previously with SDI through the UK Trade
& Investment (UKTI) to improve the commercial success of the
Synbiosis Division of Synoptics, he is reshaping the strategic
direction of the Synoptics business and driving the international
sales and marketing effort.
Artemis CCD also continues to report increased sales and
profitability through direct and OEM camera sales.
Basic earnings per share was 0.64p (2015: 0.04p) and fully
diluted earnings per share was 0.63p (2015: 0.04p).
As at 31 October 2016, the Group has net cash of GBP1,198,000
which will be used to advance SDI's own technologies as well as the
acquisition of new companies with complementary technologies and it
is hoped further announcements will be made in 2017 that will
continue to support the expansion of the Company.
PRODUCT PORTFOLIO
Syngene, which remains the largest of the Synoptics brands, has
had continued investment in order to improve software and hardware
in several of its products and expects to launch new systems in
2017.
During the period, Syngene has introduced an updated version of
its GeneSys image capture software. This can now acquire stain-free
protein gel images and will help update the G:BOX and NuGenius
systems to match the capabilities of Syngene's major competitor.
North America and Asia-Pac regions remain major target markets for
Syngene growth. To remain competitive in these markets a new
version of the high-end G:BOX imager is being introduced in early
2017.
Synbiosis has broadened its portfolio to include additional
automation for the food and clinical microbiology market. A new
Minimum Inhibitory Concentration (MIC) point software module to
measure antibiotic resistance has been released, which further
extends the application of the ProtoCOL 3 and ChromoZona in
clinical markets. This has resulted in sales growth ahead of
budget. As a result of the strong worldwide drive to develop and
test new antibiotics in response to increasing concerns about
antimicrobic resistance, Synbiosis believes sales of its automation
for this sector will continue to grow in 2017.
Synoptics Health has continued to sell ProReveal, a fluorescence
test to detect proteins on re-usable surgical instruments in North
American hospitals. These hospitals are using the ProReveal system
to optimise the performance of their washer-disinfection process.
The uptake of the test has been slower by the NHS in the UK.
However, since the UK Department of Health (DoH) published
additional new guidelines in July 2016 which provide the limit of
acceptable protein contamination on re-usable surgical instruments
(https://www.gov.uk/government/publications/management-and-decontamination-of-surgical-instruments-used-in-acute-care),
there has been increased interest in ProReveal. Currently, it is
the only available CE-marked instrument capable of measuring less
than 50ng of protein and thus meeting DoH requirements.
During the period, Artemis CCD delivered better than expected
sales and profitability. The business continues to develop
market-led new products and launched the Atik 16200 camera in 2016.
This high-specification CCD camera, which can be fitted to a range
of telescopes, is proving popular with astronomers and there are
already forward orders for the Atik 16200 which will be delivered
in 2017. We continue to invest in product focused R&D and plan
to bring further new products and developments to market in
2017.
The first six months have seen a significant increase in Atik
sales to OEM customers. These mainly operate in the life science
area where Atik cameras are used to detect end points including
fluorescence and luminescence in a range of analysis techniques.
Atik is able to work closely with such OEM customers bringing their
experience and knowledge of low light detection to help win
design-ins. We are expanding our production team in Lisbon to keep
up with demand from these repeat orders and remain committed to
controlling production costs. The Board expects OEM sales will
continue to make a positive contribution to trading.
Opus Instruments' Osiris camera sales continue to be on budget,
supported by additional sales of the Macro Lens and Illumination
Kit accessories. With servicing of existing cameras and new models
now being developed at our Norwich site, the Board believes the
Osiris camera can be produced more cost-effectively over time. Opus
is looking at ways to develop the product portfolio, including the
possibility of enhanced performance versions of the existing
Osiris.
Sentek reported strong growth in the first half of the year for
its single-use electrode for use in bioprocessing applications.
Automated systems in pharmaceuticals and biotech companies are
becoming more widely used, and Sentek expects revenues from the
single-use electrodes required by these systems to continue to
grow. The company has been brought into the Group with no
disruption and we have invested in a new website that is reaping
rewards through the generation of new prospects
(http://www.sentek.co.uk/).
ACQUISITIONS
SDI acquired Astles Control Systems Limited on 12 January 2017.
The company, a manufacturer and supplier of chemical dosing and
control systems, based in the UK, has growing revenues (five-year
revenue CAGR of 17%) and is a profitable business (five-year PBT
CAGR of 22%), with 70-80% of sales exported globally. The maximum
consideration of GBP4.8m payable will be financed by the GBP3.1m
placing, the issue of GBP100,000 in SDI shares to the vendor,
GBP850,000 of existing cash as well as drawing down GBP750,000 on a
new five-year term loan.
