Interim Results
Lo-Q PLC
22 August 2006
Lo-Q plc ('Lo-Q' or the 'Company')
Interim Results for the six months ending 30 June 2006
Chairman's Statement
We have had a good start to the season with customer demand, on average, being
above last year's levels. This has resulted in a turnover that has increased by
72.4% and with costs having changed by only 23.1%, the loss during the first
half of the year has shrunk to £60,900 compared with £202,447 for the similar
period last year. The gross value of Q-bot rentals to the end of July has risen
compared with last year by 34%
There have been some increases in rental charges but the revenue growth is
largely due to improved penetration of Q-bots, with the proportion of guests
using the Q-bot up considerably on 2005. The actual income level on any day,
when compared with the same day last year, is greatly influenced by factors such
as weather. We had a string of rainy Saturdays just after the season started and
at that point seemed to be improving only modestly. We are renting more Q-bots
this year on days with lower attendances due, we believe, to guests perception
of not knowing what the day may be like in regard to the length of queues on the
rides. We think that guests do not want to take a chance of not getting a Q-bot
if the park turns out to be busy. This sentiment has particularly increased the
sales of the more expensive gold service in the two larger parks, as the number
of gold Q-bots available is relatively small.
We are encouraging Six Flags to capitalise on the opportunity in corporate
sales. On one occasion 600 Q-bots were rented on a corporate outing day, through
a single order. Factors that have enhanced our revenue have been the tight
management of the Georgia Park sales operation (which is staffed and managed by
Lo-Q's own staff); targeted customer selling particularly in the Georgia Park as
well as in the New Jersey Park at the weekends. Our hands-on control on
management and sales at the Georgia Park has produced a sales level that is 50%
above the other parks. A new ride in the Georgia park has also contributed to
the enhanced revenue.
The new management team that is now in place in the Six Flags Corporation has
been enthusiastic towards our system; with the CEO, Mark Shapiro's positive
comments to the financial analysts in New York in July, when asked about the
Flash Pass system, (our operating name in the parks), being typical. His
interview can be reached via a link on our website - www.lo-q.com
In the development lab, our team of R&D staff are working on a major system
upgrade, which will lead to a new version of our product. Built on our years of
user experience, we are producing a system with lower infrastructure costs,
simpler installation requirements, and using enhanced state-of-the art radio
communication techniques. The new system will give users more information in
their own hands. This system is called VQ 20/20 and is expected to be trialled
in the field later this year. It will feature wait times for rides being
displayed on the Q-bot and users will be able to book any ride that is on our
system without having to go to the ride entrance. The Company is applying for
patents covering certain aspects of this recent R&D work. We believe that the
new system will allow us to have a greater proportion of the park guests using
the system, and will have marked advantages over alternative competitive
products that are based on paper, RFID, or mobile telephones.
We are pleased that we were able to announce that Dollywood, which is situated
in the Smoky Mountains of Tennessee, have agreed to install a pilot system this
autumn. The outcome of a successful pilot will be a three-year contract.
Discussions continue with a number of other parks and park chains and we are
still involved in trying to secure further orders for our system.
Lo-q has opted to adopt the International Financial Reporting Standards early.
This has resulted in presentational changes. The comparatives and accounting
treatment are not materially different of those previously stated.
This month the two millionth customer rented a Q-bot and we and we are pleased
to record this milestone. Baring any significant negative event we are on track
to meet market forecasts, which should result in the Company recording an after
tax profit for the current financial year.,
Contacts:
Jeff McManus, Chairman: 01491 577 201
John Prior, Corporate Synergy Plc: 0207 448 4400
LO-Q PLC
Consolidated Interim Income Statement
Six months to Six months to Audited 15
30 Jun 2006 30 Jun 2005 months to 31
Dec 2005
£ £ £
Revenue
Income derived from Q-Bot Rental 653,900 379,362 1,596,482
Cost of Sales 162,024 112,194 273,269
__________ __________ __________
Gross profit 491,875 267,168 1,323,213
Other Operating Income 0 0 75,671
Administrative expenses 554,375 469,623 1,460,747
__________ __________ __________
Operating loss (62,500) (202,455) (61,863)
Interest receivable 1,772 219 2,139
Interest payable and similar charges (172) (211) (440)
__________ __________ __________
Loss on ordinary activities before taxation (60,900) (202,447) (60,164)
Taxation on loss on ordinary activities 0 (2,727) (29,565)
__________ __________ __________
Loss on ordinary activities after taxation (60,900) (199,720) (30,599)
__________ __________ __________
Earnings (loss) per share (pence)
Basic EPS (0.41) (1.40) (0.21)
Diluted EPS (0.39) (1.31) (0.20)
All amounts relate to continuing activities
