Interim results for six months ended 30 Sept 2015
Enteq Upstream plc
Interim results for the six months ended 30 September 2015
AIM traded Enteq Upstream plc ("Enteq", the "Company" or the "Group"), the oil & gas drilling technology company, today releases its interim results for the six months ended 30 September 2015.
Operational Highlights
· Oil price and North American rig count reduced by over 50% since September 2014
· Overhead run-rate reduced by approximately 50% in same time period
· Half-on-half revenues continued to decline reflecting rig count reduction
· Cash balance, at 30 September 2015, increased to $14.5m
Financial Metrics
|
|
Six months to: |
|||
|
|
30 Sept 2015 US$m |
|
30 Sept 2014 US$m |
|
|
· Revenue |
3.0 |
|
13.6 |
|
|
· Consolidated adjusted EBITDA1 |
0.4 loss |
|
1.0 |
|
|
· Loss before tax |
1.3 |
|
2.2 |
|
|
· Adjusted earnings per share (cents)2 |
2.5 loss |
|
1.3 |
|
|
· Cash |
14.5 |
|
13.8 |
|
Outlook
· Oil price and North American rig count expected to remain depressed until at least 2017
· Spare equipment capacity in market continues to depress demand for Enteq products
Neil Warner, Chairman of Enteq Upstream plc, commented:
"Enteq's reported results mirror recent announcements from other major oil-field service companies. As expected, Enteq's revenues and profits have suffered due to the scale of the industry down-turn. In addition to the decisive internal cost reduction programme reported in our March 2015 full year results, further reductions have been made during H1 2015/16. As a result, we have improved our cash balance since March 2015 and now operate at close to a break-even adjusted EBITDA level. The Group continues to explore opportunities to expand market share outside North America and to maintain a strong technology offering."
1 Adjusted EBITDA is reported profit before tax adjusted for interest, depreciation, amortisation, foreign exchange movements, performance share plan charges and exceptional items.
2 Adjusted earnings per share is reported profit per share adjusted for foreign exchange movements, amortisation, performance share plan charges and exceptional items.
For further information, please contact:
Enteq Upstream plc +44 (0) 1494 618741
Martin Perry, Chief Executive Officer
David Steel, Finance Director
Investec Bank plc (Nomad and Broker) +44 (0) 20 7597 4000
Chris Treneman, Patrick Robb, David Anderson
Interim Report
CHAIRMAN & CHIEF EXECUTIVE OFFICER REPORT
Introduction
Enteq Upstream is a supplier of Measurement While Drilling equipment to oil and gas directional drilling service companies. In the six months ended 30 September 2015 in excess of 80% of Enteq's revenues were generated in North America, driven by the activity of drilling directional and horizontal wells for the extraction of oil and gas from shale.
Enteq produces specialist equipment which measures directional and other operational parameters whilst a well is being drilled. The service company customer typically buys or rents this equipment in order to support a drilling contract they have with the oil or gas company.
Since September 2014, as a result of a fall in WTI crude oil prices from US$110 to approximately US$50, much of the drilling has become uneconomic, resulting in contracts for rigs and drilling being cancelled or not renewed. The number of active rigs in North America has fallen from approximately 2,000 to around 800. The service companies, therefore, currently have substantial levels of unutilised equipment. Service companies with remaining contracts 'cannibalise' their excess capacity in order to maintain the equipment which is still in operation. Purchases of new equipment are, therefore, substantially reduced whilst this over- capacity exists.
As and when the North American drilling market stabilises, albeit at a potential new, lower, level of activity, the remaining equipment will need to be refreshed and updated, and the excess capacity of equipment which has been 'cannibalised' will disappear from the market.
Enteq has taken pro-active and timely steps to adjust both overheads and production capacity to reflect the reduced market size. The business is now operating at close to break-even at an adjusted EBITDA level given the current market conditions. The business is also cash positive, as existing debtors are collected and new sales are made from existing inventories. By maintaining a strong cash balance, Enteq is well positioned for any market recovery.
