RNS Number:6705E
Hightex Group PLC
28 September 2007
HIGHTEX GROUP PLC
INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2007
CHAIRMAN'S STATEMENT
RESULTS OVERVIEW
Hightex designs, produces and installs polymer membrane tensile structures
(lightweight roofs and building envelopes) for sports and commercial projects
worldwide. SolarNext is chiefly focused on applications in the solar generation
of energy and also on solar cooling in order to enable the cleaner provision of
air conditioning.
The first half of 2007 has seen the Hightex Group make further progress in
developing its businesses. Revenues have increased by 46% with the unaudited
consolidated results for the six month period to 30 June 2007 showing a turnover
of Euro5.7 million, compared with combined Euro3.9 million for the first six months of
2006.
The loss before taxation for the period was Euro437,000, compared with a combined
loss before taxation of Euro894,000 in the first half of 2006.
The Hightex Group was not created until 6 September 2006, when the company
acquired all the underlying Hightex businesses. The combined financial
information for the six months ended 30 June 2006 therefore relates to the time
before Hightex Group plc was incorporated, but has been previously reported on
that basis as if the Hightex Group had been formed throughout the comparative
period. Further details of comparative financial information are set out in note
2 to the interim report.
The deficit per share for the period was Euro(0.0030) (combined 2006: Euro(0.0079)).
CASH FLOW
In the half year ended 30 June 2007, the Group had an operating cash outflow of
Euro166,000 (2006: cash inflow of Euro110,000). The net cash outflow amounted to
Euro810,000 (2006: cash inflow of Euro2,314,000), the balance of the cash outflow
being principally due to net capital expenditure from cash resources of Euro358,000
and the repayment of shareholder loans of Euro286,000. The cash inflow in the first
half of 2006 arose as the net proceeds from equity fund-raisings by the
constituent parts of the Group in that period.
OPERATIONS
POLYMER MEMBRANE BUSINESS
The Hightex membrane business designs, produces and installs polymer membrane
structures for a diversity of projects ranging from roof systems for sports
stadia to transparent enclosures for leisure centres. Recent projects include
the Skilled Stadium at Robina, the Gold Coast in Brisbane, Australia; Miroiterie
in Lausanne; Aquapark Sopot in Poland; Oasis in Ireland; a bus terminal in the
Czech Republic; projects in Horseferry Road, London and at Chessington in the
UK; and the Munich Technology Centre in Germany.
The intention of the board is immediately to establish two well-focussed
operations in South Africa and the Americas, in addition to its existing
operations in Europe, to which management resources can be devoted and expanded
and then to create a permanent presence in South East Asia and Australasia.
Hightex continues to increase its project volume in the supply of transparent
ETFE roof systems for leisure and commercial buildings and in the last six
months has secured more than Euro1.5 million of new contracts in Europe. In
addition, Hightex has recently received a Letter of Intent for the installation
of an ETFE Roof on a very substantial project in Lisbon, Portugal. Hightex is
working on the transition from this status to a signed contract, and will
announce further details at such time. Hightex is actively pursuing project
opportunities for the 2012 London Olympics, and is working to support and work
within the design teams by bringing its specialist knowledge to help create
future projects in which to participate.
In South Africa, Hightex is forming a joint venture company with Circle Capital
Ventures (Pty) Ltd, with whom it has submitted tenders for the membrane roof and
facades on some of the new football stadia to be built in connection with the
FIFA World Cup in 2010.
In the Americas, Hightex has already been awarded three design and engineering
contracts with a total value in excess of US$1 million, which it is hopeful may
lead to significant contracts.
One of these contracts concerns a marine research centre, which it is proposed
will combine Hightex's architectural membrane systems with SolarNext's cooling
technology and flexible membrane solar cells, to create a fully sustainable
clean energy building.
In the US, SolarNext and Hightex are about to complete a futuristic building
with a translucent membrane cushion roof showcasing a new technology developed
by SolarNext which combines exceptional high thermal insulation properties with
high light transmission.
