Interim Results

Jetcam International Holdings Ld 23 October 2000 JETCAM International Holdings Limited ('JETCAM' or 'the Group') Consolidated Interim Results for the Six Months ended 30 June 2000 JETCAM develops and markets software systems for computer programming of punching and cutting machines used in sheet metal fabrication. Results I am pleased to report the results of JETCAM for the six months ended 30 June 2000. Group turnover has more than doubled to £2,055,000 (1999: £902,000). Profit before tax and goodwill amortisation was £154,000 (1999: £300,000). This profit is after charging £85,000 amortisation of goodwill on the acquisition of Camtek Limited ('Camtek'). These results reflect the acquisition of Camtek, together with an increase in expenses, to which I refer below, which have been carried for most of the period. They also include an exceptional item of £116,000 from the sale of intellectual property to sheetmetalworld.com plc, a newly formed B2B portal for the sheet metal industry. JETCAM International dealer revenues increased overall by some 47% compared to the same period last year. Whilst OEM revenues, which are largely denominated in Euros, also rose some 26%, the increase was largely offset by the exchange loss caused by the weakness of the Euro. Sales in Camtek UK were also slightly higher, despite weakness in the Yen. Review of operations The first half of the financial year has been marked by a concentrated effort to implement the key outstanding elements of product development and the marketing and sales infrastructure needed to enable the Group to grow its business aggressively. There has, as a result, been an inevitable increase in associated costs, resulting in considerable additional expense being incurred in the period under review. However, your Directors believe that this investment, although costly in the short term, will ensure higher returns in the medium term. The JETCAM UK sales operation has been streamlined with the full integration of its operations with those of Camtek, resulting in a reduction in trading losses experienced earlier in the year. These losses were largely caused by adverse market conditions in the UK manufacturing sector due to the strength of sterling, exacerbated by problems particularly in the motor industry. However, your Directors believe that the UK still holds great potential for the Group and that the marketing resources put in place at the beginning of the year will enable JETCAM to take full advantage of those opportunities. A business development manager for Europe has been appointed and new dealers are now beginning to generate additional enquiries and sales. Clive Daykin, our Group financial controller, has been appointed Group finance director in place of Ian Ilsley who remains on the Board as a non-executive Director. In addition, Geoff Hawkesford is stepping down as a director of the Company and from day-to-day executive responsibility for Camtek, but will continue to provide consultancy services in the area of software development. The administrative systems, which were under development in the second half of last year, have now been completed. In parallel with this, the fabrication products of JETCAM and Camtek have been co-ordinated under a single product development strategy, which allows the Group to maximise the utilisation of development resources and to minimise the time to market for new product features and functionality. sheetmetalworld.com A significant event during the period was the sale of intellectual property developed by JETCAM International in exchange for cash and a 40% holding in sheetmetalworld.com plc, a company which is being developed independently of the Group but which will provide continuing consultancy income. In the event that the corporate ambitions of sheetmetalworld.com are fully realised, JETCAM should become a major beneficiary in terms of its asset base. New product launch A major new product, Pentacut(TM), was released in September 2000, after the end of the period under review. Pentacut(TM) is a system for 3D sheet metal component manufacture programming. This important product release means that Group products now meet the needs not just for flat metal manufacturers, but also for manufacturers of complex three-dimensional components such as those found in automobiles, domestic appliances and the aerospace industry. Pentacut(TM) is already generating a great deal of interest, opening doors to previously inaccessible OEMs as well as enhancing the reputation and sales momentum of our existing products. In addition to the release of Pentacut(TM), we have developed an important new user configurable interface to our fabrication products, which, again, has attracted a great deal of interest in the OEM community. The interface gives OEMs the opportunity to supply an 'own-label' version of the software, which the Directors of JETCAM believe, is difficult with competitor systems. US activity Our activities in the USA are increasing and sales of JETCAM products are now being channelled through the Atlanta office of Camtek USA, as the base for building and supporting the Group dealer network. A significant order from a large, high profile US customer has helped in reinforcing existing product presence in this important market and created a great deal of new interest in what we have to offer. Dividend In view of the trading results for the first six months, your Board believes it is prudent not to declare an interim dividend. The dividend policy will be reviewed in the light of the outcome for the year as a whole. Current trading and prospects As already indicated above, the trends in dealer and OEM sales for JETCAM International have been encouraging with a significant increase in sales compared to the corresponding period last year and the trend is expected to continue. The Group is also in active discussion on several major OEM and joint venture