RNS Number:3189Q
LTG Technologies PLC
30 September 2003
30 September 2003
LTG Technologies PLC: Interim Results for the six months ending 30 June 2003
Highlights
LTG Mailaender Division
* Sales of #22.9 million (2002 first half: #15.9 million)
* Break-even at operating profit level (2002 first half: loss of #1.3
million)
* Order book remains strong at #26.2m (#30.6m at 28 February 2003)
* Trading and operating conditions are now considered to be much more
favourable than a year ago
Imagelinx
* Sales of #3.7 million up 2% on the same period in 2002
* Operating loss of #2.2 million before exceptionals and goodwill
amortisation (2002 first half: loss of #2.7 million).
* Major investments and expansion costs now incurred, headcount and
overheads now being reduced
* Continues to win new clients
LTG Mailaender has performed well during the first half, in particular when
compared with the first half of 2002. Sales were up 44%, gross margins remained
satisfactory and the division broke even at the operating profit level where
last year the continuing operations lost # 1.3 million.
Imagelinx has again gained important new clients but sales growth has been weak
with 2 per cent. This is due to existing clients having reduced the volume of
business. We believe that this is a temporary effect as a result of an insecure
economic climate during the first half of this year. Imagelinx has implemented
major cost reductions and has almost completed the main investments programmes.
As such we are expecting cost to be much more in line with sales in the
foreseeable future.
Group Results Highlights - # millions Unaudited 30 Unaudited 30
June 2003 June 2002
Sales 28.2 22.1
Operating loss before exceptional costs and (2.8) (5.3)
goodwill write-downs
Operating exceptional costs (3.3) (1.6)
Goodwill amortisation and write down (0.3) (5.3)
Operating loss (6.4) (12.2)
Net interest (0.3) (0.4)
Loss before tax (6.7) (12.6)
Albert Klein, Chief Executive, said: "We believe that our future lies in the
packaging graphics business despite recent sales growth not being in line with
expectations and we are pleased with the development of LTG Mailaender which we
had to steer through hard times during the last two years. Both our businesses
offer exciting opportunities in a rapidly changing world. And our numbers are
indicating the potential of LTG to move from losses to profits."
Enquiries
LTG Technologies PLC
Albert Klein, Chief Executive Tel: +44 7801 910920
Michael Williamson, Finance Director Tel: +44 7769 703365
Seymour Pierce Limited Tel: +44 20 7107 8000
Jonathan Wright / John Depasquale
Gavin Anderson & Company
Tom Siveyer Tel: +44 20 7554 1400
CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW
LTG Technologies PLC has delivered improved results in the first six months of
2003 when compared to previous year's results despite two negative market
developments.
In the Far East, which is a key market for the sale of LTG Mailaender's new
Sprint technology and other conventional metal sheet decorating equipment, the
SARS crisis has severely affected the demand for our products in 2003 and only
since July 2003 have we seen stability in these markets and a return to normal
trading. Orders for our conventional equipment have been strong in other world
markets and a major push from Asia will in our view transpire during the next
few months.
Our Imagelinx business, which focuses upon providing outsourced packaging
graphics services to global branded consumer companies, has seen demand for its
services decrease from existing clients and a slower than anticipated conversion
of new clients. We believe that these developments reflect special circumstances
in the still small number of Imagelinx's clients and we are encouraged to
believe that our clients will increase spending with us in the near future.
Despite the above we have seen an improvement in the results mainly due to cost
reductions. The highlights of the interim results are as follows.
* Sales of #28.2m verses #22.1m (6 months for 2002), which represents an
increase of 28% mainly from LTG Mailaender.
* Loss before tax of #6.7m compared to #12.6m (2002). The results reflect
improvements in the operating results and the exclusion of the adverse
results from Crabtree as included in the 2002 results.
* Operating losses before interest, goodwill amortisation, exceptional
costs and large one off items included in operating costs, are #2.8m
compared to #5.3m (2002). Improved sales in the Mailaender division
combined with tighter cost management in Imagelinx are reflected in the
operating result improvement.
* In operating costs we have provided for the write down of costs
associated with the development of the I-con project, which management
consider under FRS 15 are no longer justified to remain as capital
expenditure. The total of these cost write downs and provisions are #3m
(2002 full year #1.3m). Management will continue to review the
capitalisation of directly attributable costs required to complete the
I-con technology. It is the current estimate that the I-con technology
will be completed in 2004, within the budgeted cost.
FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
Operating highlights (Unaudited) (Unaudited)
30 June 2003 30 June 2002
#'000 #'000
Sales - continuing 26,618 19,479
Sales - discontinued 1,592 2,595
Total Sales 28,210 22,074
Operating loss before goodwill and (2,851) (5,270)
exceptionals
Operating exceptional costs (3,286) (1,630)
Goodwill (310) (524)
Goodwill write-down - (4,774)
-------- --------
Operating loss after goodwill - (6,650) (6,424)
continuing
Operating profit/(loss) after goodwill - 203 (5,774)
discontinued
Total operating loss after goodwill (6,447) (12,198)
-------- --------
Net interest (277) (361)
-------- --------
Loss before tax (6,724) (12,559)
======== ========
Interim Results for the six months ending 30 June 2003
The Group results for the first six months of 2003 reflect the strong
performance of the LTG Mailander division and difficult trading conditions for
Imagelinx. Group sales have grown by 28% to #28.2m (2002 #22.1m). Pre tax losses
are #6.7m (2002 #12.6m). Losses in operations are #2.8m (2002 #5.3m)
Mailaender division has delivered strong growth of 44%, with sales of #22.9m. It
has achieved break even level verses a loss of #1.3m in 2002. Mailaender has
performed as planned, meeting contract deliveries on Sprint, and the
conventional pipeline is developing well. This division has traditionally
performed better in the second half of the year than during the first half which
encourages us to believe that LTG Mailaender will perform well this year.
Imagelinx has not performed to plan with sales growth of 2%. This has been due
to the instability in the global economy and its effect on global consumer
product groups. As a result key customers have either reduced the volume of work
or not changed supplier accounts to Imagelinx. In response to these developments
the management has undertaken staff and cost reductions to improve operating
performance. This process will continue in the second half year. A strong
pipeline remains, but existing customers such as Gillette, US Can and CMB have
reduced volumes of business in the first half of 2003 compared to the first half
of 2002. With the recovery in economic conditions since May 2003 Imagelinx has
experienced increased client interest in its services and after the announcement
of these results a recovery in volumes is expected from existing clients as well
as from recently acquired new clients.
The movements in the balance sheet and cash flow statement reflect the
utilisation of funds which has taken place this year to support the businesses.
Net assets now stand at #1.1m at 30 June 2003 (#7.8m 31 December 2002). This
reduction arises due to the losses incurred in the first half year, including
the write-down of capitalised assets.
OUTLOOK
Despite the difficult conditions in the Far East the order book is relatively
strong for Mailaender and we are confident we can achieve our plan for 2003. For
Imagelinx it has been a difficult trading period and operational changes have
resulted. The pipeline and interest from new clients remains strong. However we
remain confident in the market opportunity and the technology available in
Imagelinx.
MANAGEMENT AND STAFF
For the reasons highlighted above, recent months have not been easy ones for the
group. They have required immense efforts and the committed involvement of
employees across the group. On behalf of the Board of LTG Technologies PLC we
would like to thank staff and management for their efforts.