SDI is actively seeking further profitable scientific and
technology acquisition targets in the GBP1m to GBP10m price range
to continue its buy and build strategy.
OUTLOOK
SDI now has a growing portfolio of profitable businesses which
are providing the Group with increased profitability. The Board
expects the Company to continue to make good progress over the
remainder of the financial year as it continues to pursue an
organic and acquisitive growth strategy.
Ken Ford, Chairman
23 January 2017
Consolidated income statement
Unaudited for the six months ended 31 October 2016
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2016 2015 2016
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
----------------------------- ----- ------------ ------------ ----------
Revenue 4,902 3,671 8,473
----------
Costs of sales (1,784) (1,541) (3,298)
----------------------------- ----- ------------ ------------ ----------
Gross Profit 3,118 2,130 5,175
----------
Administrative expenses (2,672) (1,941) (4,437)
----------------------------- ----- ------------ ------------ ----------
Adjusted operating profit 446 189 738
----------
Reorganisation costs (4) (17) (17)
----------
Share based payments (1) (4) (7)
----------
Acquisition and fundraising
costs (6) (139) (178)
----------
Operating profit 435 29 536
----------
Net financing expense (25) (16) (40)
----------------------------- ----- ------------ ------------ ----------
Profit before taxation 410 13 496
----------
Income tax credit 3 - 75
----------------------------- ----- ------------ ------------ ----------
Profit for the period 413 13 571
----------------------------- ----- ------------ ------------ ----------
Earnings per share
----------
Basic earnings per share 2 0.64p 0.04p 1.17p
----------------------------- ----- ------------ ------------ ----------
Diluted earnings per share 0.63p 0.04p 1.17p
----------------------------- ----- ------------ ------------ ----------
Consolidated statement of comprehensive income
Unaudited for the six months ended 31 October 2016
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2016 2015 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------ ------------ ----------
Profit for the period 413 13 571
----------
Other comprehensive income
Items that will be reclassified subsequently
to profit and loss
----------
Exchange differences on translating
foreign operations 218 - 82
----------------------------------------------- ------------ ------------ ----------
Total comprehensive profit for the
period 631 13 653
----------------------------------------------- ------------ ------------ ----------
Consolidated balance sheet
Unaudited at 31 October 2016
31 October 31 October 30 April
2016 2015 2016
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------- ----- ----------- ----------- ---------
Assets
---------
Non-current assets
---------
Property, plant and equipment 422 367 382
Intangible assets 4,303 4,103 4,309
Deferred tax asset 76 105 67
------------------------------------------- ----- ----------- ----------- ---------
4,801 4,575 4,758
Current assets
Inventories 1,766 1,159 1,378
Trade and other receivables 1,573 1,244 1,496
Current tax assets - - 132
Cash and cash equivalents 1,773 365 1,708
------------------------------------------- ----- ----------- ----------- ---------
5,112 2,768 4,714
------------------------------------------- ----- ----------- ----------- ---------
Total assets 9,913 7,343 9,472
------------------------------------------- ----- ----------- ----------- ---------
Liabilities
---------
Current liabilities
---------
Overdraft 127 108 128
---------
Trade and other payables 1,442 1,432 1,447
---------
Provisions for warranty 21 19 18
---------
Borrowings 3 282 1,343 273
---------
Current tax payable - - 151
------------------------------------------- ----- ----------- ----------- ---------
1,872 2,902 2,017
---------
Non-current liabilities
---------
Borrowings 3 166 372 314
---------
Trade and other payables 107 73 -
---------
Deferred tax liability 373 174 377
------------------------------------------- ----- ----------- ----------- ---------
646 619 691
------------------------------------------- ----- ----------- ----------- ---------
Total liabilities 2,518 3,521 2,708
------------------------------------------- ----- ----------- ----------- ---------
Net assets 7,395 3,822 6,764
------------------------------------------- ----- ----------- ----------- ---------
Equity
---------
Share capital 642 329 642
Merger reserve 3,030 3,030 3,030
Share premium account 3,457 1,472 3,457
Foreign exchange reserve 231 (72) 13
Own shares held by Employee Benefit Trust (85) (85) (85)
Other reserves 81 80 81
Retained earnings 39 (932) (374)
------------------------------------------- ----- ----------- ----------- ---------
Total equity 7,395 3,822 6,764
------------------------------------------- ----- ----------- ----------- ---------
Consolidated statement of cash flows
Unaudited for the six months ended 31 October 2016
12 months
6 months to 6 months to to
31 October 31 October 30 April
