Final Results

RNS Number : 9552E
Scientific Digital Imaging Plc
22 July 2016
 

SCIENTIFIC DIGITAL IMAGING PLC

Final Results for the year ended 30 April 2016

 

Cambridge, UK 22 July 2016: Scientific Digital Imaging (AIM: SDI, "SDI", the "Company" or the "Group"), the AIM quoted group focused on scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation, is pleased to announce its final audited results for the year ended 30 April 2016.  

Financial Highlights

 

·      Revenue £8.5m (2015: £7.0m)

·      Increased gross margin 61.1% (2015: 59.2%)

·      Operating profit £536,000 (2015: £59,000)

·      Adjusted operating profit £792,000 before costs of reorganisation, acquisition costs, amortisation of acquired intangibles and share based payments (2015: £420,000)

·      Basic earnings per share 1.17p (2015: 0.15p)

 

Operational Highlights

 

·      Successful £2.5m equity fundraising enabled us to make the earnings enhancing acquisition of Sentek Limited

·      Atik sales and profitability exceeded budget

 

Post balance sheet

 

·      The Department of Health's new guidance confirms that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods.  ProReveal, our highly sensitive fluorescence-based patented protein detection test, is the only marketed product of which we are aware that can adhere to these stringent guidelines. It allows the testing of the whole instrument for protein, rather than just a small, swabbed area, and will be invaluable to the Sterile Services Departments in hospitals throughout the UK and overseas.

 

Commenting on the results, Ken Ford, Chairman of SDI said: "During the year SDI has seen continued growth in its Synbiosis and Synoptics Health brands alongside high levels of growth in Artemis CCD. Together with the acquisition of Sentek, these have been the major contributors to the Group's improved profitability. As well as investing in its current operations, SDI will continue to assess new businesses with complementary products and plans to add further new companies to the Group. "

 

FOR FURTHER INFORMATION

 

Scientific Digital Imaging Plc

Ken Ford, Chairman

Mike Creedon, Chief Executive Officer

www.scientificdigitalimaging.com

01223 727144

 

 

finnCap Ltd           

Ed Frisby/ Simon Hicks - Corporate Finance

Mia Gardner - Corporate Broking

020 7220 0500

 

 

JW Communications

Julia Wilson - Investor & Public Relations

 

07818 430 877

 

 

 

About Scientific Digital Imaging plc:

Scientific Digital Imaging plc ("SDI") designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation. SDI plans to continue to grow through its own technology advancements as well as strategic, complementary acquisitions.

 

www.scientificdigitalimaging.com

 

 

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

 

hairman's Statement

 

Overview

The year to 30 April 2016 was a turning point for Scientific Digital Imaging Plc ("SDI"), A successful fundraising enabled us to acquire the earnings enhancing company, Sentek Limited ("Sentek") and we are continuing to grow a diversified company with increasing revenue streams.

Having raised £2.5 million in the year, we will continue to pursue our buy and build strategy and have identified a number of potential acquisitions that have complementary technologies.

The Board is confident that SDI is now in an excellent position for continued good growth through increased revenue and the potential for further acquisitions in 2016/17.

Financial results

Revenue for the year ended 30 April 2016 was £8.5m (2015: £7.0m). This has resulted in an operating profit for the year of £738k before acquisition, fund raising costs and share based payments. This result is inclusive of currency losses. Basic earnings per share were 1.17p (2015: 0.15p) and diluted earnings per share were 1.15p (2015: 0.15p).

Strategy

During the year SDI has seen continued growth in its Synbiosis and Synoptics Health brands alongside high levels of growth in Artemis CCD. Together with the acquisition of Sentek, these have been the major contributors to the Group's improved profitability. SDI continues to assess new businesses with complementary products and plans to add further new companies to the Group by the end of 2016/17. SDI will also continue to invest in its current operations.

Current trading and outlook

In the financial year to the end of April 2016, SDI successfully added Sentek to the SDI group and has continued to make process improvements to maintain the Company's skill base and output capability.

Artemis CCD significantly exceeded its budget. It introduced a new astronomy camera, Infinity, which has opened up a new and lucrative market segment for the division. Synbiosis has invested in and has achieved an in-vitro diagnostics (IVD) medical devices CE mark for its new antimicrobial resistance testing system, ChromaZona. These successful new products launches demonstrate the Group's commitment to investing in product development.

