Half Yearly Report

RNS Number : 2615X

Enteq Upstream PLC

18 November 2014

 

Enteq Upstream plc

Interim results for the six months ended 30 September 2014

AIM traded Enteq Upstream plc ("Enteq", the "Company" or the "Group"), the oil & gas drilling technology company, today releases its interim results for the six months ended 30 September 2014.

Operational Highlights

·          Appointment of partner/distributor in China with initial and repeat shipments of integrated MWD systems

·          System sales and repeat orders from regional operator in Middle East

·          Further integration of in-house engineered products into product range

·          Investment in, and consolidation of, product line for regular directional drilling activities

Financial Metrics

	Sept 2014	Sept 2013	Change
	USDm	USDm
·          Revenue	13.6	10.6	+29%
·          EBITDA in Drilling Tools Division	3.1	2.3	+38%
·          Consolidated adjusted EBITDA1	1.0	0.5	+120%
·          Loss before tax	2.2	2.5	+12%
·          Adjusted earnings per share (cents) 2	1.3	0.4	+227%
·          Cash	13.8	21.3	-35%

Outlook

In the medium term, key drivers for drilling activity and demand for Measurement While Drilling equipment are expected to be the demand for Oil & Gas production in North America and through the requirement for more local/regional suppliers in the Eastern Hemisphere.  Enteq will continue to be well placed to supply equipment to satisfy this demand and will continue to invest in strengthening its core product lines and technical capabilities. The fall in oil price over the last three months has not yet affected the North American rig count or current demand for Enteq equipment. Any future impact from a reduction in activity should be partially mitigated by on-going improvement in operational efficiencies and further business development in the Eastern Hemisphere.

Martin Perry, CEO of Enteq Upstream plc, commented:

 "The first half of this financial year has demonstrated further organic progress in the business as a result of on-going investment, integration and market development. Our first sales into the high-potential Chinese and Middle Eastern markets represent a notable development in our sales and marketing efforts. In light of recent oil price reductions we shall continue to implement operational efficiencies and preserve the cash balance in the business."

Neil Warner, Chairman of Enteq Upstream plc, commented:

"These results, which were in line with our expectations, are a pleasing improvement over the first half of 2013/14. The North American market continues to be susceptible to prevailing commodity prices.   We remain confident that the business is well placed to withstand any potential short term  impact and to improve its market position in the longer term. "

¹Adjusted EBITDA is reported profit before tax adjusted for interest, depreciation, amortisation, foreign exchange movements, performance share plan charges and exceptional items.

²Adjusted earnings per share is reported profit per share adjusted for foreign exchange movements, amortisation, performance share plan charges and exceptional items.

For further information, please contact:

Enteq Upstream plc                                       [phone]

Martin Perry, Chief Executive Officer

David Steel, Finance Director

Investec Bank plc (Nomad and Broker)       [phone]

Chris Treneman, Patrick Robb, David Anderson

Vigo Communications                                   [phone]

Peter Reilly, Patrick d'Ancona

Interim Report

CHAIRMAN & CHIEF EXECUTIVE OFFICER REPORT

Introduction

The first half of this financial year, 1 April to 30 September 2014, has shown significant improvements over the same period last year and represents the 5^th half on half progression in margin and adjusted EBITDA since the acquisition of the businesses which now make up Enteq Drilling.   Management has focused on further market share growth in North America and market penetration in to the Eastern Hemisphere.  Business development has been under-pinned by the integration of the acquired Measurement While Drilling product range into a full operating system, and the addition of in-house engineered products to the product range.

Trading during the first half of the year has been consistent with management and market expectations.

Highlights

·    Appointment of  partner / distributor in China with initial and repeat shipments of integrated MWD systems

·    System sales and repeat orders from regional operator in Middle East

·    Further integration of in-house engineered products into product range

·    Investment in, and consolidation of, product line for regular directional drilling activities

Overview

The integration of the acquired businesses has been continued, with a single commercial operation now representing the Measurement While Drilling systems, sensor and electronic components as well as the directional drilling and mud-motor components. 

The objective of diversifying the business from dominance by North America land drilling has been progressed, through successful relationships, which have resulted in initial and repeat system sales, with both China and the Middle East.

Investment in product development and engineering has resulted in new product releases which have been commercialised and integrated into the Measurement While Drilling systems which have driven sales growth.

