Interim Results

RNS Number : 3278G
Zytronic PLC
11 May 2011
 



For Immediate Release

11 May 2011

 

 

 

Zytronic plc

("Zytronic" or the "Group")

 

Interim Results for the six months ended 31 March 2011

 

Zytronic plc, a leading specialist manufacturer of touch sensors and optical filters for electronic displays, announces its consolidated interim results for the six months ended 31 March 2011.

 

Highlights                                                                                                                                            

 

·      Revenue increased by 11% to £9.1m (2010: £8.2m)

·      Touch sensor sales now 66% of total sales (2010: 56%)

·      Sales revenues from touch sensors increased by 29%

·          Profit before tax increased by 19% to £1.3m (2010: £1.1m)

·          Earnings per share ("EPS") increased by 19% to 6.4p (2010: 5.4p)

·      Interim dividend increased by 5% to 2.1p per share (2010: 2.0p)

·      Tudor Davies appointed Chairman on 4 March 2011

Commenting on the results, Chairman, Tudor Davies said:

"The 18% increase in operating profits is a good result and particularly since it has arisen from the continuing worldwide rollout of the Group's touch sensor products which now represent 66% of total revenues."

 

"The increasing acceptance of our touch sensors across an expanding number of geographic regions and applications, and the current healthy inflow of orders, provides a good platform for continuing growth and shareholder value."

 

 

Enquiries:

 

Zytronic plc

(Today: 020 7466 5000; Thereafter 0191 414 5511)

Mark Cambridge, Chief Executive


Denis Mullan, Finance Director




Buchanan

020 7466 5000

Richard Darby, Isabel Podda, Gabriella Clinkard




Brewin Dolphin Ltd


Neil Baldwin

0845 270 8610

 

 

Notes to Editors

Zytronic is the developer and manufacturer of a unique range of internationally award-winning touch sensor products. These products employ an embedded sensing element and are based on projected capacitive technology ("PCT™"). PCT offers significant durability, environmental stability and optical enhancement benefits to system designers of integrated electronic displays, beyond that which was previously attainable.

Zytronic is also an industry leader in the development and manufacture of customised optical filters to enhance electronic display performance and an innovator in the production of specialised and transparent laminates for niche markets.

Operating from three modern factories near Newcastle-upon-Tyne in the United Kingdom, Zytronic assembles touch sensors, optical filters and other laminates, using special glass and plastic materials, in environmentally controlled clean rooms.

 

 


CHAIRMAN'S STATEMENT

 

Following my recent appointment as Chairman on 4 March 2011, it is pleasing to be able to present a set of Interim Results showing such positive progress for the six months ended 31 March 2011.

 

The 18% increase in operating profits is a good result and particularly since it has arisen from the continuing worldwide rollout of the Group's touch sensor products which now represent 66% of total revenues.

 

Results

Revenues increased by 11% to £9.1m (2010: £8.2m); operating profits increased by 18% to £1.3m (2010: £1.1m); profit before taxation increased by 19% to £1.3m (2010: £1.1m); and, after taxation of 26%, resulted in profits after taxation of £0.9m (2010: £0.8m) and an increase in earnings per share of 19% to 6.4p ( 2010: 5.4p).

 

Trading

The strategy of the Group for several years has been to grow through the development and market acceptance of our ZYPOS® and ZYBRID® touch sensor products, and diversify away from the traditional lower growth electronic display products. These results are driven by our continuing progress in the development of this strategy.

 

Touch Sensors

In the last six months the revenues from touch sensors have risen from 56% to 66% of sales, and compared with the same period last year orders received have increased by 36% and sales have increased by 29%, reflecting the growth in applications for our products across several geographic regions.

 

Our products are rugged compared with most touch sensor products and are generally suitable for outdoor and high use environments such as: ATMs, Self-Service and Vending, Ticketing and Parking, Gaming and Entertainment, Digital Signage, Industrial Automation, and Home Automation.

 

We have experienced good growth in the supply of touch sensors for the Coca Cola Freestyle™ vending machines and from Bosch und Siemens Hausgeräte (BSH) for its new Gaggenau induction cooktop. Other notable areas of increased sales have been in Digital Signage and we have also experienced a rebound in sales to the previously depressed Gaming and Entertainment market.