The Board expects SDI to make good progress over the coming financial year as we will continue to pursue our strategy of organic and acquisitive growth. As well as the positive contribution of Sentek, Opus Instruments and Atik, the new Synoptics products released in 2016, together with a focused sales strategy, are expected to drive continued growth.

With growing interest in our products from North America, particularly in the rapid microbiology and antibiotic resistance testing sectors, the Board views the next financial year with confidence.

 

Dividend policy

The Board propose that dividends will be paid to shareholders when SDI has generated distributable profits and has surplus cash flow.

Our team

On behalf of the Board, I would like to thank all our staff for their creativity in ensuring that our new products meet our customers' current and future needs. The Board looks forward to the coming financial year with confidence.

 

Ken Ford

Chairman

21 July 2016

Chief Executive's Operating Report

 

SDI designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation, through its Synoptics brands (Syngene, Synbiosis, Synoptics Health and Syncroscopy), its Artemis CCD brands (Atik and Artemis CCD) and Opus Instruments brand (Osiris). Through its recent acquisition of Sentek, SDI has broadened its offering into the development and manufacture of electrochemical sensors.

Synoptics 

Synoptics designs and manufactures scientific instruments based on digital imaging, for the life science research, microbiology and healthcare markets. Synoptics is the largest of the SDI companies and its division offer its products under brands including G:BOX, PXi, ProtoCOL 3, Protos 3 and ProReveal, each targeting a different sector of these markets.

Syngene 

Syngene develops, manufactures and markets systems and software for visualising, analysing and recording gels and blots used by life scientists. Almost all research in biological sciences requires an understanding of molecular processes involving DNA, RNA and proteins, so gel electrophoresis and Western blotting are widely used by laboratories in this sector.

The market for image analysers is mature and Syngene continues to experience aggressive pricing competition in the DNA imaging sector. This has become more apparent this year in Europe and the Asia Pacific region. Syngene is addressing this issue with the introduction of NuGenius, a new, competitively priced imager. The new imager, the only one in the world using a Raspberry Pi processor, received positive feedback at the trade show Analytica. It is also beginning to attract interest in China, Syngene's largest Asia Pacific territory.

Syngene's G:BOX Chemi XRQ mid-range system continues to sell well in all territories. The upgraded GeneGnome XRQ, a budget system, also sold well during the year; a new competitor system in North America could not match its technical capabilities. We intend to improve revenue and margins by cutting costs and in particular by introducing low end systems such as NuGenius.

Competitive pricing is not enough: Syngene must also differentiate itself by providing excellent service. To this end, Syngene continuously assesses its worldwide network of distributors. We have recruited eight new, life-science focused distributors in the Asia Pacific region and we now have four non-exclusive distributors in Germany, our largest European market, including two recruited in the period. Syngene has also developed an inexpensive OEM imager for one of its largest European distributors, which will contribute to European sales.

With new Asia Pacific and European distributors in place alongside competitively-priced own-brand and OEM imaging systems, Syngene expects to maintain its market share in the coming year.

Synbiosis 

Synbiosis provides image analysis systems for microbiological testing in food, water and pharmaceutical applications. Its products reduce labour costs, provide more reproducible results, and record data for audit purposes, an increasingly important area as testing becomes more regulated.

During the year, Synbiosis had a more focused commercial strategy, with increased commitment to training and support for its largest target markets, and the appointment of new distributors in Europe. These efforts were rewarded by very significant sales growth, driven by its high-end ProtoCOL 3 automated colony counter and zone measurement system.

 

Protos 3 is a new, mid-range automated colony counter that can also identify colonies on chromogenic plates automatically. It is selling well into the food microbiology sector across Europe and North America, where objective, fully traceable results are required. To capitalise on the increased interest from the food microbiology sector, the Division has launched a new, low-cost colony counter, aCOLyte HD. To the same end, a complementary range of systems to help scientists prepare food samples for microbial testing is about to be launched, ProBlend and ProDilute.

 

In September 2015, Synbiosis launched the new eAST software to measure zones around antibiotic sensitivity discs and automatically predict antibiotic resistance from the results. The software, which can be used as a standalone product or with the ProtoCOL 3, was upgraded in 2016 to measure zones around Minimum Inhibitory Concentration (MIC) strips from major suppliers. The enhancement makes eAST attractive to a wider market. During 2016, this software will be further upgraded to include the Clinical and Laboratory Standards Institute (CLSI) database of MIC breakpoint values, making it easier for analysts to adhere to quality standards in North America and the Asia Pacific region.