Investment in, and rationalisation of, products and inventories in the businesses have resulted in improved customer satisfaction, new customer wins and regular repeat business.

Market conditions

The company has made excellent progress in achieving initial diversification away from the dominance of North American land drilling, but this market remains the dominating influence. 

Drilling activity, as represented by the number of drilling rigs deployed (or rig-count), is the primary driver for the use of equipment supplied by Enteq.   During a period of growth in rig count the market will require additional Measurement While Drilling equipment, driving demand for the equipment such as that supplied by Enteq.   Should there be a decline in rig-count, the market will have excess capacity of equipment resulting in low levels of capital purchases.  In a stable environment without excess capacity there is a regular demand for replacement and up-grade equipment.  Through all cycles, there is an activity related demand for consumable parts, which is also a significant portion of Enteq revenues.

During the reporting period from April to September this year, the North American market remained stable with the oil price supporting a stable rig rate in the major shale, oil producing, and fields in North America. Notable new field developments occurred in the Eagleford and Hainsville fields, both of which encounter particularly high temperature and rugged drilling environments, which favour the reliable and robust equipment supplied by Enteq.

In the medium term, analysts forecast that North America will convert their power requirements, and transport fuels to derivatives of gas produced from shale formations. Liquefied gas is already beginning to be exported from the USA, including to the Grangemouth refinery in the UK.  When this demand for gas is increased, it is predicted that a resumption of drilling in the shale gas fields in North America is inevitable. With fairly rapid decline rates from shale gas wells, in order to maintain long term production rates, repeat drilling will be required for the foreseeable future.

 Subsequent to the end of the financial period being reported on there have been declines in world oil prices based on supply and demand curves and this has also resulted in declines in the WTI, or North American, oil prices.  At the time of publishing these results the lower oil price has not affected rig utilisation with overall land rig utilisation in North America continuing to increase. On-going drilling will be required to maintain production volumes.  Sustained lower oil prices in North America however are likely to affect the returns from, and therefore investment in, further field development.

Results

For the six month period to 30 September 2014 Enteq reported revenues of $13.6m (September 2013 $10.6m), a 29% improvement on the same period last year, and an adjusted EBITDA of $1.0m (September 2013 $0.5m), a 120% improvement on last year.

The group's cash balance remains strong at $13.8m as at 30 September 2014.

These are pleasing results demonstrating progress within the business, penetration of new markets and a demonstration of operational gearing through the control of overheads as revenues increase.

Investment activities and cash flows

The group has continued to use cash for investment purposes where it can be demonstrated that competitive returns on investment can be achieved in the medium term.  These investment activities totalled $1.8m and include increases in rental and demonstration equipment, product development and production capital expenditure as shown in the below table.

	$m
Investment in rental and demonstration equipment	0.9
Investment in product development	0.8
Capex	0.1
Total Investments	1.8

The Group had available cash of $13.8m as at 30 September 2014 after having made the investments described above and funding working capital growth (which arose through increased revenue) and central costs.

	$m
Cash generated by Drilling division	3.1
Working capital absorbed	(4.2)
Central costs	(2.1)
Total Investments	(1.8)
Net cash movement	(5.0)
Cash balances as at 1 April 2014	18.8
Cash balances as at 30 September 2014	13.8

Corporate

As announced on September 17^th, the Enteq remuneration committee approved a Performance Share Plan for senior executives with a 3 year vesting period and performance targets related to the Group's Earnings per Share growth and Total Shareholder Return.

The Board thanks our employees for their contribution to the progress made in the business and the financial success during this and previous financial periods.

Prospects

Enteq has strengthened the business through further technical and commercial integration, achieving success in new markets outside North America and adding new products.

Additional opportunities in the Eastern Hemisphere are being pursued, and a re-focus of the North American product line to give more competitive pricing and availability for consumable products will serve to off-set some short term capital equipment sales reductions in North America which could result from sustained lower commodity prices.

Any potential short term reduction in North American drilling operations would cause an over capacity of equipment in that market. The over capacity would be consumed when the market stabilised, even at a reduced level of activity, with replacement equipment required. Any subsequent growth would require further new equipment purchases.

