Audited Full Year Results to 31 May 2019
23 October 2019
FILTRONIC PLC
AUDITED FULL YEAR RESULTS FOR THE YEAR ENDED 31 MAY 2019
Filtronic plc (AIM: FTC), the designer and manufacturer of antennas, filters and mmWave products for the critical communications and wireless telecoms markets, announces its full year results for the 12 months ended 31 May 2019.
Financial Highlights
|
|
|
Restated |
|
|
2019 |
2018 |
|
Revenue |
£15.9m |
£21.6m |
|
Earnings before interest, taxation, depreciation and amortisation |
£0.7m |
£3.6m |
|
Operating profit |
£0.2m |
£3.2m |
|
Profit before taxation |
£0.1m |
£2.7m |
|
Basic (loss)/earnings per share |
(0.63)p |
0.59p |
|
Diluted (loss)/earnings per share |
(0.63)p |
0.59p |
|
Net cash balance as at 31 May |
£2.5m |
£3.6m |
|
Cash inflow (used in)/from operating activities |
£0.0m |
£1.8m |
Operational Highlights
· Strong demand for 5G backhaul products:
· Over £10m of order intake for Orpheus for delivery in FY2020.
· Production capacity and capability increased at the Sedgefield site to meet rising demand.
· Public safety market product offering and engineering capability extended.
· Engineering team strengthened in Leeds to capitalise on these opportunities.
· Progression of the divestment of the Telecoms Antenna Operations following a comprehensive strategic review.
· Final settlement of the warranty claim settled at $2.0m (£1.6m) with the balance sheet impact reflected in note 11. The warranty claim will be paid out of existing cash resources over four instalments.
Commenting on the outlook, Reg Gott, Chairman, said:
"We have concluded a challenging year but entered the new year with optimism and excitement as we seek to capitalise on numerous opportunities with the potential to deliver significant organic growth. The decision to divest our Telecoms Antenna Operation allows us to focus on a profitable continuing business where we can sustainably differentiate ourselves in the market and operate with a reduced geographical footprint and a more efficient overhead cost base.
We are delighted with the recent order intake in excess of £10m for our class-leading Orpheus transceiver product, utilised in 5G backhaul networks, which builds on the long-term defence contracts we have accumulated in recent years. This progress in these key markets, together with the new products we are developing for our customer in the public safety market, will provide us a robust layer of business on which to build and grow. To enable us to exploit these opportunities, we have made significant investments in both plant and machinery and further expanded our engineering team to augment capacity and capability in order to facilitate further contract wins."
Annual General Meeting
The Annual General Meeting will take place at 11am on 27 November 2019 at the offices of Pinsent Masons, 1 Park Row, Leeds, LS1 5AB.
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|
Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
Chairman's statement
The financial year proved to be both challenging and rewarding and despite setbacks associated with our Telecoms Antenna Operation, both in terms of drastically reduced demand for mMIMO antennas and warranty claims, we exit the year with renewed optimism on the back of strong demand for our 5G backhaul, public safety and defence and aerospace offerings.
5G backhaul demand has been strong and during the past few months we have built up a sizeable order book for which we have been scaling up production. Additionally, we saw production of the first two defence contracts previously announced fully ramped. The combination of these two events saw us approaching capacity at our Sedgefield facility and we have committed the funding to increase our manufacturing capability ahead of further growth in demand.
Substantial progress has been made by Filtronic's executive team to refine and implement a strategy to address the changes in the markets we operate in and it is pleasing to see us build on established customer relationships as well as making good progress to expand the markets we serve.
As previously announced, we have decided to sell our Telecoms Antenna Operations. We have concluded that to be successful in this consolidating market requires a greater scale of organisation to compete with the much larger competitors now operating in this part of the market. Consequently, we will report this part of our business as a discontinuing operation.