Operational Highlights
· Oil price and North American rig count reduced by over 50% since September 2014
· Overhead run-rate reduced by approximately 50% in same time period
· Half-on-half revenues continued to decline reflecting rig count reduction
· Cash balance, at 30 September 2015, increased to $14.5m
Operational Overview
In the six months to 30 September 2015, Enteq merged two operational sites, in the Houston area, into one without significantly impacting the level of service provided to the customer base. Mechanical manufacturing has been broadly suspended and sales are being made from existing inventories. The Californian technology and electronic sensor manufacturing facilities have been consolidated into a single unit, with the core engineering function being maintained. All support functions to the operating business, including Finance, HR, Group and general administration, have been reduced to a minimum. During the period, the US moved to a single finance team using one common system, resulting in reduced staff and other support costs. On 1 July 2015, the Board of Directors and other senior managers accepted a further salary reduction.
New opportunities continue to be explored, primarily in the Eastern Hemisphere.
Market conditions
Rig count, or the number of operational drilling rigs, is driven primarily by the price of oil. Below a certain price the drilling of a new well is not cost-effective.
Improved efficiencies in drilling and production techniques in North America and the volume of wells drilled in the last two to three years has given rise to all-time high production levels of oil in North America. OPEC and Saudi Arabia in particular are reluctant to lose global market share to North American oil and have maintained production, resulting in a substantial and sustained fall in the price of oil.
Many other global factors need to be taken into consideration, but for domestic economic reasons in OPEC countries, and for the oil industry to sustain the required supply levels, oil prices are expected to increase, in the medium term. However, there is little consensus as to what will be the new "normal" price and when this will be reached and hence when the drilling market will stabilise.
Outlook
· Oil price and North American rig count expected to remain depressed until at least Q4 2016
· Spare equipment capacity in market depressing demand for Enteq products
Results
For the six month period to 30 September 2015, Enteq reported revenues of US$ 3.0m (September 2014 US$ 13.6m) and an adjusted EBITDA loss of US$ 0.4m (September 2014: profit of US$ 1.0m).
The group's cash balance remains strong at US$ 14.5m as at 30 September 2015.
Like-for-like overheads have reduced from US$ 4.4m, in the 6 months to September 2014, to US$ 2.3m in the period being reported; a reduction of 48%. The majority of the reduction has been staff related, with 17 posts being removed across all overhead related departments; 5 of which have been removed since 1 April 2015.
Cash balance and cashflow
As at 30 September 2015, the Group had a cash balance of US$ 14.5m (September 2014 US$ 13.8m), an improvement of US$ 0.4m over the position as at 31 March 2015. This movement can be analysed as follows:
|
|
US$m
|
|
Adjusted EBITDA |
(0.4)
|
|
Change in operational working capital |
0.7
|
|
Operational cash generated |
0.3
|
|
R&D expenditure |
(0.1)
|
|
Warranty settlement received |
0.3
|
|
Severance payments |
(0.1) |
|
|
|
|
Net cash movement |
0.4
|
|
Cash balances as at 1 April 2015 |
14.1 |
|
Cash balances as at 30 September 2015 |
14.5 |
During the period, US$ 0.3m was received in relation to a claim against the warranties given by the vendors of M&R Industries, Ltd. and Pro-Flow Fabrications Technologies, Ltd, the assets and liabilities of which formed the subsidiary, Enteq KMS LLC. This cash receipt represented the full and final settlement of the claim.
The US$ 0.1m severance payments related to the 26 posts eliminated during the period in order to further align the cost base of the Group to the challenging market conditions. Of the 26 posts, 21 were from production areas and 5 related to overhead functions.
Prospects
In the medium term, the North American market for land drilling is expected to stabilise and Enteq is determined to maintain or increase its market share in that market. Outside North America, Enteq continues to identify and convert new customers in order to broaden the customer base. New technologies continue to be reviewed and developed.
