RNS Number:5824J
Superscape Group PLC
3 April 2003
FOR IMMEDIATE RELEASE 3 April 2003
SUPERSCAPE GROUP plc
PRELIMINARY RESULTS
Encouraging reaction to 'Swerve' from wireless market
Superscape Group plc, the designer, developer and marketer of interactive 3D
technology (i3D) - branded as Swerve - for wireless devices including mobile
phones and Personal Digital Assistants, today announces preliminary results for
the year ended 31 January 2003.
Key Points
* Successful fundraising supports transition to wireless.
* #9.3m in cash
* First wireless revenues
* Expanded relationships with major wireless players
* Growing portfolio of Swerve based content
* Superscape, Nokia, Motorola, ARM, Siemens and Vodafone originated 3D Java
standard, JSR-184
For further information:
Kevin Roberts, Chief Executive
John King, Chairman
Superscape Group plc Tel: (01256) 745 757
Paul Berthold Tel: (020) 7329 7420
Leadenhall Communications
SUMMARY OF FINANCIAL RESULTS
Turnover for the year ended 31 January 2003 amounted to #1.4m (2002: #1.9m) and
the loss before taxation for the same period amounted to #9.2m (2002: #9.6m).
The reduced turnover, has resulted from a move away from low margin projects
based business to higher margin licence fees and royalties, associated with our
new wireless business model.
The loss per share for the year was 17.1p (2002: 25.9p).
At the year end the group disposed of its Spanish subsidiary for nil
consideration, incurring a loss on disposal of # 0.2m.
At the end of the period the Group had net cash balances and short-term deposits
totalling #9.3m (2002: #11.3m).
OPERATIONAL REVIEW
Considerable progress has been made over the past twelve months as we continue
in our bid to win validation for our technology and to establish Swerve 3D as
the de facto standard for over the air delivery of 3D Java applications on
mobile devices.
Key activities have included extending our relationship with ARM Holdings plc
("ARM"), developing a portfolio of 3D games in conjunction with Cybiko and THQ
Wireless, working with major industry players on the development of a global
standard for 3D Java applications on mobile handsets, delivering solutions for
companies such as Hewlett Packard and France Telecom and progressing our
negotiations with the major players in the global mobile marketplace. As
previously stated, this progress and high level of activity has yet to be
translated into meaningful revenues. However the Board anticipates revenues
later in 2003 with significant increases in 2004, particularly as the new
standards-based Java-enabled, colour screen handsets become widely available.
There still remains a risk, however, that the rate of adoption by the market may
be slower than anticipated which would have a corresponding effect on future
revenues.
From our meetings with the worldwide mobile industry during the year, including
our participation in the international 3GSM World Congress, held in Cannes
(18-21 February 2003), it is evident that there is increasingly strong demand
for rich media Java content from both the handset manufacturers and the network
operators - both of whom regard this as a key revenue-generator in the months
and years ahead. Progress towards 3D standardisation through the Java Community
Process, which is on schedule, is setting the direction for the industry as it
looks to exploit this opportunity. We believe that we are well-placed to take
advantage of this need and be first to market.
Over the course of the year, Superscape's Swerve 3D technology has been
successfully ported to ten different handset platforms. Some of these ports are
now subject to Limited Use Licenses ("LULs"), which enable our technology to be
used in field trials.
Transition to wireless
In our transition to a wireless business model, we have engineered the structure
of our organisation to meet the needs of the wireless market. This programme,
initiated in 2001, has included a redeployment and reduction of headcount and
facilities, that has significantly reduced our monthly cash outflow and resulted
in a more focussed and cost effective organisation.
International Standards
As reported in the half year statement, a new Java Specification Request (JSR)
was passed on 6 May 2002 with the mandate to develop a new Applications
Programming Interface (API) for programming 3D for mobile phones and other
similar devices. JSR 184 was originated by an initial group of companies
comprising Superscape, Nokia, Motorola, ARM, Siemens and Vodafone. Since that
time, there has been very significant progress within the JSR 184 expert group.
The JSR has now reached its first major milestone on time - the Community Review
- whereby the new API has been made available to the Java Community for
feedback. In tandem with this specification activity, Superscape is developing
an implementation of the JSR API: this will become Swerve 2.0, a generic
solution for all 3D applications on mobiles, and is expected to be the first
commercial grade implementation compliant with JSR 184 to be available to
handset manufacturers.
