Half Yearly Report - Amendment

RNS Number : 1295X
Software Radio Technology PLC
17 November 2014
 



The 'Half yearly report for the six months ended 30 September 2014' announcement for Software Radio Technology PLC released on Friday 14 November 2014 at 15:47 under RNS No 1178X has been re-released in the interests of market clarity.

 

The announcement text is unchanged and is reproduced in full below.

 

SOFTWARE RADIO TECHNOLOGY PLC

("SRT" or the "Group")

 

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

 

 

SRT, the AIM-quoted developer and supplier of maritime identification and tracking technologies, announces its unaudited interim results for the six months ended 30 September 2014 (the "Period").

 

 

Financial Highlights

 

·      Revenue of £5.4 million, a 71% increase over H1 2013/14

·      Profit before tax of £517,000 (H1 2013/14: loss of £434,000)

·      Profit after tax of £943,000, as a result of R&D tax credit (H1 2013/14: loss of £434,000)

·      Cash of £2.6 million at 30 September 2014

·      Stock of £5.0 million valued at cost and manufactured for pending orders

 

 

Operational Summary

 

·      Market penetration and market share targets achieved for the Period

·      Increasing demand from projects with conversion of major Middle East order and accelerated progression of existing projects

·      Considerable pipeline with several new significant opportunities

·      Increased revenue sources smoothing overall financial performance

 

Chairman's Statement

 

For the six months ended 30 September 2014, revenue and profit before tax were £5.4 million and £517,000 respectively.  As at 30 September 2014, the Group had cash of £2.6 million, with drawn down borrowings of £1.0 million and stock valued at cost of £5.0 million, manufactured for pending orders. 

 

The gross margin for the Period was 55%, reflecting the greater weighting of project business during the Period over lower margin core, OEM and module business.  We continue to expect our gross margin to average around 50% over a 12 month period.  Group cash overheads, inclusive of administration and research and development costs, but excluding amortisation and depreciation, increased to £2.6 million from £2.0 million in the corresponding period last year.  This was due to the impact of the acquisition of SRT Marine System Solutions Ltd (formerly GeoVs Ltd) in October 2013, together with increased investment in new product development.

 

During the Period, whilst our market penetration and market share targets were achieved, the generally subdued economic landscape resulted in sales derived from the non-mandated leisure and commercial market sectors for onboard AIS transceivers to be below our expectations.  However, this segment remains an important opportunity for SRT due to an expected long-term trend of AIS penetration matching that of radar.  Our investment in core technology, derivative products and relevant OEM and module customers ensures that sales from this segment will grow with general market demand in the future.

 

Demand from existing mandates such as in Russia and the EU Inland Waterways and Fisheries, both of which had final deadlines during calendar year 2014, is expected to be second half weighted due to enforcement schedules and therefore made little contribution during the Period.  The long pending USA mandate remains outstanding, but at the time of this statement the scheduled implementation appears likely to start to generate revenues for the Group during the second half.

 

Driven by a widespread requirement to track and monitor fishing fleets and other small commercial vessels, our project business was focused on the conversion of a major Middle East opportunity during the Period, accelerated progression of most existing project opportunities and the addition of several new opportunities.  Most of these are very significant projects and take time to reach their implementation stage and revenue generation for SRT.  However, we now have a considerable pipeline of these opportunities, some of which are expected to reach their implementation phase in the near future.  Again, our investments in technologies such as ABSEA and GeoVS dynamic 3D visualisation, coupled with established local customers, is now starting to bear fruit as demonstrated by the project conversion during the Period.  

 

For the first time our fledgling AtoN business started to make meaningful progress in respect of developing a pipeline of sales opportunities through an increasingly established sales network.  We have continued to invest in new product development both on the transceiver and display side, as well as commencing a sustained marketing programme to train our customers and educate the market.

 

During the second half we expect our core OEM and module business to remain flat, but see our projects and mandates business performing strongly due to existing and new mandates along with the conversion of some significant vessel tracking projects into their implementation phases.  We anticipate that AtoN will continue to make steady progress, and the recent launch of the first series of stand-alone GeoVS licences and ABSEA related data sales could see SRT generating its first recurring revenue.

 

Finally, we were pleased that during the period the broadening of our revenue sources across multiple market segments have smoothed our overall financial performance.  We have delivered a 71% increase in revenues compared to the same period last year despite one of our target segments experiencing a lull in its long-term growth trend.  Our leading position within the global AIS market will continue to drive the growth of our company and with a significant pipeline of future opportunities we look forward to a busy second half and beyond. 