Martin Perry Neil Warner
Chief Executive Chairman
Enteq Upstream plc
12 November 2015
|
Enteq Upstream plc |
|
|
|
|
|
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months to 30 September 2015 |
Six months to 30 September 2014 |
Year to 31 March 2015 |
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
Notes |
US$ 000's |
US$ 000's |
US$ 000's |
|
|
|
|
|
|
|
|
|
Revenue |
|
2,983 |
13,635 |
18,525 |
|
|
Cost of Sales |
|
(628) |
(8,201) |
(11,614) |
|
|
Gross Profit |
|
2,355 |
5,434 |
6,911 |
|
|
Administrative expenses before amortisation |
|
(3,743) |
(4,735) |
(8,809) |
|
|
Amortisation of acquired intangibles |
9b |
- |
(2,863) |
(5,701) |
|
|
Impairment of acquired intangibles including goodwill |
|
- |
- |
(39,538) |
|
|
Other exceptional items |
|
41 |
(108) |
(122) |
|
|
Foreign exchange (loss)/gain on operating activities |
|
10 |
(2) |
(12) |
|
|
Total Administrative expenses |
|
(3,692) |
(7,708) |
(54,182) |
|
|
Operating loss |
|
(1,337) |
(2,274) |
(47,271) |
|
|
|
|
|
|
|
|
|
Finance income |
|
39 |
83 |
127 |
|
|
|
|
|
|
|
|
|
Loss before tax |
|
(1,298) |
(2,191) |
(47,144) |
|
|
|
|
|
|
|
|
|
Tax expense |
8 |
- |
- |
(83) |
|
|
Loss for the period |
5 |
(1,298) |
(2,191) |
(47,227) |
|
|
|
|
|
|
|
|
|
Loss attributable to: |
|
|
|
|
|
|
Owners of the parent |
|
(1,298) |
(2,191) |
(47,227) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/loss per share (in US cents): |
7 |
|
|
|
|
|
Basic |
|
(2.2) |
(3.7) |
(80.1) |
|
|
Diluted |
|
(2.2) |
(3.7) |
(80.1) |
|
|
|
|
|
|
|
|
|
Adjusted earnings per share (in US cents): |
7 |
|
|
|
|
|
Basic |
|
(2.5) |
1.3 |
(3.1) |
|
|
Diluted |
|
(2.5) |
1.3 |
(3.1) |
|
|
Condensed Consolidated Statement of Comprehensive Income |
|
|
|
|
|
|
|
Six months to 30 September 2015 |
Six months to 30 September 2014 |
Year to 31 March 2015 |
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
US$ 000's |
US$ 000's |
US$ 000's |
|
|
|
|
|
|
|
Loss for the period |
|
(1,298) |
(2,191) |
(47,227) |
|
Other comprehensive income for the period: |
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
- |
- |
- |
|
Items that will be reclassified subsequently to profit or loss |
|
- |
- |
- |
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
(1,298) |
(2,191) |
(47,227) |
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
Owners of the parent |
|
(1,298) |
(2,191) |
(47,227) |
|
Enteq Upstream plc |
|
|
|
|
|
Condensed Statement of Financial Position |
|
|
||
|
|
|
|
|
|
|
|
|
30 September 2015 |
30 September 2014 |
31 March 2015 |
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Notes |
US$ 000's |
US$ 000's |
US$ 000's |
|
Assets |
|
|
|
|
|
Non-current |
|
|
|
|
|
Goodwill |
9a |
- |
15,127 |
- |
|
Intangible assets |
9b |
148 |
26,821 |
- |
|
Property, plant and equipment |
|
3,069 |
3,516 |
4,837 |
|
Non-current assets |
|
3,217 |
45,464 |
4,837 |
|
|
|
|
|
|
|
Current |
|
|
|
|
|
Trade and other receivables |
|
4,323 |
13,324 |
5,019 |
|
Inventories |
|
7,690 |
7,463 |
7,363 |
|
Cash and cash equivalents |
|
14,524 |
13,791 |
14,091 |
|
Current assets |
|
26,537 |
34,578 |
26,473 |
|
Total assets |
|
29,754 |
80,042 |
31,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
10 |
943 |
939 |
939 |
|
Share premium |
|
90,467 |
90,395 |
90,395 |
|
Share based payment reserve |
|
456 |
271 |
364 |
|
Retained earnings |
|
(64,119) |
(17,785) |
(62,821) |
|
Total equity |
|
27,747 |
73,820 |
28,877 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current |
|
|
|
|
|
Trade and other payables |
|
2,007 |
6,222 |
2,433 |
|
Total equity and liabilities |
|
29,754 |
80,042 |
31,310 |
|
Enteq Upstream plc |
|
|
|
|
|
|
Condensed Consolidated Statement of Changes in Equity
Six months to 30 September 2015 |
|
|
|||
|
|
|
|
|
