Preliminary Results
Timestrip PLC
22 May 2007
TIME.L
Timestrip Plc
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
Timestrip Plc ('Timestrip') develops, manufactures and sells two technologies in
the field of time and temperature measurement. The patented Timestrip smart
label monitors for how long perishable food and other replaceable products have
been open or in use. The patent pending iStrip undergoes an irreversible colour
change when exposed to freezing temperatures and is designed to indicate that
the efficacy of products, such as vaccines, has been compromised.
Key points:
• Results in line with the trading update issued 2nd February 2007
• Significant progress achieved towards commercialising Timestrip's technology
• Deals and alliances have been announced during the period under review with;
• Henkel
• Whirlpool
• Curver
• Plastek
• CCL Label
• Hygolet
• DryandStore
• PATH
• Advanced discussions and trials underway with other major international
companies.
• Steady progress across core targeted international markets
Paul Freedman, Timestrip's joint CEO, commented:
'During the period under review, Timestrip has achieved some major milestones
with a number of international companies looking to adopt the technology. We
have seen some encouraging uptake of the technology in the appliance and
consumables market, most notably with Whirlpool and with our existing customers
such as Hamilton Beach/Febreze. Alliances with leading packaging companies are
helping to accelerate progress in the food and pharmaceutical markets and we are
optimistic that the deal pipeline currently in place is capable of generating
significant ongoing revenues for the Group. We look forward to updating the
market with further progress in due course.'
For further information:
Paul Freedman, Joint CEO and founding Director, Timestrip 01462 440 700
Shane Dolan, Biddicks 020 7448 1000
Fergus Marcroft, Evolution Securities 020 7071 4300
TIMESTRIP PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
The Company has reached an exciting point in its drive towards widespread
adoption of its core technology, the Timestrip(R), and has also made excellent
progress with its more recent development, the iStrip(R).
During 2006 we have continued to focus on improving our technology through
extensive R&D activity. As a result, Timestrip is now more versatile, easier to
integrate into packaging and products, and less expensive to manufacture.
Recently announced strategic partnerships with global packaging companies
Plastek and CLL Label are the direct consequence of these developments and the
ability to deliver fully customised packaging solutions will accelerate the
widespread adoption of the technology in key markets.
During 2006, Timestrip has demonstrated its ability to satisfy the technology
requirements and production standards of major international customers and has
established the foundation for significant growth. We are greatly encouraged by
the range of potential customers that the Company is now dealing with and the
strength of many of these relationships.
The Company is focused on securing large contracts with major corporations and
lengthy evaluation periods and decision-making processes are unavoidable. The
deal pipeline is continually reviewed and despite the seemingly lengthy process,
we remain very confident of securing some major contracts at the end of it.
Financial Results
We have seen a near four-fold increase in turnover for the year to 31st December
2006 of £378,975 (2005 - £103,303). At the pre-tax level the Company recorded a
loss of £1,494,502 (2005 - £1,325,343 as restated) including a charge relating
to FRS20 amounting to £113,966 (2005 - £66,308 as restated). The resultant loss
per share is 0.46p (2005 - 0.52p). The liquidity position remains healthy with
cash resources in excess of £2.5m as at end December 2006.
Current Trading and Prospects
Although sales in the first quarter of 2007 have remained at similar levels to
previous quarters, some significant milestones have been reached in a number of
key projects, which we are confident will convert into significant levels of
revenue in the near future. These milestones include the successful completion
of product testing, agreement on graphics and integration methods, and, in
certain cases, the start of in home trials and consumer tests. It is important
to stress the quality and reliability of the revenues behind these potential
contracts, which for the most part relate to products which will adopt the
Timestrip technology but which have an established track record in their
individual markets.
S.V.Oakes
Chairman
21 May 2007
TIMESTRIP PLC
JOINT CHIEF EXECUTIVES' STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Operating Review
The Company currently develops and markets two technologies in the field of time
and temperature measurement; the Timestrip(R) and the iStrip(R).
Timestrip smart labels address the relatively new problem created by the
proliferation of 'period after opening' instructions such as 'once opened use
within xx days' or 'replace every month' which feature in a number of
international mass markets, including; Appliances and Consumables, Food and
Beverage, Catering/ Foodservice, Cosmetics, Pharmaceuticals and Medical Devices,
all of which have been specifically targeted by Timestrip.