Also in the area of standards, Superscape joined the Khronos Group (in October
2002), an international body dedicated to promoting the creation and deployment
of rich media through the creation of open standard APIs. Other members of this
group include Motorola, SGI, ARM, Texas Instruments and Symbian.
Fundraising
In October 2002, Superscape raised #7.0m (#6.4m net of expenses) in new funds
for investment in R&D, business development and worldwide sales activities. This
resulted in the placing of 50 million new Ordinary Shares at 14p each. The new
funding included an investment of #1.5 million by ARM.
The ARM relationship
In August 2002, we announced the extension of our existing collaboration with
ARM to cover 3D mobile content. ARM is the industry's leading provider of 16/
32-bit embedded RISC microprocessor solutions. Under a previous agreement, the
two companies were working together successfully on the porting of the
Superscape Swerve 3D client to the ARM architecture which ARM licenses to
wireless handset OEMs and its semiconductor Partners. During the year,
Superscape delivered to ARM the capability to build variants of the Swerve 3D
client (Micro, Lite, Standard and Enhanced) to meet the specific needs of their
customers. The extended agreement, covering mobile content based on the Swerve
3D client on ARM core-based mobile phones, ensures that ARM and Superscape are
able to work together to offer a seamless, completely integrated solution
comprising the Swerve 3D client, development tools and all related content to
include mobile games, 3D menuing applications, graphical user interfaces and
advanced messaging systems.
"This agreement enables us to build upon the strong foundation of our existing
collaboration with Superscape," said Warren East, CEO, ARM, "We believe that by
working together both companies can help drive the development of compelling,
rich multimedia applications and their worldwide delivery on both 2.5 and 3G
mobile platforms."
To further augment the collaboration between the two companies, Pete Magowan
joined the board of Superscape as a non-executive director in August 2002. He
was previously on the board of ARM Holdings plc as Executive Vice President of
Business Development.
Building content
Compelling content - initially focused on entertainment - is critical to the
take up of the new handsets, a fact keenly recognised by handset manufacturers
and operators. Recent reports from industry experts confirm the potential size
of the mobile gaming market. Ovum states that the market will grow to $4.4
billion by 2006, while Frost and Sullivan's research indicates a $9.3 billion
industry by 2009.
Superscape signed agreements with Cybiko and THQ Wireless during the year, two
leading players in the mobile content arena. Early versions of a range of new 3D
Java games were demonstrated at 3GSM World Congress in February 2003. Full
versions of the games are now being actively marketed.
Cybiko Wireless is a leading developer of 2D wireless games with over 55 titles
launched including the first perspective view racer in the industry, the highly
successful MotoGP game for THQ. One of Cybiko's games, Ki Tia, became the focus
of Sprint's autumn TV advertising campaign. Clients for Cybiko-developed content
include hardware manufacturers such as Motorola, US and international carriers
such as Sprint and Vodafone, and high-end traditional publishers such as THQ,
Sega and Midway. Superscape and Cybiko are now working together to develop a
suite of innovative 3D games in Java.
Donald Wisniewski, President of Cybiko said: "We are very excited by this new
relationship with Superscape. Their technology is immensely impressive. It is
clear to us that, armed with Superscape's Swerve, we will be able to create
absolutely stunning and impactful 3D games which are sure to set a new standard
for the mobile gaming sector."
Slam Dunk Basketball will be the first 3D basketball game created for mobile
phones from the Cybiko/Superscape partnership. It features fast moving gameplay,
using perspective camera views that change to exciting close-up positions for
dunks and buzzer-beating shots from the floor to the net. Games are two-on-two
as a single exhibition, or in a session against progressively difficult teams.
As reported in the half year statement, Superscape has formed a partnership with
THQ, one of the world's largest third-party videogame publishers. Under two
separate agreements, THQ licenses its IP (intellectual property) to Superscape
for the development of 3D games in Java. The second agreement (announced on 5
September 2002) detailed a revenue sharing and joint marketing agreement between
the two companies.
One of the first games from the Superscape/THQ collaboration is Astrosmash 3D!