Share |
|
|
|
Called up |
Profit |
|
based |
|
|
|
share |
and loss |
Share |
payment |
Total |
|
|
capital |
account |
premium |
reserve |
equity |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
|
|
|
|
|
|
|
|
Issue of share capital |
4 |
- |
72 |
- |
76 |
|
Share based payment charge |
- |
- |
- |
92 |
92 |
|
Transactions with owners |
4 |
- |
72 |
92 |
168 |
|
|
|
|
|
|
|
|
Loss for the period |
- |
(1,298) |
- |
- |
(1,298) |
|
Other comprehensive expense for the period - |
- |
- |
- |
- |
|
|
Total comprehensive income |
- |
(1,298) |
- |
- |
(1,298) |
|
|
|
|
|
|
|
|
Movement in period: |
4 |
(1,298) |
72 |
92 |
(1,130) |
|
As at 1 April 2015 (audited) |
939 |
(62,821) |
90,395 |
364 |
28,877 |
|
As at 30 September 2015 (unaudited) |
943 |
(64,119) |
90,467 |
455 |
27,747 |
|
Six months to 30 September 2014
|
|
|
|
|
|
|
|
|
|
|
Share |
|
|
|
Called up |
Profit |
|
based |
|
|
|
share |
and loss |
Share |
payment |
Total |
|
|
capital |
account |
premium |
reserve |
equity |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
|
|
|
|
|
|
|
|
Share based payment charge |
- |
- |
- |
49 |
49 |
|
Transactions with owners |
- |
- |
- |
49 |
49 |
|
|
|
|
|
|
|
|
Loss for the period |
- |
(2,191) |
- |
- |
(2,191) |
|
Other comprehensive expense for the period - |
- |
- |
- |
- |
|
|
Total comprehensive income |
- |
(2,191) |
- |
- |
(2,191) |
|
|
|
|
|
|
|
|
Movement in period: |
- |
(2,191) |
- |
49 |
(2,142) |
|
As at 1 April 2014 (audited) |
939 |
(15,594) |
90,395 |
222 |
75,962 |
|
As at 30 September 2014 (unaudited) |
939 |
(17,785) |
90,395 |
271 |
73,820 |
|
Enteq Upstream plc |
|
|
|
|
Condensed Consolidated Statement of Cash flows
|
|
|
|
|
|
|
|
|
|
|
Six months to 30 September 2015 |
Six months to 30 September 2014 |
Year to 31 March 2015 |
|
|
Unaudited |
Unaudited |
Audited |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
|
Cash flows from operating activities |
|
|
|
|
Loss for the period |
(1,298) |
(2,191) |
(47,227) |
|
Net finance income |
(39) |
(83) |
(127) |
|
Loss on disposal of fixed assets |
- |
- |
195 |
|
Share-based payment non-cash charges |
91 |
49 |
142 |
|
Impact of foreign exchange movement |
(10) |
2 |
12 |
|
Impairment of acquired intangibles and goodwill |
- |
- |
39,538 |
|
Depreciation and Amortisation charges |
939 |
3,198 |
6,665 |
|
|
(317) |
975 |
(802) |
|
|
|
|
|
|
Decrease/(increase) in inventory |
506 |
(1,873) |
(1,773) |
|
Decrease/(increase) in trade and other receivables |
697 |
(4,658) |
3,645 |
|
(Decrease)/increase in trade and other payables |
(427) |
1,358 |
(2,429) |
|
Net cash from operating activities |
459 |
(4,198) |
(1,359) |
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
Purchase of property, plant and equipment |
(3) |
(154) |
(2,297) |
|
Purchase of intangible fixed assets |
(148) |
(767) |
(1,197) |
|
Interest received |
39 |
83 |
127 |
|
Net cash from investing activities |
(112) |
(838) |
(3,367) |
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
Share issue |
76 |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents |
423 |
(5,036) |
(4,726) |
|
|
|
|
|
|
Non-cash movements - foreign exchange |
10 |
(2) |
(12) |
|
Cash and cash equivalents at beginning of period |
14,091 |
18,829 |
18,829 |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
14,524 |
13,791 |
14,091 |
ENTEQ UPSTREAM PLC
NOTES TO THE FINANCIAL STATEMENTS
For the six months to 30 September 2015
1. Reporting entity
Enteq Upstream plc ("the Company") is a public limited company incorporated and domiciled in England and Wales (registration number 07590845). The Company's registered address is The Courtyard, High Street, Ascot, Berkshire, SL5 7HP.
The Company's ordinary shares are traded on the AIM market of The London Stock Exchange.
