Active Imaging PLC - Interim Results
September 23 1997 - 7:12AM
UK Regulatory
RNS No 2225t
ACTIVE IMAGING PLC
23rd September 1997
Results for the 6 months ended 30 June 1997
Your Company has experienced a varied and eventful period in the 6 months to
30 June 1997. Many of the circumstances and events that hampered our progress
were set out in the recent Rights Issue document. The financial effects are
addressed in the commentary on the Trading Results. Of greater interest to
shareholders is to learn how we are addressing these historic problems, of
sales prospects, product development and the actions we have taken to seek to
secure the long term future of Active Imaging.
Trading Results
In the 6 months to 30 June 1997 the loss on ordinary activities before/after
tax amounted to #2.9 million on sales of approximately #2.0 million. The loss
is after charging the following exceptional or non-recurring amounts to the
profit and loss account:
(i) #250,000 in respect of a stock write-down provision for the first batch
of the MvNet (version1) cameras. These first units have to a large
degree been superseded by the advanced MvNet Plus units; however the
remaining units are being sold or are used as demonstration units by our
reseller network.
(ii) #147,000 in respect of legal and professional fees and other direct costs
incurred on the aborted transaction with TVX Inc. Undoubtedly this
transaction cost the Company a great deal more in lost opportunity and
contributed to a loss of business focus during this time.
(iii)#84,000 of operating costs incurred in the period and #688,000 in
respect of closure costs and write-offs in respect of Active Traffic
Management (ATM). ATM was closed in early June and is in the process of
voluntary dissolution under the Texas Business Corporation Act. The
effect of the closure on the Balance Sheet of Active Imaging is a write-
off of #1,262,000 in respect of intangible assets, which includes
#925,000 in respect of the patent owned by Active Vision Systems Inc.
(AVS), a subsidiary of ATM, and #206,000 in respect of net current assets
as at 31 December 1996. The consideration for the assets of Invision
Inc. acquired in December 1995 and the acquisition of AVS in April 1996
provided for a significant element of deferred consideration in the form
of cash, contingent issue of shares and warrants to subscribe for shares.
These future contingent considerations had been fully provided for in the
Balance Sheet as at 31 December 1996. Accordingly these subsequent
events allow the release of a liability of #585,000 in respect of
contingent cash consideration and #890,000 in respect of the cancellation
of reserves for the contingent issue of shares and warrants.
Rights Issue
On the 15 August we successfully concluded a 5 for 4 Rights Issue to raise
#2.3 million, before expenses. The Rights Issue was supported by a number of
our existing institutional shareholders especially 3i group plc, Schroder
Investment Management, funds managed by Quester and by myself. I was
particularly pleased with the support for the issue from members of staff and
some of our key suppliers. In total this group, including my fellow
directors, subscribed for approximately #190,000 worth of new shares. AIM has
become a difficult market for raising money especially against a background of
poor historic performance. I am grateful for the support shown by all our
existing shareholders who participated in this fund raising.
Management
Following the Rights Issue, Kevin Waterhouse (MD Active Imaging) and Ian Young
(MD Data Cell) have joined the board of directors of Active Imaging plc. We
also today announce the following changes in the structure of the board of
directors.
Raymond Fagan, currently Finance Director, will take up the position of Deputy
Chairman. Raymond Fagan has played a large part in the reorganisation of the
Group since the withdrawal of the offer by TVX and was instrumental in the
completion of the recent Rights Issue. This new role recognises his
continuing contribution to the strategic management of the Group. Active
Imaging is currently seeking a Group Financial Director who will work closely
with Kevin Waterhouse and Ian Young in developing the financial systems and
controls for the Group as it progresses. In the interim period Raymond Fagan
will still have responsibility for finance.
