TIDMAER
RNS Number : 4656A
Aerte Group PLC
30 March 2012
AERTE GROUP PLC ("Aerte" or "the Company")
Unaudited Results for the Six Months Ended 31 December 2011
Aerte Group PLC, a leading environmental technology group, today
reports its unaudited results for the six months ended 31 December
2011.
Overview
-- As expected, launch of new product range interrupted sales in
H1, resulting in revenues of GBP47,000 (2010: GBP202,000)
-- Since the end of H1, received a first order for 3,200 units
from our proposed Chinese distributor, to be delivered shortly
-- Further interest from and samples issued to potential
distributors in the Middle East, India, Central America and
Europe
-- Primary focus on markets in China and India
-- Placing in November 2011, raised GBP1.7m net of expenses
providing the capital to support the Company's commercial plans
-- As of today's date, the Company had net cash of GBP1.0 million
-- Appointed a new Chief Marketing Officer, John Morton
-- Worldwide demand for air disinfection products remains strong
Javier Segura, Managing Director of Aerte, said,
"The response from customers to the new devices has been good.
Management is focused on securing further orders from our Chinese
and other distribution partners. The expected launch of the new
devices interrupted sales in H1 but we expect revenues to recover
in the Q4. The Company still has to deliver on increasing sales
volumes but, based on the level of interest being shown in the new
devices and the ongoing need for air disinfection, I believe we are
well positioned to do so."
For further information:
Aerte Group PLC Tel: +44 (0) 20 7603 1515
Andrew Tonks, Finance Director
Panmure Gordon (UK) Limited Tel: +44 (0) 20 7459 3600
Andrew Godber / Adam Pollock
Cardew Group Tel: +44 (0) 20 7930 0777
Tim Robertson / Georgina Hall
Chairman and Managing Director's Report
Introduction
Aerte specialises in air disinfection technology and products.
The Company's products disinfect the air and surfaces of bacteria
and viruses, eliminating airborne infections in enclosed spaces
using hydroxyl radicals.
During the period under review, the Company was focused on, and
invested in, developing its flagship air disinfection product, "the
AD", through bringing to market the next generation of devices. As
previously reported, the introduction of the new versions of the AD
meant there was a hiatus in terms of sales during the period as
distributors waited for the new products and as a result revenues
for the period were lower. This together with increased investment
meant the Company recorded a loss of GBP1.7 million for the period.
Since the period end, orders for the new ADs have commenced with an
order for 3,200 devices. This is a positive start given that 1,760
units were sold throughout the previous financial year.
In November 2011, the Company raised GBP1.7 million (net of
expenses) through a Placing and the new capital has supported the
sales and marketing of the new devices and further product
development.
Strategy
While we had hoped that the AD 2.0 and Klean would have moved
into production more quickly than they did, we are very pleased
with the end result. We are confident that their introduction will
translate into higher sales volumes. The design, cost and
capabilities of these products have improved substantially.
The Company's two most immediate markets for future sales are
China and India. In China, the Company is making good progress with
its distribution partner, who also participated in the Group's
recent fund raising, and is presently responsible for the majority
of new sales for AD 2.0 and Klean. India also remains a primary
territory and is expected to be a key market for the Company in
2012.
The strategic focus for the business is also on marketing the
new devices to other distributors but only those with sufficient
scale and networks to support orders in larger quantities than
previously. Aerte's marketing team under the newly appointed Chief
Marketing Officer, John Morton, is focused on securing new orders
and re-focusing the distributor network.
An agreement has also been signed with a company specialising in
e-commerce sales and this venture is scheduled to launch in the UK,
France and Spain in May.
New Product Range
Whilst technically superior to alternative solutions in the
marketplace, the original 'AD' had the scope to be improved and to
meet further customer requirements. After an extensive period of
research and development, two new models were introduced replacing
the original 'AD'. The first is the "AD 2.0", specifically designed
for commercial and professional use; and second, named "Klean", is
designed for small commercial and domestic use.
The new models of the AD are based on the same science and
technology, and have already attracted significant attention from
customers as they achieve the same effective results as the
existing AD, but are now substantially cheaper and smaller than
this. In addition, they have been wholly redesigned with both
significant practical and aesthetic improvements and offer the
choice of two consumable cartridges, with diluted H(2) O(2) offered
as an alternative to d-limonene to produce the key hydroxyl
radicals.
In the final phase of manufacturing the new products there have
been delays in completing the first batch of 5,000 devices and
associated consumable cartridges. This has been due to several
technical problems, which have contributed to the manufacturer
missing their scheduled delivery dates. The problems experienced
are not unusual when launching new products that are highly
technical and complex like AD 2.0 and Klean. The remaining issues
are being resolved and the first production order is expected to be
completed shortly.
Development of the miniaturised AD solely for the retail market
has slowed while the Group's focus has been on AD 2.0 and Klean.
Now that these products have been launched, the research and
development team will again focus on the development of the mini AD
which represents a significant opportunity given the size of the
potential marketplace. The Company will defer any decision on
forming a joint venture to commercialise the mini AD as the
management believe the terms of any partnership will be
disadvantageous to Aerte until the mini AD has been further
developed.
