Half Yearly Report

RNS Number : 2174L
Scientific Digital Imaging Plc
08 January 2016
 



 

Scientific Digital Imaging plc

("SDI", the "Company" or the "Group")

(AIM: SDI)

 

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2015

The Board of Scientific Digital Imaging plc, 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 unaudited interim results for the six months ended 31 October 2015.

 

Highlights

 

·      Revenue increased by 15% to £3,671,000 (2014: £3,188,000)

·      Adjusted operating profit* was £189,000 (2014: loss £20,000)

·      Operating profit was £29,000 (2014: loss £207,000)

·      Gross margin increased to 58.0% (2014: 57.6%)

·      New acquisition Sentek Limited ("Sentek") acquired on 28 October 2015. SDI paid £2,000,000. The acquisition was funded initially using existing cash resources and a debt facility, with the majority of the debt subsequently repaid by raising £2,500,000 in equity after the period end

·      Post period event - settlement following a general meeting of the successful equity fundraising of £2,500,000 (before expenses) to repay debt from acquiring Sentek, with the balance of net proceeds to be reinvested in the business

·      Artemis CCD continued to report increased levels of sales and profitability

 

* Before transaction costs, reorganisation costs and share based payments

 

Ken Ford, Chairman of SDI, commented:

 

"The Board anticipates that the recent acquisition of Sentek will be earnings enhancing in the first full year of ownership. The Board expects SDI to continue to make good progress over the remainder of the financial year as we continue to pursue our strategy of organic and acquisitive growth."

 

Enquiries

Scientific Digital Imaging plc                                                  01223 727144

Ken Ford, Chairman

Mike Creedon, CEO

www.scientificdigitalimaging.com 

 

finnCap Ltd                                                                              020 7220 0500

Ed Frisby/Simon Hicks - Corporate Finance

Mia Gardner- Corporate Broking

 

JW Communications                                                                07818 430877

Julia Wilson - Investor & Public Relations

 

 

Copies of the interim report are being sent to shareholders and can also be viewed on the Company's website: www.scientificdigitalimaging.com

 

 

About SDI:

 

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.

 

 

IMPORTANT NOTICES

No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

 

 

 

 

 

Interim 2015 highlights

 

·      Revenue increased by 15% to £3,671,000 (2014: £3,188,000)

·      Adjusted operating profit* was £189,000 (2014: loss £20,000)

·      Operating profit was £29,000 (2014: loss £207,000)

·      Gross margin increased to 58.0% (2014: 57.6%)

·      New acquisition Sentek Limited ("Sentek") acquired on 28 October 2015. SDI paid £2,000,000. The acquisition was funded initially using existing cash resources and a debt facility, with the majority of the debt subsequently repaid by raising £2,500,000 in equity after the period end

·      Post period event - settlement following a general meeting of the successful equity fundraising of £2,500,000 (before expenses) to repay debt from acquiring Sentek, with the balance of net proceeds to be reinvested in the business

·      Artemis CCD continued to report increased levels of sales and profitability

 

* Before transaction costs, reorganisation costs and share based payments

 

 

Synoptics

 

Synoptics designs and manufactures special-purpose, innovative instruments and systems for use mainly in the life science industry. The Company exploits digital imaging technologies for a range of disciplines and offers its products through four brands:

 

·      Syngene produces equipment for life scientists to image and analyse electrophoresis gels for DNA and protein analysis

·      Synbiosis produces equipment for microbiologists to automate microbial colony counting

·      Syncroscopy provides systems that apply digital imaging techniques to microscopy applications, such as life and material sciences

·      Synoptics Health focuses on imaging techniques within the hospital and clinical environments using the ProReveal system.

 

 

Artemis CCD

 

Artemis CCD designs and manufactures high sensitivity cameras for deep sky astronomical and life science imaging under the Atik brand.

 

 

Opus Instruments

 

Opus designs and manufactures an infrared camera, Osiris, which is used to examine works of art using infrared camera technology.

 

 

Sentek

 

Sentek manufactures and sells both reusable and single-use electrodes for the measurement of pH and conductivity of aqueous solutions. Applications range from laboratory use to manufacture of foods, beverages, pharmaceuticals and personal care products.



Chairman's statement

 

OVERVIEW

 

In the six-month period ended 31 October 2015, SDI acquired Sentek. The acquisition was completed on 28 October 2015 and therefore has very limited effect on the six month period results. Going forward, we expect that the acquisition of Sentek will be earnings enhancing in the first full year of ownership.

 

SDI revenue was £3,671,000 in the six months to 31 October 2015 (increased by £483,000 relative to revenue of £3,188,000 for the six months to 31 October 2014). The increase in revenue arose from Synoptics and Atik over the six-month period.

