Final Results
Comeleon PLC
04 December 2002
FOR IMMEDIATE RELEASE 4 DECEMBER 2002
comeleon plc
FULL YEAR RESULTS
for the twelve months ended 30th September 2002
2001/2002; Continued growth and development of the business
comeleon plc is pleased to announce its final results for the twelve months
ended 30th September 2002.
Highlights:
Sales, Operational & Technical
• Rapid growth in order book in last 12 months
• Order intake for first 2 months of FY 2003 : £1.4m
• Continued penetration of US and European markets
• Diversification and Innovation
• Non-mobile production rising - three significant orders during period
- Philips for new 'Coolskin' shavers
- Geemarc Telecom : fixed line desk top telephone design
- Listawood : Computer mice
• ImageBox (desktop machine applying 3D dimensional images on products)
- Launched in September
- Major distribution licences signed in Europe and US worth over £2m
• Global patent application being filed through European Patent Office
Financial
• Sales for 12 months grown by 1081% to £4.5m
• Loss before tax on plan at £3268k
• Cash balances ahead of plan at £3m
• Successfully raised £4.2m for development and marketing of ImageBox
On prospects, Jon Pither, Chairman, said: 'The emphasis over the next year will
be on generating a positive bottom line performance by taking advantage of an
increasing geographical market and product portfolio and by offering technical
licensing opportunities to the potentially large and increasing customer base.
As a relatively young business we have succeeded in rising to many challenges
and although sales in the summer were disappointing comeleon is now close to
breakeven with a strong order book, rapidly diversifying sources of revenue and
ample cash resources.''
For further information, please contact:
Roy Stanley, Chief Executive Officer Today on: 020 7466 5000
Tim Robinson, Finance Director thereafter on: 01207 523333
comeleon plc www.comeleon-ir.co.uk
Tim Anderson
Lisa Baderoon Tel No: 0207 466 5000
Buchanan Communications Limited www.buchanan.uk.com
CHAIRMAN'S STATEMENT
Introduction
The company, in a relatively short space of time, has established a strong
position within its target markets. It is already recognised as a leader in
imaging technology, in the mobile phone market with companies such as Nokia, and
increasingly in the wider consumer products arena. For example, comeleon has
established a link with Philips as their exclusive imaging partner.
Our technology and its application is still new and developing at a fast rate
and the potential for our technology seems to increase almost daily. We are
working with a number of major manufacturers on new products for launch during
the next 12 months. A recent success has been the development during the past
year of the ImageBox which, for the first time, allows small businesses or
retailers to put full colour images onto a range of 3 dimensional objects, such
as computer mice, in less than 10 minutes. The ImageBox is now selling at an
encouraging rate.
In this rapidly changing environment we are learning fast. In the first half of
the calendar year sales moved up to over £600,000 per month, bringing comeleon
close to its monthly breakeven target of approximately £800,000. However, in
the third calendar quarter the mobile phone companies launched a number of new
models backed by high-profile marketing. This created two issues. The new
models were very successful and their production diverted plastic supplies to
the primary phone manufacturers creating a supply shortage of secondary product
for comeleon. Meanwhile consumption of older models declined. Both factors
contributed to a slow down for order intake during the summer months before
resuming budgeted levels in the first two months of the new Financial Year. We
have taken a number of measures to overcome the plastic supply problem and to
ensure it does not reoccur, but in the short-term it inhibited our sales growth.
As we diversify in terms of products, markets and geography, our dependence on a
single market area, such as mobile phones, will decrease.
Financial Review
Over the last 12 months the company has successfully grown sales by over 1000%.
The order book currently stands at about £3.5m and the book to bill ratio is
currently running at 1:3, a strong indication that growth is continuing and is
sustainable.
Sales for the 12 month period were £4.5m (2001: £0.4m) and losses before taxes
were £3268k (2001: £4702k). Sales in the second six months of the financial
year were £2.9m compared to £1.6m in the first six months. Capital expenditure
in the year was £1.1m. In July we successfully raised £4.2m through a placing of
2,545,758 New Ordinary Shares at a price of 165p per share with existing and
several new institutional investors. The funds raised were to support the
development and marketing of the Imagebox and Imaging Through Gloss (ITG)
projects.
The positive cash balance was £3m at the period end (2001 : £3.8m). In addition
the Company has available unused overdraft and lease facilities in excess of
£3m. Based on our current budgets the Directors believe that we have ample cash
resources to fund comeleon through to profitability.
Product Development/Sales and Marketing
comeleon is maturing and has made considerable progress during its first two
years. It has been successful in creating a strong brand awareness with its
customers. The company continues to work with a number of major manufacturers
on new products either launched into the market over the past year or planned
for coming months. This has broadened the product base of the business and
means that the company is now imaging a growing range of products.
