Final Results

Zytronic PLC 12 December 2002 ZYTRONIC PLC Preliminary Results for the Year to 30 September 2002 Zytronic Plc, a specialist manufacturer of touch screens and optical filters for electronic displays, announces its preliminary results for the year to 30 September 2002. Summary • Strong recovery in second half, sales 45% up on first half; annual turnover down 12% to £5.1 million (2001 : £5.8 million) • Second half operating profit £88,000; annual operating loss £394,000 (2001: profit £706,000) • Cash £1.2 million; net cash £0.6 million (2001: £1.2 million) • Touch Screens - Substantial contracts expected to start impacting in second half of 2003 Post year end • Worldwide distribution agreement with 3M, a major world player in the touchscreen market John Kennair, Chairman, commented: 'With a year end cash balance of £1.2 million, the capital expenditure programme related to capacity expansion now complete and Zytouch accepted in the market place, the company is well positioned, both financially and technically to take advantage of the contracts that have been secured. 'We expect progress of Zytouch in the touchscreen market to continue through sales directly to OEM's and, in the longer term, from our new distribution agreement with 3M. This is a major step in the longer term development of the markets for Zytouch.' 12 December 2002 ENQUIRIES: Zytronic Plc John Kennair, MBE , Chairman Tel: 0191 414 5511 Ian Lawson, Chief Executive Today only: 020 7457 2020 After today: 0191 414 5511 College Hill Nicholas Nelson/Clare Warren Tel: 020 7457 2020 CHAIRMAN'S STATEMENT The year to 30 September 2002 has seen further significant progress in the development of the business although this is yet to be reflected in the results. The initial contracts for Zytouch, the Group's new touchscreen product, entered production in the last quarter of the year. Other substantial contracts in the banking and interactive kiosk markets have been secured and will come on stream in 2003, and in November a worldwide distribution agreement was completed with 3M, who are one of the leading touchscreen manufacturers in the world. Trading Results The events of September 2001 had a significant adverse impact on the electronic sector in general, affecting the results of Zytronic's traditional business of filters for electronic displays and slowing down the introduction of Zytouch. Although the second half saw significant recovery, with sales 45% higher than the first half, sales for the year to 30 September 2002 were 12.5% lower than the previous year at £5.1 million. The second half produced an operating profit of £88,000 reducing the overall operating loss for the year to £394,000. Cash generated from trading in the course of the year (operating profit before depreciation and amortisation) was £222,000, which combined with improvements in working capital of £413,000 to produce an overall cash inflow from operating activities of £635,000. Outlook With a year end cash balance of £1.2 million, the capital expenditure programme related to capacity expansion now complete and Zytouch accepted in the market place, the company is well positioned, both financially and technically to take advantage of the contracts that have been secured. We expect progress of Zytouch in the touchscreen market to continue through sales directly to OEM's and, in the longer term, from our new distribution agreement with 3M. They will brand our product with the 3M name and include it in their touchscreen offering through their outlets worldwide. This is a major step in the longer term development of the markets for Zytouch and provides a further endorsement of the Zytouch technology by a company who are not only a world leader in the manufacture of touchscreens, but also a world leader in technology relating to electronic information displays. Sales of Zytouch have taken longer to achieve than anticipated and uncertainties remain in the electronics sector. Therefore, the Directors do not expect progress to be reflected in trading until the second half of the 2003 financial year. However, the 3M distribution agreement, combined with the contracts that have already been secured in banking, telecommunications and interactive kiosks, lead the directors to continue to be optimistic about the future prospects of the group. Dividends While our cash position is strong, in common with many new companies we have not built up significant distributable reserves. Following a reduction in reserves