David Straker-Smith Albert Klein
Chairman Chief Executive
DIVISIONAL INCOME STATEMENTS (CONTINUING OPERATIONS)
30 June 2003 LTG Mailaender Imagelinx Group Eliminations Total
Division Division
#'000 #'000 #'000 #'000 #'000
Sales 22,866 3,732 635 (615) 26,618
Cost of (16,768) (2,147) - (13) (18,928)
sales
Gross margin 6,098 1,585 635 (628) 7,690
% 26.7% 42.5% 28.9%
Other (5,945) (3,819) (1,608) 628 (10,744)
operating
expenses
before
exceptionals
and goodwill
Operating 153 (2,234) (973) - (3,054)
profit/(loss)
before
exceptionals
and goodwill
Severance - (204) - - (204)
costs
Write down of - (3,023) - - (3,023)
fixed assets
Provision for (129) 70 - - (59)
closure
Operating 24 (5,391) (973) - (6,340)
profit/(loss)
before
goodwill
% 0.1% -144.5% -23.8%
Goodwill - (310) - - (310)
amortisation
Operating 24 (5,701) (973) - (6,650)
profit/(loss)
% 0.1% -152.8% -25.0%
30 June 2002 LTG Mailaender Imagelinx Group Eliminations Total
Division Division
#'000 #'000 #'000 #'000 #'000
Sales 15,929 3,652 694 (796) 19,479
Cost of (11,671) (1,966) - 41 (13,596)
sales
Gross margin 4,258 1,686 694 (755) 5,883
% 26.7% 46.2% 30.2%
Other (5,559) (4,395) (1,842) 755 (11,041)
operating
expenses
before
exceptionals
and goodwill
Operating loss (1,301) (2,709) (1,148) - (5,158)
before
exceptionals
and goodwill
% -8.2% -74.2% -26.5%
Rights issue (292) - (292)
costs
Severance - (211) (211)
costs
Write-down of (291) (291)
fixed assets
Other 14 14
Exchange (182) - (182)
difference on
subsidiary
loan
Operating loss (1,287) (3,211) (1,622) - (6,120)
before
goodwill
% -8.1% -87.9% -31.4%
Goodwill - (304) - - (304)
amortisation
Operating (1,287) (3,515) (1,622) - (6,424)
loss
% -8.1% -96.2% -33.0%
GROUP PROFIT AND LOSS ACCOUNT
(Unaudited) (Unaudited) (Audited)
Notes 30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
TURNOVER 2
- Ongoing 26,618 19,479 48,209
- Discontinued 1,592 2,595 9,675
-------- -------- --------
GROUP TURNOVER 28,210 22,074 57,884
-------- -------- --------
Cost of sales
- Ongoing (18,928) (13,596) (34,575)
- Discontinued (1,167) (1,553) (7,220)
-------- -------- --------
(20,095) (15,149) (41,795)
-------- -------- --------
Gross profit
- Ongoing 7,690 5,883 13,634
- Discontinued 425 1,042 2,455
-------- -------- --------
8,115 6,925 16,089
Other operating (10,966) (12,195) (25,511)
expenses
Operating (3,286) (1,630) (2,232)
exceptional
items
Goodwill (310) (304) (620)
amortisation -
continuing
Goodwill - (220) (220)
amortisation -
discontinued
Goodwill - (4,774) (4,774)
impairment -
discontinued
-------- -------- --------
OPERATING LOSS
- Ongoing (6,650) (6,424) (11,583)
- Discontinued 203 (5,774) (5,685)
-------- -------- --------
(6,447) (12,198) (17,268)
Exceptional 3 - - (658)
expenses
Interest 50 45 152
receivable and
similar income
Amounts written of - (57) (57)
investments
Interest payable (327) (349) (843)
and similar
charges
Other finance - - 40
income
-------- -------- --------
Loss on ordinary (6,724) (12,559) (18,634)
activities before
taxation
Tax on loss on 52 43 80
ordinary
activities
-------- -------- --------
Loss on ordinary (6,672) (12,516) (18,554)
activities AFTER
taxation
-------- -------- --------
Retained loss for (6,672) (12,516) (18,554)
the period/year
-------- -------- --------
Loss per ordinary 4 (2.9p) (10.3p) (11.6p)
share - basic and
diluted
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Retained loss for the (6,672) (12,516) (18,554)
period/year
Exchange difference on
retranslation of net
assets of subsidiary (103) 52 635
undertakings
Actuarial loss - - (3,046)
-------- -------- --------
total recognised losses (6,775) (12,464) (20,965)
relating to the period/
year
-------- -------- --------
Prior year adjustment - - (2,529)
-------- -------- --------
TOTAL RECOGNISED LOSSES
SINCE
THE LAST STATEMENT/ANNUAL (6,775) (12,464) (23,494)
REPORT
-------- -------- --------
RECONCILIATION OF SHAREHOLDERS' FUNDS
