RNS Number:2335N
Innovision Research&Technology PLC
05 December 2006
INNOVISION RESEARCH & TECHNOLOGY PLC
Results for six months ending 30 September 2006.
Innovision Research & Technology plc today announces its interim results for the
six months ending 30 September 2006.
Highlights:
* Turnover up from #0.5m to #1.8m;
* Substantial turnover, #1.2m, generated by licences, royalties and
products;
* Loss before tax down from #2.3m to #0.8m;
* Major new design and licensing contract with a leading wireless
communications company;
* Tags supplied for world's first RFID-enabled games console.
Commenting on the results, David Wollen, Chief Executive said:
"The Company has made good progress in the NFC* and RFID markets, securing new
development and licensing contracts. The engineering capability has been
significantly strengthened and the organisation structure consolidated placing
the Company in an excellent position to further enhance its market presence. We
are pleased to have secured a substantial contract win at the beginning of the
year and we are in active discussions for additional contracts."
5 December 2006
Enquiries:
Innovision Research & Technology plc Tel: 01285 888 200
David Wollen, CEO
Brian McKenzie, Finance Director
College Hill Tel: 020 7457 2020
Matthew Smallwood
* Near Field Communications, www.nfc-forum.org
Chairman's Statement
Results for the six months (unaudited)
The company has made good progress over the six months securing new licence fee
and development contracts as well as delivering chips for inclusion in the
world's first RFID-enabled gaming console. We have continued to build our
position with international, blue-chip customers in the Near Field
Communications (NFC) market and to strengthen the engineering and management
expertise across the organisation.
Overall turnover increased to #1.84m (2005: #511,000), which is the company's
highest ever 6-month revenue figure. Revenue derived from development
engineering increased to #610,000 (2005: #511,000), royalty and licence revenue
increased to #865,000 (2005: #nil), and product sales increased to #367,000
(2005: #nil). Administrative costs were #2.6m (2005: #2.3m) with the increase
due to further investment in engineering staff and integrated circuit design,
simulation and testing tools. There were no exceptional items (2005: #556,000)
and the loss before tax reduced to #840,000 (2005: #2.26m). The loss included
#46,000 (2005: #66,000) related to the recognition of share-based payments under
FRS20, which has been adopted for the first time. Net cash outflow was #1.15m
(2005: #2.07m) and at 30 September the Company had cash deposits of #2.94m and
further net current assets of #929,000.
Operations Review
We continued to enhance our IC (Integrated Circuit) design capability based in
Cirencester with emphasis on near-field data communications and RFID. Innovision
R&T continues to play a strong role as a company and via staff leadership in the
NFC standards body (see www.nfc-forum.org). We are seeing a growing acceptance
of the NFC standard as a key technology within mobile phones and other devices
which has enabled us to initiate negotiations with a number of new, high quality
prospects.
During the period we secured a significant new design and licensing contract
with a leading wireless communications company. This contract complements the
other new NFC activities and the ongoing developments on contracts secured
during 2005/06. One of our first designs is now in pre-production, with initial
product availability planned for the first half of 2007. NFC is a key area for
our future strategic development and we continue to target major semiconductor
manufacturers across the world as potential customers for our NFC IP and design
platforms.
On the RFID side our experience in custom tag and reader IC design combined with
a strong systems design capability enabled us to successfully deliver in excess
of 8 million tag chips for the initial production of the world's first
RFID-enabled hybrid gaming platform launched by Mattel Inc. in September 2006.
As previously stated the market for limited use contactless ticketing is
developing at a slower pace than originally planned. However, we have added a
further licensee for our Jewel product and we have seen growing end-user
interest in recent months.
Our intellectual property portfolio continues to grow as a result of quality
work by the in-house engineering teams. The IP blocks underpinning the business
are an increasing part of the value-proposition to customers, and provide more
scope for flexible revenue models.
Staff
In the six months under review we have significantly strengthened our
engineering capability in Cirencester and consolidated the organisation
structure. I would like to thank everyone at the Company for their continued
hard work and commitment. At Board level we welcomed Brian McKenzie to replace
Mike Wroe as Finance Director. Brian brings excellent experience from high
growth, hi-tech companies. Trevor Crotch-Harvey stepped down as Sales Director.
I would like to thank Mike and Trevor for their contributions to the company.