The first six months of 2007 has been a period focused both on growing Hightex's
presence in its core markets and on marketing to secure new contracts. It is our
hope and expectation that we will be in a position to announce the successful
conversion of a number of promising proposals, currently under consideration
into firm contracts in the near future.
SOLAR BUSINESS
The solar business has been slower to develop than anticipated, but the Company
has generated modest initial revenue from engineering consulting for a very
large international retailer.
More significantly, SolarNext is developing solar cooling kits. After having
finalised the testing with the absorption chiller "chillii(R) PSC 10", the first
five units made were all sold in August 2007 with minimal marketing and sales
support. Two additional customers have placed orders for another three units of
this absorption machine. The adsorption chiller "chillii(R) STC 6" was shown at
INTERSOLAR 2007 in Freiburg: it is expected that the testing stage will be
completed at the end of October.
In a further development, the Company has developed an innovative system control
panel, which is able to control the heating system, the warm water system and
the cooling system of a building. So far as the Company is aware, this product
is unique. It is expected that the first prototype of this system will be
delivered in October and the first mini series will be produced in December this
year. This system not only allows one control panel to run the whole heating and
cooling system but also reduces the cost of a solar cooling kit considerably.
The Company absorption and adsorption solar cooling kits can be adapted to
different market conditions and applications without any need for redesign for
different applications or climate conditions.
On 16 July, Hightex announced that it had signed an agreement with VHF
Technologies SA for the exclusive system co-development of a flexible
photovoltaic ETFE membrane for intelligent building envelopes, known as Flexcell
TM. It is expected that the first Flexcell product installation will be
completed during October 2007 and that it will then be demonstrated to the
building and clean energy market.
CONCLUSION
The businesses of the Group have made reasonable progress in the period and we
are encouraged by the improved results compared to 2006. The nature of both the
membrane and the solar business is such that considerable development
expenditure is required to build up a pipeline of substantial and smaller
projects which provide critical mass. The loss before taxation for the first
half year of Euro437,000 is stated after charging a deficit of Euro430,000 incurred on
the solar business. For the membrane business we have seen a very encouraging
start to 2007 but, whilst welcome when they are signed, a reliance on larger,
long term contracts is not without its difficulties. A change in the
specification and delay in the timing of one specific larger contract, combined
with the aforementioned investment in the solar business, is likely to result in
the Company making a small loss for the full year, although at a much improved
level compared to 2006.
The Directors believe that good progress has been made in developing the
membrane business in its three principal geographical areas of activity and that
the company is working to realise the excellent potential of the SolarNext
business, not only in solar cooling products but also in applying the Flexcell
photovoltaic membrane to some of its roofs for sporting stadia and other
structures throughout the world. The Group is therefore now well positioned to
drive significant additional growth in the coming months and looks forward to
being able to provide shareholders with additional updates.
Charles DesForges
Chairman
27 September 2007
For further information please contact:
Charles DesForges (Chairman) 07799 626 238
Frank Molter (Finance Director) 0049 1729 651 464
Sindre Ottesen/Thilo Hoffmann 020 7426 9000
(Landsbanki Securities (UK) Limited)
CONSOLIDATED INCOME STATEMENTS
Notes 6 Months Period ended
30 June 31 Dec
2007 2006
(Unaudited) (Audited)
Euro'000 Euro'000
Turnover 5,735 3,790
Cost of sales (3,202) (1,838)
Gross margin 2,533 1,952
Salaries and related expenses (1,215) (947)
Other operating expenses (1,666) (1,969)
Depreciation and amortisation (158) (136)
Operating deficit (506) (1,100)
Net interest 4 69 (46)
Net deficit before taxation (437) (1,146)
Taxation 5 110 249
Loss after tax and before minorities (327) (897)
Minority interest (29) (53)
Loss from continuing operations and
attributable to equity holders (356) (950)
(Deficit)/surplus per share
Deficit per share in Hightex Group plc 6 Euro(0.0030) Euro(0.0079)
With the exception of exchange differences arising on combination, the Group had
no recognized gains or losses other than the deficit for the period. Changes in
combined shareholders' equity are set out in the statement below.
