Information  X 
Enter a valid email address

Oxford Adv Surfaces (OXA)

  Print      Mail a friend

Monday 29 September, 2008

Oxford Adv Surfaces

Interim Results

RNS Number : 4494E
Oxford Advanced Surfaces Group PLC
29 September 2008
 



29 September 2008


Oxford Advanced Surfaces Group PLC (the 'Group' )


Interim Accounts as at 30 June 2008



CHAIRMAN'S STATEMENT 


I am delighted to report on your Group's performance for the six months to 30 June 2008 in this first Interim Financial Report since the successful reverse acquisition of Kanyon plc and the readmission to AIM as Oxford Advanced Surfaces Group plc. 


Group revenue in the 6 month period ended 30 June 2008 was £84,000 compared to £55,000 for the six months to 30 June 2007. The loss before tax was £1,547,000 compared to £59,000. Excluding the non-cash share based payment cost attributable to share options of £929,000, the loss before tax for the period ended 30 June 2008 was £618,000 (period to 30 June 2007: £58,000). Research and development costs directed towards valuable and practical opportunities increased from £26,000 to £179,000.


Cash balances at 30 June 2008 amounted to £6.0 million and continue to be managed prudently, with tight cost controls. The balance sheet was further strengthened in August 2008 when the Company successfully raised an additional £5 million before expenses with the issue of 7,695,600 new ordinary shares at a price of £0.65. This placing was a great success especially considering the difficult market conditions at the time and underlines the strength of the company's technology and business plans.


The fundraising will enable the Group to take advantage of the many attractive development opportunities that are currently available. Good progress was made in the first half of the year with staff numbers growing from 7 to 15, the addition of some necessary extra laboratory space at our Oxford HQ and the recruitment of an experienced Commercial Director who will be responsible for the significant Electronics and Alternative Energy markets.


I am pleased to report that during the period a number of new Joint Development Agreements with major international customers, including DuPont Advanced Fibre Systems, were signed. We are now engaged in a wide range of projects with market leading collaborators targeted at potentially large and valuable global markets including flat screen displays, printed circuit boards, advanced materials and fast moving consumer goods. 


We have also started to develop applications of the Onto™ technology for use in photovoltaic devices and solid state lighting and will be seeking appropriate development partners in the next few months. 


In June 2008 the Group announced its involvement in an important collaborative research and development project with the University of Manchester's Organic Materials Innovation Centre and the Centre for Process Innovation Ltd (CPI), a project which is to be supported by over £600,000 of funding from the Technology Strategy Board over the next 24 months. The project brings together the Group's OntoTM technology with leading edge research and process development skills from Manchester and the CPI. The target market opportunities will include the field of plastic electronics, ranging from radio frequency identification (RFID) to printed photovoltaic devices. 

 

The Board is confident that the successes of the first half of 2008 will continue and expect to progress a number of existing Joint Development Agreements to initial commercial projects with key industry players in our target markets and to conclude new Joint Development Agreements with leading companies in 2009.


I would like to thank all our staff for their commitment and hard work which has allowed us to make excellent progress in developing the exciting potential commercial success of your company.  





Jeremy Scudamore     
Chairman
    
29 September 2008







Contact:

Oxford Advanced Surfaces Group plc

Marcelo Bravo, Chief Executive


www.oxfordadvancedsurfaces.com

Tel: 01865 845807


Novum Securities Limited - Broker

Henry Turcan

Michael Brennan

Tel: 020 7562 4700

Zimmerman Adams International - Nominated Adviser

Ray Zimmerman/Jonathan Evans

Tel: 020 7060 1760


    



Six Months to 30 June 2008


Six Months to 30 June 2007


Five Months to 31 December 2007



(Unaudited)


(Unaudited)


(Audited)



£'000


£'000


£'000


Notes






CONTINUING OPERATIONS







Revenue


84


55


65








Cost of sales


(32)


(2)


(8)








GROSS PROFIT


52


53


57








Administrative expenses


(1,752)


(124)


(683)








LOSS FROM OPERATIONS

2

(1,700)


(71)


(626)








Finance income


153


12


11








LOSS BEFORE TAX


(1,547)


(59)


(615)