 

After the period, Synbiosis introduced ChromaZona for antibiotic resistance testing in clinical laboratories, using the new eAST software. This is a timely product as there is a drive globally to fund the discovery of new antibiotics, as well as to rapidly test bacteria for antibiotic resistance. The system was registered with the MHRA (Medicines and Healthcare Products Regulatory Agency) and in 2016 it successfully achieved an in-vitro diagnostics (IVD) medical devices CE mark. This registration and the upgrade of the eAST software to include the CLSI database enables Synbiosis to promote ChromaZona for clinical diagnostic use in hospital laboratories, especially in North America. This is a very large market segment that Synbiosis has not previously been able to address.

The newly widened range of products for food microbiologists will help to drive sales in this market. Additionally, new software and automation for antimicrobial resistance testing can command higher prices. We expect Synbiosis to deliver further growth in the coming year.

Synoptics Health

The Synoptics Health Division manufactures and supplies ProReveal, an automated imaging system and spray test to detect microgram amounts of protein left on surgical instruments after the hospital decontamination processes. ProReveal is the only commercial test on the market that complies with new recommendations for preventing iatrogenic variant Creutzfeldt-Jakob disease (vCJD) infection. ProReveal has achieved the BS EN ISO 15883-1 standard, a test for measuring washer-disinfector efficacy.

ProReveal is unlike any other test for detecting proteins on surgical instruments because it utilises fluorescence, which is far more sensitive than colorimetric detection. It offers a highly sensitive alternative to past techniques. Moreover, it tests the whole instrument for protein, not just a small, swabbed area. Taking less than five minutes to complete, ProReveal offers a visual display of the presence (or absence) of any protein and these results can be documented and archived as proof of process cleanliness.

ProReveal is gaining acceptance as the benchmark test of the performance of washer-disinfectors in the USA, potentially the largest market for this product. Systems have been sold to prestigious hospitals such as the Piedmont Hospital in Atlanta and others that are part of large healthcare groups. Synoptics Health believes that sales of ProReveal will continue to increase steadily in North America as more hospitals in each healthcare group become aware of the technology.

To drive sales of ProReveal internationally, Synoptics Health is building a commercial team and new distributors have been appointed in Europe and the Asia Pacific region.

New guidelines from the UK Department of Health (DOH), issued on 8 July 2016, that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods*. Detecting protein levels on surgical instruments is an important means of minimising transmission risk of Creutzfeldt-Jakob Disease (CJD) and variant Creutzfeldt-Jakob Disease (vCJD) in healthcare settings, and the DOH continue to recommend that the upper limit of acceptable protein contamination after processing to be 5µg BSA equivalent per instrument side, with a lower level necessary for neurosurgical instruments.

It is a goal that all healthcare providers engaged in the management and decontamination of surgical instruments used in acute care will be expected to have implemented this guidance by 1 July 2018. However, providers whose instruments are likely to come into contact with higher risk tissues, for example neurological tissue, are expected to give this guidance higher priority and move to in situ protein detection methodologies by 1 July 2017.

The Department of Health's new guidance confirms that protein levels on a surgical instrument should be measured directly on the surface rather than by swabbing or other commonly used methods.  ProReveal, our highly sensitive fluorescence-based patented protein detection test, is the only marketed product of which we are aware that can adhere to these stringent guidelines. It allows the testing of the whole instrument for protein, rather than just a small, swabbed area, and will be invaluable to the Sterile Services Departments in hospitals throughout the UK and overseas."

* https://www.gov.uk/government/publications/management-and-decontamination-of-surgical-instruments-used-in-acute-care

Synoptics Health believes that its commercial strategy will generate steady growth of product sales in the coming year.

Artemis CCD

Artemis CCD designs and manufactures high-sensitivity cameras. These are sold for life science and industrial applications under its Artemis Cameras brand and for deep-sky astronomy imaging as Atik Cameras.

Artemis CCD Cameras

Artemis CCD had its best year for sales and profitability of CCD cameras in the life science industry and continues to sell cameras to its established OEM customers. In addition it is expanding into new product sectors and territories. Over the year Artemis has been able to offer a highly bespoke approach to potential OEM customers resulting in optimised versions of our core products for specific applications. This has helped sales in this area and is expected to provide further growth as additional projects move towards the production phase during 2016.

