Preliminary Results

Screen Technology Group plc 20 April 2006 For immediate release 20 April 2006 Screen Technology Group plc ("Screen Technology" or "the Company") 2005 PRELIMINARY RESULTS Screen Technology Group plc ("Screen Technology" or "the Company" or "the Group") the designer and manufacturer of revolutionary high-resolution large- screen displays for high ambient light environments announces its first consolidated results for the year ended 31 December 2005. Highlights • Successful flotation in July 2005 raising £7.1m for production expansion • Successful launch of ITrans to international market • First displays shipped to value added resellers • Orders placed for high speed production equipment • Expanded and strengthened management team Key financial information • Sales £115,500 in line with expectations • Consolidated operating loss before tax £1.9 million • Cash at bank at 31 December 2005 £5.6 million Peter Smyth, Non-executive Chairman, said today: "This year has been a very exciting one for Screen Technology. We have moved from being a small research and development based company to being a quoted manufacturing company. Since our flotation in August of 2005, the workforce has nearly doubled and we have shipped our first products. We are now concentrating on building up our production resources to capitalise on the growing demand for ITrans." For more information please contact Screen Technology Group plc 01223 559600 Tom Jarman, CEO Simon Barton, Finance Director www.screentechnology.com Buchanan Communications 0207 466 5000 Isabel Podda Chairman's statement 2005 has seen a major step forward for Screen Technology. The year has seen the development of the Group's technology into a product that can be manufactured on a commercial scale, the flotation of the business on AIM, the launch of ITrans on the international market to considerable acclaim from the display industry, an expansion and strengthening of the management team, the first products shipped to customers and the commencement of our planned substantial investment in production capacity. The Group's key product, ITrans, remains the only solution capable of producing high-resolution, large seamless displays viewable over short or long distances in high brightness environments. The commercial display industry has continued to show very strong interest in ITrans. Since the flotation the Group's focus has been to increase production capacity to deliver commercial quantities to satisfy the levels of demand being expressed by the marketplace. By the end of 2005, orders had been placed for two additional production machines and two further machines have been ordered since the year end. I was delighted to join the Screen Technology team prior to its flotation in July 2005. Simon Barton joined the executive board as Finance Director at the time of the flotation and his extensive experience has made a significant contribution to the management of the business. Tony Kellett however resigned as CEO in April 2006 and has been replaced by Tom Jarman, previously a non-executive director of the Group. I would like to thank Tony for his contribution to Screen Technology's development. Screen Technology's management board has been substantially enhanced and strengthened during 2005. Alex Suszko joined the management board as Production Director at the end of 2005. His many years of manufacturing experience have been invaluable in driving through the changes in the business from being a research based technology company to become a manufacturing company delivering quality product in volume. Andy Holmes joined the management board as Commercial Director in March 2005. His extensive knowledge of the display industry and contacts around the world have been valuable in raising the profile of Screen Technology and providing the platform for sales growth. Staff numbers have increased significantly since the beginning of 2005 and rapid growth is continuing and I would like to thank all our staff for their hard work and dedication during the period. Business review Flotation On 28 July 2005, Screen Technology Group plc was formed with the acquisition of Screen Technology Limited and the Group floated on the AIM market on 1 August. This move was made possible with the almost simultaneous launch of ITrans, the Group's revolutionary high-brightness, high-resolution large seamless display technology, the culmination of nine years of development. First discussions with key prospective customers in the display industry demonstrated the potential of the technology and it became clear that the top priority was to increase production capacity to meet the demand being expressed. £7.1 million was raised (net of expenses) from institutional investors and private individuals of which £2.0 million came from MTI Partners, one of Screen Technology's early backers. These funds have been earmarked principally for expenditure on new production machinery to take the Group's existing low volume capacity to a high-volume fully automated production facility. Funds were also required for an increase in staff numbers as the business grows and also to fund a continuing product development process to keep ITrans at the forefront of commercial large screen display technology. Expansion in production capacity At the time of the flotation in August 2005, Screen Technology had one machine capable of low volume production of ITrans tiles that go to make a seamless ITrans display. This machine produced a number of demonstration units and the ITrans product was successfully launched to an expectant display industry in September 2005. Further demonstration units have been produced and also the first production units were shipped in December 2005. These production units