Half-yearly report & Change of Directors
KleenAir Systems International plc
(the 'Company')
KLEENAIR INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2008 & CHANGE OF DIRECTORS
London, 18 June 2008 (KSIP) KleenAir Systems International plc ("KleenAir" or
"the Company"), a leading provider of vehicle pollution filters, today announces
its Interim Results for the period ended 31 March 2008.
Highlights
· Turnover up ten-fold to £258,014 as sales start to take off
· Delays in orders and deliveries now ended with significant increase in orders
for existing products
· New Transport Refrigeration product launched at the Commercial Vehicle Show
expected to contribute additional growth
· Distribution and supply agreements reached for new products for perishable
food transport and light commercial vehicles
· Increasing signs of commitment to establish Low Emission Zones seen in other
cities
CHAIRMAN'S STATEMENT
Sales for the half year were £258,014 (half year ended 31st March 2007,
£25,700), resulting in an operating loss for the period of £389,491 (loss,
£389,347) and as compared to a loss of £441,536 in the second half of the last
financial year.
The business was funded during the period principally by the issue of further
shares which produced net proceeds of £839,605.
As foreshadowed by my Chairman's statement in our annual report sent to
shareholders at the end of March, the half year's results reflect a slower than
expected start to the Company's trading. This is primarily related to delayed
and lower orders by freight operators than had been anticipated for the London
Low Emission Zone (LEZ).
During the first half-year our margins were adversely impacted by currency
movements in the Canadian dollar in which our supplies were principally
denominated. To counter these effects the Company has now put in place
distribution agreements denominated in a broader range of currencies.
We took a record level of monthly orders in May and orders for June are at
a higher level than at the equivalent point in May. The launch of our
filter for Transport Refrigeration Units (TRU), used in the transport of
perishable food, at the Commercial Vehicle Show in April, was well received
and we expect that the system will successfully contribute to revenues over
the next year as the refrigerated truck industry focuses on upgrading
trailers. The Board is confident of the Company's prospects moving into
the fourth quarter.
Recent distribution and supply agreements have now given us access to products
for both the TRU industry and for light commercial vehicles (LCVs). The latter
are the next target of the London LEZ, and enquiries are already building for
the upgrade of this class of vehicle. There are also increasing signs of
commitment from other urban areas to establishing low emission zones. It is
expected that these will not only include LCVs as well as heavy goods vehicles,
but NOx requirements too, as the probable failure of the UK to meet 2010 EU
targets for NOx reduction is causing considerable concern in government circles.
It is here that the company's intellectual property is focused.
The directors believe that the products and technologies in the Company's
portfolio, together with the technical and marketing team and the physical
facilities now in place, will enable the Company to become a significant force
in meeting the demand for emissions reductions solutions that will be driven by
the implementation of the low emission zones here in the UK and throughout the
EU. Meanwhile, the Company is actively managing its cash resources and taking
measures to exclude or defer any expenditure not essential to the development of
the business.
I am grateful to my fellow board members for their support in this formative
stage of the business. We much regret that our long serving non-executive
director Tony Downes, formerly chief technology officer of Perkins Engines, has
had to step down due to ill health. His guidance and wisdom were invaluable as
he helped us to develop our product portfolio and technology to tackle the
automotive emission pollution issues.
The board is sorry also to have accepted today the resignation of Nigel Weller,
a non-executive director who has contributed to our development since our
admission to AIM two years ago. Peter Newell, our Managing Director, will be
giving up his executive responsibilities at the end of this month, but we are
very pleased that he has agreed to remain on the board. At the same time the
company has appointed a general manager to drive sales, bring costs down and
improve margins.
L Simons
For further information please contact:
Peter Newell 07786 333 046
peter.newell@kleenairsystems.co.uk
Nick Harriss (Nomad) 020 7489 4500
Blomfield Corporate Finance Ltd
13 June 2008
Consolidated Group income statement
for the six months ended 31 March 2008
Six months Six months Year end
to 31 March to 31 March 30
2008 2007 September
(Unaudited) (Unaudited 2007
and (Unaudited
restated) and restated
£ £ £
Notes
Revenue 258,014 25,700 35,102
Cost of sales (216,628) (1,449) (3,707)
_______ _______ _______
41,386 24,251 31,395
Sales and marketing expenses 3 (81,556) (55,997) (132,948)
Research and development expenses 3 (51,609) (106,817) (119,685)
Administrative expenses 3 (297,712) (250,784) (609,645)
_______ _______ _______
Operating loss (389,491) (389,347) (830,883)
Finance expenses (772) - -
Finance income 599 4,858 5,880
_______ _______ _______
Loss before taxation (389,664) (384,489) (825,003)
Taxation - - -
_______ _______ _______
Loss for the period attributable to (389,664) (384,489) (825,003)
equity holders of the Company ======= ======= =======
Loss per share expressed in
pence per share
Basic 6 (1.67) (2.03) (4.10)
Diluted 6 (1.67) (2.03) (4.10)
======= ======= =======
All amounts relate to continuing operations.