Income tax expense

3

-


-


-








LOSS FOR PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY


(1,547)


(59)


(615)








    


Loss per share attributable to the equity holders of the Company during the year:

 

Total and continuing:
 
 
 
 
— Basic and diluted
4
(0.87)p
(0.08)p
(0.83)p


 






Share








Based

Reverse 

 




Share

Share

Payment

Acquisition

Merger

Retained

Total


Equity

Premium

Reserve

Reserve

Reserve

Earnings

Equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000









At 1 January 2007

2

694

-

-

-

(67)

629

Loss for the 6 month period to 30 June 2007

-

-

-

-

-

(59)

(59)

Share based payments

-

-

1

-

-

-

1









At 30 June 2007

2

694

1

-

-

(126)

571









Loss for the 6 month period to 31 December 2007

-

-

-

-

-

(631)

(631)

Share based payments

-

-

394


-

-

394

Share options cancelled or exercised

-

-

(8)

-

-

8

-

Reverse acquisition (see note 1)

1,777

5,123

-

(6,831)

22,514


-

22,583









At 31 December 2007

1,779

5,817

387

(6,831)

22,514

(749)

22,917









Loss for the 6 month period to 30 June 2008

-

-

-

-

-

(1,547)

(1,547)

Share based payments

-

-

929

-

-

-

929









At 30 June 2008

1,779

5,817

1,316

(6,831)

22,514

(2,296)

22,299
















30 June 2008


30 

June 

2007


31 December 2007




(Unaudited)


(Unaudited)


(Audited)




£'000


£'000


£'000









ASSETS








NON-CURRENT ASSETS








Intangible assets



16,335


184


16,340

Property, plant and equipment



181


30


52












16,516


214


16,392

CURRENT ASSETS








Trade and other receivables



141


2


109

Cash and cash equivalents



5,967


396


6,866












6,108


398


6,975

LIABILITIES








CURRENT LIABILITIES








Trade and other payables



325


41


368

Bank overdrafts



-


-


82












325


41


450









NET CURRENT ASSETS



5,783


357


6,525









NET ASSETS



22,299


571


22,917









SHAREHOLDERS EQUITY








Called up share capital



1,779


2


1,779

Share premium



5,817


694


5,817

Merger reserve



22,514


-


22,514

Reverse acquisition reserve



(6,831)


-


(6,831)

Retained earnings



(2,296)


(126)


(749)

Share based payments reserve



1,316


1


387









TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY



22,299


571


22,917


The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2008 and were signed on its behalf by: 




        

M L Bravo - Director                                                        P G Spinks - Director




Six Months to 30 June 2008


Six Months to 30 June 2007


Five Months to 31 December 2007




£'000


£'000


£'000




(Unaudited)


(Unaudited)


(Audited)


Notes







Cash flows from operating activities








Cash generated from operations

5


(823)


(42)


(197)









Net cash inflow / (outflow) from operating activities



(823)


(42)


(197)

















Cash flows from investing activities








Purchase of intangible assets



-


-


(15)

Purchase of property, plant and equipment



(148)


(31)


(20)

Acquisition of subsidiaries



-


-


6,633

Interest received 



154


12


11









Net cash inflow from investing activities



6


(19)


6,609









Net cash from financing activities








Share issues



-


-


6









Net cash inflow from financing activities



-


-


6









Increase in cash and cash equivalents



(817)


(61)


6,418


Cash and cash equivalents at beginning of period



6,784


457


366

Cash and cash equivalents at end of period



5,967


396


6,784










 

1.   ACCOUNTING POLICIES
 
General information
Oxford Advanced Surfaces Group plc (“the Company”) and its subsidiaries (together “the Group”) develops and commercialises advanced materials and technology solutions leveraging a breakthrough surface modification technology platform called OntoTM. The Company is registered in England and Wales and is listed on AIM, a market operated by the London Stock Exchange.


Basis of preparation

The accounting policies adopted in these interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the period to 31 December 2007.  The interim financial information for the six months ended 30 June 2008 and 30 June 2007 is unaudited and does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. These interim financial statements include audited comparatives for the period to 31 December 2007. The 2007 Annual Report and Accounts received an unqualified audit opinion and have been filed with the Registrar of Companies. These interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and have been prepared under the historical cost convention. 