Financial performance summary
Group sales for the year from continuing operations were £15.9m (2018: £21.6m) and an operating profit of £0.2m was achieved (2018: £3.2m). Earnings before interest, taxation, depreciation and amortisation ("EBITDA") from continuing operations was £0.7m (2018: £3.6m).
The Group had net cash of £2.5m at the end of the financial year (2018: £3.6m). The cash reduction in the year is due to the investment in internally-generated development costs and plant and equipment. The Group maintains an invoice discounting facility in the UK with Barclays Bank plc of £3.0m that was undrawn at the year-end (2018: £nil). We have a further financing agreement with Wells Fargo Bank for an invoice factoring facility in the United States of $4.0m that was also undrawn at the year-end (2018: £nil).
Dividend
No dividend is proposed for the year (2018: £nil). The Board continues to be of the opinion that shareholders are better served by cash being retained by the company to fund future opportunities.
Board Composition
We were delighted to announce the appointment of Pete Magowan to the Board during the year. Pete has brought a fresh perspective to the business and his sector experience and capital markets knowledge are proving invaluable as we look to develop the business.
Outlook
Filtronic has entered the new financial year with a strong order book for both 5G backhaul and defence and aerospace related products. With a major investment program in new capital equipment on schedule, significant upside potential available from public safety markets and a disposal process for our Telecoms Antenna Operations underway, the Group is looking forward with considerable optimism.
Uncertainties continue to surround the terms and timing of the United Kingdom's exit from the European Union and whilst operationally we have taken action to mitigate currently foreseeable disruption, it is not possible to predict all eventualities. The biggest impact we currently anticipate and are indeed witnessing, is in relation to foreign exchange, as the Group manages a surplus of US dollars through operating in global markets.
Finally, I would like to thank our shareholders for the considerable patience they have shown as we restructure the Group, to our customers for their continuing faith in Filtronic and to our employees for their hard work throughout an incredibly busy year.
Reg Gott
Chairman
22 October 2019
Chief executive's review
FY2019 proved to be a pivotal year for Filtronic and FY2020 has started well with strong order intake on the 5G backhaul product.
After considerable investment in developing mMIMO antennas for our lead OEM customer it was frustrating that the consolidation in the US Mobile Network Operator ("MNO") market changed capital spending priorities. This resulted in a significant shortfall in our planned revenues for the year and triggered our decision to divest our Telecoms Antenna Operations. The warranty claim that arose during the year, relating to an antenna product shipped in 2016/17, exacerbated our challenge and whilst the final settlement is capped at £1.6m we are grateful for the constructive way this issue was approached by our customer and the efforts that were taken to mitigate the scale of the final settlement.
Whilst we faced challenges with our Telecoms Antenna Operations, we saw good performance in our continuing operations. Demand for 5G backhaul products was healthy in FY2019 and has accelerated in FY2020 with a succession of orders received. Currently, year to date sales plus order book for these products exceeds £10m. Sales of filters and combiners to the public safety market continue to be good and we have worked hard to gain further access to this market over the past 18 months. This has opened up a number of opportunities for us and we commenced a new product development program in FY2019 with the first new products being released at the end of the calendar year. Sales to our leading defence and aerospace customer were strong throughout FY2019 and we anticipate further growth in this sector in FY2020.
Our strategy and markets
Having decided that it is in the best interest of our stakeholders to sell our Telecoms Antenna Operations, considerable thought has gone into how we move forward as a business. Our simplified operating structure and reduced geographic footprint will enable us to clarify our strategy and underscores our long-term objective of serving markets that value our know-how, IP and ethos of working in partnership to create better technical and commercial solutions that meet our customers' needs.
At our core, Filtronic is a specialist designer and manufacturer of advanced RF products that transmit, receive, condition and manage radio waves. We sell to markets that demand advanced and highly reliable products and solutions that add value to our customers' offerings. Our deep know-how of RF products, from fundamental design principles to advanced manufacturing techniques, has made us a "go-to" supplier for leading US tech companies and major European OEMs.