In the medium term, drilling activity and demand for Measurement While Drilling equipment will be maintained through the demands for Oil & Gas production in North America and through the requirement for more local/regional suppliers in the Eastern Hemisphere.  Enteq will continue to be well placed to supply equipment to satisfy this demand and will continue to invest in strengthening its core product lines and technical capabilities. The Board is confident in Enteq's robust technical and financial position, with a product line well positioned to take advantage of market opportunities and a strong cash balance to support on-going development. 

Martin Perry                                                    Neil Warner

Chief Executive                                               Chairman

Enteq Upstream plc

18 November 2014

Enteq Upstream plc
Condensed Consolidated Income Statement
			Six months to 30 September 2014	Six months to 30 September 2013	Year to 31 March 2014
			Unaudited	Unaudited	Audited
	Notes		$ 000's	$ 000's	$ 000's
Revenue			13,635	10,560	24,554
Cost of Sales			(8,201)	(6,008)	(14,725)
Gross Profit			5,434	4,552	9,829
Administrative expenses before amortisation			(4,735)	(4,339)	(8,510)
Amortisation of acquired intangibles	9b		(2,863)	(3,180)	(6,358)
Impairment of acquired intangibles including goodwill			-	-	(9,783)
Release of contingent consideration	10		-	153	3,361
Other exceptional items			(108)	(11)	(382)
Foreign exchange (loss)/gain on operating activities			(2)	315	292
Total Administrative expenses			(7,708)	(7,062)	(21,380)
Operating loss			(2,274)	(2,510)	(11,551)
Finance income			83	28	75
Loss before tax			(2,191)	(2,482)	(11,476)
Tax expense	8		-	-	(96)
Loss for the period	5		(2,191)	(2,482)	(11,572)
Loss attributable to:
Owners of the parent			(2,191)	(2,482)	(11,572)
Earnings per share (in US cents):	7
Basic			(3.7)	(4.2)	(19.6)
Diluted			(3.7)	(4.2)	(19.6)
Adjusted earnings per share (in US cents):	7
Basic			1.3	0.4	2.2
Diluted			1.3	0.4	2.2

Condensed Consolidated Statement of Comprehensive Income
		Six months to 30 September 2014	Six months to 30 September 2013	Year to 31 March 2014
		Unaudited	Unaudited	Audited
		$ 000's	$ 000's	$ 000's
Loss for the period		(2,191)	(2,482)	(11,572)
Other comprehensive income for the period:
Items that will not be reclassified subsequently to profit or loss		-	-	-
Items that will be reclassified subsequently to profit or loss		-	-	-
Total comprehensive income for the period		(2,191)	(2,482)	(11,572)
Total comprehensive income attributable to:
Owners of the parent		(2,191)	(2,482)	(11,572)

Enteq Upstream plc
Condensed Statement of Financial Position
		30 September 2014	30 September 2013	31 March 2014
		Unaudited	Unaudited	Audited
	Notes	$ 000's	$ 000's	$ 000's
Assets
Non-current
Goodwill	9a	15,127	19,619	15,127
Intangible assets	9b	26,821	36,402	28,917
Property, plant and equipment		3,516	3,603	3,697
Non-current assets		45,464	59,624	47,741
Current
Trade and other receivables		13,324	4,554	8,666
Inventories		7,463	5,399	5,590
Cash and cash equivalents		13,791	21,252	18,829
Current assets		34,578	31,205	33,085
Total assets		80,042	90,829	80,826
Equity and liabilities
Equity
Share capital	11	939	939	939
Share premium		90,395	90,395	90,395
Share based payment reserve		271	265	222
Retained earnings		(17,785)	(6,504)	(15,594)
Total equity		73,820	85,095	75,962
Liabilities
Current
Trade and other payables		6,222	2,526	4,864
Non-current
Contingent Consideration	10	-	3,208	-
Total liabilities		6,222	5,734	4,864
Total equity and liabilities		80,042	90,829	80,826

