Final Results - Year Ended 31 March 2000

Feedback PLC 21 June 2000 Feedback PLC - Final Results for the year ended 31st March 2000 - Chairman's Statement I am pleased to report a significant improvement in profits for the year. On turnover, up 10% on the previous year to £9,294,400, pre-tax profits rose to £611,700 for the year to 31 March 2000, compared with £182,400 for the year to 31 March 1999. Whilst most media coverage on the Group has continued to focus on our Internet company, TekniCAL, the results for the year reflect the underlying strength of the Instruments and Data companies. Export business represented 55% of Group turnover with sales in over 60 countries. There was a strong recovery in the Far Eastern markets, reflecting the economic improvement in the region. The Middle East, which is basically a US dollar trading area, held up well but the slide of the Euro hampered our efforts in the more traditional Continental European markets. Feedback Instruments Limited Considerable progress was made at the Instruments company during the year with turnover up 16% on the previous year. Having made a substantial operating loss in the previous year, it is pleasing to report a return to profitability at this company. The current level of available funding and focus in the educational market, both in the UK and overseas, encouraged us to increase the investment in sales and marketing during the year. Over 40 exhibitions and seminars were mounted in the year and it is clear that the company is well placed with the current hardware and software product ranges developed and updated over recent years to meet market requirements. The joint venture company, TekniCAL Limited, which supplies the 'Virtual Campus' Internet based on-line delivery system for education and training, did not achieve the expected results. Following a good first half performance when the company supplied a confident and buoyant educational market, the delayed implementation of Government initiatives caused uncertainty and a distortion in the market. Whilst the Government's commitment to 'Life Long Learning' and training for a much broader section of the population will undoubtedly benefit TekniCAL, lack of clear guidance from the implementing body led to delays in orders being placed in the second half of the year. During the year TekniCAL was re-located from University premises to new offices which, although increasing costs, provide the facilities necessary for the expansion of the business. Expenditure on new product development was increased to ensure that this company maintains a leading position in the delivery of Internet based training solutions. I mentioned at the Interim stage that the TekniCAL 'Virtual Campus' has a well established educational user base. Work to provide a 'Virtual Training Manager', based on Virtual Campus technologies, suitable for the corporate market and professional training bodies, is now complete. The level of interest in both these areas of the business remains high and the current prospects are very encouraging. Feedback Incorporated After a good start to the year, activity in the third quarter of the year slowed which resulted in a small operating loss for the year. However, the level of business secured in the final quarter, whilst not sufficient to make up the third quarter shortfall, was at a satisfactory level. A review by the new management of this company led to a restructuring of the American representatives network and a refocusing of the support given to them. This, together with new products available from the Instruments company, will enable Incorporated to address the post-secondary education market in a more positive manner. The launch of the TekniCAL 'Virtual Campus' in the Americas is progressing and prospects will be greatly enhanced with the installation of the necessary computer server equipment in the USA. Feedback Data The Company had another very good year. The strong demand for data capture terminals, the Company's core product range, continued. The market for Access Control/Security product (Microtrak) has been developed further with additional products. Whilst the take up of the machine monitoring terminal has been slow, much has been learned in this market which will enable the company to offer the product in a revised form. The newest terminal, designed to meet the European Working Time Directive reporting requirements, is creating a good level of interest which augers well for the future in what is a new business area for the Company. The Company continues to place great emphasis on the enhancement of hardware, software and service support in its chosen market area. The results of the German subsidiary were disappointing. However, on-going contracts for the coming year were secured which should enable the operation to achieve better results in the future. Current Trading and Future Prospects The improvement in business seen at Feedback Instruments during last year has continued in the first quarter of the current year. Orders received to date show a marked improvement on the same period last year, with the receipt of a number of larger contracts from the Far East. Whilst all the current signs indicate further progress for the rest of the year, predicting the timing of the centrally funded larger projects remains uncertain and makes firm forecasting difficult. Order receipts at TekniCAL in the first quarter have shown an improvement on the second half of the last financial year. The level of interest and prospects within this sector of the business is very encouraging. Discussions are presently underway to supply the TekniCAL products to a number of educational users and larger corporate customers. In all other areas of the Group, order intake for the first quarter of the current year is broadly in line with expectations and the Board remains confident about the Group's future prospects. Dividend Your Board is not recommending that a dividend