Basis of consolidation and reverse acquisition

The Company was incorporated on 13 June 2006 as Kanyon Two plc. On 10 July 2006 the Company changed its name to Kanyon plc and on 28 December 2007 it was changed to Oxford Advanced Surfaces Group plc. On 31 December 2007 following the readmission to AIM the Company became the legal parent of Oxford Advanced Surfaces Limited.


The combination has been accounted for as a reverse acquisition as if Oxford Advanced Surfaces Limited acquired Oxford Advanced Surfaces Group plc. Although this Interim Financial Report has been issued in the name of the legal parent, the Group's activity is in substance a continuation of that of the legal subsidiary, Oxford Advanced Surfaces Limited, because after the transaction the former Board of Oxford Advanced Surfaces Limited were deemed to have control of the Group and of the legal parent. The following accounting treatment has been applied in respect of the reverse acquisition: 

 

a)   The assets and liabilities of the legal parent, Oxford Advanced Surfaced Group plc, are recognised and measured in the Group financial statements at the pre-combination carrying amounts, which are considered to reflect their fair value. The excess of the combination cost over the fair value of the assets and liabilities acquired is accounted for as goodwill.
b)   The retained (loss) / earnings and other equity balances recognised in the Interim Financial Report to the date of the business combination reflect the retained (loss) / earnings and other equity balances of Oxford Advanced Surfaces Limited immediately before the business combination, and its results for the period from 14 June 2006 to the date of the business combination. However, the equity structure appearing in the Interim Financial Report reflects the equity structure of the legal parent, including the equity instruments issued under the share for share exchange to effect the business combination on 31 December 2007. The effect of using the equity structure of the legal parent gives rise to the reverse acquisition reserve.
c)   Comparative numbers for the six months to 30 June 2007 presented in the Interim Financial Report are those of the legal subsidiary, Oxford Advanced Surfaces Limited. The Group’s Interim Financial Report and related notes are for the six month period to 30 June 2008.

d)   The cost of the acquisition has been determined from the perspective of Oxford Advanced Surfaces Limited. As there was no readily available fair value of the legal subsidiaries’ equity instruments at the date of the acquisition the total fair value of all the issued equity instruments of the legal parent, Oxford Advanced Surfaces Group plc, before the business combination was used as the basis for determining the combination’s cost. Immediately before the acquisition the legal parent had 88,384,131 ordinary 1 pence shares in issue. The Directors have placed a fair value on these shares of 25 pence each valuing the combination at £22,096,000.

2.    OPERATING LOSS 


Operating loss is stated after charging


Period to 30 June 2008


Period to 30 June 

2007


Period to 31 December 

2007


£'000


£'000


£'000

Research and development costs 

179


26


82

Share based payments

929


1


394

Depreciation of property, plant and equipment - owned

19


2


5

Amortisation of intangible assets - patents

5


5


4

 

3.    INCOME TAX EXPENSE


No tax charge has been recognised in the accounts as the Group is currently in a net loss position. No deferred tax asset has been recognised in respect of the losses as recoverability is currently uncertain.

 

4.    LOSS PER SHARE (BASIC AND DILUTED)


The loss per share is based on the loss for the period and the number of ordinary shares of 1 pence each, being the weighted average number of shares in issue during the period. The weighted average number of shares for the period ended 30 June 2008 equates to the shares in issue at the period end. At 31 December 2007 the weighted average number of shares in issue are based on the number of shares issued by Oxford Advanced Surfaces Group plc to acquire Oxford Advanced Surfaces Limited for the period up to the acquisition and the weighted average number of shares in issue for the period since the acquisition. The weighted average number of shares for the period ended 30 June 2007 assumes that the 77,539,907 ordinary shares issued in relation to the reverse acquisition of Oxford Advanced Surfaces Limited are weighted in relation to the number of shares in issue by Oxford Advanced Surfaces Limited during the period.


30 June

30 June

31 December


2008

 2007

2007

Loss attributable to equity holdersof the Group (£'000)

(1,547)

(59)

(615)

Weighted average number of ordinary shares in issue

177,924,038

73,582,186

74,341,761

Basic & diluted loss per share (pence) 

(0.87)

(0.08)

(0.83)


The share options and warrants in issue are anti-dilutive and, therefore, diluted loss per share is equivalent to the basic loss per share.

