Final Results
Amino Technologies PLC
24 January 2005
FOR IMMEDIATE RELEASE 24 January 2005
AMINO TECHNOLOGIES PLC
RESULTS FOR THE 11 MONTHS ENDED 30 NOVEMBER 2004
Amino Technologies plc ('Amino'; stock code : AMO), the Cambridge based
broadband network software and systems company, announces its unaudited
preliminary results for the eleven-month period ended 30 November 2004.
Key points:
• These are Amino's maiden preliminary results since the IPO on AIM in
June 2004.
• Although still at a relatively early stage in the development of the
IPTV market, Amino is able to report a profit for the period.
• Turnover jumped to £13.2m (2003: £1.0m).
• Shipments of AmiNET products for the period were 174,000 (2003:
11,500)
• Profit before tax and exceptional items was £0.53m (2003: loss of
£3.39m).
• Basic earnings per share were 3.0p (2003: loss of 13.0p).
• Net cash balances were £6.4m (2003: £4.3m).
On outlook, Grant Masom, Chairman stated:
'All our key business metrics point towards a sharp increase in sales volumes in
the year to 30 November 2005. The current year started with a strong order book
with a substantial pipeline of significant opportunities. Based on firm delivery
schedules and forecasts received, we anticipate a substantial bias in our
results towards the second half-year of 2005.
Amino has successfully established itself as a leading supplier of IPTV
technology at a time when the prospects are outstanding. Our challenge now is to
manage the expected growth of the business.'
About Amino
Amino (www.aminocom.com) is a designer and supplier of electronic systems and
consultancy, specialising in products for digital broadcast and on-demand TV,
IPTV (telco triple-play applications) and in-home multimedia distribution.
Its range of small, low cost, high functionality set-top boxes and gateway
products is designed for consumer applications in telecom, satellite and digital
terrestrial broadcast markets, as well as on-demand systems for hotels and
hospitality markets, healthcare, retail and education. Amino also provides
systems consultancy and partners with world-leading companies in content
aggregation, middleware, conditional access and head-end systems.
CONTACTS
Amino Technologies: 020-7444-4140 today;
thereafter 01954-234100
Grant Masom, Chairman www.aminocom.com
Bob Giddy, Chief Executive
Stuart Darling, Finance Director
Bankside: 020-7444-4140
Steve Liebmann or Susan Scott
CHAIRMAN'S STATEMENT
Introduction
Amino is pleased to present its first annual results since its Admission to AIM
in June 2004. Despite still being at a relatively early stage in the
commercialisation of IPTV (internet protocol TV) technologies and services,
Amino is able to report a profit for the 11-month period as a whole. This is a
considerable achievement given the increased level of investment that Amino has
been making to exploit the explosive growth potential of the marketplace.
Results and finance
As Amino has changed its financial year-end from 31 December to 30 November, the
results now reported are for the 11 months to 30 November 2004 (comparatives are
for the 12 months to 31 December 2003). Total shipments of AmiNet products for
the period were 174,000, up from 11,500 in 2003 resulting in turnover that
jumped from £1.0 million to £13.2 million. Turnover included the first licence
sale.
Profit before tax and exceptional items were satisfactory, although lower than
expected at £0.53 million (2003: loss of £3.39 million). The results were
partially affected by the fact that the bulk of Amino's revenues are denominated
in US$ where there was continued weakness against Sterling. In addition, the
Board has made decisions over the past 6 months which affect short term
profitability but which it believes are important to build on Amino's initial
market leadership - particularly as large scale opportunities in 'tier 1' and
'tier 2' telcos emerge in several countries worldwide. As of January 2005, Amino
was engaged in trials and roll-outs with 216 customers versus just 45 only
twelve months ago.
After an exceptional charge of £0.33 million (2003: £1.04 million) associated
with the cost of Admission to AIM, the profit before tax was £0.20 million
(2003: loss of £4.43 million). Basic earnings per share were 3.0p (2003: loss
per share of 13.0p).