As described in note 2, the income statements set out above have been prepared
in accordance with the basis of preparation adopted in the audited financial
statements of the Company for the period from incorporation on 28 June 2006 to
31 December 2006 and incorporated the trading results of the Hightex Group for
the approximately four month period from the date of acquisition on 6 September
2006. The company has previously published financial information in relation to
the period prior to the formation of the Group on a combined basis and further
comparative financial information on this basis is included in note 2.
CONSOLIDATED BALANCE SHEETS
Notes 30 June 31 Dec
2007 2006
(Unaudited) (Audited)
Euro'000 Euro'000
Current assets
Cash and cash equivalents 4,495 5,305
Inventories and work in progress 103 143
Accounts receivable 3,964 3,638
Total current assets 8,562 9,086
Non-current assets
Goodwill 6,627 6,627
Intangible fixed assets 77 65
Property, plant and equipment (net) 974 768
Deferred tax assets 371 143
Total non-current assets 8,049 7,603
Total assets 16,611 16,689
Current liabilities
Trade accounts payable 1,023 1,329
Accrued liabilities and deferred income 2,244 1,358
Other accounts payable 786 1,009
Total current liabilities 4,053 3,696
Non-current liabilities
Accrued liabilities and deferred income 193 187
Other non-current liabilities 91 67
Total non-current liabilities 284 254
Shareholders' equity
Share capital 6 1,775 1,775
Share premium account 6 11,757 11,757
Retained earnings (1,485) (991)
Minorities 227 198
Total shareholders' equity 12,274 12,739
Total liabilities and shareholders' equity 16,611 16,689
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months Period ended
30 June 31 Dec
2007 2006
(Unaudited) (Audited)
Euro'000 Euro'000
Cash flows from operating activities
Operating loss for the period: (506) (1,100)
Adjustments for:
Loss on disposal - 4
Depreciation and amortisation 141 186
Net operating income before working capital changes (365) (910)
Changes in working capital:
Decrease/(increase) in inventories 40 (143)
Decrease/(increase) in accounts receivable (327) 903
Increase in accounts payable 486 260
Net cash (used in)/generated from operating activities (166) 110
Interest paid (18) (115)
Income tax paid (34) (23)
Net cash used in operating activities (218) (28)
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired - 4,307
Acquisition of property, plant and equipment (358) (468)
Interest received 87 69
Net cash (used in)/generated from investing activities (271) 3,908
Cash flows before financing (489) 3,880
Cash flows from financing activities
Issue of shares for cash - 2,178
Costs of issue of shares - (1,088)
Movements in shareholders' loans (286) 263
Changes in finance leases 75 72
Exchange difference (110) -
Net cash provided by financing activities (321) 1,425
Net increase/(decrease) in cash and cash equivalents (810) 5,305
Cash and cash equivalents, beginning of period 5,305 -
Cash and cash equivalents, end of period 4,495 5,305
Cash at bank and in hand comprises:
Cash and cash equivalents 1,860 2,997
Cash lodged under performance and warranty bonds 2,635 2,308
4,495 5,305
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY
Combined share Share premium Retained
capital account earnings
Total
Euro'000 Euro'000 Euro'000 Euro'000
Balances at 28 June 2006 - - - -
Net deficit for the period - - (950) (950)
Exchange differences - - (41) (41)
Issue of shares 1,775 12,845 - 14,620
Costs of issue of shares - (1,088) - (1,088)
Balances at 31 December 2006 1,775 11,757 (991) 12,541
Net deficit for the period - - (356) (356)
Exchange differences - - (138) (138)
Balances at 30 June 2007 1,775 11,757 (1,485) 12,047
1. Business of the Hightex Group plc
Hightex Group plc is the holding company for the Group. The principal activity
of the Group is the design, supply and assembly of polymer membrane structures
for use in engineering and construction of technically advanced buildings.