Consolidated Group balance sheet
as at 31 March 2008
31 March 31 March Year end
2008 2007 30
(Unaudited) (Unaudited September
and 2007
restated) (Unaudited
and restated)
£ £ £
Notes
Assets
Non-current assets
Intangible assets 168,218 83,354 186,772
Property, plant and equipment 42,675 22,720 46,879
_______ _______ _______
210,893 106,074 233,651
_______ _______ _______
Current assets
Inventories 150,865 - 178,643
Trade and other receivables 268,390 54,777 67,456
Net cash and cash equivalents 297,202 235,764 9,166
_______ _______ _______
716,457 290,541 255,265
_______ _______ _______
Total assets 927,350 396,615 488,916
======= ======= =======
Equity
Capital and reserves attributable to
equity holders of the Company
Ordinary shares 277,544 198,080 206,885
Share premium 2,754,020 1,843,899 1,985,074
Retained earnings (2,511,696) (1,738,804) (2,126,118)
_______ _______ _______
Total shareholders' equity 519,868 303,175 65,841
Liabilities
Current liabilities
Trade and other payables 226,342 93,440 323,075
Provisions 3,070 - -
_______ _______ _______
229,412 93,440 323,075
_______ _______ _______
Non-current liabilities
Interest-bearing borrowings 175,000 - 100,000
Provisions 3,070 - -
_______ _______ _______
178,070 - 100,000
_______ _______ _______
Total liabilities 407,482 93,440 423,075
_______ _______ _______
Total equity and liabilities
927,350 396,615 488,916
======= ======= =======
Statement of changes in shareholder's equity
Ordinary Share Retained
shares premium earnings
Note (Unaudited) (Unaudited (Unaudited
and and
restated) restated)
£ £ £
At 1 October 2006 3 189,235 1,705,699 (1,374,722)
Loss after tax for the period to 31 - - (384,489)
March 2007
Shares issued 8,845 138,200 -
Equity-settled share-based payments - - 20,407
_______ _______ _______
At 31 March 2007 3 198,080 1,843,899 (1,738,804)
Loss after tax for the period
to 30 September 2007 - - (440,514)
Shares issued 8,805 141,175 -
Equity-settled share-based payments - - 53,200
_______ _______ _______
At 30 September 2007 3 206,885 1,985,074 (2,126,118)
Loss after tax for the
period to 31 March 2008 - - (389,664)
Shares issued 70,659 768,946 -
Equity-settled share-based payments - - 4,086
_______ _______ _______
At 31 March 2008 3 277,544 2,754,020 (2,511,696)
======= ======= =======
Consolidated Group cash flow statement
for the six months ended 31 March 2008
Six months Six months Year end
to 31 March to 31 March 30
2008 2007 September
(Unaudited) (Unaudited 2007
and (Unaudited
restated) and restated)
£ £ £
Note
Cash flows from operating activities
Cash used in operations 7 (624,779) (391,105) (704,159)
Investment income 599 4,858 5,880
Finance costs (772) - -
_______ _______ _______
Net cash absorbed by operating (624,952) (386,247) (698,279)
activities _______ _______ _______
Cash flows from investing activities
Purchase of property, plant and equipment (1,617) (8,841) (37,860)
Expenditure on capitalised development costs - - (135,548)
_______ _______ _______
Net cash used in investing activities (1,617) (8,841) (173,408)
_______ _______ _______
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 839,605 147,044 297,045
Proceeds from borrowings 75,000 - 100,000
_______ _______ _______
Net cash generated from financing activities 914,605 147,044 397,045
_______ _______ _______
Net increase/(decrease) in cash and
cash equivalents 288,036 (248,044) (474,642)
Net cash and cash equivalents at
beginning of period 9,166 483,808 483,808
_______ _______ _______
Net cash and cash equivalents at end
of period 8 297,202 235,764 9,166
======= ======= =======
- - - -
Notes to the interim accounts
for the six months ended 31 March 2008
1. Basis of preparation
These interim financial statements are the first interim financial statements
following the adoption of International Financial Reporting Standards (IFRS).
