RNS Number:4030H
Amstrad PLC
13 February 2003
AMSTRAD PLC
INTERIM STATEMENT
SIX MONTHS ENDED 31 DECEMBER 2002
Chairman's Statement
Financial Results
I am pleased to report on the results for the six month period ended 31 December
2002.
Amstrad Business
The Amstrad business made a profit before tax of #5.5m (2001: #2.5m) on sales of
#19.1m (2001: #18.4m). Earnings per share from the Amstrad business were 4.7p
(2001: 2.6p).
Amserve Business (E-m@ilers)
Amserve's loss before tax, after initial subsidies on phones as referred to
later in this Statement, was #5.5m (2001: #1.6m) on sales of #4.2m (2001:
#1.2m).
Group
The Group as a whole reported a pre tax break even result (2001: #0.9m profit)
on sales of #23.3m (2001: #19.6m). The earnings per share were 0.5p (2001:
1.2p).
The interim dividend is to be maintained at 0.8p (2001: 0.8p) per ordinary share
to be be paid on 8 April 2003 to shareholders on the register as at 21 February
2003.
The Group balance sheet remains strong with net assets of #23.4m (2001: #28.2m)
of which #18.9m (2001: #28.8m) was cash.
Operating Review
Amstrad Business
Sales of digital decoders ("set top boxes") to BSkyB were 4% higher in volume
terms than the same period last year but lower in value terms reflecting the
continuing price pressure on this business. Our focus remains on driving down
the cost of the set top box and in September 2002 we launched a new fourth
generation box. We have orders in place for the remainder of this financial year
and for the next financial year.
Our continued focus on quality control has enabled us to release #0.7m at the
half year from provisions against potential warranty costs for past supplies of
set top boxes where warranty costs incurred have been lower than anticipated.
The Hong Kong business had a very successful first half with direct shipments of
audio products, mainly to the US market, significantly ahead of the same period
last year.
Amserve Business
As part of a deliberate and planned marketing exercise, the retail price of the
second generation e-m@iler ("the e-m@iler plus") was halved to #49.99 by most
retail outlets after Christmas in a move aimed at significantly increasing the
installed base. In addition to the 125k units of the original model sold,
approximately 85k units of the new model have now been bought and registered by
consumers since the launch in February 2002, of which 41k units have been
registered since Christmas. This makes a total installed base of 210k units.
This price reduction has been partially offset by lower manufacturing costs but
it has increased the initial subsidy per unit. In view of this the Board has
recognised a provision of #2.2m in the value of stock, representing the
shortfall against cost which will arise when the stock held at 31 December 2002
is sold. This therefore will avoid the loss that would otherwise have arisen on
the sale of these units in the second half of the year. The positive side of
this approach is that in future years the results of Amserve will reflect a
clearer view of the ongoing revenue stream from the installed base of phones.
The revenue derived from the usage of the e-m@iler continues to hold up well
with the majority of the income continuing to come from e-mail usage although in
the last six months other services such as the ability to download ringtones
have generated a more meaningful contribution. At the time of these results the
average gross revenue generated in the past 30 days from the average installed
base of approximately 201k units was #13k per day (approximate annualised rate
of #4.7m per annum).
We expect this revenue to increase both through the growth in the installed
base, allowing for any customer churn, and through the first generation model
moving at the end of March 2003 to the same revenue sharing arrangements as
apply to the current model.
We remain fully committed to the e-m@iler business and continue to develop new
software that enhances the functionality and revenue earning potential of the
phone which is periodically downloaded to the existing installed base.
Outlook
We continue to work with BSkyB to develop opportunities in the digital satellite
TV market and are pursuing promising opportunities in other geographic markets
for digital set top boxes.
In the Amserve business our focus remains on increasing the installed base of
e-m@ilers and enhancing future profitability through maximising existing revenue
sources such as e-mail and by adding new revenue sources.
