Interim Results
December 14 2005 - 2:02AM
UK Regulatory
RNS Number:6272V
Feedback PLC
14 December 2005
FEEDBACK PLC
Interim Statement for the six months ending 30 September 2005
Chairman's Interim Statement
During the first six months of the year the Group produced an operating profit
before reorganisation costs and pension adjustments of #186,100 which is an
improvement of #154,000 compared with the corresponding period in 2004. This is
an encouraging performance which reflects the progress made as a result of
restructuring which has taken place across the Group during the past 2 years (at
an exceptional cost of #139,300 in 2004). After taking into account the pension
scheme adjustments to comply with FRS17, which are described in the Notes to the
Interim Statement, the result for the period was a loss of #32,600 (2004:
profit of #197,800 which included a one time gain of #480,000 associated with
the closure of the defined benefit pension scheme).
The deficit in the now closed defined benefit pension scheme continues to be an
enormous drain on the Group's resources notwithstanding the variation in
contributions agreed with Opra (now replaced by The Pensions Regulator). The
situation is being reviewed with the Group's professional advisors and we will
keep shareholders abreast of any noteworthy developments.
Feedback Instruments has seen a significant improvement during the period as a
result of the appointment of new senior personnel in Manufacturing, Development
and Sales, reduced costs and a more clearly defined strategic plan. The level of
routine business is encouraging and, although securing larger orders continues
to be slow due to changing political and economic circumstances in various parts
of the world, prospects for the latter part of this year are in line with
budget.
Feedback Data and its German subsidiary continue to trade profitably. A new
management structure has been introduced and there is a revitalised focus on
both the traditional core business and the Access Control markets. New products
are being introduced and efforts are being made to increase the company's
penetration in the European market.
Feedback Incorporated had a very disappointing first half year after a bright
start. We are addressing the reasons for the weak sales performance. Prospects
for the second half of the year are more satisfactory.
Dividends
The company was unable to pay a dividend on its Cumulative Convertible
Redeemable Preference Shares due to the continued lack of distributable
reserves.
Outlook
Current trading is somewhat better than it was at this time last year. Prospects
are encouraging but the timing of the receipt of some significant orders is, as
always, difficult to accurately predict. The general financial position of the
Group is compromised by the pension situation.
David Harding
Chairman
SUMMARISED PROFIT AND LOSS ACCOUNT
6 months to 6 months to Year to
30 Sept 2005 30 Sept 2004 31 March 2005
#'000s #'000s #'000s
Restated Restated
Unaudited Unaudited Audited
Turnover 4,090.8 5,813.1 9,179.2
Operating profit before reorganisation costs
and pension adjustments 186.1 32.1 97.0
Reorganisation costs - (139.3) (139.3)
Gains on settlements and curtailments arising
on closure of pension scheme - 480.0 480.0
Other pension adjustments 0.6 36.9 32.0
Operating profit 186.7 409.7 469.7
Net interest payable (80.3) (57.9) (143.1)
Other finance costs (139.0) (154.0) (310.0)
(Loss) / profit on ordinary activities before
taxation (32.6) 197.8 16.6
Tax on ordinary activities - - 39.2
Retained (loss) / profit for the period (32.6) 197.8 55.8
Basic and diluted loss per share (0.27)p
Basic earnings per share 1.64p 0.46p
Diluted earnings per share 1.48p 0.46p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Loss) / profit for the period (32.6) 197.8 55.8
Currency translation differences on foreign
currency net investments 32.1 (31.6) (55.1)
Actual return less expected return on pension
scheme assets 827.0 (231.0) 74.0
Experience gains and losses arising from scheme
liabilities - (497.0) (494.0)
Changes in assumptions underlying the present
value of the scheme liabilities (1,025.0) - (352.0)
Total losses relating to the period (198.5) (561.8) (771.3)
Prior year adjustment (7,156.0) - -
Total recognised losses since the last annual
report (7,354.5) (561.8) (771.3)
SUMMARISED BALANCE SHEET
6 months to 6 months to Year to
30 Sept 2005 30 Sept 2004 31 March 2005
#'000s #'000s #'000s
Restated Restated
Unaudited Unaudited Audited
Fixed Assets 516.9 566.4 526.3
Current Assets
Stock 1,218.3 1,013.7 1,210.7
Debtors 1,758.9 2,718.8 1,753.6
Cash at bank and in hand 682.5 428.9 760.4
3,659.7 4,161.4 3,724.7
Creditors: amounts falling due within one year (1,639.9) (1,935.8) (1,734.0)
Net current assets 2,019.8 2,225.6 1,990.7
Total assets less current liabilities 2,536.7 2,792.0 2,517.0
Creditors: amounts falling due after more than one (1,555.3) (1,593.6) (1,517.2)
year
Borrowings (612.9) (671.9) (561.5)
Convertible Redeemable Cumulative Preference
Shares (778.2) (838.1) (830.4)
Dividend Reserve (164.2) (83.6) (125.3)
Net assets excluding pension liability 981.4 1,198.4 999.8
Pension liability (8,315.0) (8,247.0) (8,187.0)
Net liabilities including pension liability (7,333.6) (7,048.6) (7,187.2)
Ordinary share capital 1,234.1 1,204.6 1,208.4
Share premium account 410.2 379.8 383.7
Revaluation reserve 379.7 369.4 379.7
Capital reserve 299.9 299.9 299.9
Profit and loss account (9,657.5) (9,302.3) (9,458.9)
Reserves (8,567.7) (8,253.2) (8,395.6)
Shareholders' funds (7,333.6) (7,048.6) (7,187.2)
CASH FLOW STATEMENT
6 months to 6 months to Year to
30 Sept 2005 30 Sept 2004 31 March 2005
#'000s #'000s #'000s
Restated Restated
Unaudited Unaudited Audited