 

It is particularly pleasing that the majority of this growth has resulted from our strategy to develop sales over wider geographical areas through the appointment of Value Added Resellers ("VAR"). These successes have resulted in this sales channel increasing its proportion of sales from 27% to 35%.

 

The two ZYPOS laminators recently purchased in the period were installed and commissioned in December and January respectively. This added much needed increased capacity and efficiency to meet the increasing growth in touch sensor sales, and particularly to assist in efficiently manufacturing the larger 32" to 65" touch sensors required to service the Digital Signage and Vending markets.

 

Electronic Display Products

In the ATM market, the anticipated changes in product cycles and designs have resulted in lower sales in this period and, as expected, sales of our lower growth electronic display products have reduced by 18%.

 

Financial Liabilities/Cash Generation

The Group has cash and short term deposits of £2.1m and current financial liabilities of £1.6m, representing a current net financial asset position as at 31 March 2011 of £0.5m. The Group also has non-current financial liabilities of £1.9m, being mortgages on our freehold properties over 10 year terms. The overall position at 31 March 2011 is gearing of 12% and net financial liabilities of £1.5m compared with gearing of 11% and net financial liabilities of £1.2m at the 30 September 2010 year end.

 

The Group generated £1.1m cash from operating activities in the six months to 31 March 2011: it invested £0.5m in capital expenditure, principally the laminators; and after it incurred debt service costs of £0.3m, generated £0.3m before the payment of the £0.7m final dividend for last year.

 

Dividend

The Directors have declared an interim dividend of 2.1p per share (2010: 2.0p per share) payable on Friday 29 July 2011 to shareholders on the Register on Friday 15 July 2011.

 

Board

I was appointed Chairman of the Board in succession to David Banks on 4 March 2011.

Both I and the rest of the Board would like to express our thanks to both John Kennair, the Company's founder, who retired on 10 February 2011, and David Banks, who had been a Director since flotation, for their significant contributions to the development and progress of the Group over nearly 11 years.

 

Outlook

The increasing acceptance of our touch sensors across an expanding number of geographic regions and applications, and the current healthy inflow of orders, provides a good platform for continuing growth and shareholder value.

 

 

Tudor Davies

 

Non-executive Chairman

 

11 May 2011

 

 

Consolidated income statement

Unaudited results for the six months to 31 March 2011

 

 



Six months to

Six months to

Year to



31 March

31 March

30 September



2011

2010

2010



Unaudited

Unaudited

Audited


Notes

£'000

£'000

£'000

Group revenue


9,092

8,199

18,483

Cost of sales


6,172

5,599

12,589

Gross profit


2,920

2,600

5,894

Distribution costs


119

105

231

Administration expenses


1,574

1,386

2,738

Group trading profit


1,227

1,109

2,925

Other operating income


93

13

112

Group operating profit from continuing operations


1,320

1,122

3,037

Finance costs


(55)

(65)

(126)

Finance revenue


-

6

13

Profit from continuing operations


1,265

1,063

2,924

Tax expense

3

(329)

(276)

(736)

Profit for the period from continuing operations


936

787

2,188

Earnings per share





 - Basic

4

6.4p

5.4p

 - Diluted

4

6.3p

5.3p

14.8p

 

 

Consolidated statement of comprehensive income

Unaudited results for the six months to 31 March 2011

 

There are no recognised gains or losses other than the profit attributable to shareholders of the Company as presented in the consolidated income statement above.

 

 

 

Consolidated statement of changes in equity

For the six months to 31 March 2011

 


Called





up share

Share

Retained



capital*

premium**

earnings

Total


£'000

£'000

£'000

£'000

At 30 September 2010

147

6,550

4,755

11,452

Profit for the period

-

-

936

936

Share based payments

-

-

21

21

Dividends

-

-

(735)

(735)

At 30 March 2011 (unaudited)

147

6,550

4,977

11,674

*Share capital represents proceeds on issue of the Company's equity share capital.

**Share premium comprises the excess in proceeds on issue of the Company's equity share capital above the nominal value of the shares issued.