 

 

Simon Rogers

Chairman

 

 

 

Contacts:




Software Radio Technology plc


Simon Tucker, Chief Executive Officer

+44 (0) 1761 409500


simon.tucker@softwarerad.com

WH Ireland Limited


Tim Feather

Liam Gribben

+44 (0) 113 394 6600



Yellow Jersey PR Limited

Dominic Barretto

www.yellowjerseypr.com

+44 (0)7768 537739

Anna Legge

+44 (0)7747 788221

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

 

 



Six months ended

 

Six months ended


Year

ended



30 Sep 2014

 

30 Sep 2013


31 Mar

 2014



Unaudited

 

Unaudited


Audited



 

 



 


 

£

 

£


£

 






Revenue 

5,410,060


3,164,711


6,110,359

Cost of sales

(2,430,584)


(1,666,429)


(3,479,159)

 

Gross profit

 

2,979,476

 

 

1,498,282

 

 

2,631,200

Administrative expenses

(2,462,516)


(1,935,916)


(4,141,823)

 

Operating profit / (loss)

 

516,960


 

(437,634)


 

(1,510,623)

Investment revenues

162


3,194


4,249

 

Profit / (loss) before income tax

 

517,122

 

 

(434,440)

 

 

(1,506,374)

Income tax credit

425,469


-


-

 

Profit / (loss) for the period

 

942,591

 

 

(434,440)

 

 

 (1,506,374)

 

Total comprehensive income / (loss) for the period

 

 

942,591

 

 

 

(434,440)

 

 

 

(1,506,374)

 

Earnings / (loss) per share:

Basic

Diluted

 

 

0.77p

0.75p

 

 

 

(0.37)p

(0.37)p


 

 

(1.3)p

(1.3)p

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2014

 

 



As at

 

As at

 

As at



30 Sep

 

30 Sep

 

31 Mar



2014

 

2013

 

2014



Unaudited

 

Unaudited

 

Audited



 

 

 

 

 


Notes

£

 

£

 

£

 







Assets







Non-current assets







Intangible assets


5,847,995


4,523,541


5,685,301

Property, plant and equipment


142,963


146,618


185,397

 

Total non-current assets

 

 

5,990,958

 

 

4,670,159

 

 

5,870,698








Current assets







Inventories


4,990,882


3,275,295


4,170,726

Trade and other receivables


2,824,440


1,745,594


2,620,825

Cash and cash equivalents


2,651,359


2,184,997


1,290,539

 

Total current assets

 

 

10,466,681

 

 

7,205,886

 

 

8,082,090








Liabilities







Current liabilities







Trade and other payables


(2,117,881)


(814,487)


(2,023,508)

Financial liabilities


(1,000,000)


-


(1,000,000)








Total current liabilities


(3,117,881)

 

(814,487)

 

(3,023,508)

 


 

 

 

 

 

Net current assets


7,348,800

 

6,391,399

 

5,058,582








 

Net assets

 

 

13,339,758

 

 

11,061,558

 

 

10,929,280








 







Shareholders' equity

 






Ordinary shares

4

127,453


115,920


119,003

Share premium


4,844,989


2,471,121


3,400,538

Other reserves

6

5,490,596


5,490,596


5,490,596

Retained earnings


2,876,720


2,983,921


1,919,143

 

Total shareholders' equity

 

 

13,339,758

 

 

11,061,558

 

 

10,929,280

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

 

 



Six months ended

 

Six months ended


Year ended



30 Sep 2014

 

30 Sep

 2013


31 Mar 2014



Unaudited

 

Unaudited


Audited



 

 



 


Notes

£

 

£


£








 







Cash generated from operating activities

 

5

 

491,341


 

1,426,010


 

509,013

Corporation tax received


425,469


-


-

 

Net cash  generated from operating activities

 

 

 

 

916,810

 

 

 

1,426,010

 

 

 

509,013








Investing activities







Expenditure on product development


(999,892)


(705,661)


(1,596,901)

Cash acquired


-


-


1,973

Purchase of property, plant and equipment


 

(9,161)


 

(73,922)


 

(163,171)

Interest received


162


3,194


4,249

 

Net cash used in investing activities

 

 

(1,008,891)

 

 

(776,389)

 

 

(1,753,850)

 

Cash (outflow) / inflow before financing

 

 

 

(92,081)

 

 

 

649,621

 

 

 

(1,244,837)

 







Financing activities







Short term loan


-


-


1,000,000

Net proceeds from issue of ordinary share capital


 

1,452,901


 

-


 

-

 

Net cash generated from financing activities

 

 

1,452,901

 

 

-

 

 

 

1,000,000

 

 

Net increase / (decrease) in cash and cash equivalents

 

 

 

1,360,820

 

 

 

649,621

 

 

 

(244,837)

 

Cash and cash equivalents at beginning of period


 

 

1,290,539


 

 

1,535,376


 

 

1,535,376

 

Cash and cash equivalents at end of period

 

 

 

2,651,359

 

 

 

2,184,997

 

 

 

1,290,539

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

 

 

 

 


Share

Capital

Share

Premium

Retained Earnings

Other Reserves

Total

 


 

 


 

 

 


£

£

£

£

£

 







 

Balance at 31 March 2013

115,920

2,471,121

3,401,211

5,490,596

11,478,848

 

 






 

Comprehensive loss for the period

-

-

(434,440)