Sales to amateur astronomers have also grown, led by the introduction of the Atik Infinity camera. This new product introduced during the year is aimed at bridging the gap between the complex astrophotography hobby and visual star gazing. The camera and its associated software automates in real time much of the complex image processing that has been a required part of imaging deep sky objects such as galaxies and distant nebulae.

The division is investing in new staff in software engineering and digital marketing to ensure that creative product development continues and is driven by customer needs.

During the year, Artemis CCD entered into an agreement with one of the world's leading life science companies, to supply cameras for a new life science product. It introduced a new cooled CCD camera in the period and this, together with the success of its existing products, is helping Artemis CCD to make an increasing contribution to the SDI Group via intra-group revenues to Synoptics and growth in OEM sales.

Opus Instruments


Opus Instruments designs and manufactures cameras for art conservation and restoration.

The Opus OSIRIS camera was developed as a collaboration with the National Gallery and has become a world leader in the field of Infrared Reflectography. There were further sales of the camera throughout the year to prestigious institutions including the Metropolitan Museum of Art in New York.

The Opus range currently comprises of a single camera and its associated accessories. During 2016, we will invest in the development to broaden the range of products we can offer customers within this market.

Sentek

Sentek manufactures and sells electrodes primarily for the measurement of pH and conductivity of aqueous solutions. Applications range from the laboratory, to manufacture of foods, beverages and personal care products, through to leisure. Sentek's electrodes have a working life of only 6-12 months, and therefore need to be replaced regularly.

Sentek represents a transformational deal for SDI. It is earnings enhancing, creates a scientific instrument company with a strongly growing top and bottom line and diversifies the company into a new area of instrumentation. We believe the integration risk is low: Sentek management will remain with the business and SDI and Sentek share many distributors in common.

Mike Creedon

Chief Executive Officer

21 July 2016

 

Strategic review

Principal activity and business review

Scientific Digital Imaging Plc (SDI) designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation.

The Board intends to pursue a strategy of acquiring related companies, as well as seeking to generate organic growth. The Board believes there are many businesses operating within the market, a number of which have not achieved critical mass, and that this presents an ideal opportunity for consolidation. This strategy will be primarily focused within Europe but, where opportunities exist, acquisitions in the United States and elsewhere will also be considered. The acquisition of Artemis and Perseu represented the first step in the implementation of this strategy in 2008 followed by the acquisition of Opus Instruments in 2014 and recently the acquisition of Sentek in October 2015

The Chairman's Report and Chief Executive's Operating Report give an overview of the performance of the Group during the year and likely future developments.

Key Performance Indicators

The key financial performance indicators (KPI's) used to monitor the business include the order pipeline, revenue, gross profit, operating profit, cash and earnings per share. The KPI's are reviewed on a monthly basis against budget by the Directors and management in respect of changes within periods and changes between reporting periods.

The non-financial key performance indicators are monitoring cost and timelines for research and development projects compared to project management targets.

Group Summary

Group revenue for the year is stable at £8.5m (2015: £7.0m).

Gross profit increased to £5.2m (2015: £4.1m) with increased gross margin at 61.1% (2015: 59.2%).

Operating profit for the year was £536k (2015: £59k) and £738k (2015: £393k) before reorganisation costs, acquisition costs and share based payments

Investment in R&D

Total research and development in the current year was £596k, representing 7% of Group sales (2015: £618k representing 8.9% of Group sales). Under IFRS we are required to capitalise certain development expenditure and in the year ended 30 April 2016 £478k (2015: £280k) of cost was capitalised and added to the balance sheet. This expenditure represents the Group's investment in new product development. The amortisation charge for 2016 was £122k (2015: £312k). The carrying value of the capitalised development at 30 April 2016 was £882k (2015: £770k) to be amortised over three years.  

Reorganisation Costs

The Board constantly carries out a thorough review of the operations and structures of the Group which gave rise to £17k (2015: £200k) of costs from the review and reorganisation incurred in 2015.

Acquisition and Fundraising Costs

£179k of costs relating to the acquisition of Sentek. In 2015 the group incurred £126k of costs relating to work on potential acquisitions and fundraising in the year.