It has been agreed that John Osborne, currently Business Development Director
and President of Active Imaging Inc., will resign as a director of Active
Imaging plc and as President of Active Imaging Inc., effective 30 September
1997. Over the next few weeks he will work closely with Kevin Waterhouse to
ensure that the United States activities of Active Imaging are fully
integrated with those in the UK to ensure that a consistent customer driven
message is delivered to all our employees, suppliers and partners. John
Osborne will continue to advise the Company on new developments in video
networking and digital transmission, especially in the United States.
I would like to express my appreciation to John Osborne for the vision he has
shown in conceiving the Active Imaging products and to wish him well in his
future career.
We are also seeking to strengthen the board with the appointment of a non-
executive director with experience of the sectors into which the Group's
products are sold.
Business Strategy
As announced in the Rights Issue document, the Company has channelled its
financial and management resources into achieving success with its MvVision
technology and with its value added reseller business, Data Cell.
MvNet Plus, which allows live video to be delivered across a variety of
computer and telephone networks, is now available both in ethernet and modem
versions. The camera can be controlled remotely and can be mounted on a pan
tilt zoom mechanism. We are now building a reseller network and dealing
directly with key OEM accounts. Resellers, focusing on particular vertical
markets, have been appointed in the UK, Belgium, France and Japan. Following
the re-organisation of Active Imaging Inc. this policy is also now being
followed in the United States. Users of MvNet Plus have included Lords
Cricket ground (to broadcast Test Match cricket over the Internet), the London
Notting Hill Carnival (to webcast the event), various adult entertainment
sites, a UK utility company to monitor power stations, a toll-bridge project
in California and Smartroutes in Boston, New England, who are using a custom
built MvNet Plus for traffic monitoring in their commercial SmartTraveller
service.
The first production release of Mv2000 (or "Surveyor") is now available and
will be shipped to customers during this month. Initial orders have been
received from a number of partners all wishing to purchase Mv2000 for
installation at customer sites for extended trials. The Mv2000 is aimed at
replacing analogue multiplexing and recording devices (VCR's) as well as
providing additional benefits of corporate network transmission for remote
monitoring.
Bell Security, a UK based security systems installer to the retail banking
sector, has been working closely with Active Imaging to ensure the Mv2000
product meets the needs of its customers. One leading retail bank (a client
of Bell Security) has substantially completed extensive trials of the Mv2000
to assess the viability of replacing its analogue CCTV equipment and to allow
remote monitoring of its nation-wide branches by transmitting images across
its own computer network.
Discussions are also now well advanced with Aritech, a leading European
manufacturer and distributor of security products. It is anticipated that an
agreement with Aritech will give Mv2000 and MvNet immediate Europe-wide
coverage particularly in the banking, retail and utilities sectors.
Interested shareholders can view some of the camera sites at
http://www.imaging.co.uk
In the first six months of 1997 Data Cell sales showed an improvement on the
previous six months. Since March 1997 Data Cell has been involved in a
project to develop an evidential video enhancement system. This has now
received approval from the Police Scientific Development Branch; consequently
it is expected that this system will become an important source of new sales
during the remainder of this financial year and into 1998.
Snapper, the Company's jointly owned image acquisition board, has seen
improved sales levels during the first half year. Initial orders have been
received from major OEM's especially in the United States and Israel. The
applications include both scientific and military uses.
Future Prospects
In July we announced the receipt of an order for approximately #1 million for
MvVision technology from Trafficmaster. It is expected that the first units
will be delivered to Trafficmaster in the final quarter of 1997.
We have taken action to reduce our overheads through the closure of ATM and
through staff reductions in the United States and in the UK. We are also now
seeing the development phase of Mv2000 coming to an end. However, the Board
recognises that there are still certain risks associated with the exploitation
of these new technologies. It is therefore prudent to remind shareholders of
the statements contained in the Rights Issue document, that the Group's
working capital and its future financial results will be dependant on the
timing and level of sales of the Mv2000 product actually achieved, and on
increasing the sales of the Mv Net network camera.