be paid on the ordinary shares. General The Company's shares are now included in the TechMARK listing on the London Stock Exchange. Over the last year there has been a greater interest shown in our shares by investors, with the share price moving similarly to many other companies in the high technology field. The year has been one of progress, particularly in the continuing development and marketing of products to meet the needs of customers. This has been achieved without impact on our balance sheet position, which remains strong with cash resources of almost £800,000. We should not underestimate the demands which this has made upon staff and I would like to thank them for their efforts on behalf of the Company. D H Harding Chairman 21 June 2000 FEEDBACK PLC PROFIT AND LOSS ACCOUNT Year ended Year ended 31 March 2000 31 March 1999 £'000s £'000s Turnover: Group and share of joint venture 9,700.7 8,596.3 Less: Share of joint venture's turnover (406.3) (151.3) -------- -------- Group Turnover 9,294.4 8,445.0 Cost of Sales (5,459.2) (4,774.0) -------- -------- Gross profit 3,835.2 3,671.0 Other operating expenses (3,249.8) (3,455.3) Reorganisation costs - (116.6) -------- -------- Operating profit 585.4 99.1 Share of operating profit of joint venture 28.3 107.6 -------- -------- Profit on ordinary activities before interest and tax 613.7 206.7 Net interest charge (2.0) (24.3) -------- -------- Profit on ordinary activities before tax 611.7 182.4 Tax on profit on ordinary activities (207.6) 43.0 -------- -------- Profit on ordinary activities after tax 404.1 225.4 -------- -------- Dividends - non equity (105.6) (152.1) Preference share costs appropriation (86.6) (3.6) -------- -------- Retained profit for Group and its share of joint venture 211.9 69.7 -------- -------- Earnings per share (pence) Basic 2.1p 0.8p Fully diluted 2.1p 0.8p All amounts relate to continuing operations. FEEDBACK PLC CONSOLIDATED BALANCE SHEET 31 March 2000 31 March 1999 £'000s £'000s £'000s £'000s Fixed Assets Tangible Assets 483.0 546.2 Investment in joint venture - Share of gross assets 191.3 150.6 - Share of gross liabilities (44.2) (25.6) -------- -------- 147.1 125.0 -------- -------- 630.1 671.2 Current Assets Stocks 1,444.7 1,477.6 Debtors 4,222.3 3,213.4 Cash at bank and in hand 787.2 1,017.3 -------- -------- 6,454.2 5,708.3 -------- -------- Current liabilities Amounts falling due within one year - Borrowings (84.6) (94.9) - Other creditors (2,514.5) (1,974.4) -------- -------- (2,599.1) (2,069.3) -------- -------- Net Current Assets 3,855.1 3,639.0 -------- -------- Total assets less current liabilities 4,485.2 4,310.2 Creditors Amounts falling due after more than one year - Borrowings (190.9) (231.1) -------- -------- Net assets 4,294.3 4,079.1 ======== ======== Capital and reserves Called up share capital 2,090.2 2,382.6 Share premium account 24.8 21.8 Revaluation reserve 214.2 214.2 Capital reserve 299.9 299.9 Other reserve 307.5 13.8 Profit and loss account 1,357.7 1,146.8 -------- -------- -------- -------- Total reserves 2,204.1 1,696.5 -------- -------- Shareholders' funds 4,294.3 4,079.1 ======== ======== Included within shareholders' funds is an amount of £795,600 (1999: £1,296,100) in respect of non-equity interests. FEEDBACK PLC CONSOLIDATED CASHFLOW STATEMENT Year ended Year ended 31 March 2000 31 March 1999 £'000s £'000s £'000s £'000s Net cash inflow from operating activities 24.2 413.0 Returns on investments and servicing of finance - Interest received 45.0 18.4 - Interest paid (47.0) (42.7) - Non equity dividends paid (105.6) (152.1) -------- -------- Net cash (outflow) from returns on investments and servicing of finance (107.6) (176.4) -------- -------- (83.4) 236.6 Corporation tax paid (31.8) (102.3) Capital expenditure - Payments to acquire tangible fixed assets (79.7) (60.5) - Receipts from sales of tangible fixed assets 10.9 12.1 -------- -------- (68.8) (48.4) -------- -------- Net cash (outflow)/inflow before use of liquid resources and financing (184.0) 85.9 Management of liquid resources - Treasury deposit 200.0 (850.0) Financing - Issue of ordinary share capital 4.4 - - Repayments of bank and other loans (30.0) (30.0) - Repayments of obligations under finance leases and hire purchase contracts (11.8) (20.5) -------- -------- Net cash (outflow) from financing (37.4) (50.5) -------- -------- (Decrease) in cash (21.4) (814.6) -------- -------- Notes: 1. The earnings per share for the year ended 31 March 2000 is based on the Group profit on ordinary activities after taxation and preference dividends attributed to 10,181,320 ordinary shares, being the weighted average number of ordinary shares in issue throughout the year (1999: 8,606,521). The diluted earnings per share is calculated allowing for both the full conversion of the Preference Shares and the full exercise of outstanding share options. However, in accordance with the Financial Reporting Standard (FRS) 14, as neither of these conversions have a dilutive effect, the earnings per share figure remains unaltered. The adjusted weighted average number of shares is 14,370,947 (1999 - 16,222,836). The Group profit on ordinary activities after taxation has been adjusted by the preference dividend paid. 2. The financial information for the year ended 31 March 1999 is extracted from the Group's financial statements to that date which received an unqualified auditors' report and have been filed with the registrar of companies. The financial information for the year ended 31 March 2000 is extracted from the Group's financial statements to that date which received an unqualified auditors' report and will be filed with the registrar of companies. 3. The Report and Accounts will be posted to shareholders in due course and the Annual General Meeting will be held at 10.30 a.m. on 23 August 2000. Enquiries: Roger Barnett Group Managing Director Feedback plc 01892 653 322

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