Superscape is using its Swerve technology to create a 3D interpretation of this
classic sci-fi shoot-out which was originally developed for the Intellivision
games console. High visual quality and real-time interactivity will be available
to players who can play in either the basic mode or, as skill level increases,
power-ups can be used to enhance the weapons to combat increasingly challenging
attacks. Users are able to post their scores to a high-score server.
A second title, MotoGP, allows players to race motorbikes in time trials,
against friends, in arcade mode or against real world riders in the 2002 Grand
Prix circuit - where they can choose to race as one of the world's top sixteen
riders or create their own customised rider. Players will be able to download
more tracks as they become available, and submit scores and best times to a
server to receive a ranking.
Matthew Bellows in Wireless Gaming Review said
"THQ's MotoGP with Superscape's Swerve 3D engine by Cybiko. This game, running
on a Nokia 7650, sets a new standard for graphical achievement on mobile phones.
The introduction alone is impressive, featuring full 3D titles, bikes and
fly-overs. Playing the game is even better. For the first time with a mobile
phone game, I got that woozy, swaying feeling when threading my bike
side-to-side on the track."
Branding for France Telecom
Superscape is working with France Telecom R&D, mandated by Orange Innovation, to
develop a series of branded 3D menus, initially for the Nokia 7650 mobile phone.
The work for France Telecom R&D is designed to create an application, which will
provide the opportunity for network operators to brand services available on the
phone, as well as grabbing the attention of users.
For Orange Innovation, this project aims at comparing the more interesting
technologies capable of supporting branded user interfaces.
Olivier Strilka, CEO of France Telecom R&D UK ltd said: "To offer to its
customers an easier and friendlier access to mobile multimedia services is key
to France Telecom group and will contribute significantly to the growth of usage
of these services. Our interface on a high-end device, developed in partnership
with Superscape, is one step toward enhancing our customer experience."
France Telecom R&D, the France Telecom group's research and development centre,
drives innovation for the group in France and worldwide. The centre anticipates
technological revolutions and paradigm shifts in usage. The centre focuses on
innovation that provides customers with best-in-class communications solutions,
paving the way for technologies that will become ubiquitous in the future. The
performance of France Telecom R&D makes it Europe's leading telecom research and
development centre. Orange Innovation is the department that is responsible for
delivering future technology expertise within Orange group.
Swerve 3D on Wireless PDAs
In November 2002, Superscape announced that its Swerve technology had been
utilised to develop a sophisticated multi-player motorbike racing game to be
included with every new HP iPAQ Pocket PC h5400, the latest model in HP's range
of PDAs (personal digital assistants). A key feature of the new HP iPAQ Pocket
PC h5400 is an integrated wireless LAN. The game developed by Superscape takes
full advantage of this integrated wireless feature, allowing players to
challenge each other across the wireless network. Superscape has developed ten
different language versions of the game, including English, Korean, German,
Italian, Chinese and Japanese. During the year the group recognized its first
royalty revenues deriving from these Swerve enabled wireless devices.
Cindy Box, Director of Marketing, Smart Handhelds at HP said: "Our aim with the
launch of the new iPAQ Pocket PC h5400 was to provide our customers with
compelling, interactive experiences wherever possible using the new integrated
wireless capability of the product. I am delighted with the application
developed by Superscape. It is a great example of what can be achieved using 3D
over a wireless network and I am sure that it will prove to be very popular."
The Japanese market
In February 2003, Superscape announced the signing of a major licensing and
distribution agreement with Disco Corporation, a 100% owned subsidiary of Taito
Corporation, and Wirebee Inc. Under the terms of the agreement, Disco and
Wirebee will jointly promote Superscape's 3D Swerve enabling technology for
mobile phones and PDAs to the Japanese marketplace. Japan is the largest and
most innovative market in the world for games on mobile phones.
Mr. Takashi Hayashi, President, Disco Corporation said: "I am delighted that we
have this exciting opportunity to bring Superscape's Swerve technology to the
Japanese marketplace. There is considerable demand for new, high quality 3D
applications and based on my experience of the marketplace for mobile games, I
believe that Swerve-based applications will prove to be very popular in Japan."
Disco and Wirebee will initially be focused on licensing the use of Swerve
Author with the aim of creating a catalogue of Japanese applications with big
content providers like Taito Corporation.