The Company's principal subsidiary, Hightex International AG ('HTI') is the
holding company for a number of companies which were acquired by HTI during
2006, including Hightex Americas LLC. The HTI sub-group undertakes the polymer
membrane business.
The business of SolarNext AG is the exploitation of solar energy for solar
cooling and other applications, including the design and implementation of
active technology (photovoltaics and thermal applications) in the area of foil
and membrane structures.
2. Basis of presentation and significant accounting policies
The financial information has been prepared in accordance with applicable
International Financial Reporting Standards ('IFRS').
The financial information set out in this interim financial report is unaudited
and does not constitute the Company's statutory accounts for the six month
period ended 30 June 2007.
The accounting policies and practices used in preparing the financial
information contained in this interim report are consistent with those used in
preparing the statutory financial statements of the Company for the period ended
31 December 2006. The statutory financial statements of the Company for the
period ended 31 December 2006 covered the period from incorporation of the
Company and included the consolidated results of the Company's subsidiary
undertakings for the period from 6 September 2006 (when the Hightex Group was
created) to 31 December 2006.
This is a different basis from that used in the preparation of the financial
information contained in the document issued in relation to the admission of the
Company to the AIM Market of the London Stock Exchange on 6th September 2006 and
in the previously published financial information covering the six months ended
30 June 2006.
The financial information on the underlying Hightex businesses contained in the
Company's AIM Admission document and the interim financial report covering the
six months ended 30 June 2006 related to the period before the Company acquired
the HTI and SolarNext businesses, and were drawn up on a combined basis as if
the Group had been in existence throughout that period. This was permitted by
the Standards of Investment Reporting issued by the Auditing Practices Board in
the United Kingdom.
For comparison purposes, results for the current period and the previously
published results are reproduced below.
6 Months 6 Months 12 Months
30 June 30 June 31 Dec
2007 2006 2006
A B C
Note (Unaudited (Unaudited (Unaudited
consolidated) combined) combined)
Euro'000 Euro'000 Euro'000
Turnover 5,735 3,878 8,446
Cost of sales (3,202) (2,737) (4,915)
Gross margin 2,533 1,141 3,531
Salaries and related expenses (1,215) (959) (2,120)
Other operating expenses (1,666) (1,000) (3,146)
Depreciation and amortisation (158) (83) (242)
Operating (deficit)/ surplus (506) (901) (1,977)
Net interest 69 7 (80)
Net (deficit)/surplus before taxation (437) (894) (2,057)
Taxation 110 353 484
Loss after tax and before minorities (327) (541) (1,573)
Minority interest (29) - (37)
Loss from continuing operations and
attributable to equity holders (356) (541) (1,610)
Notes
A. The financial information in column A is consolidated financial
information because the Group existed in its current structure throughout the
six months ended 30 June 2007.
B. The financial information in column B in relation to the six months
ended 30 June 2006 was prepared on a combined basis as if the Group had been
formed on 1 January 2006.
C. The financial information in column C in relation to the year ended 30
June 2006 was prepared on a combined basis as if the Group had been formed on 1
January 2006.
3. List of principal entities
Principal entities included in the consolidated financial information are as
follows:
Name of Company Country Holding Nature of business
Hightex International AG Switzerland 100% Holding Company
Hightex GmbH Germany 100% Design, consultancy, supply,
installation and construction of
membrane structures
SolarNext AG Germany 100% Ownership an exploitation of solar
and related technologies
Hightex Limited UK 100% Installation and assembly of
membrane structures
Hightex Structures Pty Ltd South Africa 100% Design, consultancy, supply,
installation and construction of
membrane structures
Hightex Pty Ltd Australia 100% Design, consultancy, supply,
installation and construction of
membrane structures
Hightex Americas LLC United States 100% Design, consultancy, supply,
installation and construction of
membrane structures
Metal System Sp z.o.o. Poland 60% Provision of steel structures and
components
4. Interest
30 June 31 Dec
2007 2006
Euro'000 Euro'000
Interest/receivables on bank and other deposits 87 69
Interest/payables on bank and other borrowings (18) (115)
69 (46)
5. Taxation
30 June 31 Dec
2007 2006
Euro'000 Euro'000
Deferred taxation 210 272
Current taxation (100) (23)
Corporate taxation credit/(charge) 110 249
6. Share capital and (deficit)/surplus per share
a) Share capital
2007 2006
Euro '000 Euro '000
Authorised:
170,000,000 Ordinary shares of 1p each 2,524 2,524
Issued:
119,652,582 Ordinary shares of 1p each 1,775 1,775
b) Share options and warrants
On 30 June 2007 and as at the date of this document, the Company had outstanding
warrants to subscribe for 8,928,750 new ordinary shares as follows:
Exercise price
Number of warrants per share Expiry date
Issued in connection with the
Placing of March 2006 1,128,750 Euro0.1107419 1 Dec 2010
Issued in connection with the
Admission to AIM 7,800,000 #0.11 6 Sept 2008
The warrants are exercisable at any time before their respective expiry dates.