Net cash balances were £6.43 million (2003: £4.25 million).
Looking forward to 2005, Amino will continue to invest in building on and
maintaining our market leadership. The issues affecting short-term
predictability of shipment volumes and product mix are expected to begin
settling down as the market matures, particularly during the second half of the
year, with resulting increased efficiencies.
Strategy and business development
The core strategy is to position Amino as the provider of choice of technology
and products for the delivery of digital TV and on-demand content over broadband
networks with a primary focus on the consumer end of the system.
Telcos are beginning to invest heavily in IPTV systems in order to increase
revenues in the face of intensifying competition for traditional voice and data
services. The end-to-end market place for IPTV systems requires technologies,
products and services from a variety of suppliers. A particular strength of
Amino's people and technology is the ability to partner with and rapidly
integrate most suppliers of the different elements of the IPTV system,
irrespective of the mix chosen by a particular telco. In addition to the ease of
integration it offers, Amino's architecture allows it to develop much lower cost
products for its end customers, with increased competitiveness to their business
models as a result. As the market expands, Amino's challenge is to ensure that
new customers continue to recognise the real enduring advantages that employing
its technology offers.
The key elements of these technology advantages are software based. At present,
customers have access to Amino's technology through its own hardware products,
the AmiNET series. Looking forward, it is a key element of Amino's strategy to
offer its key technology to the widest range of IPTV users possible - from the
direct provision of consumer set top boxes, through OEM arrangements, and in the
licensing of software and hardware designs to those customers wishing to
incorporate the technology within other equipment.
Board and employees
I would like to thank all employees and the Board for their hard work in
successfully coping with a very rapid rate of expansion and in establishing
Amino as a leader in its field.
Outlook
The IPTV market is developing at an exceptionally fast rate and the number of
opportunities Amino is actively engaged with has grown faster than anticipated.
However, the early stage of the market's development makes it difficult to
predict forward delivery volumes and product mix as these depend on the speed
that customers roll out their IPTV services. In time, forward prediction will
become more certain as our customers' programmes become more defined.
All our key business metrics point towards a sharp increase in sales volumes in
the year to 30 November 2005. The current year started with a strong order book
with a substantial pipeline of significant opportunities. Based on forward
delivery schedules and indications received, we anticipate a substantial bias in
our results towards the second half-year of 2005.
Amino has successfully established itself as a leading supplier of IPTV
technology at a time when the prospects are outstanding. Our challenge now is to
manage the expected growth of the business.
Grant Masom
Chairman
CHIEF EXECUTIVE'S STATEMENT
Overview
Within a short period Amino has established itself as one of the key players
within the IPTV arena and is recognised as the reference point and market leader
for client-end IPTV products and software technologies. At the outset of our
first period as a quoted company we set ourselves very ambitious objectives. We
sought to:
•transition from a promising start-up to an established, profitable
business;
•develop a 3 year growth strategy to build upon and strengthen Amino's
initial leadership position;
•develop market awareness of Amino as a value added and innovative
solutions supplier; and
•gain a first class reputation for the quality of our products and
services.
We have achieved these goals; Amino's name is now well established throughout
our worldwide market.
Company development
Amino is very fortunate to have a committed and enthusiastic staff and
management team. Their skill and experience mix is well suited to the needs of
an international, dynamic and fast growing high-tech company.
In May 2004 we expanded our international operations and opened our first
international office in Atlanta, Georgia, USA. An office in Hong Kong for our
Asia Pacific activities followed in September.
During the course of the period the headcount has grown from 47 as of December
2003 to 75 at 30 November 2004. We have strengthened our sales force, customer
support functions and the management of partner relationships with experienced
executives. The benefit of these recent hires will be realised during 2005.
The contract manufacturing arrangements for Amino hardware products are working
well with our Far-Eastern manufacturing partner achieving high quality and low
return rates. During the first-half of 2005 we expect to commence manufacturing
with a second supplier, particularly for the Americas.