Sir Alan Sugar
Chairman
13 February 2003
Amstrad plc (www.amstrad.com)
Register No 955321
Brentwood House Press Enquiries:
Brentwood Nick Hewer - 07785 318737
Essex CM14 4EF hewer@amstrad.com
Amstrad plc
Consolidated Profit and Loss Account
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2002 2001 2002
(unaudited) (unaudited) (audited)
Total
Note before
Amserve Amserve Total Group Group
#'000 #'000 #'000 #'000 #'000
Turnover:
Group and share of joint 19,070 4,190 23,260 19,597 40,204
venture
Less: Share of joint - - - (474) (474)
venture
Group turnover 19,070 4,190 23,260 19,123 39,730
Cost of sales (12,192) (7,406) (19,598) (15,223) (32,528)
Gross profit/(loss) 6,878 (3,216) 3,662 3,900 7,202
Net operating expenses (1,701) (2,284) (3,985) (3,062) (9,552)
Group operating profit/ 5,177 (5,500) (323) 838 (2,350)
(loss)
Share of joint venture
operating loss - - - (571) (571)
Total operating profit/ 5,177 (5,500) (323) 267 (2,921)
(loss)
Net interest receivable/
(payable):
Group 348 (22) 326 706 1,186
Share of joint venture - - - (50) (50)
Profit/(Loss) on ordinary
activities before taxation 5,525 (5,522) 3 923 (1,785)
Tax on profit/(loss) on 2
ordinary activities - - (50)
Profit/(Loss) on ordinary
activities after taxation 3 923 (1,835)
Minority interest 372 67 386
Profit/(Loss) attributable
to shareholders 375 990 (1,449)
Dividends payable (640) (640) (1,839)
Retained (loss)/profit (265) 350 (3,288)
Group earnings/(loss) per 3 0.5p 1.2p (1.8)p
share
Group diluted earnings/ 3
(loss) per share 0.5p 1.2p (1.8)p
Adjusted earnings per share
(excluding Amserve) 4 4.7p 2.6p 3.7 p
Equity dividends per share 0.8p 0.8p 2.3 p
Statement of Total Recognised Gains and Losses
Profit/(Loss) for the
financial period 375 990 (1,449)
Exchange translation
differences on foreign
currency net investments (67) (32) (80)
Total recognised gains/
(losses) relating to the
period 308 958 (1,529)
Amstrad plc
Consolidated Balance Sheet
As at As at As at
31 December 31 December 2001 30 June
2002 (unaudited) 2002
(unaudited) #'000 (audited)
Note #'000 #'000
Fixed assets
Intangible fixed assets 1,143 1,447 1,295
Tangible fixed assets 470 559 551
1,613 2,006 1,846
Current assets
Stocks 4,572 2,285 4,864
Debtors 10,675 9,366 7,565
Cash at bank and in hand 18,853 28,841 22,617
34,100 40,492 35,046
Creditors: amounts falling due
within one year (9,987) (9,888) (9,748)
Net current assets 24,113 30,604 25,298
Total assets less current
liabilities 25,726 32,610 27,144
Provisions for liabilities and
charges (2,326) (4,456) (3,040)
Net assets 23,400 28,154 24,104
Called up share capital 7,997 7,996 7,997
Share premium 6,084 6,082 6,084
Capital reserve 3,618 3,618 3,618
Profit and loss account 5,605 9,623 5,937
Equity shareholders' funds 5 23,304 27,319 23,636
Minority interest 96 835 468
23,400 28,154 24,104
Amstrad plc
Consolidated Cash Flow Statement
Six months Six months ended Year
ended 31 December 2001 ended
31 December 2002 (unaudited) 30 June
(unaudited) #'000 2002
#'000 (audited)
#'000
Net cash (outflow)/inflow from
operating activities (2,645) 2,623 (2,915)
Returns on investments and
servicing of finance 354 727 1,251
Taxation (110) (199) (578)
Capital expenditure and financial
investment (154) (27) (220)
Acquisitions and disposals - 21 21
Equity dividends paid (1,200) (1,199) (1,839)
Cash (outflow)/inflow before use of
liquid resources and financing (3,755) 1,946 (4,280)
Financing - 9 12
(Decrease)/Increase in cash (3,755) 1,955 (4,268)
Reconciliation of net cash flow to
movement in net cash
(Decrease)/Increase in cash in the
period (3,755) 1,955 (4,268)
Exchange translation differences (9) (1) (2)
Cash at 1 July 22,617 26,887 26,887
Cash at 31 December 18,853 28,841 22,617
Amstrad plc
Notes to the Interim Financial Statements
1. Basis of preparation of the interim financial statements
The consolidated profit and loss account, balance sheet and cash flow statement
have been prepared on a basis consistent with the financial statements for the
year ended 30 June 2002. The financial information contained in the Interim
Financial Statements does not constitute statutory accounts within the meaning
of Section 240 of the Companies Act 1985. The turnover and operating profit/
(loss) all relate to continuing operations.
The results for the year ended 30 June 2002 are extracts from the published
financial statements. A copy of the full financial statements for that year, on
which the Auditors have issued an unqualified report, has been delivered to the
Registrar of Companies.
2. Taxation
Taxation for the half year ended 31 December 2002 is based on the effective
rate which is estimated to apply in the year ending 30 June 2003.
3. Earnings per share and diluted earnings per share
Earnings per share is based upon earnings of #375,000 (2001: #990,000) and
79,969,659 (2001: 79,935,202) ordinary shares being the average number of
ordinary shares in issue during the six months ended 31 December 2002.
Diluted earnings per share is based upon earnings of #375,000 (2001: #990,000)
and 80,048,538 (2001: 80,868,942) ordinary shares allowing for the exercise of
outstanding share purchase options exercisable at a price below the average fair
value during the period.
4. Adjusted earnings per share (excluding Amserve)
Adjusted earnings per share excludes the losses of Amserve and is therefore
based upon earnings of #3,729,000 (2001: #2,092,000) and 79,969,659 (2001:
79,935,202) ordinary shares being the average number of ordinary shares in issue
during the six months ended 31 December 2002.
5. Reconciliation of movements in shareholders' funds
#000
Shareholders' funds at 1 July 2002 23,636
Profit for the financial period 375
Exchange translation differences (67)
Dividends (640)
Shareholders' funds at 31 December 2002 23,304
Amstrad plc
Independent Review Report to Amstrad plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 31 December 2002 which comprises the profit and loss
account, the balance sheets, the cash flow statement and related notes 1 to 5.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company for our review work, for this report, or for the conclusions we have
formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
polices and presentation applied to the interim figures are 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 the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. 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 United Kingdom 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.
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 31 December 2002.
Deloitte & Touche
Chartered Accountants and Registered Auditors
London
13 February 2003
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