-

(434,440)

 

Share based payment expense

-

-

17,150

-

17,150

 







 







 

Balance at 30 September 2013

115,920

2,471,121

2,983,921

 

5,490,596

 

 11,061,558

 

Comprehensive loss for the period

-

-

(1,071,934)

-

(1,071,934)

 

Shares issued on acquisition

3,083

929,417

-

-

932,500

 

Share based payment expense

-

-

7,156

-

7,156

 







 

 

 

 

 

 

 

 

Balance at 31 March 2014

119,003

3,400,538

1,919,143

5,490,596

10,929,280

 





 

 

 

Issue of equity share capital

8,450

1,512,550

-

-

1,521,000

 

Costs of issue of equity share capital

-

(68,099)

-

-

(68,099)

 

Share based payment expense

-

-

14,986

-

14,986



 

942,591

 

 

Comprehensive profit for the period

-

-

942,591

-

942,591



 

 







 


 

 

 

 

 

 

Balance at 30 September 2014

127,453

4,844,989

2,876,720

5,490,596

13,339,758

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

 

1.      Accounting Policies

           

Basis of preparation

 

The interim financial information in this report has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 31 March 2015.

 

Non-statutory accounts

 

Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 ("the Act"). The statutory accounts for the year ended 31 March 2014 have been filed with the Registrar of Companies. The report of the auditors on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act.

 

The financial information for the 6 months ended 30 September 2014 and 30 September 2013 is unaudited.

 

The interim financial statements will be available to download on the Company's website www.softwarerad.com.

 

Accounting policies

 

The accounting policies as applied by the group are the same as those applied by the Group in the consolidated financial statements for the year ended 31 March 2014 except that IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint Arrangements' and IFRS 12 'Disclosure of Interests in Other Entities' have been adopted from 1 January 2014. The adoption of these standards has had no material effect on the results of the Group.

 

 

2.      Earnings per share

 

The basic earnings per share have been calculated using the profit for the period of £942,591 (six months ended 30 September, 2013 - loss of £434,440; year ended 31 March, 2014 - loss of £1,506,374) divided by the weighted average number of ordinary shares in issue of 123,111,982 (six months ended 30 September, 2013, 115,919,774 and year ended 31 March, 2014 117,355,526).

 

During the 6 months ended 30 September 2014, the diluted earnings per share have been calculated using weighted diluted shares of 125,919,549. During the six months ended 30 September 2013 and year ended 31 March 2014 the group has incurred losses for the period and therefore there is no impact of the share options granted on diluted earnings per share.

 

3.      Income tax credit

 

         During the period, the Group received income tax credits of £425,469 in respect of its Research and Development activities.

 

 

4.      Called up share capital



30 Sep

 2014

 

30 Sep 2013


31 Mar 2014



Unaudited

 

Unaudited


Audited



£

 

£


£

 

Allotted: (Ordinary shares of 0.1p each):


 

127,453


 

115,920


 

119,003



 

 

 


 



 

 

 


 

Share capital reconciliation:


Number of shares

 

 


 








Shares outstanding at 31 March 2013 and 30 September 2013


115,919,774





 



 

 


 

Shares issued on acquisition


3,082,645

 

 


 

 



 

 


 

Shares outstanding at 31 March 2014


119,002,419





 



 

 


 

Placing July 2014


8,450,000

 

 


 




 

 


 

Shares outstanding at 30 September 2014


127,452,419





 

 

 

a)      The shares issued on acquisition were as consideration for the investment in SRT Marine System Solutions Limited (formerly Geovs Ltd).  The shares were issued at a price of 30.25p per share resulting in a total consideration of £932,500.

 

b)      The placing in July 2014 took place at 18p per share raising gross proceeds of £1,521,000 before costs of £68,099.

 

5.      Cash from operations



Six months ended

 

Six months ended


Year ended



30 Sep 2014

 

30 Sep 2013


31 Mar 2014



Unaudited

 

Unaudited


Audited



 

 



 



£

 

£


£



 

 

 


 

Operating profit / (loss)

 

516,960

 

(437,634)

 

(1,510,623)

Depreciation of property, plant and equipment


 

51,595


 

57,934


 

118,969

Amortisation of intangible fixed assets


837,198


563,624


1,221,656

Share-based payment charge


14,986


17,150


24,306

(Increase) / decrease in inventories


(820,156)


144,226


(751,205)

(Increase) / decrease in trade and other receivables


 

(203,615)


 

1,704,192


 

829,155

Increase / (decrease) in trade and other liabilities


 

94,373


 

(623,482)


 

576,755

 

 

Net cash generated from operations

 

 

 

491,341

 

 

 

1,426,010

 

 

 

509,013

 

 

6.      Statement of movement in shareholders' equity

 

Other reserves consist of: Capital Redemption Reserve £2,857 (2013: £2,857), Warrants Reserve £62,400 (2013: £62,400) and Merger Reserve £5,425,339 (2013: £5,425,339).  There were no movements during the period.


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