There are no recognised gains or losses other than those within the profit and loss account
LO-Q PLC
Consolidated Balance Sheet
Six months to Six months to Audited 31 Dec
30 Jun 2006 30 Jun 2005 2005
£ £ £
Non-Current Assets
Property, Plant and Equipment 16,298 27,646 18,304
__________ __________ __________
Current Assets
Inventories 258,681 202,566 208,124
Trade and other receivables
- Trade receivables 456,880 547,296 43,484
- Other receivables 8,654 15,747 2,717
- Corporation tax 32,477 9,897 30,114
Receivables falling after one year
Cash and cash equivalents 105,140 39,597 637,429
__________ __________ __________
861,832 815,103 921,868
__________ __________ __________
Total Assets 878,131 842,749 940,172
Equities And Liabilities
Called up share capital 147,658 143,478 143,478
Share premium account 4,982,067 4,971,617 4,971,617
Capital reserve 12,473 12,473 12,473
Profit and loss account (4,374,929) (4,645,014) (4,318,964)
__________ __________ __________
Total Equity 767,269 482,554 808,604
__________ __________ __________
Current Liabilities
Trade Accounts Payable 29,282 71,869 12,860
Taxes Payable 18,951 16,254 15,166
Provisions & Other Liabilities 62,629 272,072 103,542
__________ __________ __________
Total Current Liabilities 110,862 360,195 131,568
__________ __________ __________
Total Liabilities & Equity 878,131 842,749 940,172
__________ __________ __________
LO-Q PLC
Consolidated cash flow statement
Six months to Six months to Audited 15 months
30 Jun 2006 30 Jun 2005 to 31 Dec 2005
£ £ £
Net cash (outflow)/inflow from operating activities (543,927) (104,216) 331,868
__________ __________ __________
Returns on investments and servicing of finance
Interest received 1,772 219 2,139
Interest paid (172) (211) (440)
__________ __________ __________
Net cash inflow from returns on investments and 1,600 8 1,699
servicing of finance
__________ __________ __________
Taxation
Corporation tax (paid)/received (2,363) 34,592 41,213
__________ __________ __________
Capital expenditure and financial investments (7,163) (1,895) (3,921)
__________ __________ __________
Cash (outflow)/inflow before use of liquid resources (551,854) (71,511) 370,859
and financing
Financing
Net cash inflow from shares issue 14,630 0 0
__________ __________ __________
(Decrease)/Increase in cash (537,224) (71,511) 370,859
__________ __________ __________
LO-Q PLC
Notes to the consolidated cash flow statement
Reconciliation of operating loss to net cash flow from operating activities
Six months to Six months to Audited 15 months to
30 Jun 2006 30 Jun 2005 31 Dec 2005
£ £ £
Operating loss (62,500) (202,455) (61,863)
Depreciation charges 9,169 15,838 38,545
Loss on sale of tangible fixed assets (1,771)
Decrease/(increase) in stock (50,557) 2 (9,676)
Decrease/(increase) in debtors (419,333) (168,363) 345,486
(Decrease)/increase in creditors (20,706) 250,762 21,147
__________ __________ __________
Net cash movement from operating activities (543,927) (104,216) 331,868
Reconciliation of net cash flow to movement in net debt
Six months to Six months to Audited 15 months to
30 Jun 2006 30 Jun 2005 31 Dec 2005
£ £ £
(Decrease)/Increase in cash for the period (537,224) (71,511) 370,859
Exchange translation 4,935 13,756 7,273
__________ __________ __________
Movement in net funds (532,289) (57,754) 378,132
Net funds at beginning of period 637,429 97,352 259,297
__________ __________ __________
Net funds at end of period 105,140 39,597 637,429
__________ __________ __________
Notes to the Interim Statements
1. These accounts have been prepared in accordance with the International
Financial Reporting Standards (IFRS) and show the effects of changes from
Generally Accepted Accounting Practice (GAAP) previously adopted in the
Accounts.
The interim statement for the six months are unaudited and do not constitute
statutory accounts for the purpose of the Companies Acts. The accounts for the
year ended 31st December 2005 have been filed with the Registrar of Companies
and the auditors' report on those accounts was not qualified.
2. The adjustment necessary to reflect the changes to IFRS are as follows:
2.1 Share-based incentive payments
The company has from time to time issued share options to its staff as an
incentive with options always based on the then current market place price. The
fair value of employee share plans has been calculated using a Black Scholes
model. In accordance with IFRS 2 'Share-based payment' the resulting cost is
charged to the income statement over the vesting periods of the plans. The value
of the charge is adjusted to reflect the expected and actual levels of options
vesting. IFRS 2 has been applied to all grants of equity instruments after 7th
November 2002 that were unvested as at 1st January 2005.
The calculation of the share options issued to the employees has resulted in a
value which is not material for the financial statement therefore no adjustment
has been made.
2.2 IAS 21 deals with the accounting for foreign currency and has had no impact
on the translation of the overseas operation.
3. Due to corporation tax loses available no tax charge has been provided.
4. Earnings per share have been calculated on the profits for the period after
taxation and 14,699,837 shares in issue. The diluted earnings per share
calculation is based on 15,674,599
5. The directors have not declared an interim dividend. No dividend is shown in
the income statement.
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