opportunities. One of these ventures has already been agreed, with the recent announcement of a technology partnership with Virtek ((TSE): VRK) a provider of advanced laser systems for sheet metal component inspection. Under this agreement, the companies will work together to provide a customised version of the JETCAM Expert CNC programming system which will be integrated with Virtek's laser inspection machines. This will result in some sales this year, but the major impact is likely in the next financial year. The Directors believe that the major reorganisation, which has taken place in the UK operations, in particular, will begin to reverse the operating profit decline experienced in the first half of the financial year, although, the outcome for the Group for the current financial year as a whole, is expected to fall short of current market expectations. Camtek UK's sales are expected to increase following the release of the new Pentacut(TM) product, which is stimulating interest across the whole fabrication product range. New features in the mill/turn area are expected to accelerate sales through existing OEM relationships and Camtek USA is expected to benefit from new third party sales channel initiatives. The considerable investment in product development and Group infrastructure made during the current financial year is expected to yield tangible results in the financial performance of the Group in the medium term. ENQUIRIES: JETCAM International Holdings Limited Tel: 00 377 97 97 16 40 John Wright George Kynoch Tel: 0860 452 6066 College Hill Tel: (00 44) 20 7 457 2020 Chelsea Allen chelsea.allen@colleghill.com JETCAM International Holdings Limited Consolidated Interim Profit and Loss Account Six Months ended 30 June 2000 Half Year Half year ended year 2000 31/12/99 1999 £'000 £'000 £'000 Turnover 2,055 2,200 902 Cost of sales (116) (134) (47) Gross profit 1,939 2,066 855 Administrative expenses (1,901) (1,661) (555) Operating profit 38 405 300 Exceptional profit 116 - - Profit on ordinary activities before taxation 154 405 300 Taxation - (35) - Profit for the period 154 370 300 Dividend paid and - (474) - proposed Retained profit for the 154 (105) 300 Period Earnings Per Share (pence) Basic 0.7p 2.7p 1.7p Diluted 0.7p 2.6p 1.7p Statement of Total Recognised Gains and Losses Six Months ended 30 June 2000 Profit for the Financial 154 370 300 Period Currency translation 85 (16) 22 difference Total gains and losses 239 354 322 recognised since last annual report JETCAM International Holdings Limited Consolidated Interim Balance Sheet 30 June 2000 Period Year Period ended ended ended 30/06/00 31/12/99 30/06/00 £'000 £'000 £'000 Fixed Assets Tangible assets 530 544 121 Investments 1 1 - Intangible asset 3,415 3,387 - 3,946 3,932 121 Current Assets Stocks 12 20 - Trade debtors 924 1,094 570 Other debtors 369 121 96 Prepayments and accrued 13 50 45 income Cash at bank and in hand 313 366 303 1,631 1,651 1,014 Creditors: amounts falling due within one year Trade creditors 304 327 24 Other taxes and social 114 185 - security Accruals and deferred 89 222 174 income Dividend payable 250 333 - 757 1,067 198 Net Current Assets 874 584 816 Total assets less 4,820 4,516 937 current liabilities Creditors: amounts falling due after more than one year Provisions for (97) (132) - liabilities and charges Net Assets 4,723 4,384 937 Capital and Reserves (see note 4) Called up share capital 144 143 113 Contributed surplus 3,995 3,896 36 Profit and loss account 584 345 788 Equity Shareholders' 4,723 4,384 937 Funds JETCAM International Holdings Limited Consolidated Cash Flow Statement Six Months ended 30 June 2000 Half Year Half year year ended ended ended 30/06/00 31/12/99 30/06/99 £'000 £'000 £'000 Cash flows from operating activities: Operating profit 154 405 300 Depreciation 58 56 15 Amortisation of goodwill 85 29 - Exchange differences 107 (35) 20 Decrease in warranty provision (35) - - Decrease in stock 8 - - (Increase)/decrease in trade 170 (265) (34) debtors (Increase)/decrease in other (211) 207 (99) debtors and prepayments Increase/(decrease) in (224) - 102 liabilities Net cash inflow from operating 112 397 304 activities Capital expenditure and financial investment Payments to acquire tangible (44) (93) (78) fixed assets Acquisitions on investment and servicing of finance: Purchase of subsidiary (13) (2,256) - undertaking Equity dividends paid (108) (142) - Cash (outflow) before use of (53) (2,094) 226 liquid resources and financing Financing Issue of share capital - 3,210 309 Share issue expenses - (789) (271) (Decrease)/increase in cash (53) 327 264 during the period Analysis of movement in net funds (Decrease)/increase in cash (53) 327 264 during the period Net funds at 1 January 2000 366 39 39 Net funds at 30 June 2000 313 366 303 JETCAM International Holdings Limited Notes to the Interim Financial Information for the Period Ended 30 June 2000 1. Results The six month results have been prepared on the historical cost basis. They are unaudited and do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2. Earnings per share The calculation for earnings per share is based on profit after tax divided by the weighted average number of shares in issue during the financial period. The diluted earnings per share calculation is based on profit after tax, divided by the weighted average number of shares in issue as adjusted for the dilution effect of the full exercise of all ordinary share options granted by the Company. 4. Reserves Called up Share Contributed Capital Surplus Reserves £'000 £'000 £'000 At 1st January 2000 143 3,896 345 Shares issued 1 99 - Retained profit for the - - 154 period Currency translation - - 85 difference At 30th June 2000 144 3,995 584 5. Copies of this report are to be sent to all shareholders and are available from Cornhill Secretaries Limited, 1 Snow Hill, London EC1A 2EN.

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