The Company has agreed in principle with Philips an extension of its exclusivity
agreement to image shavers under which we have the potential to supply over a
quarter of a million items. In September we announced the third major order
outside the mobile phone arena. This was with Geemarc Telecom S.A. a French
telecoms equipment supplier with strong distribution links to major UK high
street retailers such as Dixons, Comet and John Lewis. The agreement is for the
supply of fixed line desktop telephones using its on-line design service.
Customers will be able to choose their designs in store or on-line.
There continues to be a high level of interest within the consumer electronics
market for the comeleon technology, for example from computer and games hardware
manufacturers. comeleon is making headway in establishing its reputation in
this demanding and exciting market.
Licensing currently only involves the ImageBox, but we are examining ways that
comeleon's manufacturing process can be integrated into other company's
production lines as an efficient means of furthering the penetration of our
technology into new markets. To this end we have entered a strategic alliance
with Virdev USA, a product development company who have close relationships
with a number of very large contract manufacturing companies
The development of the website and Internet capability of the business has been
enhanced by exclusive partnerships with key players in the e-commerce and
electronics industries. The principal aim has been to achieve maximum turnover
by entering collaborative deals that give partners a commission on internet
sales. Consumers may download their own image, which will be returned as an
imaged product. Five major telecom companies have adopted the Interactive Design
Studio (IDS) onto their websites. The IDS has been adapted to offer this
facility for a number of new products, including Geemarc products.
Listawood Limited, a company serving the corporate and promotional gift market
across Europe, signed contracts worth £1 million, c£300k of which fell in the
financial year under review and the balance over the next 18 months. The
contracts include the first distribution licence for comeleon's ImageBox under a
12 month exclusive agreement and an 18 month agreement to supply imaged
corporate mice in the UK and Europe.
ImageBox
In July 2002 the company raised £4.2 million through a placing with existing and
new institutional investors. The money was raised to fund the development and
marketing of the ImageBox, a development of the patented comeleon process.
The first model of the ImageBox has been successfully developed. This allows
small businesses or retailers, for the first time to put full colour images onto
a range of plastic, glass and ceramic 3 dimensional objects whilst the customer
is waiting. This product, which was only officially launched in September 2002,
has been exceptionally well received in the market. The company has already
concluded license deals for the distribution of the ImageBox across Europe and
the USA. The total value of these licenses exceeds £2 million, with each
distributor committed to delivery of a significant number of ImageBoxes.
Operations
The company continues to develop and enhance the comeleon technology. Our
manufacturing capacity has expanded over the past twelve months from 30,000 to
75,000 products per week. The company has invested further in its new sales,
manufacturing and design headquarters based at Tanfield Lea, County Durham,
which has 40,000 square feet of office and shop floor space. The training and
development of staff represents a major investment. comeleon was formally
recognised as an Investor in People in the early part of the year.
No major capital expenditure on plant and equipment is currently planned, as
there is sufficient capacity to achieve planned targets for the coming year.
The company is also in the process of implementing technical improvements that
will achieve significant manufacturing cost savings.
The company has Patent Pending on the comeleon process and has already
satisfactorily completed the UK Patent Office formalities. A global Patent is
now being filed through the European Patent Office.
Board Changes
Brendan Campbell was appointed to the Board as executive director responsible
for operations. Brendan has made a very valuable contribution to comeleon's
development since the company's conception. I would like to take this
opportunity to welcome him to the Board.
Prospects
Diversification from mobile phones is a prime objective. Last year we started
the process with the prestigious contract from Philips for shaver covers. We
are now entering the second phase with Philips. Moving into fixed-line
telephones with Geemarc takes us further into consumer applications.
Additionally, we are at the prototype stage with leading game console and data
modem manufacturers. Our imaging technology is ideally suited to these markets
and we are confident that the projects will develop into volume orders in due
course.
The ImageBox has got off to a remarkably fast start. Since September we have
received over 1,000 enquiries from Europe and US. Initial distribution
agreements are in place and we continue to negotiate further agreements. The
first ImageBoxes have been shipped and we have commitments for several hundred
over the next twelve months. We have carefully put together a package for the
small business or retailer, which enables them to recover their capital outlay
quickly. This formula, we believe, will lead to its rapid and enthusiastic
uptake.
The emphasis over the next year will be on generating a positive bottom line
performance by taking advantage of an increasing geographical market and product
portfolio and by offering technical licensing opportunities to the potentially
large and increasing customer base. As a relatively young business we have
succeeded in rising to many challenges and although sales in the summer were
disappointing comeleon is now close to breakeven with a strong order book,
rapidly diversifying sources of revenue, and ample cash resources.
I would like to thank all employees for their great contribution during the last
year and to investors for their continued support. The next year promises to be
positive and exciting for comeleon.
