Interim Results
September 23 2005 - 3:00AM
UK Regulatory
Timestrip Plc
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30TH JUNE 2005
Timestrip Plc is pleased to announce its unaudited interim results for the 6
months to 30 June 2005.
Timestrip Plc develops, manufactures and sells patented Timestrip smart labels
which monitor for how long perishable food and other replaceable products have
been open or in use.
* Maiden interims following reverse takeover of Timestrip UK Limited in March
2005
* A full-scale commercial trial with Nestle FoodServices UK recently
announced (16th September 2005)
* Joint Development project agreed with Pfizer for pharmaceutical application
* Significant progress made across core targeted international markets
Highlights include:
* In preparation for the new EU Food Hygiene Directive, distribution secured
in Germany and Benelux through a 3-year exclusive supply contract with
Label Lord, part of the NSD Labelling Group. Good progress in North America
with new orders from Taylor Precision Products, the leading manufacturer of
measurement related products in North America, and Daymark Food Safety
Systems.
* For the food retailing sector, The Lifetime Cap(tm) project with Crown Zeller
(announced in April 2005) is progressing well with further product
development underway.
* New EU labelling regulations driving demand in cosmetic and beauty care
sector.
* Additional production machinery on line to fulfill future demand
* Commercialisation strategy moving towards revenue generation
* Directors confident of continued progress
Paul Freedman, Timestrip's joint CEO commented:-
"Timestrip has made significant progress to date in the marketing of our smart
label technology in key sectors. Timestrips are now perceived to be a highly
desirable packaging innovation for companies wishing either to differentiate
their products in competitive markets or improve their compliance with new
labelling regulations. We are confident of reporting further progress in due
course and delivering significant value to our shareholders."
For further information:
Paul Freedman, Joint CEO and founding Director, Timestrip 01462 440700
Shane Dolan, Biddicks 020 7448 1000
John Frederick, Athanor Capital 020 7430 1991
Roland Cornish, Beaumont Cornish 020 7638 3396
Chairman's Statement
The past six months have seen some exciting changes for the Company as it made
the transition from Internet Music & Media Plc, a shell company, into Timestrip
Plc, a smart label technology business, through the reverse takeover of
Timestrip UK Limited in March. At this time, the Company raised just over �2
million by way of an equity placing, most of which was allocated as working
capital.
We are making significant progress in commercialising this exciting technology
through commercial trials and development projects with a wide range of
international customers and are confident that this can be developed into
significant future revenue streams.
The addition of key personnel to our Research and Development and Business
Development team has enabled us to introduce more customers to the technology
and respond to their individual development requirements more effectively than
in the past. The Company is operating well within its internal budget forecasts
and retains a very disciplined approach to controlling costs.
We expect the current momentum to continue to accelerate over the year ahead as
we look to our goal of establishing Timestrip as the new international standard
in product labelling.
Stephen Oakes
Chairman
23rd September 2005
Joint Chief Executives' Statement
Timestrip has developed a patented smart label, the `Timestrip', which enables
users of perishable food and other products to monitor for how long an item has
been open or in use. The Timestrip is a disposable multi-layer laminated label
which contains a timing device consisting of a specialised porous material and
a non-toxic liquid. Upon squeezing the label to activate, the liquid starts to
move through the porous material by micro-capillary action. A printed
calibration on the top layer of the label allows the user to tell at any point
in time how long the label has been active. The label is currently manufactured
with adhesive backing enabling it to be attached to perishable goods as a
reminder to use or replace the product. The label is designed to be easily
customised and is capable of being embedded into the product packaging or the
product itself. It can be activated automatically either upon first opening the
package or upon first use of the product.
The solution provided by Timestrip relates to the difficulty in monitoring
relative expiry dates, such as "Use within two weeks of opening". The Timestrip
addresses this problem by reliably monitoring the lapse of time, providing a
visual indication that the relative expiry date is approaching, thereby giving
the user the opportunity to manage perishable items in a way that was
previously problematic.