Net cash inflow from operating activities 19.1 611.6 964.7
Returns on investments and servicing of finance (33.8) (10.0) (38.2)
Corporation tax recovered - - 28.7
Capital expenditure (13.8) (10.6) (22.5)
Financing (15.0) (15.0) (59.6)
(Decrease) / increase in cash (43.5) 576.0 873.1
Reconciliation of operating profit to net cash flow
from operating activities
Operating profit 186.7 409.7 469.7
Depreciation of tangible fixed assets 23.2 43.1 76.7
Sale of tangible fixed assets - - 19.9
Exchange difference 32.0 (93.5) 9.9
(Increase) / decrease in stock (7.6) 678.7 481.7
(Increase) / decrease in debtors (5.3) 1,300.4 2,236.9
Decrease in creditors (0.9) (996.8) (1,340.1)
Pension - current service cost - 116.0 116.0
Pension - gains on settlements and curtailments - (480.0) (480.0)
Pension contributions paid (209.0) (366.0) (626.0)
Net cash inflow from operating activities 19.1 611.6 964.7
Notes to the Interim Statement
Basis of the Report
The interim figures for the six months to 30 September 2005, which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Annual Report for the year ended 31 March 2005, except where these policies
have changed in respect of Financial Reporting Standard 17 - Retirement
Benefits, and Financial Reporting Standard 25 - Financial Instruments, as noted
below. The financial information contained in this Interim Statement does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985. The restated results for the year ended 31 March 2005 are based upon
the published accounts for that period on which the auditors gave an unqualified
report under Section 235 of the Companies Act and which have been filed with the
Registrar of Companies.
Due to the changes in accounting policies, comparative figures for 30 September
2004 and 31 March 2005 have been restated.
Accounting Policies
The Group's policy for pension scheme accounting changed during the period in
order to comply with the full provisions of FRS17. Additionally, as a
consequence of the introduction of FRS25, preference shares and the related
dividend reserve are now reclassified as liabilities. As a result preference
share dividends payable are now accounted for as interest payable. Comparative
figures have been restated accordingly to reflect these changes and their effect
on the accounts have been as follows:
6 months to 6 months to Year to
30 Sept 2005 30 Sept 2004 31 March 2005
#'000s #'000s #'000s
Profit and loss account
Increase in interest payable: pension (139.0) (154.0) (310.0)
dividends (46.7) (47.9) (104.9)
Decrease in pension expense 388.2 822.1 1,139.0
Increase in profit on ordinary activities for the financial
period 202.5 620.2 724.1
Statement of total recognised gains and losses
Recognition of change in pension fund liability during
the period (198.0) (728.0) (772.0)
Derecognition of SSAP24 provision at 1 April 2005 1,031.0 - -
Recognition of pension fund liability at 1 April 2005 (8,187.0) - -
Decrease in gains and losses (7,354.0) (728.0) (772.0)
Total decrease in gains and losses (7,151.5) (107.8) (47.9)
Balance Sheet
Reclassification of preference shares & dividend reserve (942.4) (921.7) (955.7)
Recognition of pension liability (8,315.0) (8,247.0) (8,187.0)
Derecognition of SSAP24 provision 1,210.1 974.1 1,031.0
Decrease in net assets (8,047.3) (8,194.6) (8,111.7)
Loss per Share
The loss per share for the six months ended 30 September 2005 is based on the
Group loss on ordinary activities after taxation of #32,600 (2004 - restated
profit of #197,800) attributable to 12,294,532 (2004 - 12,045,846) ordinary
shares, being the weighted average number of shares in issue. The diluted
earnings per share is calculated allowing for the full conversion of the
Preference Shares.
Going Concern
The Group has committed bank facilities through to 31 July 2006 and the support
of a former director, who has provided a long-term loan to the parent company.
Based on this support and the bank facilities, the directors anticipate that the
Group will continue to have sufficient resources to meet its financial
liabilities as they fall due. On this basis the directors have prepared the
interim statement on a going concern basis.
Copies of the interim statement will be mailed to shareholders, and will be
available from the company's website from 14 December 2005.
Independent review report to Feedback plc
Introduction
We have been instructed by the company to review the financial information which
comprises the Summarised Profit and Loss Account, the Statement of Total
Recognised Gains and Losses, the Summarised Balance Sheet, the Cash Flow
Statement and the Notes to the Interim Statement and we have read the other
information in the interim statement and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim statement and for no other purpose. We
do not, therefore, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
Directors' responsibilities
The interim statement, 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 Statement in accordance with the AIM
Market Rules which require that the accounting policies and presentation applied
to the interim figures must be consistent with those that will be adopted in the
company's annual accounts.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board as if that Bulletin applied. 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 International Standards on Auditing (UK and
Ireland) 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 30 September 2005.
BAKER TILLY
Chartered Accountants
Hanover House
18 Mount Ephraim Road
Tunbridge Wells
Kent
TN1 1ED
14 December 2005
This information is provided by RNS
The company news service from the London Stock Exchange
END
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