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Total recognised losses: (6,775) (12,464) (20,965)
New shares issued - - 5,246
Premium on share issue - - 2,099
Share issue costs written - (252) (252)
off against the share
premium account
-------- -------- --------
Total recognised losses (6,775) (12,716) (13,872)
during the period/year
Shareholders' funds at 7,839 24,240 21,711
start of period/year
-------- -------- --------
Shareholders' funds at end 1,064 11,524 7,839
of the period/year
-------- -------- --------
GROUP BALANCE SHEET
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
FIXED ASSETS
Intangible assets 10,284 10,903 10,507
Tangible assets 8,774 12,459 11,793
Investments 164 141 86
-------- -------- --------
19,222 23,503 22,386
CURRENT STOCKS
Stocks 9,541 16,709 11,926
Debtors 6,623 10,838 10,597
Cash at bank and in hand 1,959 685 6,170
-------- -------- --------
18,123 28,232 28,693
CREDITORS: amounts falling (28,581) (36,792) (33,758)
due within one year
-------- -------- --------
NET CURRENT LIABILITIES (10,458) (8,560) (5,065)
-------- -------- --------
TOTAL ASSETS LESS CURRENT 8,764 14,943 17,321
LIABILITIES
CREDITORS: amounts falling (124) (523) (666)
due after more than one
year
Provisions for liabilities (2,395) (2,896) (3,635)
and charges
-------- -------- --------
NET ASSETS EXCLUDING 6,245 11,524 13,020
PENSION LIABILITIES
Pension liabilities (5,181) - (5,181)
-------- -------- --------
1,064 11,524 7,839
-------- -------- --------
CAPITAL AND RESERVES
Called up share capital 11,542 6,296 11,542
Share premium account 37,828 35,729 37,828
Merger reserve 3,524 3,524 3,524
Other reserves (2,023) (2,503) (1,920)
Profit and loss account (49,807) (31,522) (43,135)
-------- -------- --------
Equity shareholders' 1,064 11,524 7,839
funds
-------- -------- --------
GROUP CASH FLOW STATEMENT
(Unaudited) (Unaudited) (Audited)
Notes 30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
cash outflow from 5 (1,894) (2,710) (1,447)
operating
activities
-------- -------- --------
Returns on (277) (304) (651)
investments and
servicing of
finance
Taxation 52 (156) (68)
Capital (1,983) (2,990) (4,595)
expenditure and
financial
investment
Acquisitions/ 1,992 - (192)
Disposals
-------- -------- --------
Net cash flow (2,110) (6,160) (6,953)
before financing
Financing (62) 2,401 7,027
-------- -------- --------
(DECREASE)/ (2,172) (3,759) 74
INCREASE in cash
----- ----- -----
RECONCILIATION OF NET CSH FLOW TOMOVEMENT IN NET DEBT
(Unaudited) (Unaudited) (Audited)
Notes 30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
(Decrease)/ (2,172) (3,759) 74
Increase in cash
in the period/year
Cash inflow/
(outflow) from
increase/
decrease
in debt and lease 62 (2,401) 66
financing
-------- -------- --------
Change in net debt (2,110) (6,160) 140
arising from cash
flows
Exchange 288 (125) 610
movement
Loans and finance 50 - -
leases disposed of
with
subsidiaries
New finance - (510) -
leases
-------- -------- --------
Movement in the (1,772) (6,795) 750
period/year
Net debt at (1,710) (2,460) (2,460)
beginning of
period/year
-------- -------- --------
Net debt at end of 5 (3,482) (9,255) (1,710)
period/year
-------- -------- --------
1 FINANCIAL INFORMATION
The financial information set out above does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985. The results for the
year to 31 December 2002 and the balance sheet and cash-flow statements as at
that date have been extracted from the annual report of LTG Technologies PLC for
that year, which has been delivered to the Registrar of Companies and which
carries an audit report which is unqualified and which and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
This preliminary announcement has been prepared on the same basis as set out in
the previous year's annual accounts, and was approved by the Board of Directors
on 26 September 2003.