Prospects
Wherever possible we are structuring contracts to optimise cash flow both in the
short and medium term. This will, of course, depend on our customers'
requirements and each contract is individually negotiated. The business model
remains for the company to secure IC design and demonstration contracts, coupled
with the opportunity to generate a sustainable high level of royalties in the
medium to long term
I am encouraged by the positive developments in the market for near-field data
communications and the broader RFID markets. We started 2006/07 with a
substantial contract win, however we do need more new contracts both to finance
the business in the medium term and to provide a base for the long term. We are
in active discussions with a number of high quality prospects for similar scales
of business and I look forward to reporting further progress for the company
during the second half.
Malcolm Baggott
5 December 2006
Innovision Research & Technology plc
PROFIT AND LOSS ACCOUNT
For six months ended 30 September 2006
Notes 6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2006 2005 2006
(unaudited) (unaudited, (audited,
#'000 as restated) as restated)
#'000 #'000
TURNOVER 1,842 511 1,650
Cost of sales (151) (47) (101)
--------- --------- ---------
Gross Profit 1,691 464 1,549
Administrative expenses
Normal operating 5 (2,614) (2,312) (4,347)
Exceptional items 3 - (556) (556)
--------- --------- ---------
OPERATING LOSS (923) (2,404) (3,354)
Interest receivable 83 144 252
--------- --------- ---------
LOSS ON ORDINARY
ACTIVITIES BEFORE
TAXATION (840) (2,260) (3,102)
Taxation 2 42 40 80
--------- --------- ---------
LOSS ON ORDINARY
ACTIVITIES AFTER TAXATION (798) (2,220) (3,022)
========= ========= =========
LOSS PER SHARE Pence per Pence per Pence per
share share share
Basic and
diluted 4 (1.69) (4.75) (6.42)
The operating loss for the period arises from the company's continuing
operations.
No separate Statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the Profit and Loss Account.
Innovision Research & Technology plc
BALANCE SHEET
30 September 2006
Notes As at 30 As at 30 As at
September September 2005 31 March
2006 (unaudited, as 2006
restated) (audited,
(unaudited) #'000 as restated)
#'000 #'000
FIXED ASSETS
Tangible assets 314 262 283
--------- --------- ---------
314 262 283
--------- --------- ---------
CURRENT ASSETS
Stocks 4 11 16
Debtors 1,691 1,189 1,370
Cash at bank and in hand 2,936 5,077 4,075
--------- --------- ---------
4,631 6,277 5,461
CREDITORS:
Amounts falling due
within one year (766) (797) (742)
--------- --------- ---------
NET CURRENT ASSETS 3,865 5,480 4,719
--------- --------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 4,179 5,742 5,002
PROVISION FOR
LIABILITIES & CHARGES (107) (179) (190)
--------- --------- ---------
NET ASSETS 4,072 5,563 4,812
========= ========= =========
CAPITAL AND RESERVES
Called up share capital 471 470 470
Share premium 15,652 15,625 15,641
Profit and loss account (12,051) (10,532) (11,299)
--------- --------- ---------
EQUITY SHAREHOLDERS'
FUNDS 6 4,072 5,563 4,812
========= ========= =========
Innovision Research & Technology Plc
CASH FLOW STATEMENT
For the six months ended 30 September 2006
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2006 2005 2006
(unaudited) (unaudited, (audited,
#'000 as restated) as restated)
#'000 #'000
Operating loss (923) (2,404) (3,354)
Depreciation 86 81 161
Loss on sale of fixed assets - 1 3
Decrease /(increase) in stocks 12 (11) (16)
(Increase) in debtors (360) (192) (476)
Increase in creditors 24 343 109
(Decrease) /Increase in provision
for liabilities & charges (83) - 190
Other non-cash changes 46 66 101
--------- --------- ---------
Net cash outflow from operating
activities (1,198) (2,116) (3,282)
Returns on investments and
servicing of finance
Interest received 78 104 256
Taxation 85 - 100
Capital expenditure and financial
investment
Purchase of tangible fixed assets (116) (60) (165)
Sale of tangible fixed assets - - 1
--------- --------- ---------
Net cash flow for capital expenditure
and financial investment (116) (60) (164)
--------- --------- ---------
Cash outflow before use of liquid
resources and financing (1,151) (2,072) (3,090)
Management of liquid resources
Decrease in treasury deposit account 1,258 1,294 2,432
Financing
Net proceeds from share issue 12 412 428
--------- --------- ---------
Increase / (decrease) in
cash in period 119 (366) (230)
========= ========= =========
Reconciliation of net cash
flow to movement in net
funds
Increase / (Decrease) in
cash in period 119 (366) (230)
Cash (outflow) from decrease in
liquid resources (1,258) (1,294) (2,432)
--------- --------- ---------
Change in net funds
resulting from cash flow (1,139) (1,660) (2,662)
Opening net funds 4,075 6,737 6,737
--------- --------- ---------
Closing net funds 2,936 5,077 4,075
========= ========= =========
Innovision Research & Technology plc
NOTES
For the six months ended 30 September 2006
1 BASIS OF PREPARATION
The financial information contained in this interim report does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The interim results, which have been reviewed but not audited, have been
prepared using accounting policies consistent with those used in the preparation
of the Annual Report and Accounts for the year ended 31 March 2006, with the
exception of the application of FRS 20, 'Share-based payment'. Those accounts
have been filed with the Registrar of Companies and received an unqualified
audit report which did not contain a statement under section 237(2) or (3) of
the Companies Act 1985.