Both the Company and its subsidiaries (together referred to as the "Group") are focused on the provision of specialist products and technologies to the upstream oil and gas services market.
2. General information and basis of preparation
The information for the period ended 30 September 2015 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the period ended 31 March 2015 has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.
The Group's consolidated interim financial statements are presented in US Dollars (US$), which is also the functional currency of the parent company. These condensed consolidated interim financial statements (the interim financial statements) have been approved for issue by the Board of directors on 12 November 2015.
This half-yearly financial report has not been audited, and has not been formally reviewed by auditors under the Auditing Practices Board guidance in ISRE 2410.
3. Accounting policies
The interim financial statements have been prepared on the basis of the accounting policies and methods of computation applicable for the period ended 31 March 2015. These accounting policies are consistent with those applied in the preparation of the accounts for the period ended 31 March 2015, except for the adoption of the following standards as of 1 April 2015:
• Annual Improvements to IFRSs 2010 -2012 Cycle
The adoption of these new accounting standards has not had a material impact on the interim statement for the current period. Further details of the impact of their adoption will be given in the year-end financial statements for the year ended 31 March 2016.
4. Estimates
When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last annual financial statements for the year ended 31 March 2015.
5. Adjusted Earnings
The following analysis illustrates the performance of the Group's activities, and reconciles the Group's loss, as shown in the condensed consolidated interim income statement, to adjusted earnings. Adjusted earnings is presented to provide a better indication of overall financial performance and to reflect how the business is managed and measured on a day-today basis. Adjusted earnings before interest, taxation, depreciation and amortisation ("adjusted EBITDA") is also presented as it is a key performance indicator used by management.
|
|
Six months to 30 September 2015 |
Six months to 30 September 2014 |
Year to 31 March 2015 |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
|
|
|
Loss for the period |
(1,298) |
(2,191) |
(47,227) |
|
Other exceptional items |
(145) |
112 |
122 |
|
Impairment of intangible assets |
- |
- |
39,538 |
|
Amortisation of acquired intangible assets |
- |
2,863 |
5,701 |
|
Foreign exchange movements |
(10) |
2 |
12 |
|
Adjusted earnings |
(1,453) |
786 |
(1,854) |
|
|
|
|
|
|
Depreciation charge |
939 |
335 |
964 |
|
Finance income |
(39) |
(83) |
(127) |
|
PSP charge |
104 |
- |
93 |
|
Other non-recurring charges |
- |
- |
57 |
|
Tax charge |
- |
- |
83 |
|
|
|
|
|
|
Adjusted EBITDA |
(449) |
1,038 |
(784) |
|
|
|
|
|
|
Exceptional bad debt charge |
- |
- |
835 |
|
|
|
|
|
|
Underlying adjusted EBITDA |
(449) |
1,038 |
51 |
6. Segmental Reporting
For management purposes, the Group is currently organised into a single business unit, the Drilling Division, which is based, operationally, solely in the USA.
The principal activities of the Drilling Division are the design, manufacture and selling of specialised products and technologies for Directional Drilling and Measurement While Drilling operations used in the energy exploration and services sector of the oil and gas industry.
At present, there is only one operating segment and the information presented to the Board is consistent with the consolidated income statement and the consolidated statement of financial position.
The net assets of the Group by geographic location (post-consolidation adjustments) are as follows:
|
Net Assets |
30 September 2015 |
30 September 2014 |
31 March 2015 |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
|
|
|
Europe (UK) |
15,039 |
17,328 |
13,834 |
|
United States |
12,708 |
56,492 |
15,028 |
|
Total Net Assets |
27,747 |
73,820 |
28,862 |
The net assets in Europe (UK) are represented, primarily, by cash balances.
The revenue, by geographical area, is as follows:
|
Revenue |
30 September 2015 |
30 September 2014 |
31 March 2015 |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
|
|
|
North America |
2,456 |
10,731 |
15,312 |
|
China |
106 |
1,948 |
1,950 |
|
Middle East |
421 |
956 |
1,263 |
|
Total Revenue |
2,983 |
13,635 |
18,525 |
7. Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders for the six months of US$ 1,298,000 (September 2014: loss of US$ 2,191,000) by the weighted average number of ordinary shares in issue during the period of 59,031,278 (September 2014: 58,953,653).