2016 2015 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ------------ ------------ ----------
Operating activities
----------
Profit for the period 413 13 571
Depreciation and amortisation 354 256 663
Finance costs and income 25 16 40
Taxation expense in the income
statement - - (75)
Increase in provisions 3 1 -
Employee share based payments - 4 8
---------------------------------------- ------------ ------------ ----------
Operating cash flow before movement
in working capital 795 290 1,207
(Increase)/decrease in inventories (321) (177) (166)
Changes in trade and other receivables 133 340 421
Changes in trade and other payables 67 (48) (164)
---------------------------------------- ------------ ------------ ----------
Cash generated from operations 674 405 1,298
Interest paid (25) (16) (40)
Income taxes (received)/paid (151) 5 5
---------------------------------------- ------------ ------------ ----------
Cash generated from operating
activities 498 394 1,263
Cash flows from investing activities
Capital expenditure on fixed
assets (166) (97) (209)
Expenditure on development and
other intangibles (196) (137) (511)
Acquisition of subsidiaries,
net of cash - (2,111) (2,360)
Proceeds from sale of property,
plant and equipment - 40 65
---------------------------------------- ------------ ------------ ----------
Net cash used in investing activities (362) (2,305) (3,015)
Cash flows from financing activities
Movement in finance leases (5) (13) (21)
Share issue costs (6) -
Proceeds from share issue - 2,292
Share based payment reserve 7
Repayment of borrowings (50) (189)
Other loans (50) 100
Proceeds from bank borrowings (85) 1,253 500
---------------------------------------- ------------ ------------ ----------
Net cash from/(used in) financing
activities (140) 1,291 2,582
---------------------------------------- ------------ ------------ ----------
Net (decrease)/increase in cash
and cash equivalents (4) (620) 830
Cash and cash equivalents, beginning
of period 1,708 876 876
Foreign currency movements on
cash balances 69 1 2
---------------------------------------- ------------ ------------ ----------
Cash and cash equivalents, end
of period 1,773 257 1,708
---------------------------------------- ------------ ------------ ----------
Consolidated statement of changes in equity
Unaudited for the six months ended 31 October 2016
6 months to 31 October Own
2016 - unaudited shares
Share Merger Share held Other Foreign Retained
capital reserve premium by EBT reserves exchange earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 1 May 2016 642 3,030 3,457 (85) 81 13 (374) 6,764
Share based payments - - - - - - - -
Issue of share capital - - - - - - - -
Fundraising costs - - - - - -
Transactions with owners - - - - - - - -
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Profit for the period - - - - - - 413 413
Foreign exchange on
consolidation
of subsidiary - - - - - 218 - 218
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Total comprehensive income
for the period - - - - - 218 413 631
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 31 October 2016 642 3,030 3,457 (85) 81 231 39 7,395
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
6 months to 31 October Own
2015 - unaudited shares
Share Merger Share held Other Foreign Retained
capital reserve premium by EBT reserves exchange earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 1 May 2015 329 3,030 1,478 (85) 73 (69) (945) 3,811
Share based payments - - - - 7 - - 7
Fundraising costs - - (6) - - - - (6)
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Transactions with owners - - (6) - 7 - - 1
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Profit for the period - - - - - - 13 13
Foreign exchange on
consolidation
of subsidiary - - - - - (3) - (3)
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Total comprehensive income
for the period - - - - - (3) 13 10
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 31 October 2015 329 3,030 1,472 (85) 80 (72) (932) 3,822
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
12 months to 30 April 2016 Own
- audited shares
Share Merger Share held Other Foreign Retained
capital reserve premium by EBT reserves exchange earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 1 May 2015 329 3,030 1,478 (85) 73 (69) (945) 3,811
Shares issued 313 - 1,979 - - - - 2,292
Share based payments - - - - 8 - - 8
Transactions with owners 313 - 1,979 - 81 - - 2,300
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Profit for the year - - - - - - 571 571
---------
Foreign exchange on
consolidation
of subsidiaries - - - - - 82 - 82
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Total comprehensive income - - - - - 82 571 653
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Balance at 30 April 2016 642 3,030 3,457 (85) 81 13 (374) 6,764
--------------------------- --------- --------- --------- --------- ---------- ---------- ---------- ---------
Notes to the interim financial statements
Unaudited for the six months ended 31 October 2016
The accompanying accounting policies and notes form an integral
part of these interim financial statements.