Appliances and Consumables
In this sector, Timestrip has developed a visual reminder system which is
positioned as a cost effective method of improving customer compliance with
manufacturer's instructions such as 'replace every 3 months'.
We have secured deals with Hamilton Beach/Febreze(R) (air filters), Hygolet
(washroom devices), DryandStore(R) (hearing aids) and most recently Whirlpool
(fridge filters). Customer feedback indicates that the incorporation of the
Timestrip has been well received by end users and is helping increase the
frequency of repeat purchase. We are confident that existing development
contracts and new supply contracts currently under negotiation will establish
Timestrip as the technology of choice, leading to growing revenues in this broad
ranging sector.
Food and Beverage
In the F&B sector, Timestrips are positioned as a tool to help consumers gauge
the freshness of products, as well as avoid unnecessary waste by providing the
opportunity to consume products before they expire.
Despite the length of time required to gain a foothold in this market, the
revenue potential is considerable and our effort has been concentrated on
methods of seamlessly incorporating the Timestrip technology into, for example,
customised label and bottle closure applications. This has culminated in
recently announced partnerships with Plastek (closures) and CCL Label. Although
these partnerships have only recently been formed, the extra resource now
available to us as well as the added credibility, has enabled us to accelerate a
number of ongoing projects with major F&B brands.
In parallel, the distribution of consumer packs of Timestrips which can be
purchased at retail outlets, through catalogues and online remains key to our
strategy to increase awareness of the technology. The product continues to sell
online in the UK with Ocado and trials with QVC in the US have shown that more
work is required to identify the key messages and price points. Our recently
announced partnership with Curver will see Timestrips introduced as a
promotional item in ranges of Curver food storage containers, which is seen as
an important pre-cursor to a retail launch in Europe. A Direct TV campaign that
starts shortly will help to refine our proposition for the US market, where we
are pleased to report there is significant retail interest in the product.
Catering / FoodService
In this sector, Timestrips are positioned as a simple and fool-proof system to
help catering businesses comply with the food safety (HACCP) principles
enshrined in the EU Directive on Food Hygiene and in State regulations across
North America. Timestrips currently feature on a range of sauces sold by Nestle
Foodservices UK and have attracted the attention of other brand owners in this
category. In addition, Timestrips are distributed in Northern Europe via our
partner NSD / Labellord and in the US by our partner Daymark.
We remain confident that the continued investment in marketing by our partners
will lead to Timestrip gaining increased traction in this challenging sector.
Cosmetics, Pharmaceuticals and Medical Devices
A high level of interest in Timestrip continues to be shown in the cosmetic,
pharmaceutical and medical device sectors. There is evidence that the EU
Directive, requiring all personal care products with a shelf life over 3 years
to also state the Period after Opening instruction, is starting to be seen as a
marketing opportunity in the cosmetics sector. In pharmaceuticals, we look
forward to being able to provide updates on current tests and trials with
certain leading pharmaceutical companies. We have also recently appointed agents
with specific expertise in the pharmaceutical and medical device sectors in the
US, who are already reporting high levels of interest in the technology. We
believe our partnerships with packaging experts Plastek and CCL Label will prove
invaluable as we continue to make progress in these sectors.
iStrip
Developed late in 2006, iStrip is a unique, patent pending label that changes
colour irreversibly if an accidental freezing event takes place in the cold
chain. This cost effective solution can be applied at single unit/dose level on
products such as vaccines and blood and can then be individually monitored
throughout the cold chain.
The Company has been included in an active programme by PATH (the Seattle based
international non-profit organisation) that seeks to identify the incidence of
accidental freezing in vaccines. The Company has filed a patent to protect the
technology and has been conducting thorough research and development to ensure
that the technology is robust. Manufacturing trials have commenced and samples
for further field trials and customer testing will shortly become available.
The Board believes that the potential revenue from this technology is
significant and our ability to bring it to market has been greatly enhanced by
the partnership with CCL Label who have unrivalled access to pharmaceutical
customers as well as being able to provide tailored delivery solutions.