Financial Results for the Period
These interim condensed consolidated statements are prepared
under International Financial Reporting Standards (IFRS).
In the six months ended 31 December 2011, the continuing
activities achieved revenues of GBP0.05 million (2010: GBP0.2
million) and the loss for the period was from continuing operations
was GBP1.7 million (2010: loss of GBP1.2 million). The loss
reflects the increased investment in sales and marketing resources
and research and development made by the Company as part of its
strategy to enter more markets and territories. The loss also
includes GBP0.2 million for reorganisation costs, a bad debt
provision and a write down of old 'AD' stock which can no longer be
used following the introduction of the new range.
The basic and diluted loss per share was 0.59 pence (2010: loss
of 0.47 pence).
Net cash inflow for the six months ended 31 December 2011 was
GBP0.4 million (2010: GBP1.4 million outflow). Net cash used in
operating activities was GBP1.3 million (2010: GBP1.4 million).
At 31 December 2011, the Group had net cash balances of GBP1.7
million (2010: GBP2.4 million).
The Directors do not recommend payment of a dividend for the
half year ended 31 December 2011 (2010: GBPnil).
People
John Morton has joined as Aerte Limited CMO, with significant
experience of FMCG through numerous sales and marketing roles with
the Sara Lee, SC Johnson and Colgate Palmolive groups. John spent
over 15 years at Sara Lee working in the household and body care
division, which included being the international marketing lead for
Ambipur.
Current trading and prospects
The immediate focus for the business is on securing further
sales for the new devices. The relationship with the Chinese
distributor is progressing well with the first order having been
placed. The 3,200 devices are manufactured and once the consumables
are completed, the products will be delivered shortly. We expect
further orders in due course and to finalise a full distribution
agreement later in the year.
The next phase is to focus on further discussions with all of
the Company's distribution contacts and securing orders for the new
devices. Given the product improvements, the lower price of the AD
2.0 and Klean and initial reactions of prospective customers we are
hopeful of achieving positive take up.
The Board remains confident in the future prospects of the
business whilst recognising the need to drive sales of the new
devices to ensure financial stability of the business.
John Bateson, Chairman
Javier Segura, Managing Director
30 March, 2012
Condensed consolidated interim statement of comprehensive
income
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010 audited
unaudited unaudited GBP'000
Note GBP'000 GBP'000
----------------------------------- ------ ------------- ------------- ---------
Continuing operations
Revenue 47 202 425
Cost of sales (147) (119) (304)
------------------------------------------- ------------- ------------- ---------
Gross profit (100) 83 121
Distribution expenses (6) (6) (14)
Administrative expenses (1,628) (1,401) (2,844)
Results from operating activities (1,734) (1,324) (2,737)
Finance income 3 5 8
Net finance income 3 5 8
Loss before income tax (1,731) (1,319) (2,729)
Income tax income 23 83 199
Loss for the period (1,708) (1,236) (2,530)
------------------------------------------- ------------- ------------- ---------
Total comprehensive expense
for the period (1,708) (1,236) (2,530)
------------------------------------------- ------------- ------------- ---------
Basic and diluted
Loss per share 3 (0.59)p (0.47)p (0.97)p
------------------- -------- -------- --------
Condensed consolidated interim statement of financial
position
31 December 31 December 30 June
2011 2010 2011
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------- ----------
Assets
Property, plant and equipment 11 89 30
Goodwill 1,115 1,115 1,115
Other intangible assets 483 601 542
------------------------------- ------------ ------------- ----------
Total non-current assets 1,609 1,805 1,687
Inventories 19 219 145
Trade and other receivables 12 239 180
Other current assets 100 114 113
Cash and cash equivalents 1,689 2,419 1,254
------------------------------- ------------ ------------- ----------
Total current assets 1,820 2,991 1,692
Total assets 3,429 4,796 3,379
------------------------------- ------------ ------------- ----------
Equity
Share capital 3,832 2,609 2,609
Share premium 7,477 6,955 6,955
Share based payments reserve 100 94 97
Capital redemption reserve 253 253 253
Merger reserve 3,250 3,250 3,250
Retained earnings (12,148) (9,146) (10,440)
Total equity 2,764 4,015 2,724
------------------------------- ------------ ------------- ----------
Liabilities
Deferred tax liabilities 124 164 147
Total non-current liabilities 124 164 147
Trade payables 199 154 170
Other payables and accruals 249 251 221
Deferred income 25 9 34
Short-term provisions 68 203 83
------------------------------- ------------ ------------- ----------
Total current liabilities 541 617 508
------------------------------- ------------ ------------- ----------
Total liabilities 665 781 655
------------------------------- ------------ ------------- ----------
Total equity and liabilities 3,429 4,796 3,379
------------------------------- ------------ ------------- ----------
Condensed consolidated interim statement of changes in
equity
Share
based Capital
Share Share payment redemption Merger Retained Total
capital premium reserve reserve reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
1 July 2011 2,609 6,955 97 253 3,250 (10,440) 2,724
Issue of new shares 1,223 522 1,745
Share-based payment transactions - - 3 - - - 3
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
Transactions with owners 1,223 522 3 - - - 1,748