Jon Pither, Chairman
4th December 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the twelve months ended 30th September 2002
Year 18 months
ended ended
30 September 30 September
Note 2002 2001
£ £
TURNOVER 4,502,696 416,499
Cost of sales (3,404,025) (718,398)
Gross profit/(loss) 1,098,671 (301,899)
Administrative expenses (4,378,907) (3,666,725)
Exceptional Administrative expenses - (916,619)
Total Administrative expenses (4,378,907) (4,583,344)
Other operating income 50,000 30,000
OPERATING LOSS (3,230,236) (4,855,243)
Interest receivable and similar income 91,243 245,497
Interest payable and similar charges (128,728) (92,244)
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (3,267,721) (4,701,990)
Tax on loss on ordinary activities 24,679 -
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION (3,243,042) (4,701,990)
Equity minority interest - 68,664
RETAINED LOSS FOR THE FINANCIAL
YEAR/PERIOD WITHDRAWN FROM RESERVES (3,243,042) (4,633,326)
Basic loss per ordinary shares 3 (24.32p) (63.68p)
Basic loss per share before costs in connection
with flotation 3 (24.32p) (51.08p)
CONSOLIDATED BALANCE SHEET
As at 30th September 2002
2002 2001
£ £
FIXED ASSETS
Intangible assets 839,460 828,060
Tangible assets 2,317,683 1,699,107
3,157,143 2,527,167
CURRENT ASSETS
Stocks 455,797 189,837
Debtors 4,704,713 596,253
Cash at bank and in hand 2,985,734 3,847,856
8,146,244 4,633,946
CREDITORS: amounts falling due within one year (4,587,070) (1,251,129)
NET CURRENT ASSETS 3,559,174 3,382,817
TOTAL ASSETS LESS CURRENT LIABILITIES 6,716,317 5,909,984
CREDITORS: amounts falling due after
more than one year (716,912) (588,271)
PROVISION FOR LIABILITIES AND CHARGES - -
5,999,405 5,321,713
CAPITAL AND RESERVES
Called up share capital 153,021 126,613
Shares to be issued 555,469 666,619
Other reserve 111,150 -
Share premium account 12,483,869 8,589,543
Merger Reserve 615,614 615,614
Profit and loss account (7,919,718) (4,676,676)
TOTAL EQUITY SHAREHOLDERS' FUNDS 5,999,405 5,321,713
CONSOLIDATED CASH FLOW STATEMENT
For the twelve months ended 30th September 2002
Year 18 months
ended ended
30 September 30 September
Note 2002 2001
£ £
Net cash outflow from operating activities 2 (3,882,383) (3,725,825)
Returns on investments and servicing of finance (37,485) 153,253
Taxation - -
Capital expenditure & financial investment (435,491) (1,088,058)
Cash outflow before financing (4,355,359) (4,660,630)
Financing 3,493,237 8,497,167
(Decrease)/increase in cash in the period (862,122) 3,836,537
NOTES
1. Financial information
The financial information set out above does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985 for the year ended
30 September 2002 or the year ended 30 September 2001, but is derived from those
accounts. Statutory accounts for 2001 have been delivered to the Registrar of
Companies and those for 2002 will be delivered following the Company's Annual
General Meeting.
2. Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
£ £
Operating loss (3,230,236) (4,855,243)
Depreciation on tangible fixed assets 464,864 182,490
Amortisation of intangible fixed assets 70,267 30,741
Increase in stocks (265,960) (189,837)
Increase in debtors (4,083,781) (583,653)
Increase in creditors 3,162,463 1,023,058
Costs in respect of share options - 666,619
Net cash outflow from operating activities (3,882,383) (3,725,825)
3. Loss per ordinary share
Loss per share has been calculated using the weighted average number of shares
in issue during the relevant financial periods. The weighted average number of
shares in issue is 13,333,577 (2001 - 7,276,233), and the earnings, being loss
on ordinary activities after taxation and minority interest are £3,243,042 (2001
- £4,633,326).
No diluted loss per share has been disclosed as the share options are
anti-dilutive.
Loss per share before costs in connection with flotation have been calculated
using a loss on activities after taxation and minority interests of £3,243,042
(2001 - £3,716,707). This has been presented in addition to the basic earnings
per share as permitted by FRS 3 and FRS 14 since, in the opinion of the
directors, this presents a better like for like comparison of earnings of the
Group.
Year 18 months
ended ended
30 September 30 September
2002 2001
pence pence
Loss per share (24.32) (63.68)
Exceptional items:
Costs in respect of the flotation of the group - 3.44
Costs arising from share options issued in
connection with the flotation - 9.16
- 12.6
Loss per share before costs in connection with flotation (24.32) (51.08)
Copies of this report are being forwarded to all shareholders and further copies
are available from the Company's Registered Office at comeleon House, North
Tanfield Industrial Estate, Tanfield Lea, Co Durham. DH9 9NX.
This information is provided by RNS
The company news service from the London Stock Exchange ND
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Monday, 13th May 2024
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