Business propositions
We have three main business propositions:
To date our primary business has been to supply to telecommunication operators a
hardware and software platform (set top box) that delivers IPTV. During the
eleven month FY 2004 Amino sold 174,000 units.
The second element is the hospitality market to which we supply hardware and
software to companies that offer a complete solution to the industry. This
market has demonstrated Amino's capability to develop a Systems and Systems
Integration business. Amino scopes, specifies, designs, integrates, verifies and
warrants a System Solution for a digital pay-to-view experience that is being
marketed by NEC under their brand name of Talia(R).
The third element is to license our proprietary software and hardware to major
OEM's and tier 1 telecommunication operators. We have entered into early stage
discussions with organisations that recognise and value the commercial benefits
that are offered by Amino's technologies, particularly our software, that
quickly and robustly integrate third party products. Our hardware licensing
model enables our customers to drive down costs by adopting a multi-vendor
competitive sourcing business model.
Product evolution
Innovation has been the key to Amino's initial success. During the period we
launched five new products including the world's first IPTV PVR (personal video
recorder) box, the AmiNET 500. We also have reduced the cost of our first
generation products.
At IBC (Amsterdam, September 2004) and TelCo-TV (Las Vegas, November 2004) Amino
demonstrated the AmiNET 120, our next generation MPEG 4 and WM-9 (Microsoft
compatible) products. Within the near future we are planning to release several
new products that are compliant with H.264 (now adopted as the industry
reference point for MPEG 4). We have designed variants of these new products
that are capable of supporting high definition television (HDTV). These new
products will be available with and without PVR; hybrid options that incorporate
digital terrestrial, satellite or cable decoders are also planned. These new
hybrid products will have particular appeal to the emerging tier 1 customers and
may open up licensing opportunities to the traditional satellite and cable
industry suppliers who do not have the software technology and know-how to
develop their own IPTV platforms.
Another key requirement to enable the growth of IPTV is the 'Home Network'.
Amino's roots were founded and nurtured in the home gateway arena. We continue
to research and hone our plan to expand our product range with an affordable
home networking product range. Market research indicates that the average home
has three TV viewing stations and it is our intent that an Amino IPTV platform
and associated software solution will address this opportunity.
Market development
We have been pleased with our penetration into those companies which have been
the early adopters of IPTV. Generally, as in all new technologies, these
pioneers have tended to be the smaller, more nimble regional operators. Our
technologies and products have been evaluated, trialled and deployed in more
than 50 countries.
During 2004, mainly due to the projected availability of the next generation of
low bit-rate encoders (MPEG 4, WM-9), the larger telcos started to show interest
in IPTV. Triple-play (TV, data and voice) has been on their agenda for some time
and it is now becoming commercially viable on a large scale. By offering
products which are compliant with the latest standards, Amino has been able to
enter into early stage discussions with many of these major telecommunications
operators within Europe, North and South America and the Far East. We have
tendered for a number of opportunities, often in partnership with the
traditional telecommunications equipment suppliers.
Outlook and our plans
The introduction of triple-play (voice, data & video) services has become a
clear goal of virtually all telecommunications operators worldwide. The tier 1
players are entering the market and momentum continues to accelerate. Amino is
well established with the first generation of technologies and is sampling the
next generation of MPEG 4 and WM-9 products.
Our early stage success has created a wealth of market and customer credibility
that will enable us to offer and deliver the value added services that our
technology facilitates. We will continue to grow and develop the structure of
our organisation to exploit these opportunities.
Bob Giddy
Chief Executive Officer
FINANCE DIRECTOR'S STATEMENT
Results for the period
The Group recorded a profit before taxation and exceptional items of £0.53m
(2003: loss of £3.39m), an improvement of £3.92m over the previous period.
Included in selling, general and administrative expenses is £0.33m (2003:
£1.04m) of exceptional costs relating IPO legal and professional fees. Profit
before tax was £0.20m (2003: loss of £4.43m), an improvement of £4.63m.
