Interim Results

RNS Number : 8987G
Zytronic PLC
13 May 2014
 



For Immediate Release

13 May 2014

 

 

 

Zytronic plc

("Zytronic" or the "Group")

Interim Results for the six months ended 31 March 2014

 

Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2014.

 

Overview

·      Revenue increased to £8.8m (H1 FY2013: £8.5m)

·      Touch revenues account for 77% of total (H1 FY2013: 74%)

·      Gross profit margin improved to 33.9% (H1 FY2013: 26.0%)

·      Profit before tax increased by 87% to £1.4m (H1 FY2013: £0.8m)

·      Earnings per share ("EPS") increased to 7.7p (H1 FY2013: 4.1p)

·      Interim dividend increased by 3.6% to 2.85p per share (2013 interim dividend: 2.75p)

·      Net cash increased to £4.6m (H1 FY2013: £2.8m)

 

Commenting on the results, Chairman, Tudor Davies said:

"We have a good pipeline of future prospects from both existing and new customers and with current trading continuing at the recently improved levels, we expect to make further progress."

 

 

Enquiries:

Zytronic plc

Mark Cambridge, Chief Executive

Claire Smith, Group Finance Director

 

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

Buchanan

Richard Darby, Gabriella Clinkard

 

020 7466 5000

N+1 Singer

Aubrey Powell, Will Goode

 

020 7496 3000

 



 

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 around projected capacitive technology ("PCT™") sensing. PCT offers significant durability, environmental stability and optical enhancement benefits to system designers of touch interactive, industrial, self-service and public access equipment.

 

During 2012, Zytronic developed new know-how to create mutual projected capacitive technology ("MPCT™") which enables multi-user and multi-touch touch sensing in ultra-large form factor sizes up to 84".

 

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

 


Chairman's statement

 

 

INTRODUCTION

We are pleased to announce a considerable increase in the interim results for the half year ended 31 March 2014, led by an improved mix of touch product orders and a significant improvement in margins.

RESULTS

Operating profit increased by 83% to £1.4m (2013: £0.8m) on revenues of £8.8m (2013: £8.5m).  Profit before taxation increased by 87% to £1.4m (2013: £0.8m) and after taxation of 18% (2013: 20%) resulted in profit after taxation of £1.2m (2013: £0.6m).  Earnings per share increased by 88% to 7.7p (2013: 4.1p).

The increase in profits principally arose from a significant improvement in gross margin to 34% (2013: 26%) driven by increased touch revenues of 9% to £6.8m (2013: £6.3m), a better mix of larger format touch products and production efficiencies.

The touch sensor business benefited from a redesign in the ATM market, increased orders from ticket machine manufacturing in EMEA and large format sized gaming applications in the USA. Our newer ultra-large format multi-touch technology solution for signage and interactive table applications also made encouraging progress.

CASH GENERATION

The Group generated a net £1.8m of cash before the payment of £1.0m in respect of the final dividend for last year.

The Group's net current cash position at 31 March 2014 was £6.1m (30 September 2013: £5.3m) before a non-current liability of £1.4m in relation to a property mortgage.

DIVIDEND

The Directors have declared a dividend of 2.85p per share (2013: 2.75p) payable on 25 July 2014 to shareholders on the Register on 11 July 2014.

OUTLOOK

We have a good pipeline of future prospects from both existing and new customers and with current trading continuing at the recently improved levels, we expect to make further progress.

 

 

Tudor Davies B.Sc.