RAB Special Situations (Master) Fund Limited holds a warrant to subscribe for
5,000,000 ordinary shares, which is included within the 7,800,000 noted in the
table above.
c) Deficit per share
(i) Basic
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period:
Deficit attributable to equity holders of the company (Euro 356,000)
Weighted average number of ordinary shares in issue 119,652,582
Basic loss per share (0.30) Euro cent
(ii) Diluted
Diluted loss per share is calculated by adjusting the weighted average number of
ordinary shares in issue to assume conversion of all potential dilutive ordinary
shares during the period. However, no potential ordinary shares are considered
dilutive, as loss per share would decrease had the warrants in issue been
exercised.
7. Movement in net funds
30 June 31 Dec
2007 2006
(Unaudited) (Audited)
Euro'000 Euro'000
Loans from shareholders (483) -
Cash and cash equivalents 4,495 5,305
Finance leases (212) -
Net funds 3,800 5,305
At start of year 5,305 -
Movement in net funds 1,505 5,305
8. Nature of financial information
The financial information set out above does not represent statutory financial
statements for Hightex Group plc or for any of the entities comprising the Group
for the six month period ended 30 June 2007. The results for the period ended
31 December 2006 do not comprise statutory financial statements for the purpose
of S240 Companies Act 1985 and have been extracted from the Group's published
financial statements for that period, which have been filed with the Registrar
of Companies and contain an unqualified Audit Report. The Interim Report for the
six months ended 30 June 2007 was approved by the Directors on 27 September
2007. The next statutory financial statements of Hightex Group plc will cover
the year ending 31 December 2007.
These interim results will be circulated to shareholders in Hightex Group plc.
Further copies can be obtained from the registered office at Masters House, 107
Hammersmith Road, London W14 0QH and on the Company's website at
www.hightexworld.com.
INDEPENDENT REVIEW REPORT BY MAZARS LLP TO THE SHAREHOLDERS OF HIGHTEX GROUP PLC
The Directors
Hightex Group plc
Masters House
107 Hammersmith Road
London W14 0QH
27 September 2007
Dear Sirs
Independent Review Report by Mazars LLP to the shareholders of Hightex Group plc
Introduction
We have been instructed by the directors of Hightex Group plc to review the
unaudited financial information for the six months ended 30 June 2007, which
comprise the consolidated income statement, the consolidated balance sheet, the
consolidated statement of cash flows, the consolidated statement of changes in
equity and related notes, and we have read the other information contained in
the interim report for any apparent misstatements or material inconsistencies
with the financial information.
This report is made solely to the company, in accordance with guidance contained
in Bulletin 1999/4 "Review of interim financial information" issued by the
Auditing Practices Board. To the fullest extent permitted by law we do not
accept or assume responsibility to anyone other than the company, for all 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 Listing Rules
of the Financial Services Authority as applicable to AIM listed companies
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
financial statements of the Company except where changes, and the reason for
them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of 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 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 unaudited financial information as presented for the six
months ended 30 June 2007.
Mazars LLP
Chartered Accountants
3 Sheldon Square
London W2 6PS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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