The interim results reflect the initial adoption of FRS 20, 'Share-based
payment'. The adoption of this standard represents a change in accounting policy
and the comparative figures have been restated accordingly. Details of the prior
period adjustment are given in note 5.
2 TAXATION
Taxation for the six months to 30 September 2006 is based on the estimated tax
credits for Research & Development.
3 EXCEPTIONAL ITEMS
Relocation and restructuring costs in the six months to 30 September 2005 and in
the year ended 31 March 2006 amounted to #556,000. There are no similar costs in
the current period.
4 LOSS PER SHARE
Basic loss per share has been calculated by dividing the loss for the
period attributable to ordinary shareholders by the weighted average number
of shares in issue during the period.
For diluted earnings per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all dilutive potential
ordinary shares. Dilutive potential ordinary shares arise from employee
share options. At 30 September 2006 the average market price of the
company's ordinary shares was more than the exercise price of the options
and consequently the shares in question are excluded from the diluted EPS
calculation. There is therefore no dilution as a result of outstanding
options.
6 months ended 6 months ended 12 months ended
30 September 30 September 31 March
2006 2005 2006
(unaudited) (unaudited, as (audited, as
restated) restated)
Loss for the period - as
restated (#'000) (#798) (#2,220) (#3,022)
Weighted average number
of shares 47,079,563 46,674,530 47,038,890
Loss per share (basic &
diluted) - pence per
share (1.69) (4.75) (6.42)
5 PRIOR PERIOD ADJUSTMENT
The prior period adjustment relates to the implementation of FRS 20,
'Share-based payment'. The adoption of FRS 20 has resulted in an increase in
staff costs of #46,000 (6 months ended 30 September 2005: #66,000, 12 months
ended 31 March 2006: #101,000). There is nil net impact on reserves as a result
of the adoption of this standard.
6 months ended 12 months ended
30 September 31 March
2005 2006
(unaudited) (audited)
#'000 #'000
Increase in loss for the year as a result
of FRS 20 charge to profit and loss account (66) (101)
Adjustment to reserves in respect of
employee share schemes (note 6) 66 101
-------- --------
Net adjustment to shareholders funds - -
-------- --------
6 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2006 2005 2006
(unaudited) (unaudited, (audited,
#'000 as restated) as restated)
#'000 #'000
(Loss) for the financial year
as previously reported (798) (2,154) (2,921)
Prior year adjustment (see note 5) - (66) (101)
------- ------- -------
(Loss) for the financial year (798) (2,220) (3,022)
Proceeds from share issue 6 380 428
Refund re share issue costs 6 32 -
Adjustment in respect of employee share
schemes 46 66 101
------- ------- -------
Net (withdrawals) from shareholders'
funds (740) (1,742) (2,493)
Opening shareholders' funds 4,812 7,305 7,305
------- ------- -------
Closing shareholders' funds 4,072 5,563 4,812
======= ======= =======
7 APPROVAL BY DIRECTORS
The interim financial statements set out on pages 1 to 8 were approved by the
directors on 30 November 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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