Chairman

13 May 2014

 



 

Consolidated statement of comprehensive income

Unaudited results for the six months to 31 March 2014

 

 

 

 

Six months to

Six months to

Year to

 

 

31 March

31 March

30 September

 

 

2014

2013

2013

 

 

Unaudited

Unaudited

Audited

 

Notes

£'000

£'000

£'000

Group revenue


8,828

8,504

17,282

Cost of sales


5,839

6,295

11,961

Exceptional costs


-

-

413

Gross profit


2,989

2,209

4,908

Distribution costs


72

90

210

Administration expenses


1,500

1,437

2,858

Group trading profit


1,417

682

1,840

Other operating income


-

93

94

Group operating profit from continuing operations


1,417

775

1,934

Finance costs


18

28

39

Finance revenue


12

8

44

Profit from continuing operations


1,411

755

1,939

Tax expense

3

254

151

277

Profit for the period from continuing operations


1,157

604

1,662

Earnings per share





Basic

4

7.7p

4.1p

11.1p

Diluted

4

7.6p

4.0p

11.0p

Adjusted earnings per share excluding exceptional costs





Basic

4

7.7p

4.1p

13.9p

Diluted

4

7.6p

4.0p

13.8p

 

 

Consolidated statement of changes in equity

Unaudited results for the six months to 31 March 2014

 


Called up





share

Share

Retained



capital

premium

earnings

Total


£'000

£'000

£'000

£'000

At 30 September 2013

150

7,003

8,948

16,101

Profit for the period

-

-

1,157

1,157

Exercise of share options

1

141

-

142

Share-based payments

-

-

23

23

Dividends

-

-

(958)

(958)

At 30 March 2014 (unaudited)

151

7,144

9,170

16,465

 



 

 

Consolidated balance sheet

Unaudited results at 31 March 2014

 


At

At

At


31 March

31 March

30 September


2014

2013

2013


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Assets




Non-current assets




Intangible assets

1,455

1,528

1,453

Property, plant and equipment

7,616

8,074

7,888

Trade and other receivables

-

413

-


9,071

10,015

9,341

Current assets




Inventories

3,342

2,542

3,509

Trade and other receivables

2,671

2,968

2,430

Cash and short term deposits

6,270

4,618

5,474


12,283

10,128

11,413

Total assets

21,354

20,143

20,754

Equity and liabilities




Current liabilities




Trade and other payables

1,325

1,186

1,410

Financial liabilities

200

200

200

Accruals

1,058

895

688

Taxation liabilities

241

259

192

Government grants

-

1

-


2,824

2,541

2,490

Non-current liabilities




Financial liabilities

1,439

1,637

1,538

Deferred tax liabilities (net)

626

602

625


2,065

2,239

2,163

Total liabilities

4,889

4,780

4,653

Net assets

16,465

15,363

16,101

Capital and reserves




Equity share capital

151

149

150

Share premium

7,144

6,899

7,003

Revenue reserve

9,170

8,315

8,948

Total equity

16,465

15,363

16,101


 

Consolidated cashflow statement

Unaudited results for the six months to 31 March 2014

 

 



Six months to

Six months to

Year to



31 March

31 March

30 September



2014

2013

2013



Unaudited

Unaudited

Audited


Notes

£'000

£'000

£'000

Operating activities





Profit from continuing operations


1,411

755

1,939

Net finance costs


6

20

(5)

Depreciation and impairment of property, plant and equipment


345

350

695

Amortisation and impairment of intangible assets


161

165

380

Loss/(profit) on disposals of intangible assets


18

12

(37)

Amortisation of government grant


-

(96)

(97)

Share-based payments


23

22

80

Working capital adjustments





Decrease/(increase) in inventories


167

899

(68)

(Increase)/decrease in trade and other receivables


(242)

122

1,073

Increase/(decrease) in trade and other payables


251

(145)

(86)

Cash generated from operations


2,140

2,104

3,874

Taxation paid


(206)

(368)

(607)

Net cashflow from operating activities


1,934

1,736

3,267

Investing activities





Interest received


12

8

44

Proceeds from disposal of intangible assets


-

-

49

Payments to acquire property, plant and equipment


(35)

(293)

(492)

Payments to acquire intangible assets


(181)

(81)

(220)

Net cashflow from investing activities


(204)

(366)

(619)

Financing activities





Interest paid


(18)

(28)

(39)

Dividends paid to equity shareholders of the parent


(958)

(880)

(1,294)

Proceeds from share issue re options


142

37

142

Repayment of borrowings


(100)

(98)

(200)

Net cash outflow from financing activities


(934)

(969)

(1,391)

Increase in cash and cash equivalents


796

401

1,257

Cash and cash equivalents at the beginning of the period


5,474

4,217

4,217

Cash and cash equivalents at the period end

6

6,270

4,618

5,474

 


Notes to the interim report

Unaudited results for the six months to 31 March 2014

 

 

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 report and financial statements.