Consolidated balance sheet

Unaudited results at 31 March 2011

 

 





At

At

At


31 March

31 March

30 September


2011

2010

2010


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Assets




Non-current assets




Intangible assets

1,839

1,886

1,869

Property, plant and equipment

8,429

8,443

8,387

Trade and other receivables

198

283

198


10,466

10,612

10,454

Current assets




Inventories

2,654

2,490

2,588

Trade and other receivables

3,831

3,191

3,466

Cash and short term deposits

2,070

458

1,505


8,555

6,139

7,559

Total assets

19,021

16,751

18,013

Equity and liabilities




Current liabilities




Trade and other payables

1,544

1,527

1,582

Financial liabilities

1,616

1,029

669

Accruals and deferred income

743

569

600

Taxation liabilities

351

267

357

Government grants

192

-

192


4,446

3,392

3,400

Non-current liabilities




Financial liabilities

1,881

2,206

2,045

Deferred tax liabilities (net)

827

788

827

Government grants

193

37

289


2,901

3,031

3,161

Total liabilities

7,347

6,423

6,561

Net assets

11,674

10,328

11,452

Capital and reserves




Equity share capital

147

147

147

Share premium

6,795

6,526

6,550

Revenue reserve

4,732

3,655

4,755

Total equity

11,674

10,328

11,452


Consolidated cashflow statement

Unaudited results for the six months to 31 March 2011

 








Six months to

Six months to

Year to



31 March

31 March

30 September



2011

2010

2010



Unaudited

Unaudited

Audited


Notes

£'000

£'000

£'000

Operating activities





Profit before tax


1,265

1,063

2,924

Net interest expense


55

59

113

Depreciation of property, plant and equipment


358

346

654

Amortisation of intangible assets


140

143

333

Amortisation of government grant


(96)

(6)

(102)

Share-based payments


21

21

42

(Increase)/decrease in inventories


(66)

13

(85)

Increase in trade and other receivables


(366)

(156)

(356)

Increase/(decrease) in trade and other payables


101

(57)

279

Cash generated from operations


1,412

1,426

3,802

Taxation paid


(335)

(307)

(655)

Net cashflow from operating activities


1,077

1,119

3,147

Investing activities





Interest received


-

6

13

Receipt of government grant


-

-

540

Purchases of property, plant and equipment


(393)

(158)

(640)

Payments to acquire intangible assets


(110)

(55)

(228)

Net cashflow from investing activities


(503)

(207)

(315)

Financing activities





Interest paid


(58)

(47)

(128)

Dividends paid to equity shareholders of the parent


(735)

(558)

(852)

Proceeds from share issue re. options


-

16

40

Refund of VAT on flotation expenses previously disallowed


-

32

31

Repayment of borrowings


(169)

(189)

(342)

Repayment of capital element of hire purchase contracts


(44)

(238)

(476)

Net cash outflow from financing activities


(1,006)

(984)

(1,727)

(Decrease)/increase in cash and cash equivalents


(432)

(72)

1,105

Cash and cash equivalents at the beginning of the period


1,214

109

109

Cash and cash equivalents at the period end

6

782

37

1,214


Notes to the interim report

Unaudited results for the six months to 31 March 2011

 

 

1. Basis of preparation

The financial information in these interim statements is prepared under the historical cost convention and in accordance with international accounting standards. It does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and does not reflect all the information contained in the Group's annual report and financial statements.

 

The taxation charge is calculated by applying the Directors' best estimate of the annual tax rate to the profit for the period. Other expenses are accrued in accordance with the same principles used in the preparation of the annual accounts.

 

The interim results for the six months to 31 March 2011 are not reviewed by Ernst & Young LLP and accordingly no opinion has been given.

 

The interim financial statements have been prepared using the same accounting policies and methods of computation used to prepare the 2010 annual report and financial statements.

 

The financial information for the six months to 31 March 2011 and the comparative financial information for the six months to 31 March 2010 has not been audited. The comparative financial information for the year ended 30 September 2010 has been extracted from the 2010 annual report and financial statements.

 

The annual financial statements for the year ended 30 September 2010, which were approved by the Board of Directors on 10 December 2010, received an unqualified audit report, did not contain a statement under Section 498(2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

 

The Group has one reportable business segment comprising the development and manufacture of customised optical filters to enhance electronic display performance. Products in this reportable business segment include touch sensors, filters and other laminated products. All revenue, profits or losses before tax and net assets are attributable to this reportable business segment.