Enteq Upstream plc
Condensed Consolidated Statement of Changes in Equity Six months to 30 September 2014
				Share
	Called up	Profit		based
	share	and loss	Share	payment	Total
	capital	account	premium	reserve	equity
	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's
Share based payment charge	-	-	-	49	49
Transactions with owners	-	-	-	49	49
Loss for the period	-	(2,191)	-	-	(2,191)
Other comprehensive expense for the period                              -		-	-	-	-
Total comprehensive income	-	(2,191)	-	-	(2,191)
Movement in period:	-	(2,191)	-	49	(2,142)
As at 1 April 2014 (audited)	939	(15,594)	90,395	222	75,962
As at 30 September 2014 (unaudited)	939	(17,785)	90,395	271	73,820
Six months to 30 September 2013
				Share
	Called up	Profit		based
	share	and loss	Share	payment	Total
	capital	account	premium	reserve	equity
	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's
Share based payment charge	-	-	-	122	122
Transactions with owners	-	-	-	122	122
Loss for the period	-	(2,482)	-	-	(2,482)
Other comprehensive expense for the period                              -		-	-	-	-
Total comprehensive income	-	(2,482)	-	-	(2,482)
Movement in period:	-	(2,482)	-	122	(2,360)
As at 1 April 2013 (audited)	939	(4,022)	90,395	143	87,455
As at 30 September 2013 (unaudited)	939	(6,504)	90,395	265	85,095

Enteq Upstream plc
Condensed Consolidated Statement of Cash flows
	Six months to 30 September 2014	Six months to 30 September 2013	Year to 31 March 2014
	Unaudited	Unaudited	Audited
	$ 000's	$ 000's	$ 000's
Cash flows from operating activities
Loss for the period	(2,191)	(2,482)	(11,572)
Net finance income	(83)	(28)	(75)
Share-based payment non-cash charges	49	122	77
Impact of foreign exchange movement	2	(315)	(292)
Release of contingent consideration	-	(153)	(3,361)
Impairment of acquired intangibles and goodwill	-	-	9,783
Depreciation and Amortisation charges	3,198	3,438	6,891
	975	582	1,451
Increase in inventory	(1,873)	(1,647)	(1,838)
(Increase)/decrease in trade and other receivables	(4,658)	374	(3,736)
Increase/(decrease) in trade and other payables	1,358	(1,567)	771
Net cash from operating activities	(4,198)	(2,258)	(3,352)
Investing activities
Purchase of property, plant and equipment	(154)	(620)	(531)
Purchase of intangible fixed assets	(767)	(162)	(1,604)
Interest received	83	28	75
Net cash from investing activities	(838)	(754)	(2,060)
Decrease in cash and cash equivalents	(5,036)	(3,012)	(5,412)
Non-cash movements - foreign exchange	(2)	315	292
Cash and cash equivalents at beginning of period	18,829	23,949	23,949
Cash and cash equivalents at end of period	13,791	21,252	18,829

ENTEQ UPSTREAM PLC

NOTES TO THE FINANCIAL STATEMENTS

For the six months to 30 September 2014

1.     Reporting entity

Enteq Upstream plc ("the Company") is a public limited company incorporated and domiciled in England and Wales (registration number 07590845).  The Company's registered address is The Courtyard, High Street, Ascot, Berkshire, SL5 7HP.

The Company's ordinary shares are traded on the AIM market of The London Stock Exchange. 

Both the Company and its subsidiaries (together referred to as the "Group") are focused on the provision of specialist products and technologies to the upstream oil and gas services market.

2.     General information and basis of preparation

The information for the period ended 30 September 2014 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the period ended 31 March 2014 has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The Group's consolidated interim financial statements are presented in US Dollars ($), which is also the functional currency of the parent company. These condensed consolidated interim financial statements (the interim financial statements) have been approved for issue by the Board of directors on 18 November 2014.

This half-yearly financial report has not been audited, and has not been formally reviewed by auditors under the Auditing Practices Board guidance in ISRE 2410.

3.     Accounting policies

The interim financial statements have been prepared on the basis of the accounting policies and methods of computation applicable for the period ended 31 March 2014. These accounting policies are consistent with those applied in the preparation of the accounts for the period ended 31 March 2014, except for the adoption of the following standards as of 1 April 2014:

•              IFRS 10 Consolidated financial statements

•              IFRS 11 Joint arrangements

•              IFRS 12 Disclosures of interests in other entities

•              IAS 27 (revised) Separate financial statements

•              IAS 28 (revised) Investments in associates and joint ventures

•              Amendments to IAS 36 Impairment of assets

The adoption of these new accounting standards has not had a material impact on the interim statement for the current period. Further details of the impact of their adoption will be given in the year-end financial statements for the year ended 31 March 2015.