Staff
We greatly appreciate the efforts of everyone in the organisation, including our
numerous distributors and agents across the world. We are continually looking to
strengthen our R&D team, which is key to the Company's future success, as it
strives not only to improve its core products but also to develop new
technologies in this field.
Strategy
The manufacturing process and prevailing market dynamics for both Timestrip and
iStrip lend themselves to a strategy under which Timestrip will license the
rights to manufacture and distribute in local markets to customers, joint
venture partners and distributors. The implementation of this strategy requires
us to maintain in-house production capacity, at a sufficient level to seed
markets in the early stages and ensure production machinery is kept at levels
that will enable the Company to satisfy initial contracts. Royalty revenues will
be enhanced through the supply of key raw materials and technical support to
licensees. The Company has received a number of approaches from companies
wishing to manufacture under license and will enter into such arrangements at
the earliest opportunity
The Company stipulates the use of its registered trademark on all Timestrip(R)
products, and there has been, to date, no objection to this policy from even the
largest of international brand owners. It is the Directors' belief that the
exposure to be gained by Timestrip(R) within the marketing campaigns of leading
brands will lead to the creation, over time, of an internationally recognised
brand.
Competition
It is anticipated that the ongoing commercialisation of Timestrip will stimulate
competition at some point in the future. However, the Directors are currently
not aware of any competing technologies. Although competition exists for the
iStrip technology it is generally represented by devices that are designed and
costed for use at case level, not unit level. When used at unit level on
products such as vaccines, the iStrip will enable the product condition to be
monitored more accurately and allow brand owners to reduce the cost of
rejection.
The award of the main patent for Timestrip in the US announced earlier this year
extends the protection for the technology which already exists in Europe, South
Africa and Hong Kong. Applications in other territories are expected to be
awarded in the current financial year. As the Company gains more exposure to the
needs of different markets it continually reviews and, if necessary, expands its
Intellectual Property portfolio to protect the technologies as they evolve.
Paul Freedman Reuben Isbitsky
Joint Chief Executive Officer Joint Chief Executive Officer
21 May 2007 21 May 2007
TIMESTRIP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2006
2006 2005
As restated
£ £
Turnover 378,975 103,303
Cost of sales (281,069) (66,181)
---------- ----------
Gross profit 97,906 37,122
Administrative expenses (1,706,730) (1,412,556)
---------- ----------
Operating loss (1,608,824) (1,375,434)
Other interest receivable and similar
income 122,651 55,064
Interest payable and similar charges (8,329) (4,973)
---------- ----------
Loss on ordinary activities
before taxation (1,494,502) (1,325,343)
Tax on loss on ordinary
activities 89,564 93,999
---------- ----------
Loss on ordinary activities after tax (1,404,938) (1,231,344)
========== ==========
2006 2005
£ £
Loss per share (0.0046) (0.0052)
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
There is no difference between basic and diluted loss per share.
TIMESTRIP PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 2006
2006 2005
As restated
£ £
Loss for the financial year (1,404,938) (1,231,344)
Prior year adjustment (66,308) -
---------- ----------
(1,471,246) (1,231,344)
========== ==========
TIMESTRIP PLC
BALANCE SHEETS
AS AT 31 DECEMBER 2006
Group
2006 2005
As restated
£ £
Fixed Assets
Intangible assets 6,308,550 6,339,333
Tangible assets 371,702 304,239
Investments - -
----------- -----------
6,680,252 6,643,572
----------- -----------
Current assets
Stocks 183,317 66,067
Debtors 380,865 194,735
Cash at bank and in hand 2,517,341 2,979,268
----------- -----------
3,081,523 3,240,070
Creditors: amounts falling due
within one year (430,465) (222,513)
Net current assets 2,651,058 3,017,557
----------- -----------
Total assets less current liabilities 9,331,310 9,661,129
Creditors: amounts falling due after
more than one year (70,556) (66,666)
9,260,754 9,594,463
=========== ===========
Capital and reserves
Called up share capital 3,606,621 3,603,331
Share premium account 27,541,931 26,587,956
Share Option Reserve 180,274 66,308
Profit and loss account (22,068,072) (20,663,132)