have been shipped to value-added resellers, Screen Technology's key route to market, in Dubai, Singapore and the UK where they are being used to build awareness of the ITrans product with end-users such as airports, railway stations and shopping malls. Between the flotation and the end of the year, the Company placed orders for a second low-volume machine and for the first of the Group's high-speed production machines. The low volume machine was delivered in February 2006 and has begun to contribute towards tile production but the fundamental shift in production capacity foreseen at the time of the flotation will not occur until the delivery of the first high-speed machine, which is expected to be in the mid to late summer of 2006. Since the end of 2005, two further orders have been placed for high-speed machines with a total value of almost £2 million. These will have a significant effect on production capacity towards the end of 2006 and would enable the Group to meet our expected increase in sales in 2007. Trading in 2005 As disclosed in the Group's trading statement in November 2005, Screen Technology has been concentrating primarily on enhancements to production processes and on the manufacture, using the limited production resources available to it, of demonstrator units for use with potential customers and at international display industry exhibitions. Some small sales were however shipped to customers in December 2005 and the Company is therefore pleased to announce sales of £115,500 for the period ended 31 December 2005. Outlook for 2006 The Board of Screen Technology is looking forward with considerable confidence to 2006, which promises to be another exciting year. The expected delivery of three high-speed production machines during the year will transform the Group's production capacity from a small-scale low-volume operation to a high-speed automated production facility. The Group has, to date, been reluctant to accept large orders as its limited production capacity would inevitably have meant long lead-times leading to frustration amongst customers keen to get hold of the very latest large display technology. The expected increases in production capacity mean however that the Group is beginning to accept larger orders. As disclosed last month, Screen Technology continues to see strong demand from the display industry for ITrans and, has recently received firm orders in excess of £0.5 million to commence shipment in the second half of the year. The Group continues to develop relationships with value-added resellers ("VARs") around the world. These VARs are a key route to market for Screen Technology as they provide the local contacts and support network for Screen Technology's products. The first products shipped in December 2005 were to VARs and in 2006 the Board expects VARs to be a significant source of orders. A key development for 2006 will be the launch of a modular product allowing screens of any size to be shipped easily to the customer and then assembled and installed quickly on site. The modular product design is already in progress and the board expects it to be launched during the third quarter of 2006. Financial review Overview These consolidated results are presented on a merger accounting basis. Although the Group was formed on 28 July 2005 with the acquisition of Screen Technology Limited by Screen Technology Group plc, Screen Technology Group plc then floated on AIM on 1 August 2005, the results are consolidated as though the merger took place at the beginning of 2005, presenting a full year's results for Screen Technology Limited. Comparable figures for the year ended 31 December 2004 are for Screen Technology Limited alone. Sales for the year were concentrated in December 2005 as the first production units were shipped just before the year end. These were demonstrator units shipped to key value-added resellers in the UK and overseas. The display industry is truly international with very strong interest being shown in the UK, Europe, the US and the Middle and Far East. The Group expects to focus initially on Europe and the Middle and Far East in 2006 with expansion into the US later in 2006. The consolidated loss for the year after the flotation represents the continuing development of ITrans resulting in the launch of a commercial product in July 2005. After the flotation, further significant expenditure using the funds raised was incurred in moving towards full commercial sales production and the losses for the five months after the flotation represent 60 per cent. of the losses for the whole year. This has involved an increase in staffing levels, from 12 at the beginning of 2005 to 23 by the end of December and large increase in the employment of design consultancies and additional external engineering resources to take the original low volume development machinery to a commercial scale. The loss for the year contains a number of costs that are reflective of Screen Technology Limited's status in the first half of the year as a company backed by private funds and without significant cash resources. Finance costs include interest payable and the costs of negotiating and securing loan funding which was no longer required as a result of the flotation. Cash resources The cash position of the business is strong. The £1.65 million of loan stock outstanding at the beginning of 2005 was converted into shares in Screen Technology Limited prior to the flotation. £7.1 million net of expenses was raised at the time of the flotation and the year end cash position was £5.6 million. The bulk of cash expenditure during the period has been on production machinery with over £350,000 of capital expenditure since August 2005. That investment was principally stage