Current Tradingand Future Prospects
We are pleased to report significant progress in the five international mass
markets in which relative expiry dates are predominately found, as well as a
new market - cosmetics and beauty care:
* Catering and Food Services
*
+ Our exclusive distributor in this category for North America, Daymark
Food Safety Systems, have now sold packs of Food Service Timestrips to
approximately 1000 restaurants in the US. We are delighted with the
investment in marketing from Daymark, who are proving to be a dynamic
and committed partner.
+ We have also increased our market presence in North America by securing
an order from Taylor Precision Products, the leading manufacturer of
measurement related products, who will launch the "Taylor Timestrip" at
the NAFEM Show in California this month.
+ For Europe, the adoption of new EU Food Hygiene Legislation in January
2006 represents a significant opportunity for us, as caterers look to
improve compliance with the new labelling regulations. Existing
distribution in the UK and Ireland has been augmented by a 3-year
exclusive distribution agreement covering Germany and Benelux, with
LabelLord, part of the NSD Group, leader in Food Safety labels. We
expect to open new channels to market across Southern Europe in the
coming months.
+ Recent efforts to develop the technology for custom applications in
this market have yielded a new order from Daymark for a 7-day
FoodService Timestrip that will be launched in North America in
October. We expect the range of products to expand further in response
to customer feedback and market trends.
* Food Retailing
*
+ We are now working in partnership with plastic closure, carton and tray
manufacturers as well as labelling companies, in order to develop
systems for integrating the Timestrip into the packaging of food
products. The Lifetime Cap(tm) project with Crown Zeller (announced in
April 2005) is progressing well with further product development
underway. Encouraging feedback has been received from a number of
international brand owners in the food and beverage sector.
+ Ocado (one of the UK's leading online grocers) has reported positively
on early sales of Timestrip multipacks since their introduction in May
2005. Demonstrable retail success is creating a platform to take the
proposition of a stand alone retail pack to other retailers both in the
UK and abroad. We are also pursuing options for co-branding the retail
pack with established brand names, as an alternative route to retail
shelves.
* Non-Food/Consumables
*
+ In the last three months we have experienced a significant increase in
interest from a wide range of non-food companies that wish to
communicate the useful life of their products more effectively to
consumers.
+ Joint Development projects have produced customised Timestrips that are
now undergoing performance testing with a number of companies. We will
report progress on these projects as soon as confidentiality
restrictions are lifted and supply contracts are secured.
+ In the Admission Document of 2nd February reference was made to an
order for tooling that had been received from a customer. This project
has now yielded working prototypes of a household product with
near-universal usage that contain fully integrated Timestrips. Consumer
testing and focus groups will commence in the coming weeks.
* Pharmaceuticals
*
+ A Joint Development project was recently started with Pfizer who are
interested in using the Timestrip technology to more effectively
communicate the lifetime of products once they have been opened.
+ We maintain an excellent relationship with Bayer who are currently
testing a new batch of Timestrips that have been developed to meet
their specific requirements.
* Medical Devices
*
+ We have recently entered into a confidential Joint Development project
to integrate the Timestrip technology into a medical device used in
hospitals, and hope to report progress in the near future.
* Cosmetics/Personal Care Products
*
+ This is a very exciting new category with the recent introduction of EU
labelling regulations which require the addition of a "Period After
Opening" instruction on all cosmetic products which have a shelf-life
of over 3 years. For example, mascara now carries an instruction to use
within six months of opening.
+ We have already been approached by two leading cosmetic/personal care
brands interested in the potential use of Timestrips and look forward
to reporting progress in this sector in the future.
Financial
The interim results include the results of Timestrip UK Limited from the date
of acquisition on 25 February 2005. Turnover in the period since the
acquisition amounted to �50,283 (2004 : �nil). Pre-tax loss including research
and development and re-listing costs amounted to �378,786 (2004 : profit - �
2,940). Costs attributable to the re-listing of Timestrip plc amounted to �
27,004. Research and development ("R&D") costs including subcontracted R&D
costs in the period since acquisition amounted to �100,338. Loss per share
0.02p (2004 : profit per share - 0.009p).