Earnings per Share

Basic profit per share for Group was 1.17p (2015: 0.15p) and diluted profit per share for the Group was 1.15p (2015: 0.15p).   

Finance Costs and Income

Net financing expense was £40k (2015: £36k). 

Taxation

The tax credit of £75k (2015: £21k) is largely due to prior year corporation tax adjustments and tax credits.

Cash Flow

During the year the Group improved cash flow, reporting a cash balance of £1.7m (2015: £876k) at the year end.

In October 2015 the Group raised £2.5m through an issue of 31.25m new shares at 8p. The funds raised were used to acquire Sentek Limited.

Funding and Deposits

The Group utilises short-term facilities to finance its operations. The Group has one principal banker with an invoice discounting facility and bank loan. Surplus funds are placed on short-term deposit.

The Group utilises long-term borrowings from bank loans, other loans and finance leases.

Principal risks and uncertainties

The following represent, in the opinion of the Board, the principal risks of the business. It is not a complete list of all the risks and the priority, impact and likelihood of the risks may change over time.

Dependence on key distributors

Failure to effectively manage our distributors of products could damage customer confidence and adversely affect our revenues and profits.

In order to mitigate this risk the Group has a team dedicated to maintaining close relationships with our distributors.

Competition

Competition from direct competitors or third party technologies could impact upon our market share and pricing.

In order to mitigate this risk the Group continues to invest in researching its markets and continues to offer new products in response to changing customer preferences. In addition the Group invests in research and development to maintain its competitive advantage.

Currency translation

The results for the Group's overseas businesses are translated into Pounds Sterling at the average exchange rates for the relevant year. The balance sheets of overseas businesses are translated into Pounds Sterling at the relevant exchange rate at the year end. Exchange gains or losses from translating these items from one year to the next are recorded in other comprehensive income.

As with the majority of international companies, the Group's UK and overseas businesses purchase goods and services, and sell some of their products, in non-functional currencies. Where possible, the Group nets such exposures or keeps this exposure to a minimum. The Group's principal exposure is to US Dollar and Euro currency fluctuations.

Going concern

The company's business activities, together with the factors likely to affect its future development, performance and position are set out within this Strategic report. The financial position of the company, its cash flows, liquidity position and borrowing facilities are described above. In addition, notes to the financial statements include the company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Board has prepared forecasts for the period to 31 August 2017. These reflect the sales projections for new products coming on stream as a result of the Group's research and development activity and continued cost management. The Group meets its cash flow and borrowing requirements through an invoice discounting facility which is a 12 month rolling contract and a bank loan. The Board's forecasts indicate that the Group will continue to trade within its existing facilities with scope to further manage its cost base if necessary. The Board is confident that continued focus on research and development, new product development and sales & marketing will deliver growth. The Board considers that the Group will have adequate cash resources within its existing facilities to continue to trade for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Acquisition strategy

The Board plans to make acquisitions of businesses if the targets fit appropriately into the Group by strengthening our product range and existing technologies, offering new and attractive routes to market, high performance and motivated management and a proven track record.

The successful implementation of our acquisition strategy depends on our ability to identify targets, in completing the transactions, to achieve an acceptable rate of return, and to successfully integrate the business in a timely manner post acquisition.

An example of the acquisition strategy is the acquisition of Sentek Limited this year. The deal is earnings enhancing, creates a scientific instrument company with a strong top and bottom line and diversifies the company into a new area of instrumentation.

Summary

The Strategic report, which incorporates the Chairman's Statement, Chief Executive's Operating Report and Strategic review was approved by the Board of Directors, and signed on its behalf by:

 

Mike Creedon

Chief Executive Officer

21 July 2016

 

Consolidated income statement

For the year ended 30 April 2016

 

 

 

 

 

2016

 

2015

 

 

 

 

 

£000

 

£000

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

8,473

 

6,955

Cost of sales

 

 

 

 

(3,298)

 

(2,837)

Gross profit

 

 

 

 

5,175

 

4,118

 

 

 

 

 

 

 

 

Administrative expenses

 

 

 

 

(4,639)

 

(4,059)

Operating profit

 

 

 

 

536

 

59

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

 

Gross profit

 

 

 

5,175

 

4,118

 

Other administrative expenses

 

 

 

(4,437)

 

(3,725)

 

 

 

 

 

738

 

393

 

