Interim Results
December 24 2003 - 7:03AM
UK Regulatory
RNS Number:6696T
Network Technology PLC
24 December 2003
Network Technology Plc Interim Results
Financial Highlights for the six months to 30th September 2003
2003 2002
* Turnover # 1.40m # 1.63m
* Operating profit/(loss)
- excluding depreciation
- excluding restructuring # 0.01m # 0.01m
* Operating (loss)/gain # (0.07m) # (0.65m)
* Pre-tax loss # (0.07m) # (0.65m)
* Earnings per share # -0.18p # -1.77p
* Interim Dividend nil nil
Chairman's Statement
Results
The company continues on the road to recovery. A static economy in the USA in
almost all sectors continued to have an impact on our growth capabilities over
the six months period from 1st April 2003 to 30th September 2003, leaving us
with a turnover of #1.4 million which shows that, despite the difficulties in
the market, we continued to hold our position.
The analysis of sales now shows that old product lines make 51% versus new
product lines now at 49%. The sales to OEM customers reduced to 16% compared to
20% in the same period last year.
The unaudited operating loss after depreciation was #65,000 in the half-year
ended 30th September 2003 compared to #0.65 million in the half year ended 30th
September 2002. This figure includes a depreciation of #64,000 and an interest
charge of #12,600 making the Company slightly profitable on operations.
The cash outflow in the half-year ended 30th September 2003 was #69,000 compared
to a cash inflow of #178,000 to 31st March 2003. The outflow was almost
entirely due to financing costs.
The US business is doing well under the current economic circumstances for the
industry and contributed to 35% of the turnover. German operations contributed
4% of turnover and produced a small loss.
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
The remaining and consolidated Group Companies are focused on their core
activities and are now all in a position to grow.
Nextus Limited has performed well in providing its manufacturing services for
the Group. A constant R&D effort has led to a number of significant new product
innovations and improvements during this time.
Nextus Inc., a technology company, specialises in the design and manufacture 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 for
marketing 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' contract manufacturing
is also offered to a wider range of 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' biometrics technologies for Access Control and its FollowMeTM
Printing Systems.
Outlook
The Company believes that the US market is likely to recover first. Last year's
estimate still put the start of a recovery in the US to end of 2003 which is in
line with the current situation. A European and Asian recovery is not expected
before end of 2004 and until the Dollar sees a major upturn.
Klaus Bollmann
Chairman
23rd December 2003
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2003
PROFIT AND LOSS ACCOUNT
6 months 6 months 12 months
to 30.9.03 to 30.9.02 to 31.3.03
Unaudited Unaudited Audited
#000 #000 #000
Turnover 1,396 1,628 2,800
Operating Costs (1,448) (1,832) (2,932)
Group operating loss (52) (204) (132)
Exceptional Item 0 (436) (688)
Interest (13) (11) (21)
Loss before taxation (65) (651) (841)
Tax on loss on ordinary activities 0 (1) 69
Loss after taxation (65) (652) (772)
Dividends - equity 0 0 0
Loss on ordinary activities after taxation (65) (652) (772)
Loss per share -0.18 -1.77 -2.10
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2003
BALANCE SHEET
6 months 6 months 12 months
to 30.9.03 to 30.9.02 to 31.3.03
Unaudited Unaudited Audited
#000 #000 #000
Fixed Assets
Tangible Assets 385 198 473
Intangible Assets 0 0 0
385 198 473
Current Assets
Stocks 1,319 1,120 1,297
Debtors 552 333 566
Cash at Bank and in Hand 50 40 72
1,921 1,493 1,935
Creditors
Amounts falling due within one year (1,971) (1,357) (1,981)
Net Current Assets (50) 137 (46)
Creditors
Amounts falling due after more than one (150) (177)
year
Net Assets 185 335 250
Capital and Reserves
Called up share capital 3,694 3,693 3,694
Share premium account 8,028 8,028 8,028
Capital redemption reserve 12 12 12
Profit and loss account (11,549) (11,398) (11,484)
185 335 250
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2003
CASH FLOW STATEMENT
6 months 6 months 12 months
to 30.9.03 to 30.9.02 to 31.3.03
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating loss (52) (204) (132)
Depreciation and amortisation 65 188 1,023
Working capital movements (8) (47) (974)
Net Cash inflow/(outflow) from operating activities 5 (63) (83)
Returns on investments and servicing of finance
Interest paid (13) (11) (21)
Taxation 0 (1) 178
Capital expenditure and financial investment 0 (6) (356)
Disposal of Subsidiaries 0 234 234
Cash (outflow)/inflow before financing (8) 153 (48)
Financing (61) 12 226
(Decrease)/Increase in cash (69) 165 178
NETWORK TECHNOLOGY PLC
6 MONTHS ENDED 30 SEPTEMBER 2003
ANALYSIS OF NET FUNDS AND RECONCILIATION OF NET CASH OUTFLOW TO MOVEMENT
IN NET FUNDS
30.9.03 Movement 31.3.03
Cash at Bank and in Hand 50 (22) 72
Overdrafts (81) (47) (34)
US Subsidiary Loan (57) 38 (95)
UK Bank Loan (217) 23 (240)
Total (305) (8) (297)
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 2003. The statements do not comprise 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 8.
The figures for the 12 months ended 31st March 2003 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 2003.
3. Earnings per Share
Earnings per share have been calculated on a loss after taxation of #65,000
(2002: #652,000) and 36,934,243 ordinary shares (2002: 36,934,243 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. Creditors' amounts due within one year
Included within creditors is the sum of #411,000 (31st March 2003: #411,000) due
to the liquidators of the two former subsidiary companies. The amount payable
is yet to be agreed with the liquidators.
6. Profit and loss account
6 months 6 months 6 months
to 30.9.03 to 30.9.02 to 31.3.03
Un-audited Un-audited Audited
#000 #000 #000
Opening balance (11,484) (10,712) (10,712)
Retained loss for the (65) (652) (772)
period
Exchange Differences 0 (34) 0
(11,549) (11,398) (11,484)
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 uncertainties
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
and the determination of the amounts due to the liquidators.
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 2003.
The Parker Partnership
Chartered Accountants and Registered Auditors
Hove
23rd December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FELFFLSDSEIE