Turnover
Turnover for the eleven-month period increased to £13.25m from £1.04m from the
sale of set top boxes, technology licensing and systems integration services.
The Group shipped c.174,000 set top boxes (2003: 11,500). The geographical mix
of sales was not as expected and the continuing weakness of the US dollar
combined to reduce average revenue per unit. The combined adverse impact of
these factors reduced turnover and profit by £0.35m.
Cost of Sales
Cost of goods sold was £0.77m greater than expectations reflecting higher than
expected sales of premium products and the deferral of implementing design
changes to cost reduce the current product range. Engineering resources were
prioritised to bring forward the development of set-top-boxes that support low
bit-rate encoding to meet the expected demand from tier 1 and tier 2 service
operators.
Operating Expenses
Research and development expenses are written-off as incurred. Expenditure
during the eleven-month period of £1.44m (2003: £1.26m), represents an
annualised increased investment in new technology and product development of
25%.
At the period end total headcount was 75 (2003: 47). The average number of
employees during the period was 68 (2003: 42).
Taxation
No tax liability arises on the trading profit for the financial period because
the Group is able to offset tax losses brought forward. At 30 November 2004 the
Group had approximately £8.87m of losses available to set against future taxable
profits, subject to agreement with the Inland Revenue.
The tax credit of £1.13m is almost entirely due to the deferred tax asset
estimated to be utilised in the coming financial year.
Earnings per share
Basic earnings per share for the period were 3.0p (2003: loss 13.0p) and diluted
earnings per share were 2.8p (2003: loss 13.0p). The increase reflects the move
to profitability of the Group plus the deferred tax credit referred to above
under Taxation. If the effect of the deferred tax credit is excluded, basic
earnings per share would have been 0.5p (2003: loss of 14.8p).
Working Capital
The Group ended the period with net cash balances of £6.43m (2003: net cash of
£4.25m). In the period, the Group raised £6.43m from the private placement of
ordinary shares at the time of its IPO.
Trade debtors of £3.60m (2003: £0.46m) reflect the substantial increase in
turnover, particularly near the period end. The Group has continued to maintain
credit insurance, where possible, to cover the majority of its trade debtors.
However, as expected, it has not been possible to gain insurance cover for some
of our customers or on all of the exposure to those customers covered.
The substantial increase in trading also resulted in a significant increase in
stock, including both long lead-time components and finished goods of £1.13m.
Stock at the period-end amounted to £1.36m (2003: £0.23m).
Pensions
The Group offers all employees the opportunity to participate in a Group or
personal pension scheme. As the Group's contribution is defined there are no
circumstances in which the Group will face a future pension liability.
Foreign Exchange
The Group receives the significant majority of its revenue in US dollars,
substantially all of the Group's costs of sales are paid in US dollars and the
majority of the Group's operating costs are paid in pounds sterling. To date the
Group has relied upon the natural hedge created by this combination to manage
the foreign currency exposure but will consider using financial instruments as
required.
IFRS
Amino Technologies plc will have the option but not the requirement to adopt
IFRS in the financial statements for the year ended November 2005. The board has
begun considering the difference between UK accounting standards and IFRS and
has initially identified accounting for share options and research and
development costs as two areas that could impact on the Group's financial
statements.