The financial information has been prepared in accordance with all International
Financial Reporting Standards and IFRIC interpretations that had been published
by 31 March 2008 and apply to periods beginning on or after 1 October 2007, The
standards used are those endorsed by the EU.
Further standards and interpretations may be issued that will be applicable for
financial years beginning on or after 1 October 2007 or that are applicable to
later accounting periods but may be adopted early. The Group's first full IFRS
financial statements to 30 September 2008 may therefore be prepared in accordance
with some different accounting policies from the financial information presented
here.
The interim report is unaudited and does not constitute audited accounts within
the meaning of s240 of the Companies Act 1985 and s434(3) and s435(3) of the
Companies Act 2006. The accounts for the year ended 30 September 2007 were not
prepared in accordance with International Financial Reporting Standards and IFRIC
interpretations but have been filed with the Registrar of Companies. The auditors'
report on those financial statements was unqualified and contains no statement under
s237(2) or (3) of the Companies Act 1985.
2. Segmental analysis
The Group has only one principal area of operation, the development, sale and
installation of vehicle emission reduction devices and sells product within one
geographic segment - the United Kingdom.
3. Restatement
The classification of 'other operating expenses' has been reanalysed into Sales
and marketing expenses, Research and development expenses and Administrative expenses.
The income statement for the six month period ended 31 March 2007 and the year ended
30 September 2007 have been restated to be consistent with this revised presentation.
There is no effect on reported earnings.
The gain in equity arising in respect of share-based payments is included within
Retained earnings. The Statement of changes in shareholders equity for the six
month period ended 31 March 2007 and the year ended 30 September 2007 has been
restated to be consistent with this revised presentation. There is no effect on
net shareholders' equity.
4. Taxation
The Group has incurred losses in each period and no corporation tax charge has
arisen. The Group has not recognised a deferred tax asset in respect of these losses.
5. Dividends
No dividends have been declared and approved in respect of the six month periods
ending 31 March 2008 and 31 March 2007.
6. Earnings per share
Earnings per share is calculated by reference to the weighted average of 23,035,227
ordinary shares in issue during the period (31 March 2007 - 18,957,426 and 30
September 2007 - 19,953,067).
The diluted loss per share is the same as the basic loss per share as the losses
in each period have an anti-dilutive effect.
7. Notes to the cash flow statement
Net cash flow from operating activities comprises:
Six months Six months Year end
to 31 March to 31 March 30
2008 2007 September
(Unaudited) (Unaudited 2007
and (Unaudited
restated) and restated)
£ £ £
Loss before taxation (389,491) (389,347) (830,883)
Depreciation 5,821 3,322 8,182
Amortisation of development costs 18,554 5,813 37,130
Equity-settled share-based payments 4,086 20,407 73,607
Decrease/(increase) in inventories 27,778 - (178,643)
(Increase)/decrease in trade and other (200,934) 35,295 22,595
receivables
(Decrease)/increase in trade and other (96,733) (66,595) 163,853
payables
Increase in provisions 6,140 - -
_______ _______ _______
Net cash outflow from operating activities (624,779) (391,105) (704,159)
======= ======= =======
8. Net cash and cash equivalents
Net cash and cash equivalents consist of cash and bank balances.
9. Reconciliation of net assets and profit under UK GAAP to IFRS
The Group reported under UK GAAP in its previously published financial statements
for both the year ended 30 September 2007 and the six months ended 31 March 2007.
From 1 October 2007 the Group has prepared its consolidated financial statements in
accordance with International Accounting Standards (IAS) and International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU).
There were no adjustments required to the total shareholders' equity or reported
losses for the six month period to 30 June 2007 and the year to 30 September 2007.
As explained in note 3 above the reserve arising in equity in respect of share-based
payments has been transferred to retained earnings.
10. Investment in NoNox Plc
Subsequent to the period end, on 16th April 2008, the Company paid £150,000 towards
the purchase of a 3.85% interest in NoNox Plc, a business in the related field of
emission control from land based boilers.
11. Availability
Copies of the interim report will be available on the Company's website at
www.kleenairsystems.co.uk.
-END-
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