The interim results for the six months to 31 March 2014 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 2013 annual report and financial statements.

The financial information for the six months to 31 March 2014 and the comparative financial information for the six months to 31 March 2013 have not been audited. The comparative financial information for the year ended 30 September 2013 has been extracted from the 2013 annual report and financial statements.

The annual report and financial statements for the year ended 30 September 2013, which were approved by the Board of Directors on 20 December 2013, 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 products 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 2014.

3. Tax charge on profit on ordinary activities

The estimated tax rate for the year of 18% 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

Basic 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 2014 and 2013

 



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


2014

2014

2014

2013

2013

2013


£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after taxation

1,157

15,112

7.7

604

14,917

4.1

Basic EPS

1,157

15,112

7.7

604

14,917

4.1

Adjusted EPS

1,157

15,112

7.7

604

14,917

4.1


 

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


2014

2014

2014

2013

2013

2013


£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after taxation 

1,157

15,112

7.7

604

14,917

4.1

Weighted average number of shares under option

-

50

(0.1)

-

275

(0.1)

Diluted EPS

1,157

15,162

7.6

604

15,192

4.0

Adjusted diluted EPS

1,157

15,162

7.6

604

15,192

4.0

 

For the year to 30 September 2013



Weighted




average




number



Earnings

of shares

EPS


30 September

30 September

30 September


2013

2013

2013


£'000

Thousands

Pence

Profit on ordinary activities after taxation

1,662

14,943

11.1

Basic EPS

1,662

14,943

11.1

Adjusted EPS

2,075

14,943

13.9

 

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


2013

2013

2013


£'000

Thousands

Pence

Profit on ordinary activities after taxation

1,662

14,943

11.1

Weighted average number of shares under option

-

120

(0.1)

Diluted EPS

1,662

15,063

11.0

Adjusted diluted EPS

2,075

15,063

13.8

 

5. Dividends

The Directors propose the payment of an interim dividend of 2.85p per share (2013 interim: 2.75p), payable on 25 July 2014 to shareholders on the Register on 11 July 2014. This dividend has not been accrued in these interim accounts. The dividend payment will be about £430,000.

 


Six months to

Six months to

Year to


31 March

31 March

30 September


2014

2013

2013


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Ordinary dividends on equity shares




Final dividend of 5.90p per ordinary share paid on 15 March 2013

-

880

880

Interim dividend of 2.75p per ordinary share paid on 26 July 2013

-

-

414

Final dividend of 6.35p per ordinary share paid on 14 March 2014

958

-

-


958

880

1,294

 

6. Cash and cash equivalents


Six months to

Six months to

Year to


31 March

31 March

30 September


2014

2013

2013


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Cash at bank and in hand

6,270

4,618

5,474

 

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


2014

2013

2013


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Cash at bank and in hand

4,922

2,580

3,716

Short term deposits

2,545

3,402

2,534

Bank overdraft

(1,197)

(1,364)

(776)


6,270

4,618

5,474

 

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for variable lengths, being overnight, three months or one year (with break conditions), depending on the immediate cash requirements of the Group, and earn interest at variable rates.

At 31 March 2014 the Group had available a net £1.0m (cash less overdrawn accounts) overdraft facility from Barclays Bank plc which will fall for review in January 2015.

The fair value of cash and cash equivalents is £6.3m (31 March 2013: £4.6m).

 

7. Availability of the Interim Report

A copy of the interim report is available on the Company's website www.zytronicplc.com 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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