 

 

 

 

 

 

 

 

Reorganisation costs

 

 

 

(17)

 

(200)

 

Share based payments

 

 

 

(7)

 

(8)

 

 

 

 

 

 

 

 

 

Acquisition and fundraising costs

 

 

 

(178)

 

(126)

 

 

Operating profit

 

 

 

 

 

536

 

 

59

 

 

 

 

 

 

 

 

Finance payable and similar charges

 

 

 

 

(40)

 

 

(36)

 

Net financing expenses

 

 

 

 

(40)

 

(36)

 

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

496

 

23

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

75

 

21

 

 

 

 

 

 

 

 

Profit for the year

 

 

 

 

571

 

44

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic  earnings per share

 

 

 

 

1.17p

 

0.15p

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

1.15p

 

0.15p

 

 

 

 

 

 

 

 

 

 

All activities of the Group are classed as continuing.

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Consolidated statement of comprehensive income

For the year ended 30 April 2016

 

 

 

 

 

 

        2016

2015

 

 

 

 

 

    £000

£000

 

 

 

 

 

 

 

Profit for the period

 

 

 

 

571

44

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

 

 

 

82

40

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

 

 

653

84

 

 

 

 

 

 

 

 

 

Consolidated balance sheet

for the year ended 30 April 2016

 

 

 

 

2016

2015

Assets

 

 

£000

£000

Intangible assets

 

 

4,309

2,012

Property, plant and equipment

 

 

382

417

Deferred tax asset

 

 

67

105

 

 

 

4,758

2,534

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

 

1,378

982

Trade and other receivables

 

 

1,496

1,584

Current tax assets

 

 

132

5

Cash and cash equivalents

 

 

1,708

876

 

 

 

4,714

3,447

 

 

 

 

 

Total assets

 

 

9,472

5,981

 

 

 

 

 

Liabilities

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings

 

 

314

156

Trade and other payables

 

 

-

101

Deferred tax liability

 

 

377

174

 

 

 

691

431

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

 

1,447

1,452

Provisions for warranties

 

 

18

18

Borrowings

 

 

401

269

Current tax payable

 

 

151

-

 

 

 

2,017

1,739

 

 

 

 

 

Total liabilities

 

 

2,708

2,170

 

 

 

 

 

Net assets

 

 

6,764

3,811

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

 

642

329

Merger reserve

 

 

3,030

3,030

Share premium account

 

 

3,457

1,478

Own shares held by Employee Benefit Trust

 

 

(85)

(85)

Other reserves

 

 

81

73

Foreign exchange reserve

 

 

13

(69)

Retained earnings

 

 

(374)

(945)

 

 

 

 

 

Total equity

 

 

6,764

3,811

 

 

 

 

 

 

 

 

 

 

 

The financial statements were approved by the Board of Directors on 21 July 2016.

 

 

Ken Ford                                                                                                               Mike Creedon
Chairman                                                                                                              Chief Executive Officer

 

The accompanying accounting policies and notes form an integral part of these financial statements.

Company registration number: 6385396

 

Consolidated statement of cashflows

For the year ended 30 April 2016

 

 

 

 

2016

2015

 

 

£000

£000

Operating activities

 

 

 

Profit for the year

 

571

44

Depreciation

 

216

199

Amortisation

 

447

372

Finance costs and income

 

40

36

Increase in provision

 

 

1

Taxation in the income statement

 

(75)

(21)

Employee share based payments

 

8

8

Operating cash flows before movement in working capital

 

1,207

639

Increase in inventories

 

(166)

135

Changes in trade and other receivables

 

421

(298)

Changes in trade and other payables

 

(164)

(37)

Cash generated from operations

 

1,298

439

 

 

 

 

Interest paid

 

(40)

(26)

Income taxes received/(paid)

 

5

(4)

Cash generated from operating activities

 

1,263

409

 

 

 

 

Investing activities

 

 

 

Capital expenditure on fixed assets

 

(209)

(255)

Expenditure on development and other intangibles

 

(511)

(299)

Acquisition of subsidiaries, net of cash

 

(2,360)

-

Sale of property, plant and equipment

 

65

65

Net cash used in investing activities

 

(3,015)

(489)

 

 

 

 

Financing activities

 

 

 

Finance leases repayments

 

(21)

(33)

Loan stock repayment

 

 