Shareholders' funds 9,260,754 9,594,463
=========== ===========
Equity interests 5,716,907 6,050,616
Non-equity interests 3,543,847 3,543,847
----------- -----------
9,260,754 9,594,463
=========== ===========
TIMESTRIP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
2006 2005
As restated
£ £ £ £
Net cash outflow from operating
activities (1,382,455) (1,294,053)
Returns on investments and servicing
of finance
Interest received 122,651 55,064
Interest paid (8,329) (4,973)
---------- ----------
Net cash inflow for returns on
investments and servicing of
finance 114,322 50,091
Taxation recovered - 79,853
Capital expenditure and financial
investment
Payments to acquire intangible
assets (10,272) (120,971)
Payments to acquire tangible
assets (116,700) (16,122)
---------- ----------
Net cash outflow for capital
expenditure (126,972) (137,093)
Acquisition and disposals
Net cash acquired on acquisition - 43,288
---------- ----------
Net cash outflow before management
of liquid resources and financing (1,395,105) (1,257,914)
Financing
Issue of ordinary share capital 957,096 4,521,750
Cost of share issue - (272,543)
Repayment of long term bank loan (23,918) (11,905)
---------- ----------
Net cash inflow from financing 933,178 4,237,302
---------- ----------
(Decrease)/ Increase in cash in
the period (461,927) 2,979,388
========== ==========
TIMESTRIP PLC
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
1 Reconciliation of operating profit to net
cash inflow from operating activities
2006 2005
As restated
£ £
Operating loss (1,608,824) (1,375,434)
Depreciation, amortisation and impairment
charges of intangible assets 52,668 276,269
Depreciation of tangible assets 66,845 40,889
Increase in stocks (117,252) (8,050)
(Increase) in debtors (96,566) (47,834)
Decrease/ (increase) in creditors within one year 206,708 (246,201)
Cost of Share Options 113,966 66,308
---------- ----------
Net cash outflow from operating activities (1,382,455) (1,294,053)
========== ==========
2 Analysis of net funds
Other non- 31
1 January cash December
2006 Cash flow changes 2006
£ £ £ £
Net cash:
Cash at bank and in
hand 2,979,268 (461,927) - 2,517,340
---------- ---------- ---------- ----------
Bank Loans
Debts falling due
within one year (14,286) (6,244) - (20,530)
Debts falling due
after one year (66,666) (3,885) - (70,551)
---------- ---------- ---------- ----------
(80,952) (10,129) - (91,081)
---------- ---------- ---------- ----------
Net (debt) / funds 2,898,316 (472,057) - 2,426,259
---------- ---------- ---------- ----------
3 Reconciliation of net cash flow to movement
in net funds
2006 2005
£ £
(Decrease)/increase in cash in the period (461,928) 2,979,388
Cash outflow from increase in debt and lease
financing (10,129) (80,952)
---------- ----------
Movement in net (debt)/funds in the period (472,057) 2,898,436
Opening net funds/(debt) 2,898,316 (120)
---------- ----------
Closing net funds 2,426,259 2,898,316
========== ==========
TIMESTRIP PLC
NOTES FOR THE YEAR ENDED 31 DECEMBER 2006
1 Basis of consolidation
The consolidated profit and loss account and balance sheet include the
financial statements of the company and its subsidiary undertakings made up
to 31 December 2006. The results of subsidiaries sold or acquired are
included in the profit and loss account up to, or from, the date control
passes. Intra-group sales and profits are eliminated fully on
consolidation.
2 Goodwill
The goodwill is the difference between the amount paid on the acquisition
of Timestrip UK Limited and the aggregate assets.
The directors have concluded that goodwill arising on the acquisition of
Timestrip UK Limited should not be amortised as it has an indefinite useful
economic life. The goodwill is considered to have indefinite durability
that can be demonstrated and its value can be reliably measured.
The acquired business has a product which is unique in the market place and
is able to cheaply and easily provide a record of elapsed time in the key
ambient temperatures of room, fridge and freezer. In addition, the company
has also spent many years working on the research and development
associated with the underlying diffusion technology and it is believed that
this creates a significant barrier to entry to any potential competition.
Timestrip is currently one of the leading companies in the world for
understanding micron diffusion. Finally, the company has spent significant
money successfully applying for global patents for the technology which
further adds to the protection. Hence, based on these facts the directors
are of the opinion that it has an indefinite useful economic life.