Loss for the period - - - - - (1,708) (1,708)
31 December 2011 3,832 7,477 100 253 3,250 (12,148) 2,764
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
1 July 2010 2,609 6,955 83 253 3,250 (7,910) 5,240
Share-based payment transactions - - 11 - - - 11
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
Transactions with owners - - 11 - - - 11
Loss for the period - - - - - (1,236) (1,236)
31 December 2010 2,609 6,955 94 253 3,250 (9,146) 4,015
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
1 July 2010 2,609 6,955 83 253 3,250 (7,910) 5,240
Share-based payment transactions - - 14 - - - 14
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
Transactions with owners - - 14 - - - 14
Loss for period - - - - - (2,530) (2,530)
30 June 2011 2,609 6,955 97 253 3,250 (10,440) 2,724
--------------------------------- -------- -------- -------- ----------- -------- --------- -------
Condensed consolidated interim statement of cash flows
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010 audited
unaudited unaudited GBP'000
GBP'000 GBP'000
------------------------------------------ ------------- ------------- ---------
Cash flows from operating activities
Loss for the period (1,708) (1,236) (2,530)
Adjustments for:
Depreciation 19 38 62
Amortisation of intangible assets 59 59 118
Share based payments 3 11 14
Taxation (23) (83) (199)
Loss on disposable and fixed
assets - - 35
(1,650) (1,211) (2,500)
Change in inventories 126 (59) 15
Change in trade and other receivables 181 (187) (127)
Change in trade and other payables 57 (18) 32
Change in provisions (15) 14 (106)
Change in deferred income (9) - 25
------------------------------------------ ------------- ------------- ---------
(1,310) (1,461) (2,725
Interest income (3) (5) (8)
Income tax - 66 165
------------------------------------------ ------------- ------------- ---------
Net cash (used in) operating
activities (1,313) (1,400) (2,568)
Cash flows from investing activities
Interest received 3 5 8
Purchase of property, plant
and equipment - (4) (4)
------------------------------------------ ------------- ------------- ---------
Net cash from investing activities 3 1 4
Cash flows from financing activities
Proceeds from issue of share
capital 1,745 - -
Net cash from financing activities 1,745 - -
Net increase / (decrease) in
cash and cash equivalents 435 (1,399) (2,564)
Cash and cash equivalents at
beginning of period 1,254 3,818 3,818
Cash and cash equivalents at
end of the period 1,689 2,419 1,254
------------------------------------------ ------------- ------------- ---------
Notes to the condensed consolidated interim financial
statements
1 Nature of operations and general information
Aerte Group PLC and subsidiaries' ('the Group') principal
activities are in the area of environmental technology, focussing
in particular on its innovative air disinfection products.
Aerte Group PLC is the Group's ultimate parent company. It is
incorporated and domiciled in Great Britain. Aerte Group PLC's
shares are listed on the AIM market of the London Stock Exchange.
Aerte Group PLC consolidated interim financial statements are
presented in Pounds Sterling.
These consolidated condensed interim financial statements have
been approved for issue by the Board of Directors on xx March
2012.
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 June 2011, prepared under International Financial
Reporting Standards (IFRS), have been filed with the Registrar of
Companies. The auditor's report on those financial statements was
unqualified and did not contain statements under Section 498(2) or
Section 498(3) of the Companies Act 2006.
2 Basis of preparation
The condensed consolidated interim financial statements for the
six months ended 31 December 2011 have been prepared in accordance
with the accounting policies which will be applied in the year end
financial statements to 30 June 2012. These accounting policies are
drawn up in accordance with International Accounting Standards
(IAS) and International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board and as
adopted for use in the European Union that are effective at 31
December 2011. This interim report is condensed with respect to
IFRS requirements. As permitted, this interim report has been
prepared in accordance with AIM rules for companies and not in
accordance with IAS 34 "Interim Financial Reporting".
The condensed consolidated interim financial statements are
unaudited and have not been subject to review. They do not include
all the information and disclosures required in the annual
financial statements, and therefore should be read in conjunction
with the Group's annual financial statements as at 30 June 2011.
These financial statements have been prepared under the historical
cost convention. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation
of these condensed consolidated interim financial statements.
3 Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. The
calculation of diluted earnings per share is based on the basic
earnings per share, adjusted to allow for the issue of shares and
the post-tax effect of dividends and/or interest, on the assumed
conversion of all dilutive options and other dilutive potential
ordinary shares.
Six months Six months Year to
to to 30 June
31 December 31 December 2011
2011 2010 audited
unaudited unaudited
----------------------------------- ------------- ------------- ------------
GBP'000 GBP'000 GBP'000
Loss per share
Loss for the period (1,708) (1,236) (2,530)
Weighted average number of shares
For the purposes of basic and
diluted loss per share 287,104,350 260,903,839 260,903,839
Basic and diluted loss per share (0.59)p (0.47)p (0.97)p
----------------------------------- ------------- ------------- ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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