Adjusted earnings per share
Adjusted earnings per share is calculated by dividing the adjusted earnings for the six months of US$ 1,453,000 (September 2014: loss of US$ 786,000), by the weighted average number of ordinary shares in issue during the period of 59,031,278 (September 2014: 58,953,653).
The adjusted diluted earnings per share information are considered to provide a fairer representation of the Group's trading performance.
A reconciliation between basic earnings and adjusted earnings is shown in Note 5.
As the Group is loss making, any potential ordinary shares have the effect of being anti-dilutive. Therefore, the diluted EPS is the same as the basic EPS. As the share price, as at 30 September 2015, was below the option price of all the options issued, the adjusted diluted EPS the same as adjusted EPS.
8. Income Tax
No liability to corporate taxes, in either the UK or the US, arose on ordinary activities for the six months under review.
9. Intangible Fixed Assets
a) Goodwill
|
|
US$ 000's |
|
Cost: |
|
|
As at 30 September 2015 and 1 April 2015 |
19,619 |
|
|
|
|
Impairment: |
|
|
As at 30 September 2015 and 1 April 2015 |
(19,619) |
|
|
|
|
Net Book Value: |
|
|
As at 30 September 2015 and 1 April 2015 |
- |
b) Other Intangible Fixed Assets
|
|
Developed technology |
IPR&D technology |
Brand names |
Customer relationships |
Non- compete agreements |
Total |
|
|
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
US$ 000's |
|
Cost: |
|
|
|
|
|
|
|
As at 1 April 2015 |
12,320 |
7,108 |
1,240 |
20,586 |
5,931 |
47,185 |
|
Capitalised in period |
- |
148 |
- |
- |
- |
148 |
|
As at 30 September 2015 |
12,320 |
7,256 |
1,240 |
20,586 |
5,931 |
47,333 |
|
|
|
|
|
|
|
|
|
Amortisation: |
|
|
|
|
|
|
|
As at 1 April 2015 |
(12,320) |
(7,108) |
(1,240) |
(20,586) |
(5,931) |
(47,185) |
|
Charge for the period |
- |
- |
- |
- |
- |
- |
|
As at 30 September 2015 |
(12,320) |
(7,108) |
(1,240) |
(20,586) |
(5,931) |
(47,185) |
|
|
|
|
|
|
|
|
|
Net Book Value: |
|
|
|
|
|
|
|
As at 30 September 2015 |
- |
148 |
- |
- |
- |
148 |
|
As at 1 April 2015 |
- |
- |
- |
- |
- |
- |
The main categories of Intangible Fixed Assets are as follows:
Developed technology:
This is technology which is currently commercialised and embedded within the current product offering.
IPR&D technology:
This is technology which is in the final stages of field testing, has demonstrable commercial value and is expected to be launched within the next 12 months.
Brand names:
The value associated with the XXT trading name used within the Group.
Customer relationships:
The value associated with the on-going trading relationships with the key customers acquired.
Non-compete agreements:
The value associated with the agreements signed by the Vendors of the acquired businesses not to compete in the markets of the businesses acquired.
10. Share capital
Share capital as at 30 September 2015 amounted to US$ 943,000 (31 March 2015 and 30 September 2014: US$ 939,000).
11. Going concern
The Directors have carried out a review of the Group's financial position and cash flow forecasts for the next 12 months by way of a review of whether the Group satisfies the going concern tests. These have been based on a comprehensive review of revenue, expenditure and cash flows, taking into account specific business risks and the current economic environment. With regards to the Group's financial position, it had cash and cash equivalents at 30 September 2015 of US$ 14.5 million.
Having taken the above into consideration the Directors have reached a conclusion that the Group is well placed to manage its business risks in the current economic environment. Accordingly, they continue to adopt the going concern basis in preparing the Interim Condensed Financial Statements.
12. Principal risks and uncertainties
Further detail concerning the principal risks affecting the business activities of the Group is detailed on pages 12 and 13 of the Annual Report and Accounts for the period ended 31 March 2015. Consideration has been given to whether there have been any changes to the risks and uncertainties previously reported. None have been identified.
13. Events after the balance sheet date
There have been no material events subsequent to the end of the interim reporting period ended 30 September 2015.
14. Copies of the interim results
Copies of the interim results can be obtained from the Group's registered office at The Courtyard, High Street, Ascot, Berkshire, SL5 7HP and are available from the Group's website at www.enteq.com.
This information is provided by RNS
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