 

The established Atik brand continued to report increased sales revenue and profitability.

 

Basic and fully diluted earnings per share were both 0.04p (2014: basic and fully diluted loss 0.82p).

 

The Group's cash position reduced by £619,000 to £257,000 over the period, due to the utilisation of internal funds to contribute to the purchase of Sentek. After the period end, SDI raised £2,500,000 before expenses through the issue of equity and borrowed £500,000 from its bank, used to repay short-term debt funding the purchase of Sentek with the remainder increasing the Group's working capital reserves.

 

PRODUCT PORTFOLIO

 

Syngene remains the largest of the Synoptics brands. It has been continuing to improve its software and hardware, for a number of its products. We believe that these improvements will be attractive to our current and potential customers.

 

During the period, Synbiosis released a new version of ProtoCOL 3, including antibiotic susceptibility testing software. The new software is stimulating additional interest in ProtoCOL 3; Synbiosis believes that this will translate into sales growth in 2016. The division is currently developing a new system, ChromaZona, for antibiotic resistance testing in clinical laboratories. It is currently undergoing clinical certification as it will be used for clinical diagnostics and we can then seek to exploit new large and growing markets including hospital laboratories.

 

Synoptics Health has continued to sell ProReveal, a test to detect proteins on surgical instruments. The absence of an official limit of acceptable protein contamination on re-usable surgical instruments was previously a significant barrier to the adoption by the NHS of ProReveal. In May 2015, the UK Department of Health (DoH) published new guidelines that define a limit for acceptable protein contamination on re-usable surgical instruments (http://www.gov.uk/government/publicatons/ guidance-from-the-acdp-tse-risk-management-subgroup-formerly-tse-working-group). We expect the publication of these guidelines to accelerate adoption of ProReveal for this use. ProReveal is the only available CE-marked instrument capable of determining quantitatively the level of protein contamination on instruments. Furthermore, it has been shown to be sensitive below 50ng of protein and thus fulfils the DoH requirements for greater sensitivity for neurosurgical instruments.

 

Since acquiring Opus Instruments in 2014, Osiris camera sales have remained steady. The Board believes that it will continue to make a positive contribution to SDI's trading in 2016.

 

In the first half of the financial year, Atik reported growth in sales and profitability. Atik constantly analyses the market and seeks to develop cutting edge products to attract a wider customer base. The recently introduced Infinity camera marks a departure from its existing astro-imaging products which are intended to collect data that is subsequently processed to a finished picture. The Infinity is used with a telescope to provide astronomers with near real time visualisation of faint deep sky objects such as galaxies and nebulas. The camera is proving particularly popular with astronomers who had been reluctant to try astro-imaging due to the steep learning curve, as well as those involved with outreach projects. We believe that the Infinity camera will help introduce the Atik brand to a new group of astronomers and provide an easy entry point to the rewarding astro-imaging hobby market.

SDI's latest acquisition Sentek differs in its business profile from SDI's other established divisions. Sentek makes and sells consumables rather than equipment and software, so it has a stream of repeat business. Sentek's products are electrodes that have a working life of only six to twelve months and need to be replaced regularly. Sentek also produces a single-use electrode for bioprocessing applications, a fast-growing area in pharmaceutical and biotech companies. The business has been profitable since incorporation in 1991; it has had a revenue CAGR* over the past five years of 9% and a five-year profit before tax CAGR of 33%.

 

ACQUISITIONS

 

SDI is actively seeking further profitable scientific and technology based companies to continue its buy and build strategy.

 

OUTLOOK

 

The Board anticipates that the recent acquisition of Sentek will be earnings enhancing in the first full year of ownership. The Board expects SDI to continue to make good progress over the remainder of the financial year as we continue to pursue our strategy of organic and acquisitive growth.

 

Ken Ford, Chairman

8 January 2016

 

 

 

                       

 



Consolidated income statement

Unaudited for the six months ended 31 October 2015

 


Note

6 months to

31 October

2015

Unaudited

£'000

6 months to

31 October

2014

Unaudited

£'000

12 months to

30 April

2015

Audited

£'000

Revenue


3,671

3,188

6,955

Costs of sales


(1,541)

(1,353)

(2,837)

Gross profit

Administrative expenses


2,130

(1,941)

1,835

(1,855)

4,118

(3,725)

Adjusted operating profit/(loss)

 

Reorganisation costs

Share based payments

Acquisition and fundraising costs

Aborted transaction costs


189

 

(17)

(4)

(139)

-

(20)

 

(51)

(5)

-

(131)

 

393

 

(200)

(8)

(126)

-

Operating profit/(loss)


29

(207)

 