Stuart Darling
Finance Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the eleven months ended 30 November
Period Year
ended ended
30 November 31 December
2004 2003
Notes Unaudited Audited
£ £
Turnover 4 13,247,054 1,036,598
Cost of sales (7,779,916) (739,911)
__________ __________
Gross profit 5,467,138 296,687
------------------------------
Selling, general and administrative
(non-exceptional expenses)
(3,739,718) (2,498,774)
Selling, general and administrative 5 (331,254) (1,043,400)
(exceptional expenses)
------------------------------
Selling, general and administrative (4,070,972) (3,542,174)
expenses
Research and development expenses (1,444,513) (1,259,828)
Other operating income 94,873 45,535
__________ __________
Group operating profit/(loss) 46,526 (4,459,780)
Interest receivable and similar income 185,625 45,501
Interest payable and similar charges (35,117) (15,490)
__________ __________
Group profit/(loss) on ordinary activities 197,034 (4,429,769)
before taxation
Tax on profit/(loss) on ordinary 1,130,829 540,000
activities
__________ __________
Group profit/(loss) on ordinary activities
after taxation being profit/(loss) for the
financial period
1,327,863 (3,889,769)
__________ __________
Basic earnings/(loss) per 1p ordinary 6 3.0p (13.0)p
share
Diluted earnings/(loss) per 1p ordinary 6 2.8p (13.0)p
shares
Statement of total recognised gains and losses for the period ended 30 November
2004
Period Year
ended ended
30 November 31 December
2004 2003
Unaudited Audited
£ £
Profit/(loss) for the financial period 1,327,863 (3,889,769)
Exchange translation difference on consolidation (36,185) -
__________ __________
Total recognised gains and losses for the period 1,291,678 (3,889,769)
__________ __________
All amounts relate to continuing activities.
CONSOLIDATED BALANCE SHEET
As at 30 November
30 November 31 December
2004 2003
Notes Unaudited Audited
£ £
Fixed assets
Intangible assets 186,759 32,617
Tangible assets 833,884 354,710
_________ _________
1,020,643 387,327
_________ _________
Current assets
Stocks 1,361,339 232,047
Debtors: amounts falling due after one 161,563 82,250
year
------------------------------
Debtors: amounts falling due within one 6,127,561 1,447,210
year
------------------------------
Trade debtors subject to financing stated
net of non-returnable amounts received
- 190,004
------------------------------
6,127,561 1,637,214
Short-term investments 430,000 3,730,000
Cash at bank and in hand 5,999,752 1,214,926
_________ _________
14,080,215 6,896,437
Creditors: Amounts falling due within one (2,305,485) (2,740,346)
year
_________ _________
Net current assets 11,774,730 4,156,091
Total assets less current liabilities 12,795,373 4,543,418
Creditors: Amounts falling due after more (117,281) (141,188)
than one year
_________ _________
Net assets 12,678,092 4,402,230
_________ _________
Capital and reserves
Called-up share capital 7 510,380 442,672
Share premium account 6,571,027 -
Merger reserve 16,388,755 16,098,130
Profit and loss account (10,792,070) (12,138,572)
_________ _________
Equity shareholders' funds 8 12,678,092 4,402,230
_________ _________
CONSOLIDATED CASH FLOW STATEMENT
For the eleven months ended 30 November
Period Year
ended ended
30 November 31 December
2004 2003
Notes Unaudited Audited
£ £
Net cash outflow from operating 9 (3,836,286) (4,068,455)
activities
Returns on investments and servicing of
finance
Interest received 185,625 45,501
Interest paid (35,117) (15,490)
__________ __________
Net cash inflow from returns on 150,508 30,011
investments
__________ __________
Taxation - 231,816
__________ __________
Capital expenditure and financial
investment
Purchase of tangible fixed assets (603,340) (378,640)
Purchase of intangible fixed assets (184,810) (37,494)
Sale of tangible fixed assets - 2,415
__________ __________
Net cash outflow for capital expenditure
and financial investment
(788,150) (413,719)
__________ __________
Net cash outflow before use of liquid
resources and financing
(4,473,928) (4,220,347)
__________ __________
Management of liquid resources
Decrease/(increase) in short-term deposits 3,300,000 (2,826,502)
with banks
__________ __________
Financing
Issue of ordinary share capital 6,999,999 7,310,098
Expenses of share issue deducted from share (370,639) (398,254)
premium
Cash received from exercise of share 354,824 -
options
(Decrease)/increase in other borrowings (23,907) 176,270
(Decrease)/increase in bank borrowings (1,001,523) 1,007,652
__________ __________
Net cash inflow from financing 5,958,754 8,095,766
__________ __________
Increase in net cash 4,784,826 1,048,917
__________ __________
Reconciliation of net cash flow to movement
in net funds
Opening net funds 3,937,259 1,069,492
Increase in net cash 4,784,826 1,048,917
(Decrease)/increase in deposits (3,300,000) 2,826,502
Decrease/(increase) in borrowings 1,001,523 (1,007,652)
__________ __________
Closing net funds 6,423,608 3,937,259
__________ __________
1 Group structure
The Group comprises the following companies:
Amino Technologies plc, a public limited company formed on 24 March 2004 to act
as the new holding company for the Amino group. Under a share-for-share
reorganisation effected in May 2004, the Company acquired the entire issued
share capital of Amino Holdings Limited.