4.      Estimates

When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last annual financial statements for the year ended 31 March 2014.

5.     Adjusted Earnings

The following analysis illustrates the performance of the Group's activities, and reconciles the Group's profit, as shown in the condensed consolidated interim income statement, to adjusted earnings.  Adjusted earnings is presented to provide a better indication of overall financial performance and to reflect how the business is managed and measured on a day-today basis.  Adjusted earnings before interest, taxation, depreciation and amortisation ("adjusted EBITDA") is also presented as it is a key performance indicator used by management.

	Six months to 30 September 2014	Six months to 30 September 2013	Year to 31 March 2014
	$000's	$000's	$000's
	Unaudited	Unaudited	Audited
Loss for the period	(2,191)	(2,482)	(11,572)
Release of contingent consideration	-	-	(3,361)
Other exceptional items	108	(142)	382
Impairment of intangible assets	-	-	9,783
Amortisation of acquired intangible assets	2,863	3,180	6,358
Performance share plan charges	4	-	-
Foreign exchange movements	2	(315)	(292)
Adjusted earnings	786	241	1,298
Depreciation charge	335	259	533
Finance income	(83)	(28)	(75)
Tax charge	-	-	96
Adjusted EBITDA	1,038	472	1,852

The Adjusted EBTIDA relating to the Drilling Tools Division, $3.1m (2013: $2.3m) is calculated by adding back central costs of $2.1m (2013: $1.8m).

6.     Segmental Reporting

For management purposes, the Group is currently organised into a single business unit, the Drilling Division, which is currently based, operationally, solely in the USA.

The principal activities of the Drilling Division are the design, manufacture and selling of specialised products and technologies for Directional Drilling and Measurement While Drilling operations used in the energy exploration and services sector of the Oil and Gas industry.

At present, there is only one operating segment and the information presented to the Board is consistent with the consolidated income statement and the consolidated statement of financial position.

The net assets of the Group by geographic location (post-consolidation adjustments) are as follows:

Net Assets	30 September 2014	30 September 2013	31 March 2014
	$000's	$000's	$000's
	Unaudited	Unaudited	Audited
Europe (UK)	17,328	21,378	17,679
United States	56,492	63,717	58,283
Total Net Assets	73,820	85,095	75,962

The net assets in Europe (UK) are represented, primarily, by cash balances.

The revenue by geographical area is as follows:

Revenue	30 September 2014	30 September 2013	31 March 2014
	$000's	$000's	$000's
	Unaudited	Unaudited	Audited
North America	10,731	10,560	23,317
China	1,948	-	-
Middle East	956	-	-
Other	-	-	1,237
Total Revenue	13,635	10,560	24,554

7.     Earnings Per Share

Basic earnings per share

Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders for the six months of $2,191,000 (September 2013: loss of $2,482,000) by the weighted average number of ordinary shares in issue during the period of 58,953,653 (September 2013: 58,953,653).

Diluted earnings per share

Diluted earnings per share is calculated by dividing the loss attributable to ordinary shareholders for the six months of $2,191,000 (September 2013: loss of $2,482,000) by the weighted average number of ordinary shares in issue during the period of 58,953,653 (September 2013: 58,953,653).

Adjusted earnings per share

Adjusted earnings per share is calculated by dividing the adjusted earnings for the six months of $786,000 (September 2013: loss of $241,000), by the weighted average number of ordinary shares in issue during the period of 58,953,653 (September 2013: 58,953,653).

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated by dividing the adjusted earnings for the six months of $786,000 (September 2013: loss of $241,000), by the weighted average number of ordinary shares in issue during the period of 58,953,653 (September 2013: 58,953,653).

The adjusted diluted earnings per share information are considered to provide a fairer representation of the Group's trading performance.

A reconciliation between basic earnings and adjusted earnings is shown in Note 5.

As the Group is loss making, any potential ordinary shares have the effect of being anti-dilutive. Therefore, the diluted EPS is the same as the basic EPS. As the share price, as at 30 September 2014, was below the option price of all the options issued, the adjusted diluted EPS the same as adjusted EPS.

8.     Income Tax

No liability to corporate taxes, in either the UK or the US, arose on ordinary activities for the six months under review.