during the last financial year, the Board has decided not to recommend a final dividend. On the basis of current expectations, we plan to resume the payment of dividends in respect of the year to 30 September 2003. J M Kennair Chairman 12 December 2002 GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 SEPTEMBER 2002 2002 2001 Notes £'000 £'000 Group turnover 5,066 5,785 Cost of sales 3,678 3,610 Gross profit 1,388 2,175 Distribution costs 66 54 Administrative expenses 1,716 1,415 1,782 1,469 Group operating (loss)/profit (394) 706 Interest payable (33) (17) Interest receivable 21 74 (Loss)/profit on ordinary activities before taxation (406) 763 Tax on loss/profit on ordinary activities 3 85 (225) (Loss)/Profit on ordinary activities after taxation (321) 538 Ordinary dividends on equity shares 4 (71) (179) Retained (loss)/profit for the year (392) 359 (Loss)/Earnings per share - basic 5 (2.2p) 3.8p - diluted 5 (2.2p) 3.7p Statement of Total Recognised Gains and Losses for the year ended 30 September 2002 (Loss)/profit for the financial year (321) 538 538 Total recognised gains and losses relating to the period (321) Prior year adjustment 6 (30) Total gains and losses recognised since last annual report (351) The results for both the above years derive from continuing operations. BALANCE SHEETS AT 30 SEPTEMBER 2002 Group Company 2001 2002 Restated 2002 2001 £'000 £'000 £'000 £'000 Fixed assets Intangible assets 2,357 2,248 - - Tangible assets 2,630 2,632 - - Investments - - 9,448 9,448 4,987 4,880 9,448 9,448 Current assets Stocks 895 982 - - Debtors: Amounts falling within one year 1,259 1,421 2,086 2,051 Group debtors falling due after one year - - 4,000 4,000 Cash at bank and in hand 1,176 1,156 5 63 3,330 3,559 6,091 6,114 Creditors: amounts falling due within one year 1,203 1,397 129 250 Net current assets less liabilities 2,127 2,162 5,962 5,864 Total assets less current liabilities 7,114 7,042 15,410 15,312 Creditors: amounts falling due after more than one year 499 - - - Provisions for liabilities and charges Deferred tax 149 184 - - 6,466 6,858 15,410 15,312 Capital and reserves Called up share capital 143 143 143 143 Share premium 6,212 6,212 6,212 6,212 Merger reserve (31) (31) - - Profit and loss account 142 534 9,055 8,957 Equity shareholders' funds 6,466 6,858 15,410 15,312 GROUP STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2002 2002 2001 Notes £'000 £'000 Net cash inflow from operating activities 7(a) 635 679 Return on investments and servicing of finance Interest received 21 76 Interest paid (2) (6) Interest element of finance lease rental payment s (21) (11) Net (outflow)/inflow from returns on investments and servicing of (2) 59 finance Taxation Corporation tax refunded/(paid) 13 (116) Capital expenditure and financial investment Payments to acquire intangible fixed assets (264) (86) Payments to acquire tangible fixed assets (756) (1,190) Receipts from sales of tangible fixed assets - 6 Net outflow from capital expenditure and financial investment (1,020) (1,270) Equity dividends paid (179) (214) Net cash outflow before financing (553) (862) Financing Repayment of long term loans (10) (10) Receipts from new finance lease 684 - Net repayment of capital element of finance leases and hire purchase contracts (101) (129) Net inflow/(outflow) from financing 573 (139) Increase/(Decrease) in cash 20 (1,001) RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS Increases/(Decrease) in cash 20 (1,001) Repayment of long term loans 10 10 Receipts from new finance leases (684) - Net repayment of capital element of finance leases and hire purchase contracts 101 129 Movement in net funds (553) (862) Net funds at beginning of the year 1,105 1,967 Net funds at end of year 7b 552 1,105 Notes 1. Basis of preparation The preliminary results have been prepared under the historical cost convention and in accordance with applicable accounting standards. The preliminary results have been prepared on the basis of the accounting policies set out in the group's statutory accounts for the year ended 30 September 2001, as adjusted for the change in accounting for deferred taxation referred to in note 6. 2. Basis of consolidation The group results consolidate the accounts of Zytronic Plc and all its subsidiary undertakings drawn up to 30 September 2002. 