Amino Holdings Limited, formed in 1996, and formerly the holding company of the
Group. It is now an intermediate holding company, which owns the entire issued
share capital of Amino Communications Limited and Amino Communications, L.L.C.
Amino Communications Limited, formed in 1998, and the principal trading company
of the Group.
Amino Communications, L.L.C., a US limited liability company established on 1
March 2004 to facilitate sales and customer support in the US market.
2 Accounting reference date
The Group has changed its period end from 31 December to 30 November in order to
overcome the logistical challenges presented by the year-end holiday period.
These preliminary results follow the interim results for the six months ending
30 June 2004 that represented the first reported results following Amino's
admission to the Alternative Investment Market on 9 June 2004. Hereafter, it
will report results made up to 31 May and 30 November each year.
3 Basis of preparation
The consolidated financial statements of Amino Technologies plc have been
presented under merger accounting rules. This means that the financial
statements of Amino Technologies plc and those of its wholly owned subsidiary,
Amino Holdings Limited have been aggregated and presented as if the two
companies have always been together. Accordingly, although Amino Technologies
plc acquired the entire share capital of Amino Holdings Limited on 28 May 2004
in exchange for new ordinary shares of 1p each in the share capital of Amino
Technologies plc, the results of both companies are reflected in the group
financial statements for the period to 30 November 2004 and the corresponding
amounts are presented on the same basis.
The figures for the eleven-month period ended 30 November 2004 have not been
audited. The figures for the year ended 31 December 2003 have been prepared from
the consolidated financial statements of Amino Holdings Limited for that year.
Those financial statements have been delivered to the Registrar of Companies and
included an auditors' report, which was unqualified and did not contain a
statement under Section 237 Companies Act 1985. The statutory accounts and audit
opinion for the financial period ended 30 November 2004 have not yet been signed
by the directors or the auditors respectively.
These preliminary results for the eleven months ended 30 November 2004, which
have been prepared in accordance with the accounting policies set out in the
consolidated financial statements of Amino Holdings Limited for the year ended
31 December 2003, do not constitute statutory accounts for the purpose of
section 240 of the Companies Act 1985.
4 Turnover
Turnover is wholly attributable to the Group's principal activities of
developing enabling technologies and providing flexible and rapidly deployable
designs to manufacturers and vendors of set top boxes, home gateways and other
communications devices. The analysis of turnover by destination is set out
below.
Period Year
ended ended
30 November 31 December
2004 2003
Unaudited Audited
£ £
United Kingdom and Europe 5,001,383 385,548
North America 6,467,504 412,747
Asia Pacific and Africa 1,778,167 238,303
_________ _________
13,247,054 1,036,598
_________ _________
5 Exceptional expenses
Included in selling, general and administrative expenses is an amount of
£331,254 (Year ended 31 December 2003: £1,043,400) in respect of exceptional
costs incurred by Amino Technologies plc. These exceptional costs primarily
relate to legal and professional fees incurred as a result of the admission of
Amino Technologies plc to the Alternative Investment Market on 9 June 2004. A
further £370,639 of costs relating to the admission were charged against the
share premium account (see note 9).