59

Net financing expense


(16)

(20)

(36)

Profit/(loss) before taxation


13

(227)

23

Income tax expense


-

-

21

Profit/(loss) for the period


13

(227)

44

Earnings per share




 

Basic earnings/(loss) per share

2

0.04p

(0.82p)

0.15p

Diluted earnings/(loss) per share


0.04p

(0.82p)

0.15p

 

 

Consolidated statement of comprehensive income

Unaudited for the six months ended 31 October 2015

 


6 months to

31 October

2015

Unaudited

£'000

6 months to

31 October

2014

Unaudited

£'000

12 months to

30 April

2015

Audited

£'000

Profit/(loss) for the period

13

(227)

44

Other comprehensive income

Items that will be reclassified subsequently

to profit and loss



 

Exchange differences on translating foreign operations

-

38

40

Total comprehensive profit/(loss) for the period

13

 (189)

84

 



Consolidated balance sheet

Unaudited at 31 October 2015

 


Note

31 October

2015

Unaudited

£'000

31 October

2014

Unaudited

£'000

30 April

2015

Audited

£'000

Assets




 

Non-current assets




 

Property, plant and equipment


367

379

417

Intangible assets


4,103

2,064

2,012

Deferred tax asset


105

99

105



4,575

2,542

2,534

Current assets





Inventories


1,159

1,059

982

Trade and other receivables


1,244

1,344

1,584

Current tax assets


-

-

5

Cash and cash equivalents


365

316

876



2,768

2,719

3,447

Total assets


7,343

5,261

5,981

Liabilities




 

Current liabilities

Overdraft


 

108

 

-

 

-

Trade and other payables


1,432

1,527

1,452

Provisions for warranty


19

17

18

Borrowings

3

1,343

143

269

Current tax payable


-

-

-



2,902

1,687

1,739

Non-current liabilities




 

Borrowings

3

372

198

156

Trade and other payables


73

138

101

Deferred tax liability


174

169

174



619

505

431

Total liabilities


3,521

2,192

2.170

Net assets


3,822

3,069

3,811

Equity




 

Share capital


329

278

329

Merger reserve


3,030

3,030

3,030

Share premium account


1,472

1,063

1,478

Foreign exchange reserve


(72)

(71)

(69)

Own shares held by Employee Benefit Trust


(85)

(85)

(85)

Other reserves


80

70

73

Retained earnings


(932)

(1,216)

(945)

Total equity


3,822

3,069

3,811

 



 

Consolidated statement of cash flows

Unaudited for the six months ended 31 October 2015

 


6 months to

31 October

2015

Unaudited

£'000

6 months to

31 October

2014

Unaudited

£'000

12 months to

30 April

2015

Audited

£'000

Operating activities



 

Profit/(loss) for the period

13

(227)

(44)

Depreciation and amortisation

256

282

571

Finance costs and income

16

20

36

Taxation expense in the income statement

-

-

(21)

Increase in provisions

1

-

1

Employee share based payments

4

5

8

Operating cash flow before movement in working capital

290

 

80

639

(Increase)/decrease in inventories

(177)

58

135

Changes in trade and other receivables

340

(52)

(298)

Changes in trade and other payables

(48)

103

(37)

Cash generated from operations

405

189

439

Interest paid

(16)

(20)

(26)

Income taxes (received)/paid

5

(35)

(4)

Cash generated from operating activities

394

134

409





Cash flows from investing activities




Capital expenditure on fixed assets

(97)

(62)

(255)

Expenditure on development and other intangibles

(137)

(159)

(299)

Acquisition of subsidiaries, net of cash

(2,111)

-

-

Proceeds from sale of property, plant and equipment

 

40

 

-

65

Net cash used in investing activities

(2,305)

(221)

(489)

Cash flows from financing activities




Movement in finance leases

(13)

(12)

(33)

Share issue costs

(6)

-

-

Proceeds from share issue

-

-

466

Share based payment reserve

7

-

-

Repayment of borrowings

(50)

(118)

(30)

Other loans

100

-

-

Proceeds from bank borrowings

1,253

-

-

Net cash from/(used in) financing activities

1,291

(130)

403

Net (decrease)/increase in cash and cash equivalents

(620)

(217)

323

Cash and cash equivalents, beginning of period

 

876

 

539

539

Foreign currency movements on cash balances

 

1

 

(6)

14

Cash and cash equivalents, end of period

257

316

876


Balance at 1 May 2015

329

3,030

1,478

(85)

73

(69)

(945)

3,811

Share based payments

Fundraising costs

-

-

-

-

-

(6)

-

-

7

-

-

-

-

-

7

(6)

Transactions with owners

-

-

(6)