3. Tax on loss/profit on ordinary activities 2001 2002 Restated £'000 £'000 Current tax: UK corporation tax recoverable/(payable) 94 (129) Corporation tax (under)/over provided in prior years (44) 28 Recoverable advance corporation tax written back - 30 ________ _______ Total current tax 50 (71) ________ ________ Deferred tax: Origination and reversal of timing differences (20) (154) Deferred tax over provided in prior years 55 - ________ ________ Group deferred tax 35 (154) ________ ________ Tax on loss/profit on ordinary activities 85 (225) ======= ======= Factors affecting current tax (credit)/charge Loss/profit on ordinary activities multiplied by standard rate of UK corporation tax of 30% (2001-30%) 122 (229) Expenses not deductible for tax purposes (includes amortisation of goodwill and licences) (54) (53) Accelerated capital allowances 20 154 Effect of marginal rates of UK corporation tax 6 (1) Current tax (under)/over provided in prior years (44) 28 Recoverable advance corporation tax written back - 30 ________ ________ Total current tax 50 (71) ======= ======= 4. Dividends An interim dividend of 0.5p (2001: 0.5p) per share was paid to shareholders on 21 June 2002. There is no recommended final dividend (2001: 0.75p). 5. Loss/Earnings per share The calculations of loss/earnings per share are based on a loss after taxation of £321,000 (2001: £538,000 profit), and a basic and diluted weighted average of 14,291,539 shares (2001: basic weighted average of 14,291,539 shares and diluted weighted average of 14,381,760 shares) in issue. 6. Accounting policy - Deferred taxation In order to comply with the requirements of Financial Reporting Standard No. 19, the Group has changed its accounting policy for deferred taxation. The new policy is as follows:- The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more, or a right to pay less, tax in the future have occurred at the balance sheet date, with the following exceptions: • provision is made for gains on disposal of fixed assets that have been rolled over into replacement assets only where, at the balance sheet date, there is a commitment to dispose of the replacement assets with no likely subsequent roll over and/or available capital losses. • deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. • provision on timing differences arising when an asset is continuously revalued to fair value is only made where changes in fair value are recognised in the profit and loss account. (The Group does not have any revalued assets at present.) • provision is made for the tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to the extent that, at the balance sheet date, dividends have been accrued as receivable or there is a commitment for profits to be distributed. (The Group does not have any overseas subsidiaries, associates or joint ventures at present.) Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. The change in policy has had no affect on the Group profit and loss accounts or Group cash flows for any of the periods shown in this preliminary statement. The only adjustment to the balance sheets has been to increase the provision for deferred tax at 30 September 2001 by £30,000 and reduce reserves at that date by the same amount. 7. Notes to the group statement of cash flows (a)Reconciliation of operating loss/profit to net cash inflow from operating activities: 2002 2001 £'000 £'000 Operating (loss)/profit (394) 706 Depreciation 458 306 Amortisation 155 151 Loss/(profit) on sale of fixed assets 3 (6) ________ ________ 222 1,157 Decrease/(increase) in stocks 87 (145) Decrease/(increase) in debtors 164 (163) Increase/(decrease) in creditors 162 (170) ________ ________ Net cash inflow from operating activities 635 679 ======= ======= (b) Analysis of net funds 2001 Cash Flows 2002 £'000 £'000 £'000 Cash at bank and in hand 1,156 20 1,176 External loans (10) 10 - Finance leases (41) (583) (624) _______ ________ ________ 1,105 (553) 552 ======= ======= ======== 8. Report and accounts The above results do not represent the statutory accounts. The audit report is yet to be signed. The audited accounts will be mailed to shareholders shortly and will be available from the registered office at Patterson Street, Blaydon, Tyne & Wear, NE21 5SG. The results for the year to 30 September 2001 have been extracted from the 2001 accounts of Zytronic Plc, as adjusted for the change in accounting policy for deferred taxation referred to in note 6. The 2001 accounts, which have been filed with the Registrar of Companies, received an unqualified audit report and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange

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