OUTLOOK AND FUTURE ACTIVITIES
The momentum in the mobile industry to roll-out new multimedia services has
increased significantly during the year. New Java-enabled colour handsets with
enhanced processing power are coming on to the market and it is forecast that
75% of all new handsets purchased will have these features. Thus, the core
technologies are in coming into place to support Superscape's enabling software.
This is coupled with the irrefutable recognition of the importance to future
revenues for the mobile industry of non-voice services. Entertainment is seen as
the principal new application; Java is seen as the principal software execution
environment; over the air delivery of content is seen as the principal
distribution channel. Hence Superscape has as its initial focus the development
of a portfolio of innovative 3D Java games in conjunction with well-established
games specialists. However, our work with France Telecom is a clear indication
that 3D is not confined, by any means, just to games - and that menuing systems,
multimedia messaging and even location-based services - are just around the
corner.
Looking to the year ahead the company is focused on completing Swerve 2.0, a
product that will be JSR 184 compliant. The JSR standard process is reaching a
conclusion, and as a leading participant in this activity, Superscape is ideally
placed to offer JSR-compliant technology to the mobile industry. Given the
overwhelming requirement for international standards in the global mobile
sector, we believe that the finalisation of JSR 184 will provide significant
impetus to the demand for, and creation, of 3D content for mobile phones.
Our negotiations with a number of handset manufacturers, which are being
conducted in close partnership with ARM, are very positive and we are optimistic
that the results of these will be announced shortly.
We will be actively seeking new partners and relevant organisations to develop
content using our Swerve Author, based on the model which we have developed with
Cybiko and THQ.
We believe that these three elements - client, author and applications - will
provide the industry with the capability and the products necessary to
capitalise on the wireless 3D opportunity.
CONCLUSION
The recognition of the wireless industry need for non voice revenues, the
increasing adoption of ARM-9 processor architecture, the arrival of colour
screen handsets and the adoption of the JSR-184 standard, together provide a
platform of opportunity ideally suited to Superscape's 3D technology.
As we touched upon in the main statement, the combination of the above factors
has led to significant interest concerning the adoption of our technology by a
number of leading companies within the sector. However, while the Board is
encouraged by the level of activity, which would create both upfront license
fees and longer term royalty revenue streams, it recognises that the outcome of
the negotiations, and the timing of any subsequent implementation and eventual
roll out, are often not within its control.
As we drive towards increased sales and profitability, the Board is committed to
ensuring efficiency and stringent cost control, whilst ensuring that we are able
to meet the needs of our customers and the wider marketplace. Levels of
operating expense will continue to be adapted to the pace of growth in revenues.
John King Kevin Roberts
Chairman Chief Executive
BOARD CHANGES
During the year, two non-executive directors stepped down from the Board. Philip
Crawford resigned following a reorganisation of his portfolio of activities and
Richard Hooper was obliged to resign, following his appointment as Deputy
Chairman of OFCOM, the new regulatory body. We thank them for their contribution
to Superscape and welcome Pete Magowan who has joined the Board, having
previously been Executive Vice President of Business Development at ARM Holdings
plc.
Looking forward I will reach seventy years of age very soon. I have asked the
non-executive directors to carry out a search for a successor. In the meantime I
will continue in a capacity of non-executive Chairman.
On behalf of the Board, I would like to thank our staff for their hard work,
flexibility and enthusiasm.