Reporting entity
Scientific Digital Imaging plc (the "Company"), a public limited
company, is the Group's ultimate parent. It is registered in
England and Wales. The consolidated interim financial statements of
the Company for the period ended 31 October 2016 comprise the
Company and its subsidiaries (together referred to as the
"Group").
Basis of preparation
The unaudited consolidated interim financial statements are for
the six months ended 31 October 2016. These interim financial
statements have been prepared using the recognition and measurement
principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations adopted for use
in the European Union (collectively EU IFRS). The financial
information for the year ended 30 April 2016 is based upon the
audited statutory accounts for that year. The consolidated interim
financial information has been prepared on the historical cost
basis. The consolidated interim financial statements are presented
in British pounds (GBP), which is also the functional currency of
the ultimate parent company.
The consolidated interim financial information was approved by
the Board of Directors on 23 January 2017.
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The figures for the year ended 30 April 2016
have been extracted from the statutory financial statements of
Scientific Digital Imaging plc which have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
section 498(2) or 498(3) of the Companies Act 2006. The financial
information for the six months ended 31 October 2016 and for the
six months ended 31 October 2015 has not been audited.
1. Principal accounting policies
The principal accounting policies adopted in the preparation of
the condensed consolidated interim information are consistent with
those followed in the preparation of the Group's financial
statements for the year ended 30 April 2016.
The accounting policies have been applied consistently
throughout the Group the purposes of preparation of these interim
financial statements.
2. Earnings per share
The calculation of the basic earnings per share is based on the
profits attributable to the shareholders of Scientific Digital
Imaging plc divided by the weighted average number of shares in
issue during the year, excluding shares held by the Synoptics
Employee Benefit Trust. All profit per share calculations relate to
continuing operations of the Group.
Basic
Profit Weighted earnings
attributable to average per share
shareholders number of amount in
GBP'000 shares pence
------------------------- ----------------- ----------- -----------
Period ended 31 October
2016 413 64,224,808 0.64
-----------
Period ended 31 October
2015 13 32,912,308 0.04
-----------
Year ended 30 April
2016 571 48,697,240 1.17
------------------------- ----------------- ----------- -----------
The calculation of diluted earnings per share is based on the
profits attributable to the shareholders of Scientific Digital
Imaging plc divided by the weighted average number of shares in
issue during the year, as adjusted for dilutive share options,
dilutive deferred consideration and shares held by the Synoptics
Employee Benefit Trust.
Diluted
earnings
per share
amount in
pence
------------------------------ -----------
Period ended 31 October 2016 0.63
-----------
Period ended 31 October 2015 0.04
-----------
Year ended 30 April 2016 1.17
------------------------------ -----------
The reconciliation of average number of ordinary shares used for
basic and diluted earnings is as below:
31 October 31 October 30 April
2016 2015 2016
------------------------------------- ----------- ----------- -----------
Weighted average number of ordinary
shares used for basic earnings
per share 64,224,808 32,912,308 48,697,240
Weighted average number of ordinary
shares under option 1,033,000 793,000 885,877
------------------------------------- ----------- ----------- -----------
Weighted average number of ordinary
shares used for diluted earnings
per share 65,257,808 33,705,308 49,583,117
------------------------------------- ----------- ----------- -----------
At 31 October 2016 206,000 share options are dilutive. At 31
October 2015 and 30 April 2016 all share options are non-dilutive.
Share options could potentially dilute basic earnings per share in
the future.
3. Borrowings
31 October 31 October 30 April
2016 2015 2016
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- ---------
Within one year:
Bank finance 264 1,167 378
Other loan - 150 -
Finance leases 18 26 23
282 1,343 401
-------------------------------- ----------- ----------- ---------
After one year and within five
years:
Bank finance 166 367 264
Other loan - - 50
Finance leases - 5 -
-------------------------------- ----------- ----------- ---------
166 372 314
-------------------------------- ----------- ----------- ---------
Total borrowings 448 1,715 715
-------------------------------- ----------- ----------- ---------
The Group utilises short-term facilities to finance its
operation. The Group has one principal banker with an invoice
discounting facility of up to GBP500,000. At the end of the period
the Group had utilised GBP126,902 of this facility. SDI has
subsequently given NatWest notice to terminate the facility.
Scientific Digital Imaging plc
Beacon House
Nuffield Road
Cambridge
CB4 1TF
UK
Telephone: +44 (0)1223 727144
Fax: +44 (0)1223 727101
Email: info@scientificdigitalimaging.com
This information is provided by RNS
The company news service from the London Stock Exchange
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