 

2. Basis of consolidation

The Group results consolidate the accounts of Zytronic plc and all its subsidiary undertakings drawn up to 31 March 2011.

 

3. Tax charge on profit on ordinary activities

The estimated tax rate for the year of 26% has been applied to the half year's profit before tax, in accordance with the ASB's statement on interim reports.

 

4. Earnings per share

EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period. All activities are continuing operations and therefore there is no difference between EPS arising from total operations and EPS arising from continuing operations.

 

For the six months to 31 March 2011 and 2010

 



Weighted



Weighted




average



average




number



number



Earnings

of shares

EPS

Earnings

of shares

EPS


31 March

31 March

31 March

31 March

31 March

31 March


2011

2011

2011

2010

2010

2010


£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after taxation attributable to ordinary equity







 holders

936

14,710

6.4

787

14,689

5.4

Basic EPS

936

14,710

6.4

787

14,689

5.4


Notes to the interim report

Unaudited results for the six months to 31 March 2011

 

 

4. Earnings per share continued

For the six months to 31 March 2011 and 2010 continued

The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:

 



Weighted



Weighted




average



average




number



number



Earnings

of shares

EPS

Earnings

of shares

EPS


31 March

31 March

31 March

31 March

31 March

31 March


2011

2011

2011

2010

2010

2010


£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after taxation







attributable to ordinary equity holders

936

14,710

6.4

787

14,689

5.4

Weighted average number of shares under option

-

116

(0.1)

-

115

(0.1)

Diluted EPS

936

14,826

6.3

787

14,804

5.3

 

For the year to 30 September 2010



Weighted




average




number



Earnings

of shares

EPS


30 September

30 September

30 September


2010

2010

2010


£'000

Thousands

Pence

Profit on ordinary activities after taxation




attributable to ordinary equity holders

2,188

14,696

14.9

Basic EPS

2,188

14,696

14.9

 

The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:

 



Weighted




average




number



Earnings

of shares

EPS


30 September

30 September

30 September


2010

2010

2010


£'000

Thousands

Pence

Profit on ordinary activities after taxation




attributable to ordinary equity holders

2,188

14,696

14.9

Weighted average number of shares under option

-

111

(0.1)

Diluted EPS

2,188

14,807

14.8


Notes to the interim report

Unaudited results for the six months to 31 March 2011

 

 

5. Dividends

The Directors propose the payment of an interim dividend of 2.1p per share (2010: 2.0p), payable on 29 July 2011 to shareholders on the Register on 15 July 2011. This dividend has not been accrued in these interim accounts. The dividend payment will be £309,000.

 


Six months to

Six months to

Year to


31 March

31 March

30 September


2011

2010

2010


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Ordinary dividends on equity shares




Final dividend of 3.8p per ordinary share paid on 26 February 2010

-

558

558

Interim dividend of 2.0p per ordinary share paid on 25 June 2010

-

-

294

Final dividend of 5.0p per ordinary share paid on 25 February 2011

735

-

-


735

558

852

 

6. Cash and cash equivalents

 


Six months to

Six months to

Year to


31 March

31 March

30 September


2011

2010

2010


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Cash at bank and in hand

2,070

458

1,505

 

For the purpose of the consolidated cashflow statement, cash and cash equivalents comprise the following:

 


Six months to

Six months to

Year to


31 March

31 March

30 September


2011

2010

2010


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Cash at bank and in hand

2,070

458

1,505

Bank overdraft

(1,288)

(421)

(291)


782

37

1,214

 

Cash at bank earns interest at floating rates based on daily bank deposit rates.

 

The fair value of cash and cash equivalents is £782,000 (2010: £37,000).

 

At 31 March 2011, the Group had an unused, committed, £2.0m revolving credit facility which is available until 30 June 2012.  In addition, the Group has a net overdraft facility of £1.0m which expires in April 2012.  Overdrawn accounts in foreign currencies totaled £1.3m at 31 March 2011, offset by cash balances of £2.1m.

 

7. Availability of the Interim Report

A copy of the interim report is available on the Company's website www.zytronic.co.uk and can be obtained from the Company's registered office: Whiteley Road, Blaydon-on-Tyne, Tyne & Wear, NE21 5NJ. Copies will be sent to shareholders shortly.

 

 


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