John King
Chairman
Consolidated profit and loss account
for the year ended 31 January 2003
Restated
Year ended Year ended
31 January 2003 31 January 2002
Notes #000 #000
TURNOVER
Turnover: group and share of turnover of joint venture 1,440 1,902
Less: share of turnover of joint venture - 30
Continuing operations 855 1,402
Discontinued operations 585 470
GROUP TURNOVER 2 1,440 1,872
Cost of sales 1,009 1,664
Gross profit 431 208
Research and development 3,015 1,717
Sales and marketing expenses 3,527 4,991
Administrative expenses 3,112 3,932
TOTAL OPERATING EXPENSES 9,654 10,640
Continuing operations (9,132) (10,432)
Discontinued operations (91) -
GROUP OPERATING LOSS (9,223) (10,432)
Share of operating loss of joint venture (58) (704)
TOTAL OPERATING LOSS: GROUP AND SHARE OF JOINT VENTURE (9,281) (11,136)
Continuing operations:
Profit on disposal of fixed asset investments - 793
Profit on disposal of tangible fixed assets - 34
Discontinued operations
Loss on disposal of subsidiary undertaking (210) -
LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION (9,491) (10,309)
Interest receivable 293 734
Share of interest receivable from joint venture - 4
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 2(c) (9,198) (9,571)
Tax on ordinary activities 516 68
RETAINED LOSS FOR THE YEAR 3 (8,682) (9,503)
LOSS PER SHARE - basic and diluted (17.1) p (25.9) p
Consolidated statement of total recognised gains and losses
For the year ended 31 January 2003
Year ended Year ended
31 January 2003 31 January 2002
Notes #000 #000
Loss for the financial year attributable to members
of the parent company (8,682) (9,503)
Exchange difference on retranslation of net assets
of subsidiary undertaking 2 -
TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE YEAR (8,680) (9,503)
Balance Sheets
as at 31 January 2003
Group Company
31 January 31 January 31 January 31 January
2003 2002 2003 2002
Notes #000 #000 #000 #000
FIXED ASSETS
Intangible assets 110 324 - -
Tangible assets 359 636 - -
Investments in joint ventures
- share of gross assets - 169 - -
- share of gross liabilities - (79) - -
- 90 - -
Other investments - - 431 1,031
469 1,050 431 1,031
CURRENT ASSETS
Debtors: Amounts falling due within one year 1,105 868 112 242
Cash at bank and in hand 9,343 11,293 9,075 10,813
10,448 12,161 9,187 11,055
CREDITORS:
amounts falling due within one year 957 1,257 216 120
NET CURRENT ASSETS 9,491 10,904 8,971 10,935
TOTAL ASSETS LESS CURRENT LIABILITIES 2(d) 9,960 11,954 9,402 11,966
CAPITAL AND RESERVES
Called up share capital 3 8,954 3,775 8,954 3,775
Share premium account 3 47,679 46,172 47,679 46,172
Profit and loss account 3 (46,673) (37,993) (47,231) (37,981)
TOTAL SHAREHOLDERS' FUNDS 9,960 11,954 9,402 11,966
Approved by the Board of Directors on 2 april 2003, and signed on its behalf.
David Harmes
Consolidated cashflow statement
for the year ended 31 January 2003
Year ended Year ended
31 January 2003 31 January 2002
Notes #000 #000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (8,563) (10,554)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 293 734
TAXATION
Taxes reimbursed net of payments 155 -
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire intangible fixed assets (105) (13)
Payments to acquire tangible fixed assets (80) (344)
Receipts from sales of tangible fixed assets 20 175
Additional investment in joint venture - (867)
Receipts from sale of investments - 804
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (165) (245)
ACQUISITIONS AND DISPOSALS
Net cash in hand disposed of with subsidiary undertaking (96) -
NET CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (8,376) (10,065)
MANAGEMENT OF LIQUID RESOURCES
Decrease in short-term deposits 1,659 9,577
FINANCING
Issue of ordinary share capital 7,000 -
Share issue costs (564) -
NET CASH INFLOW FROM FINANCING 6,436 -
DECREASE IN CASH (281) (488)
Reconciliation of net cash flow to movement in net funds
Year ended Year ended
31 January 2003 31 January 2002
Notes #000 #000
Decrease in cash (281) (488)
Cash outflow from short-term deposits (1,659) (9,577)
Foreign exchange movement (10) (11)
Change in net funds resulting from cash flows (1,950) (10,076)
NET FUNDS AT START OF YEAR 11,293 21,369
NET FUNDS AT END OF YEAR 9,343 11,293
NOTES
1. ACCOUNTING POLICIES
Basis of preparation
As set out above the accounts have been prepared on the going concern basis
using the historical cost convention and in accordance with applicable
accounting standards.
Going Concern Basis
The opportunity for growth in revenues based on Superscape's 3D technology is
now significant based on the combination of factors mentioned in the Chairman
and Chief Executive's statement above.
However the demand for data services may be less than anticipated, or the market
may develop at a slower rate and therefore our revenues may grow more slowly
than planned. Having regard to these risks, the directors are actively managing
the revenue pipeline and monitoring a tight control over the cost base of the
company.