Exceptional costs incurred of £1,043,400 in the year ended 31 December 2003 were
in respect of exceptional accrued bonuses for directors, for preparing the
company for a successful flotation.
6 Earnings/(loss) per share
Period Year
ended ended
30 November 31 December
2004 2003
Unaudited Audited
£ £
Earnings/(loss) attributable to shareholders 1,327,863 (3,889,769)
_________ _________
Weighted average number of shares (Basic) 43,662,984 29,975,156
_________ _________
Weighted average number of shares (Diluted) 48,174,055
_________
The calculation of basic earnings/(loss) per share is based on profit/(loss)
after taxation and the weighted average of ordinary shares of 1p each 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. The group has only one category of dilutive potential ordinary share
options: those share options where the exercise price is less than the average
market price of the company's ordinary shares during the period. There is no
dilutive effect in respect of previous years since the Group made a loss in the
year ended 31 December 2003.
7 Called-up share capital
Ordinary shares of 1p each 30 November 31 December
2004 2003
Unaudited Audited
£ £
Authorised
Nominal value 1,000,000 460,000
_________ _________
Number 100,000,000 46,000,000
_________ _________
Allotted, called-up and fully-paid
Nominal value 510,380 442,672
_________ _________
Number 51,038,052 44,267,219
_________ _________
Share issues
On 31 January 2004, the Company allotted 937,500 shares of 1p each at 32p per
share to Walbrook Trustees (Guernsey) Limited, trustees of the Amino
Communications Employee Benefit Trust, consideration for which was satisfied by
way of an interest free loan of £300,000 from Amino Holdings Limited.
On 9 June 2004, the Company allotted 5,833,333 ordinary shares of 1p each at
120p per share for cash consideration of £6,999,999 and was admitted to the
Alternative Investment Market in order to provide increased credibility and
balance sheet strength. The net proceeds of the private placement amounted to
£6,629,360 after costs of £370,639 (see note 6).
Share options
The Company operates share options schemes for employees and certain former
employees of group companies. Substantially all options granted under these
schemes will be satisfied out of ordinary shares of 1p each issued to an
Employee Benefit Trust set up in February 2003.
30 November 31 December
2004 2003
Unaudited Audited
No. No.
Shares held by the Employee Benefit Trust 3,455,961 5,500,000
_________ _________
Subsisting Options
Current and former employees 4,434,503 4,302,441
Other options granted including non-executive 238,812 178,812
directors
_________ _________
4,673,315 4,481,253
_________ _________
8 Reconciliation of movements in shareholders' funds
30 November 31 December
2004 2003
Unaudited Audited
£ £
Opening shareholders' funds 4,402,230 1,494,998
Profit/(loss) for the period 1,327,863 (3,889,769)
Other recognised gains and losses relating to the (36,185) -
period
Issue of ordinary share capital - capital 67,708 120,545
Issue of ordinary share capital - share premium 6,941,666 -
Issue of ordinary share capital to Employee Benefit (300,000) (1,277,500)
Trust
Expenses of share issue (370,639) -
Exercise of employee share options 354,824
Reversal of share compensation charge - 12,098
Movement on merger reserve 290,625 7,941,858
_________ _________
12,678,092 4,402,230
_________ _________
9 Reconciliation of operating loss to net cash outflow from operating
activities
30 November 31 December
2004 2003
Unaudited Audited
£ £
Operating profit/(loss) 46,526 (4,459,780)
Share compensation charge - 12,098
Depreciation and amortisation charge (including loss 154,834 94,850
on disposals)
Increase in stocks (1,129,292) (173,874)
Increase in debtors (3,085,128) (1,097,421)
Increase in creditors 212,959 1,555,672
Foreign exchange movement (36,185) -
_________ _________
Net cash outflow from continuing operating (3,836,286) (4,068,455)
activities
_________ _________
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