9.     Intangible Fixed Assets

a)     Goodwill

	$000's
Cost:
As at 30 September 2014 and 1 April 2014	19,619
Impairment:
As at 30 September 2014 and 1 April 2014	(4,492)
Net Book Value:
As at 30 September 2014 and 1 April 2014	15,127

Consideration has been given as to whether there have been any indicators of impairment in relation to the carrying value of Goodwill.  Whilst the Group as a whole continues to be loss-making, the underlying trading of the acquired businesses is profitable and remains in line with expectations and forecasts prepared at the 2014 year end. A full impairment test will be conducted at the year end in accordance with the Group's accounting policies.

b)    Other Intangible Fixed Assets

	Developed technology	IPR&D technology	Brand names	Customer relationships	Non- compete agreements	Total
	$000's	$000's	$000's	$000's	$000's	$000's
Cost:
As at 1 April 2014	11,364	6,867	1,240	20,586	5,931	45,988
Capitalised in period	-	637	-	-	-	637
Acquired in period	130	-	-	-	-	130
Transfers	5,144	(5,144)	-	-	-	-
As at 30 September 2014	16,638	2,360	1,240	20,586	5,931	46,755
Amortisation:
As at 1 April 2014	(6,128)	(1,189)	(116)	(6,868)	(2,770)	(17,071)
Charge for the period	(1,585)	-	(31)	(741)	(506)	(2,863)
Transfers	(1,189)	1,189	-	-	-	-
As at 30 September 2014	(8,902)	-	(147)	(7,609)	(3,276)	(19,934)
Net Book Value:
As at 30 September 2014	7,736	2,360	1,093	12,977	2,655	26,821
As at 1 April 2014	5,236	5,678	1,124	13,718	3,161	28,917

The main categories of Intangible Fixed Assets are as follows:

Developed technology:

This is technology which is currently commercialised and embedded within the current product offering.

IPR&D technology:

This is technology which is in the final stages of field testing, has demonstrable commercial value and is expected to be launched within the next 12 months.

Brand names:

The value associated with the XXT trading name used within the Group.

Customer relationships:

The value associated with the on-going trading relationships with the key customers acquired.

Non-compete agreements:

The value associated with the agreements signed by the Vendors of the acquired businesses not to compete in the markets of the businesses acquired.

10.  Contingent consideration

	30 September 2014	30 September  2013	31 March 2014
	$000's	$000's	$000's
	Unaudited	Unaudited	Audited
As at start of the period	-	3,361	3,361
Release of the above no longer expected to be paid	-	(153)	(3,361)
As at end of the period	-	3,208	-

The contingent consideration related to payments due to the vendors of XXT Incorporated if that business met various performance targets over the two years from the date of acquisition. None of these targets were met, and hence the full amount has been released through profit and loss.

Apart from the balances shown in the Condensed Statement of Financial position, the Directors are not aware of any further contingent liabilities faced by the Group as at 30 September 2014 (31 March 2014: $nil, 30 September 2013: $nil).

11.  Share capital

Share capital as at 30 September 2014 amounted to $939,000 (31 March 2014 and 30 September 2013: $939,000).

12.  Going concern

The Directors have carried out a review of the Group's financial position and cash flow forecasts for the next 12 months by way of a review of whether the Group satisfies the going concern tests. These have been based on a comprehensive review of revenue, expenditure and cash flows, taking into account specific business risks and the current economic environment. With regards to the Group's financial position, it had cash and cash equivalents at 30 September 2014 of $13.8 million.

Having taken the above into consideration the Directors have reached a conclusion that the Group is well placed to manage its business risks in the current economic environment. Accordingly, they continue to adopt the going concern basis in preparing the Interim Condensed Financial Statements.

13.  Principal risks and uncertainties

Further detail concerning the principal risks affecting the business activities of the Group is detailed on pages 14 and 15 of the Annual Report and Accounts for the period ended 31 March 2014.  Consideration has been given to whether there has been any changes to the risks and uncertainties previously reported.  None have been identified.

14.  Events after the balance sheet date

There have been no material events subsequent to the end of the interim reporting period ended 30 September 2014.

15.  Copies of the interim results

Copies of the interim results can be obtained from the Group's registered office at The Courtyard, High Street, Ascot, Berkshire, SL5 7HP and are available from the Group's website at www.enteq.com.

 

END

 

 

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