In view of the above and after making enquiries, the directors have formed a
judgment that, as a result of the fundraising in November 2002 and following the
restructuring exercise initiated in January 2003, there is a reasonable
expectation that the Group has sufficient resources to continue in operational
existence for the medium term.
For this reason, they continue to adopt the going concern basis in preparing
these accounts.
Basis of consolidation
The Group accounts consolidate the accounts of Superscape Group plc and all its
subsidiary undertakings for the year ended 31 January 2003. No profit or loss
account is presented for Superscape Group plc as permitted by Section 230 of the
Companies Act 1985. In the Company balance sheet, investments in subsidiary
undertakings are stated at cost less provision for impairment.
Intra-group transactions and profits are eliminated fully on consolidation.
The Group profit and loss account and statement of cash flows also include the
results and cash flows of Superscape RTZ S.L until its effective disposal on the
31st of January 2003.
Turnover
Turnover represents the amounts derived from the sale of goods and services,
which fall within the Group's ordinary activities, stated net of value added
tax.
Licence revenue is recognised in full once a binding contract exists, product
has been delivered, no further significant vendor obligations exist and
collectability is reasonably certain. If the duration or total contract value is
not yet certain, the minimum guaranteed revenue is spread evenly across the
minimum contract period.
Under short-term contracts, revenues and associated expenses are deferred until
the completed project has been delivered to, and accepted by, the customer.
Revenues and associated costs under long term contracts are recognised on a
percentage basis as the work is completed and any relevant milestones are met,
using latest estimates to determine the expected duration and cost of the
project.
Publication of non-statutory accounts
The financial information contained in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the preceding period is based on the
statutory accounts for the year ended 31 January 2002. Those accounts, upon
which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies.
1. ACCOUNTING POLICIES continued
Joint ventures
Entities in which the Group holds an interest on a long term basis and are
jointly controlled by the Group and one or more other venturers under a
contractual arrangement are treated as joint ventures. In the Group accounts,
joint ventures are accounted for using the gross equity method. This is a form
of equity method under which the share of the gross assets and liabilities
underlying the net amount included for the investment is shown on the face of
the balance sheet and in the profit and loss account the share of turnover,
operating loss and interest receivable are noted.
Research and development
Expenditure on research and development is written off in the period in which it
is incurred except where it relates to a specific project where technical
feasibility has been established and overall project profitability is reasonably
certain. In this case it is deferred and amortised over a maximum period of
eighteen months from the date the product is first sold or licensed.
Goodwill
Purchased goodwill arising on acquisitions is capitalised and amortised on a
straight line basis over its useful economic life. It is reviewed for impairment
at the end of each financial year following the acquisition and in other periods
if events or changes in circumstances indicate that the carrying value may not
be recoverable.
Patents
Patents are capitalised and amortised on a straight line basis over their
estimated useful economic lives.
Tangible fixed assets
The cost of tangible fixed assets is their purchase cost together with any
incidental expenses of acquisition. Depreciation is provided on all tangible
fixed assets at rates calculated to write-off the cost less estimated residual
value, based on prices prevailing at the date of acquisition, of each asset over
its expected useful life as follows:
Leasehold property The lower of the lease term and 50 years
Fixtures, fittings and office equipment 10%-20% straight line
Computer equipment 33%-50% straight line
Motor vehicles 25% straight line
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or a right to pay less, tax in
the future have occurred at the balance sheet date, with the following
exceptions:
* provision is made for gains on disposal of fixed assets that have been rolled
over into replacement assets only where, at the balance sheet date, there is a
commitment to dispose of the replacement assets.
* provision is made for tax that would arise on remittance of the retained
earnings of overseas subsidiaries and joint ventures only to the extent that, at
the balance sheet date, dividends have been accrued as receivable.
* deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
Foreign currency
Company
Transactions in foreign currency are recorded at the rate ruling at the date of
the transaction. Monetary assets and liabilities denominated in foreign currency
are translated at the rate ruling at the balance sheet date. All differences are
taken to the profit and loss account.