2 TURNOVER AND SEGMENTAL ANALYSIS
In the opinion of the directors, the group operates in two divisions with all
significant operations being based either in Europe (in the United Kingdom and
Germany) or the United States. The segmental analysis of operations is as
follows:
Segmental analysis by (Unaudited) (Unaudited) (Audited)
activity 30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Sales
Imagelinx Division 3,732 3,652 7,368
LTG Mailaender Division 22,866 15,929 41,102
Group level 20 (102) (261)
------ ------ ------
Sales - ongoing 26,618 19,479 48,209
Sales - discontinued 1,592 2,595 9,675
------ ------ ------
Total sales 28,210 22,074 57,884
------ ------ ------
Operating profit/(loss)
Imagelinx Division (5,701) (3,515) (9,002)
LTG Mailaender Division 24 (1,287) 375
------ ------ ------
(5,677) (4,802) (8,627)
Net common costs (973) (1,622) (2,956)
------ ------ ------
Group operating loss - (6,650) (6,424) (11,583)
ongoing
Operating profit/(loss) - 203 (5,774) (5,685)
discontinued
------ ------ ------
Total operating loss (6,447) (12,198) (17,268)
------ ------ ------
Segmental analysis by
geographical area
Sales by origin
Europe 26,393 21,377 55,677
Asia 439 365 838
Americas 2,635 2,023 4,428
Rest of the world - - 69
Intersegment (1,257) (1,691) (3,128)
------ ------ ------
28,210 22,074 57,884
------ ------ ------
2. TURNOVER & SEGMENTAL ANALYSIS (Continued)
(Unaudited)) (Unaudited (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Sales by destination
Europe 13,799 11,756 24,614
Asia 5,459 4,972 14,602
Americas 9,277 4,844 13,286
Rest of the world 932 2,193 8,510
Intersegment (1,257) (1,691) (3,128)
------ ------ ------
28,210 22,074 57,884
------ ------ ------
Operating loss
Europe (5,520) (11,232) (13,696)
Asia (169) (396) (1,121)
Americas (758) (570) (2,187)
Rest of the world - - (264)
------ ------ ------
(6,447) (12,198) (17,268)
------ ------ ------
3. EXCEPTIONAL ITEMS
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
NON-OPERATING EXCEPTIONAL
ITEMS
Loss on disposal of - - (658)
discontinued operation
-------- -------- --------
4 LOSS PER ORDINARY SHARE
The calculation of earnings per ordinary share (basic and fully diluted) is
based on losses of #6,672,000 and on 226,413,633 ordinary shares, being the
weighted average number of ordinary shares in issue during the period. 4,425,002
shares held by ESOTs are excluded from the total number of shares.
The 30 June 2002 calculations of earnings per ordinary share (basic and fully
diluted) were based on losses of #12,516,000 and on 121,486,981 ordinary shares,
being the relevant weighted average numbers of ordinary shares in issue during
that period. 4,425,002 shares held by ESOTs were excluded from the non-diluted
total number of shares.
The 31 December 2002 calculation of earnings per ordinary share (basic and fully
diluted) was based on losses of #18,554,000 and on 159,998,949 ordinary shares,
being the weighted average number of ordinary shares in issue during that year.
4,425,002 shares held by ESOTs were excluded from the total number of shares.
5 NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of operating loss to net cash outflow from operating
activities
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Operating loss (6,447) (12,198) (17,268)
Depreciation and 1,415 1,974 3,986
amortisation
Write-down of fixed 3,023 - -
assets
Write-down of goodwill - 4,774 4,774
Changes in working capital 115 2,740 7,061
and other non-cash items
-------- -------- --------
Net cash outflow from (1,894) (2,710) (1,447)
operating activities
-------- -------- --------
(b) Analysis of net debt
(Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
At Cash Flow Disposal of Exchange At 30 June
1 January subsidiary movement 2003
2003
#'000 #'000 #'000 #'000 #'000
Cash 6,170 (4,499) - 288 1,959
Overdraft (7,492) 2,327 - - (5,165)
------ ------ ------ ------ ------
(1,322) (2,172) - 288 (3,206)
Short-term (43) 8 35 - -
loans
Finance lease (345) 54 15 - (276)
obligations
------ ------ ------ ------ ------
Total (1,710) (2,110) 50 288 (3,482)
------ ------ ------ ------ ------
6 CONTINGENT LIABILITIES
Imagelinx Deutschland GmbH is involved in a contractual dispute with IBM Global
Services ("IBM"). IBM has threatened to bring proceedings in respect of an
alleged outstanding payment of Euro1,200,000 pursuant to the framework agreement
with Imagelinx Deutschland GmbH. Imagelinx Deutschland GmbH has responded by
threatening to bring a counterclaim for the sum of Euro3,000,000. The parties are
currently in discussions in respect of their respective claims.
Imagelinx UK Limited is involved in a contractual dispute with I2 Technologies
Inc ("I2"). I2 has threatened to bring a claim in respect of an unpaid invoice
for the approximate amount of US$ 300,000. Imagelinx UK Limited has responded by
threatening to bring a counterclaim for an unspecified amount which is
substantially higher than I2's claim in respect of a breach of contract by I2.
The parties are currently in discussions in respect of their respective claims.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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