Staff
In line with strategy, we have strengthened our R&D team with the appointment
of a chemical and a mechanical engineer. These appointments will play a key
role in strengthening our current production systems as well as developing our
future capabilities as we make rapid progress in commercialising our
technology. In addition, we have recruited a Business Development Director to
consolidate and build upon our strategic partnerships with packaging companies
as well as introduce new customers to the technology. We now have in place a
dedicated team of professionals who are committed to driving forward the
Timestrip business.
Strategy
Our manufacturing process and prevailing market dynamics lend themselves to a
strategy under which Timestrip will license the rights to manufacture and
distribute in local markets to customers, joint venture partners and
distributors. The implementation of this strategy requires a level of in-house
production in order to seed markets in the early stages and new production
machinery has recently increased our production capacity to levels that will
enable us to satisfy initial contracts. Royalty revenues will be enhanced
through the supply of key raw materials and technical support to licensees.
We stipulate the use of our registered trademark on all Timestrip products, and
there has been, to date, no objection to this policy from even the largest of
international brand owners. It is our belief that the exposure to be gained by
Timestrip within the marketing campaigns of leading brands will lead to the
creation, over time, of an internationally recognised brand of significant
value.
Competition
It is anticipated that the commercialisation of Timestrip will stimulate
competition at some point in the future, but we are not aware at this time of
any direct competition to our technology. Our first patent has now been granted
in Europe and South Africa and is pending review in all other territories. It
is our intention to continue building an Intellectual Property portfolio to
protect the technology as it evolves.
Outlook
We are making very good progress in all relevant market sectors, which we
believe will translate into significant revenue generation in the future,
building substantial value for our shareholders. Timestrip smart labels are now
perceived to be a highly desirable packaging innovation for companies wishing
either to differentiate their products in competitive markets or improve their
compliance with new labelling regulations. There is clear evidence that the
communication to consumers of a product's life has become a high priority with
a wide range of brands. The widespread adoption of the Timestrip technology
will not happen overnight but we expect momentum to build in the coming months
in relation to this exciting and innovative technology.
Paul Freedman Reuben Isbitsky
Joint Chief Executive Officer Joint Chief Executive Officer
23rd September 2005 23rd September 2005
TIMESTRIP PLC
INTERIM STATEMENT
RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005
Profit and Loss Account
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2005 2004 2004
Unaudited Unaudited Audited
GBP GBP GBP
`000s `000s `000s
Turnover 50 - -
Cost of sales (26) - -
Gross Profit 24 - -
-
Administration costs (419) (13) (34)
Amounts written off investments - 16 -
Interest payable - - -
Other operating income 16 - -
Profit/(Loss) on Ordinary Activities (379) 3 (34)
before Taxation
Taxation - - -
Profit/(Loss) on Ordinary Activities (379) 3 (34)
After Taxation
-
Retained profit/(loss) (379) 3 (34)
Basic and diluted earnings per (0.02)p 0.009p (0.12)p
ordinary share
TIMESTRIP PLC
INTERIM STATEMENT
RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005
Summary Balance Sheet
30 June 30 June 31 December
2005 2004 2004
Unaudited Unaudited Audited
GBP GBP GBP
`000s `000s `000s
Fixed assets
Investments - - -
Intangible assets 6,490
Tangible assets 312 - -
6,802 - -
Current assets
Stock 74 - -
Debtors 64 10 3
Cash 1,206 - -
1,344 10 3
Creditors: amounts falling due (122) (2,222) (15)
within one year
Net current liabilities 1,222 (2,212) (12)
Creditors: amounts falling due (138) - -
over one year
Total assets less current 7,886 (2,212) (12)
liabilities
Capital and reserves
Called-up share capital 3,593 3,545 3,551
Share premium account 24,103 13,638 15,869