-

7

-

-

1

Profit for the period

-

-

-

-

 

-

-

13

13

Foreign exchange on consolidation of subsidiary

-

-

-

-

-

(3)

-

(3)

Total comprehensive income for the period

-

-

-

-

-

(3)

13

10

Balance at 31 October 2015

329

3,030

1,472

(85)

80

(72)

(932)

3,822

 

Balance at 1 May 2014

278

3,030

1,063

(85)

65

(109)

(989)

3,253

Share based payments

-

-

-

-

5

-

-

5










Transactions with owners

-

-

-

-

5

-

-

5

Loss for the period

-

-

-

-

-

-

(227)

(227)

Foreign exchange on consolidation of subsidiary

-

-

-

-

-

38

-

38

Total comprehensive income for the period

-

-

-

-

-

38

(227)

(189)

Balance at 31 October 2014

278

3,030

1,063

(85)

70

(71)

(1,216)

3,069

 

Own shares

held by EBT

£'000

278

3,030

1,063

(85)

65

(109)

(989)

3,253

51

-

415

-

-

-

-

466

-

-

-

-

8

-

-

8

-

-

-

-

-

-

-

-

-

-

-

-

329

3,030

1,478

(85)

73

(69)

(945)

3,811


Notes to the interim financial statements

Unaudited for the six months ended 31 October 2015

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

 

Reporting entity

Scientific Digital Imaging plc (the "Company"), a public limited company, is the Group's ultimate parent. It is registered in England and Wales. The consolidated interim financial statements of the Company for the period ended 31 October 2015 comprise the Company and its subsidiaries (together referred to as the "Group").

 

Basis of preparation

The unaudited consolidated interim financial statements are for the six months ended 31 October 2015. These interim financial statements have been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRS). The financial information for the year ended 30 April 2015 is based upon the audited statutory accounts for that year. The consolidated interim financial information has been prepared on the historical cost basis. The consolidated interim financial statements are presented in British pounds (£), which is also the functional currency of the ultimate parent company.

 

The consolidated interim financial information was approved by the Board of Directors on 7 January 2016.

 

The financial information set out in this interim report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The figures for the year ended 30 April 2015 have been extracted from the statutory financial statements of Scientific Digital Imaging plc which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the six months ended 31 October 2015 and for the six months ended 31 October 2014 has not been audited.

 

 

1. Principal accounting policies

The principal accounting policies adopted in the preparation of the condensed consolidated interim information are consistent with those followed in the preparation of the Group's financial statements for the year ended 30 April 2015.

The accounting policies have been applied consistently throughout the Group the purposes of preparation of these interim financial statements.



 

2. Earnings per share

The calculation of the basic earnings/(loss) per share is based on the profits/(losses) 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 profit/ (loss) per share calculations relate to continuing operations of the Group.

 

 

 

Profit/(Loss)

 attributable to

shareholders

£'000

Weighted

average

number of

shares

Basic

earnings/(loss)

per share

amount in

pence

Period ended 31 October 2015

13

32,912,308

0.04

Period ended 31 October 2014

(227)

27,777,308

(0.82)

Year ended 30 April 2015

44

28,902,787

0.15

 

The calculation of 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, dilutive deferred consideration and shares held by the Synoptics Employee Benefit Trust.


Diluted

(loss)/earnings

 per share

 amount in

pence

Period ended 31 October 2015

0.04

Period ended 31 October 2014

(0.82)

Year ended 30 April 2015

0.15

 

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

 


31 October

2015

31 October

2014

30 April

2015

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

32,912,308

27,777,308

28,902,787

Weighted average number of ordinary shares under option

-

-

-

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

32,912,308

27,777,308

28,902,787

 

All share options are nondilutive at 31 October 2014, 30 April 2015 and 31 October 2015. Such options could potentially dilute basic earnings per share in the future.

 

 

 

3. Borrowings


31 October

2015

£'000

31 October

2014

£'000

30 April

2015

£'000

Within one year:



 

Bank finance

Other loan

1,167

150

100

-

248

-

Finance leases

26

43

21


1,343

143

269

After one year and within five years:




Bank finance

367

133

83

Other loan

-

50

50

Finance leases

5

15

23


372

198

156

Total borrowings

1,715

341

425

 

The Group utilises short-term facilities to finance its operation. The Group has one principal banker with an invoice discounting facility of up to £500,000. At the end of the period the Group had utilised £80,668 of this facility.

 

Scientific Digital Imaging plc

Beacon House
Nuffield Road
Cambridge
CB4 1TF
UK

Telephone:        +44 (0)1223 727144
Fax:                  +44 (0)1223 727101

Email:               info@scientificdigitalimaging.com

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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