payments on machines being designed and built for Screen Technology. One of the machines has since been delivered with a second machine due to be delivered by the mid to late summer of 2006. Since the year end, the Group has committed to further capital expenditure of almost £2.0 million for two more high-speed tile production machines for delivery in late 2006. The high-speed machines represent a significant cash commitment but the board expects that they will quickly generate cash as production capacity becomes available. The Group does not expect to need to raise any further cash from external sources before the Group becomes cash positive. The Group moved to new premises just after the year end at a very attractive rental. The balance sheet at the year end includes a substantial prepayment representing the entire rental on the premises for the 18 months that the premises are available. This enabled the Group to secure the premises during this 18 month period which allows time for new purpose built premises to be constructed close to Cambridge. Consolidated profit and loss statement (unaudited) For the year ended 31 December 2005 Year ended 31 December 2005 2004 Screen Screen Technology Technology Group plc Limited Consolidated £ £ Turnover 115,500 - Cost of sales (65,633) - ------------- Gross profit 49,867 - Administrative expenses (2,063,511) (1,239,104) Other operating income - 127,589 ------------- ------------- Operating profit / (loss) (2,013,644) (1,111,515) Interest receivable and similar income 115,840 2,705 Interest payable and similar charges (43,806) (846) ------------- ------------- Loss on ordinary activities before taxation (1,941,610) (1,109,656) Tax on loss on ordinary activities - - ------------- ------------- Loss for the financial year (1,941,610) (1,109,656) ------------- ------------- Consolidated balance sheet (unaudited) at 31 December 2005 31 December 31 December 2005 2004 Screen Screen Technology Technology Group plc Limited Consolidated £ £ Fixed assets 364,585 54,604 Current assets Stock & WIP 89,963 - Debtors 475,811 131,170 Cash at bank and in hand 5,646,504 14,406 Creditors (amounts falling due within one year) Convertible redeemable loan stock - (1,650,000) Other creditors (478,502) (61,689) ------------- ------------- Net current assets 5,733,776 (1,566,113) ------------- ------------- Total assets less current liabilities 6,098,361 (1,511,509) Creditors (amounts falling due after more than (7,273) - one year) ------------- ------------- Net assets 6,091,088 (1,511,509) ------------- ------------- Capital and reserves Called up share capital 1,624,449 - Share premium 6,682,989 - ------------- 8,307,438 - Other reserves 7,602,856 6,366,087 Profit and loss account (9,819,206) (7,877,596) ------------- ------------- 6,091,088 (1,511,509) ------------- ------------- Consolidated cash flow statement (unaudited) for the year ended 31 December 2005 Year ended 31 December 2005 £ Operating profit (2,013,644) Depreciation 18,347 Loss on disposal of fixed assets 32,600 (Increase)in stocks (89,963) (Increase)in debtors (344,641) Increase in creditors 414,509 ------------- Net cash outflow from operating activities (1,982,792) Returns on investments and servicing of finance 72,034 Capital expenditure and financial investment (351,351) ------------- Cash (outflow) before management of liquid resources and financing (2,262,109) Flotation proceeds 7,946,697 Other movements in reserves (633,018) Share subscription (Screen Technology Limited) 80,528 Issue of convertible loan stock 500,000 ------------- Increase in cash for the period 5,632,098 ------------- Notes to the preliminary statement of results 1. Earnings per share Earnings per share are calculated using a weighted average number of shares on the assumption that the shares issued by Screen Technology Group plc on the merger with Screen Technology Limited have been in issue since the beginning of the year. Shares in issue after the merger with Screen Technology Limited 19,875,126 Shares issued on flotation 12,613,804 Weighted average number of shares 25,162,556 Loss per share 7.7p 2. Merger accounting The financial information set out above is presented on a merger accounting basis consistent with FRS6, treating Screen Technology Group plc as having acquired Screen Technology Limited at the beginning of the year. Comparable figures for the year ended 31 December 2004 are for Screen Technology Limited alone. In the consolidated cash flow statement, the flotation proceeds are shown before expenses. The movement on reserves of £633,018 represents that element of the expenses of the flotation set against the share premium account. 3. Financial information The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2005 and 31 December 2004, but is derived from them. The accounting policies set out in the 2004 accounts have been applied in preparing the information for 2005. Statutory accounts for Screen Technology Limited for 2004 have been delivered to the Registrar of Companies. The Auditors have reported on the accounts to 31 December 2004. Their report was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. This preliminary announcement was approved by the Board on 20 April 2006. The Company will hold its Annual General Meeting in July 2006, following which the statutory accounts for 2005 will be posted and delivered to the Registrar of Companies. The Annual Report and Accounts will be posted to shareholders in June 2006. Copies of the Annual Report and Accounts and of this announcement will be available at the Company's registered office, The Maris Centre, Hauxton Road, Cambridge, CB2 2LQ. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Softcat (SCT)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today