We believe that the MvVision technology and its resulting products have
considerable potential. The Trafficmaster order and the results seen by
customers in tests of the Mv2000, especially in the retail banking sector,
indicate to us the size of the opportunities. The next few months will be
critical to us in securing volume orders from security systems integrators,
OEM's, resellers and further orders from technology partners.
M J BROOKE
Chairman
23 September 1997
Further information:
Raymond Fagan - Active Imaging plc
Tel: 01628 415 444
e mail: raymondf@active.imaging.co.uk
Tim Redfern - Beeson Gregory Limited
Tel: 0171 488 4040
Active Imaging plc
Consolidated Profit & Loss Account
for the six months ended 30 June 1997 (unaudited)
30- 30- 31-
Jun- Jun- Dec-
97 96 96
#'000 #'000 #'000
(6 months (6 months (12 months
unaudited) unaudited) audited)
Turnover 1,952 2,217 4,207
Cost of sales (1,388) (1,570) (3,036)
Gross Profit before stock
write-down 564 647 1,171
Continuing operations
- asset write-down re stock (250) - -
Gross Profit after stock
write-down 314
Net operating expenses (2,278) (2,217) (4,799)
Legal and professional costs
re aborted TVX transaction (147)
(2,425)
Loss on continuing operations (2,111) (1,570) (3,628)
Discontinued operations (84) - -
OperatingLossbefore
exceptional items (2,195) (1,570) (3,628)
Loss on closure of Active
Traffic Management
Write-off of intangible,
tangible and other assets (1,468)
Negative goodwill previously
written-off to reserves (695)
Release of contingent
consideration 585
Release of warrant and
contingent share issue 890
Total Exceptional items (688) - -
Net Interest receivable/(payable) (3) (2) 22
Loss on ordinary activities
before taxation (2,886) (1,572) (3,606)
Taxation - - -
Loss on ordinary activities
after taxation (2,886) (1,572) (3,606)
Dividends and appropriations:
Preference share appropriation (22) (10) (44)
Loss retained for the period (2,908) (1,582) (3,650)
Earnings per share
Loss per share 15.88p 13.9p 24.56p
Adjusted loss per share 15.88p 13.9p 24.56p
Active Imaging plc
Consolidated Balance Sheet 30- 30- 31-
Jun- Jun- Dec-
97 96 96
#'000 #'000 #'000
(6 months (6 months (12 months
unaudited) unaudited) audited)
Fixed assets
Intangible 264 503 1,441
Tangible 332 677 470
Investments 35 15 15
631 1,195 1,926
Current assets
Stocks 804 513 1,044
Debtors 866 1,596 1,297
Cash at bank and in hand - 4,012 1,381
1,670 6,121 3,722
Creditors
Amounts falling due within
on year (2,027) (2,650) (2,258)
Net current assets (357) 3,471 1,464
Total assets less current
liabilities 274 4,666 3,390
Creditors
Amounts falling due after
one year (50) (95) (85)
Net assets 224 4,571 3,305
Capital and Reserves
Called up share capital 444 443 443
Share premium account 5,758 5,754 5,754
Difference on consolidation 1,567 1,567 1,567
Shares to be issued - - 750
Warrant reserve - 140 140
Profit and loss account (7,052) (2,076) (4,162)
Goodwill write off reserve (493) (1,257) (1,187)
Total shareholders funds 224 4,571 3,305
This statement does not constitute full audited accounts of the group.
Audited accounts for the year ended 31 December 1996 have been delivered to
the Registrar of Companies.
Accounting policies used in the preparation of this statement are consistent
with those used in the full audited accounts for the year ended 31 December
1996 of Active Imaging plc but have not been reviewed by the auditors.
The interim results do not constitute statutory accounts within the meaning of
section 240 of the Companies Act 1985.
A copy of this report will be sent to all shareholders and will be made
available to the public at the Company's registered office, SC House, Vanwall
Business Park, Maidenhead, Berkshire, SL6 4UB.
END
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