Group
The assets and liabilities of overseas subsidiary undertakings are retranslated
at the rate of exchange ruling at the balance sheet date. The profit and loss
accounts of overseas subsidiaries are translated at the average exchange rate
ruling during the period. The exchange difference arising on the retranslation
of opening net assets is taken directly to reserves. Exchange differences due to
translation of the profit and loss account at the average rate as opposed to
closing rate are also taken to reserves. All other translation differences are
taken to the profit and loss account.
Leases
Rentals payable under operating leases are charged to income on a straight line
basis over the term of the lease.
Pensions
The Group contributes to defined contribution pension schemes for the benefit of
its directors and employees. Contributions to these schemes are charged in the
period in which they become payable.
2. SEGMENTAL ANALYSIS
Turnover, group loss on ordinary activities before tax and net assets are
analysed as follows:
(a) Turnover by product type
Year ended Year ended
31 January 2003 31 January 2002
#000 #000
Continuing operations:
Swerve wireless revenue 783 -
Professional services 3 1,090
Other * 69 342
855 1,432
Discontinued operations:
Superscape RTZ S.L. 585 470
585 470
Turnover: group and share of turnover of joint ventures 1,440 1,902
* Includes Company share of Mediadome Inc. turnover for the year ended
31 January 2003 of #nil (31 January 2002: #30,000).
The directors consider that the Group operates in only one business segment,
being the provision of software and associated services.
2. SEGMENTAL ANALYSIS continued
(b) Regional analysis of turnover by destination
Year ended Year ended
31 January 2003 31 January 2002
Continuing operations: #000 #000
UK 659 1,108
US* 9 312
Europe (excluding UK)** 187 12
855 1,432
Discontinued operations:
Superscape RTZ S.L. 585 470
585 470
Turnover: group and share of turnover of
joint ventures 1,440 1,902
* Includes Company share of Mediadome Inc. turnover for the year ended
31 January 2003 of #nil (31 January 2002: #30,000).
** Sales to Europe totalling #187,000 were made by the UK company, Superscape
Limited. This represents the only material discrepancy between destination and
origin of turnover.
(c) Loss/(profit) before taxation, by origin
Year ended Year ended
31 January 2003 31 January 2002
#000 #000
Continuing operations:
UK 6,641 4,880
USA* 2,524 4,212
Europe (excluding UK) (31) 439
Japan / Asia (27) 40
9,107 9,571
Discontinued operations:
Superscape RTZ S.L. 91 -
91 -
GROUP LOSS BEFORE TAXATION 9,198 9,571
* Includes Company share of Mediadome Inc. loss for the year ended 31 January
2003 of #58,000 (31 January 2002: #700,000).
(d) Net assets/(liabilities) 31 January 31 January
2003 2002
#000 #000
Continuing operations:
UK 9,571 11,411
USA* 251 276
Europe (excluding UK) 137 301
Japan/Asia 1 15
9,960 12,003
Discontinued operations:
Superscape RTZ S.L. - (49)
- (49)
3. RECONCILIATION OF SHAREHOLDERS' FUNDS AND MOVEMENTS ON RESERVES
Group Share Profit and Total Total
Share Premium Loss 31 January 31 January
Capital Account Account 2003 2002
#'000 #'000 #'000 #'000 #'000
At 1 February 2002 3,775 46,172 (37,993) 11,954 21,152
Exchange differences on retranslation of
net assets of subsidiary undertakings - - 2 2 -
Arising on share issues 5,179 2,071 - 7,250 305
Share issue costs - (564) - (564) -
Retained Loss for the period - - (8,682) (8,682) (9,503)
At 31 January 2003 8,954 47,679 (46,673) 9,960 11,954
Company Share Profit and Total Total
Share Premium Loss 31 January 31 January
Capital Account Account 2003 2002
#'000 #'000 #'000 #'000 #'000
At 1 February 2002 3,775 46,172 (37,981) 11,966 22,018
Arising on share issues 5,179 2,071 - 7,250 305
Share issue costs - (564) - (564) -
Retained Loss for the period - - (9,250) (9,250) (10,357)
At 31 January 2003 8,954 47,679 (47,231) 9,402 11,966
4. The Annual Report and Accounts for the year ended 31 January 2003 is
expected to be posted to shareholders on 11 April 2003. Further copies will
be available after that date on request from the Secretary, Superscape Group
plc, Cromwell House, Bartley Wood Business Park, Hook, Hampshire RG27 9XA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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