Reserves (19,810) (19,395) (19,432)
7,886 (2,212) (12)
Shareholders' Funds
Equity 4,342 (5,418) (3,556)
Non-equity 3,544 3,206 3,544
7,886 (2,212) (12)
TIMESTRIP PLC
INTERIM STATEMENT
RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005
Summary Cash Flow Statement
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2005 2004 2004
Unaudited Unaudited Audited
GBP GBP GBP
`000s `000s `000s
Net cash outflow from operating (545) - (2,222)
activities
Returns on investment and
servicing of finance
Interest received 16 - -
Net cash outflow from returns on (529) - (2,222)
investments and servicing of
finance
Capital expenditure and financial
investment
Capital contributions to - - -
subsidiaries
Payments to acquire fixed assets (108) -
&
intangible assets
Net cash outflow for capital (637) - -
expenditure and financial
investment
Acquisitions and disposals
Net cash acquired from subsidiary 43 - -
undertakings
Net cash outflow before financing (594) - -
Financing
Issue and purchase of ordinary 2,023 - 2,222
shares
Share issue expenses (273) - -
New short term loan 50 - -
Net cash inflow from financing 1,800 - 2,222
Increase in cash in the period 1,206 - -
TIMESTRIP PLC
INTERIM STATEMENT
RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005
Notes to the Cash Flow Statement
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2005 2004 2004
Unaudited Unaudited Audited
Consolidated
GBP GBP GBP
`000 `000 `000
Net cash outflow from operating
activities
Operating profit/(loss) (395) 3 (34)
Depreciation 129 - -
Increase in stocks (16) - -
Decrease in debtors 69 - 7
Decrease in creditors (332) (3) (2,195)
(545) - (2,222)
Reconciliation of net cash flow
to movement in net debt
Increase in cash 1,206 - -
Cash inflow from new loans (50) - -
Loans acquired with subsidiary (88)
Movement in net funds 1,068 - -
Opening funds - - -
Closing funds 1,068 - -
TIMESTRIP PLC
INTERIM STATEMENT
RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005
Notes To The Interim Results:-
1. Basis of preparation
The results for the six months ended 30 June 2005 are unaudited. They have been
prepared on accounting bases and policies that are consistent with those used
in the preparation of the financial statements of the company for the period
ended 31 December 2004.
The financial statements contained in this report do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
Full accounts for the period ended 31 December 2004, upon which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies.
2. Basis of consolidation
The consolidated profit and loss account and balance sheet include the
financial statements of the company and its subsidiary undertakings made up to
30 June 2005. The results of Timestrip UK Limited have been included from the
date of acquisition on 25 February 2005.
3. Goodwill, patents and trademarks
Goodwill is the difference between the amount paid on the acquisition of
Timestrip UK Limited and the aggregate fair value of its separable net assets.
Goodwill, patents and trademarks are capitalised and classified as an
intangible asset on the balance sheet. The directors have concluded that
goodwill arising on the acquisition of Timestrip UK Limited should be amortised
over its useful economic life of 20 years. Patents and trademarks are also
amortised over their useful economic life which is estimated to be 20 years.
4. Share capital
On 25 February 2005, the company acquired the entire issued share capital of
Timestrip UK Limited for a consideration of �6.4 million. The purchase price
was satisfied by the issue of 160,000,000 new Ordinary Shares of 0.02p each at
4p per share to the vendors on the sale of their Timestrip UK Limited shares.
Furthermore on 25 February 2005, 50,581,250 new Ordinary Shares of 0.02p were
issued pursuant to a placing to raise a total of �2,023,250 before expenses.
5. Dividends
No dividend is proposed for the period ended 30 June 2005.
6. Taxation
No taxation is expected to arise on the results for the period.
7. Loss per Share
The loss per share for the six months ended 30 June 2005 has been calculated on
the basis of the loss after taxation for the period of (�378,786) (June 2004:
profit - �2,940 and December 2004: �(33,942)) and the weighted average number
of shares in issue during the period of 194,262,829 (2004: 28,484,103).
END
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