-

Proceeds from bank borrowing

 

500

-

Repayment of borrowings

 

(189)

(30)

Issues of shares

 

2,292

466

Net cash from financing

 

2,582

403

 

 

 

 

Net changes in cash and cash equivalents

 

830

323

Cash and cash equivalents, beginning of year 

 

876

539

Foreign currency movements on cash balances

 

2

14

Cash and cash equivalents, end of year

 

1,708

876

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

 

Consolidated statement of changes in equity

For the year ended 30 April 2016

 

 

 

Share capital

Merger reserve

Foreign exchange

Share premium

Own shares held by EBT

Other reserves

Retained earnings

Total

 

 

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 April 2015

329

3,030

(69)

1,478

(85)

73

(945)

3,811

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued

313

 

 

1,979

 

 

 

2,292

 

 

 

 

 

 

 

 

 

 

 

Share based payments

 

 

 

 

 

  8

 

8

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with

owners

 

 

 

313

 

-

 

-

 

1,979

 

-

 

8

 

-

 

2,300

 

Profit for the year

 

 

 

 

 

 

571

571

 

Foreign exchange on consolidation of subsidiaries

 

 

 

 

 

 

 

 

82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82

 

Total comprehensive income for the period

 

 

82

 

 

 

571

653

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 April 2016

642

3,030

13

3,457

(85)

81

(374)

6,764

                                             

 

 

 

Share capital

Merger reserve

Foreign exchange

Share premium

Own shares held by EBT

Other reserves

Retained earnings

Total

 

£000

£000

£000

£000

£000

£000

£000

£000

 

Balance at 30 April 2014

278

3,030

(109)

1,063

(85)

65

(989)

3,253

 

 

 

 

 

 

 

 

 

Shares issued

51

 

 

415

 

 

 

466

Share based payments

 

 

 

 

 

8

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with owners

51

-

-

415

-

8

-

474

Profit for the year

 

 

 

 

 

 

44

    44

Foreign exchange on consolidation of subsidiaries

 

 

 

 

 

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40

Total comprehensive income for the period

 

 

40

 

 

 

44

84

 

 

 

 

 

 

 

 

 

Balance at 30 April 2015

329

3,030

(69)

1,478

(85)

73

(945)

3,811

 

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Notes to the consolidated financial statements

For the year ended 30 April 2016

 

1.   SEGMENT ANALYSIS

 

Management consider that there is a single operating segment encompassing Synoptics three marketing brands: Syngene, Synbiosis, Synoptics Health, the Atik brand which is used within Synoptics brands and sold externally to the amateur astronomy market, Osiris and Sentek. Each of the brands have a number of products and whilst sales performance of each brand are monitored, resources are managed and strategic decisions made on the basis of the Group as a whole. 

 

The geographical analysis of revenue by destination and non-current assets (excluding deferred tax) by location is set out below:

 

Revenue by destination of external customer

2016

2015

 

£000

£000

United Kingdom (country of domicile)

1,772

834

Europe

2,037

2,121

America

2,794

2,290

Rest of Asia

1,487

1,413

Rest of World

383

297

 

8,473

6,955

 

Non-current assets by location (excluding deferred tax)

2016

2015

 

£000

£000

United Kingdom

4,309

2,225

Portugal

58

60

America

134

144

 

 

4,501

2,429

 

 

 

 

2.   pROFIT BEFORE TAXATION

 

Profit for the year has been arrived at after charging/(crediting):

 

 

 

2016

2015

 

 

£000

£000

Amortisation other intangibles

 

81

60

Depreciation charge for year:

 

 

 

  Property, plant and equipment

 

199

164

  Property, plant and equipment held under finance leases

 

17

35

Research and development costs:

 

 

 

  Expensed as incurred  

 

239

338

  Amortisation charge

 

366

312

Auditor's remuneration Group:

 

 

 

  Audit of Group accounts

 

18

11

Fees paid to the auditor and its associates in respect of other services:

 

 

 

  Audit of Company's subsidiaries

 

45

35

  Tax advisory services

 

8

 

  Tax services

 

11

6

  Other services

 

-

3

Currency exchange (gains) and losses

 

(33)

40

Rental of land and buildings

 

165

128

Rental of other items

13

18

 

During the year the Board carried out a thorough review of the operations and structures of the Group which gave rise to £17k of costs incurred for the reorganisation (2015: £200k).