 

5.    RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS

 
Period to 30 June 2008
 
Period to
30 June
2007
 
Period to 31 December 2007
 
£’000s
 
£’000s
 
£’000s
Profit/(loss) before tax
(1,547)
 
(59)
 
(615)
Depreciation and amortisation charges
24
 
7
 
9
Share based payment expense
929
 
1
 
394
Finance income
(153)
 
(12)
 
(11)
 
 
 
 
 
 
 
(747)
 
(63)
 
(223)
(Increase) / Decrease in trade and other receivables
(33)
 
17
 
54
Increase / (Decrease) in trade and other payables
(43)
 
4
 
(28)
 
 
 
 
 
 
Cash generated from operations
(823)
 
(42)
 
(197)


6.    RELATED PARTIES AND DIRECTORS' TRANSACTIONS


During the period ended 30 June 2008, the Company paid remuneration to the Directors in accordance with their service contracts and letters of appointment. In addition, Dr M G Moloney received fees through Oxford University Consulting in relation to technical support to the Group for the sum of £7,000 (period ending 30 June 2007: £12,000). There was £4,000 outstanding at the end of the period (period ending 30 June 2007: £8,000).


Directors' Interests

The interests of the directors (all of which are beneficial) and persons connected with them in the issued share capital of the Company as at 30 June 2008 were as follows:






Number of 



Number of



Ordinary Shares



Ordinary Shares 

Percentage 


held assuming

Percentage of 


in the Issued

of the Issued

Number of 

full exercise 

Fully diluted


Share Capital

Share Capital

Options held

of Options

Share Capital

M A Bretherton

435,000

0.24

-

435,000

0.23

D R Norwood *

9,753,674 

5.48

-

9,753,674

5.13

M L Bravo

5,386,502

3.03

5,386,502

10,773,004

5.66

P G Spinks

-

0.00

1,069,794

1,069,794

0.56

J P Scudamore

714,390

0.40

3,886,282

4,600,672

2.42

Dr M G Moloney

10,120,527

5.69

848,219

10,968,746

5.77

Dr A J Naylor **

848,219

0.48

848,219

1,696,438

0.89


* 678,671 of these Ordinary Shares are held by IP2IPO Nominees Limited on behalf of D R Norwood

** All these Ordinary Shares are held by IP2IPO Nominees Limited on behalf of Dr A J Naylor


D R Norwood and M A Bretherton are in addition interested in 3,000,000 and 60,000 shares respectively in Ora Capital Partners plc ('Ora'), representing 3 per cent and 0.06 per cent of Ora's issued ordinary share capital. 

 

7.    POST BALANCE SHEET EVENTS 


On 1 August 2008 the Company entered into a placing agreement for 7,311,000 new ordinary shares at the placing price of £0.65 per new share representing an aggregate subscription amount of £4,752,150 before expenses.


Simultaneously the following directors of the Company agreed to subscribe in aggregate for 384,600 new ordinary shares for an aggregate subscription amount of £249,990: 


Director 

No. of new ordinary shares subscribed

Amount

£

M L Bravo 

38,500

25,025

P G Spinks 

11,500

7,475

J P Scudamore 

15,400

10,010

D R Norwood 

307,700

200,005

Dr A J Naylor 

11,500

7,475


Application was made for the 7,695,600 new ordinary shares to be admitted to trading on AIM which took place on 6 August 2008. The total amount raised was £5,002,140 and cash expenses of the issue amounted to approximately £278,000.


The new ordinary shares issued represented approximately 4% of the previously issued share capital and the new total voting rights of the company are now 185,619,638 ordinary shares.


In addition to the above expenses, the Company issued a warrant instrument to Novum Securities Limited for 230,868 new ordinary shares at a strike price of £0.65, equivalent to the subscription price. The warrants have a life of five years from the date of issue.

 

8.    INTERIM FINANCIAL STATEMENTS


These interim financial statements will be distributed to shareholders and are also available on the Company's website at www.oxfordsurfaces.com





This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR ILFISASIRFIT