The non-amortisation of goodwill constitutes a departure from the Companies
Act 1985, Part 4 Sch 12, for the over-riding purpose of giving a true and
fair view of the group's result. If goodwill arising on acquisitions had
been written off over a 20 year period, the operating loss would have
increased by £282,137 (2005 - £235,154) in the year ended 31 December 2006.
The total amortisation to date would have been £517,251 (2005 - £235,114).
3 Intangible Fixed Assets
Patents and trademarks are capitalised and classified as intangible assets
on the balance sheet and these are amortised over their estimated useful
economic life of 20 years.
Website development costs are valued at cost less accumulated amortisation.
Amortisation is calculated to write off the cost in equal annual instalments
over the estimated useful economic life of 3 years.
4 Share-based payments
The group has applied the requirements of FRS 20, 'Share-based Payments'.
The group issued equity-settled and cash-settled share-based payments which
are measured at fair value at the date of grant. The fair value determined
at the grant date of the equity-settled share-based payments is expensed on
a straight line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest.
Fair value is measured by use of a binominal model. The expected life used
in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioral
considerations.
5 Dividends
No dividend is proposed for the period ended 31 December 2006.
6 Taxation
No taxation charge is expected to arise on the results for the period
7 Basic and diluted loss per share
Basic and diluted loss per ordinary share has been calculated using the
weighted average number of shares in issue during the financial period. The
weighted average number of equity shares in issue was 307,944,104 (2005 -
236,786,705) and the loss after tax, was £1,404,938 (2005 - £1,231,344 - as
restated).
8 Share capital
In March 2006, 58,791 Ordinary shares of 0.02p were issued to raise
£2,352 before expenses subsequent to the exercise of 'B' Warrants.
In March 2006, 501,999 Ordinary shares of 0.02p were issued to raise
£30,120 before expenses subsequent to the exercise of Placing Warrants.
In April 2006, 263,111 Ordinary shares of 0.02p were issued to raise
£10,524 before expenses subsequent to the exercise of 'B' Warrants.
In May 2006, 14,456,409 Ordinary shares of 0.02p were issued to raise
£867,892 before expenses subsequent to the exercise of Placing Warrants.
In May 2006, 414,733 Ordinary shares of 0.02p were issued to raise
£16,251 before expenses subsequent to the exercise of 'B' Warrants.
In June 2006, 311,814 Ordinary shares of 0.02p were issued to raise
£12,473 before expenses subsequent to the exercise of 'B' Warrants.
In July 2006, 62,618 Ordinary shares of 0.02p were issued to raise
£2,505 before expenses subsequent to the exercise of 'B' Warrants.
In September 2006, 24,454 Ordinary shares of 0.02p were issued to raise
£978 before expenses subsequent to the exercise of 'B' Warrants.
In October 2006, 31,309 Ordinary shares of 0.02p were issued to raise
£1,252 subsequent to the exercise of 'B' Warrants.
In December 2006, 322,947 Ordinary shares of 0.02p were issued to raise
£12,918 subsequent to the exercise of 'B' Warrants.
9 Adoption of Financial Reporting Standard (FRS) 20
During the year, the group adopted FRS20 'Share Based Payments'. The
adoption of this standard constitutes a change in accounting policy.
Therefore, the impact has been reflected as a prior year adjustment in
accordance with Financial Reporting Standard 3.
The standard required that where shares or rights to shares are granted to
third parties, including employees, a charge should be recognised in the
profit and loss account based on the fair value of the shares at the date
of grant of shares or right to shares is made.
10 Financial statements
The announcement set out above does not constitute a full financial
statement of the company's affairs for the year ended 31 December 2006. The
company's auditors have reported on the full accounts for the said year and
have accompanied them with an unqualified report. The accounts have yet to
be delivered to the Registrar of Companies. The annual report and accounts
will be available from the Company Secretary, 5-7 Cranwood Street, London,
EC1V 9EE.
The information relating to the year ended 31 December 2005 is extracted
from the audited accounts that have been filed at Companies House and on
which the auditors issued an unqualified opinion.
This information is provided by RNS
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