 

Additionally £179k of costs relating to work on acquisitions and fundraising (2015: £126k) were also incurred.

 

 

 

3.   TaxATION

 

 

2016

2015

 

 

£000

£000

Corporation tax:

 

 

 

Prior year corporation tax adjustment

 

(127)

(19)

 

 

(127)

(19)

Deferred tax expense

 

51

                          

              (2)

 

 

 

 

Income tax charge

 

(75)

(21)

 

                                                                                                                        

Reconciliation of effective tax rate

 

 

2016

2015

 

 

£000

£000

 

 

 

 

Profit on ordinary activities before tax

 

496

23

Profit on ordinary activities multiplied by standard rate of

Corporation tax in the UK of 20% (2015: 20.92%)

 

99

5

Effects of:

 

 

 

Expenses not deductible for tax purposes

 

5

               19

Additional deduction for R&D expenditure

 

(63)

-

Prior year tax adjustments

 

(127)

(19)

Transferred to/(from) tax losses

 

11

            (26)

 

 

 

 

 

 

(75)

(21)

 

The Group takes advantage of the enhanced tax deductions for Research and Development expenditure in the UK and expects to continue to be able to do so. 

 

 

4.   Borrowings

 

Borrowings are repayable as follows:

 

 

2016

2015

 

 

£000

£000

Within one year

 

 

 

Bank finance

 

378

248

Finance leases

 

23

21

 

 

401

              

             269

 

 

 

 

After one and within five years

 

 

 

Bank finance

 

264

83

Other loan

 

50

50

Finance leases

 

-

             23

 

 

314

            156

 

 

 

 

Total borrowings

 

587

425

 

Bank finance relates to amounts drawn down under the Group's invoice discounting facility          (£128k (2015: £148k)) and bank loans (£514k (2015: £183k)), secured by a fixed and floating charge over the Group's undertakings. The bank loans were taken out to finance

(a)  the acquisition of Opus Instruments, is repayable in monthly instalments and attracts interest at a rate of 6.1% over NatWest base rate.

(b)  the acquisition of Sentek Limited, is repayable in monthly instalments and attracts interest at a rate of 5.95%over NatWest base rate.

 

During the year to 30 April 2014 loan stock of £368k was converted into 833,334 ordinary shares of 1 pence at a market price of 15 pence each and cash of £254k and (included outstanding loan interest of £11k), £50k of which was loaned back to the Group by a shareholder. This has been included under "Other loan", and is repayable between June 2014 and June 2018. Interest is charged at a rate of 9%.

 

5.   Earnings per share

 

The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, excluding shares held by the Synoptics Employee Benefit Trust.  All earnings per share calculations relate to continuing operations of the Group.

 

 

 

Profit/(loss) attributable to shareholders

Weighted average number of shares

Basic earnings/(loss)  per share amount in pence

 

 

 

£000

 

 

Year ended 30 April 2016

 

 

571

48,697,240

1.17

Year ended 30 April 2015

 

 

 44

28,902,787

0.15

 

 

The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, as adjusted for dilutive share options. 

 

 

 

    

 

Diluted  earnings/(loss) per share amount in pence

Year ended 30 April 2016

 

 

 

            

1.15

Year ended 30 April 2015

 

 

 

 

0.15

 

The reconciliation of average number of ordinary shares used for basic and diluted earnings is as below:

 

 

 

2016

2015

Weighted average number of ordinary shares used for basic earnings per share

48,697,240

28,902,787

Weighted average number of ordinary shares under option

885,877

-

Weighted average number of ordinary shares used for diluted earnings per share

49,583,116

28,902,787

 

 

6.   FINANCIAL INFORMATION

 

The preliminary results for the year ended 30 April 2016 and the results for the year ended 30 April 2015 are prepared under International Financial Reporting Standards as adopted for use in the EU ("IFRS"). The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 30 April 2016.

 

The financial information set out above, which was approved by the Board on 21 July 2016, is derived from the full Group accounts for the year ended 30 April 2016 and does not constitute the statutory accounts given with the meaning of section 434 of the Company Act 2006. The group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2016, will be delivered to the Registrar of Companies in due course.

 

The Company's Annual General Meeting is due to take place at Botanic House, 100 Hills Road, Cambridge CB2 1PH on 23 September 2016 at 11:00 am.

 


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