The objectives within our strategy to achieve this are:
· To nurture close working relationships with our customers to understand their needs and requirements;
· To develop class-leading products in our core technology areas of mmWave transceivers, filters, tower top amplifiers and antennas;
· To develop sub-systems and solutions that meet customer specific and general market requirements;
· To expand our customer base within the markets we serve; and
· To widen the number of markets we serve.
The main markets that our ongoing activities are currently servicing are 5G backhaul, public safety and defence and aerospace. Our product ranges include mmWave transceivers and RF conditioning products. We are targeting opportunities in other adjacent markets that include 5G test equipment, ultra-low latency RF connections for the financial services industry, gigabit per second internet connections to high-speed rail networks and long-range data links to high-altitude pseudo satellites ("HAPs"). We have achieved revenue during FY2019 in each of these target markets in the form of either product sales or development services and we are working hard to achieve further traction as these growth markets develop in the coming years.
5G Backhaul
Filtronic has supplied transceiver modules to the telecommunications industry for many years and we have established a reputation for quality and innovation. As an early mover to the E-band transceiver market, we have gained invaluable knowledge of the design and manufacturing techniques required at this high frequency, this has earned us an enviable reputation as a technology leader. With the introduction of 5G, a critical requirement for MNOs is the upgrade of backhaul to higher speed, higher capacity links required for this network architecture. Filtronic's advanced transceiver modules offer the speed and capacity in a fast to market package that meets the demands of 5G backhaul.
Our class-leading Orpheus E-band transceivers have been designed into several customers' ODU radios. Our lead customer has achieved considerable market success and has placed orders covering their current requirements that span the remainder of FY2020. In addition to our lead customer, Orpheus has been "designed-in" by tier-2 OEMs with order flow and forecasts from these customers also benefiting from 5G deployment.
We are in the process of extending and enhancing our manufacturing capability and we are currently installing plant and equipment that will meet current and forecast demand as well as working on plans for future capacity expansion. So far, we have committed to capital expenditure in FY2020 of approximately £1.0 million and we are further reviewing our longer-term needs. This investment will not only increase our capacity but the move to the latest generation equipment will allow us to improve production yields and product quality at the Sedgefield facility.
In addition to investing in our manufacturing capabilities, we continue to advance our product development and we have planned an important new product update for later in FY2020 and have commenced work on next-generation products that will be required in two to five years. The 5G backhaul market is moving rapidly, and we are determined to maintain a leading position in this sector.
Public safety
Over the past ten years, Filtronic has established itself as a key supplier to the largest Western OEM in the public safety market. Our focus has been on supplying high reliability filters and combiners that meet our customer's demanding specifications.
Over the past two years we have worked hard to increase our knowledge and understanding of our customer's future needs and requirements and as a consequence of the knowledge gained, we have launched several initiatives to better support them and to grow our sales into this market.
In FY2019 we commenced development of a new product family of Tower Top Amplifiers that not only meets our customer's specifications but brings an array of advanced functions and features that differentiate our solution from the competition. Our intelligent product is based on the latest generation of processors and seamlessly connects processing and functions at the tower top to the base station. The Tower Top Amplifier has been released in October 2019 for qualification and we are about to commence development of further exciting new products for this market.
In addition to product development, we have initiated a process to "on-shore" production of all products for the US public safety market to our facility in Salisbury, Maryland. This is in part a countermeasure to increased tariffs on Chinese made products and also a recognition that "Made in the USA" has significant value and importance to this market. We anticipate the completion of our production move to the USA in H2 FY2020. Whilst, there is some remodelling required of our facility in Salisbury, these costs are relatively minor in relation to the value of the business.
The products we have developed and are working on, are designed to be customer agnostic and we have targeted winning more customers in this important industry sector.
Defence and aerospace
During FY2019 we continued to fulfil contracts that were awarded in FY2017 and FY2018. In addition to these core programmes we have won additional elements of these projects. The current contracts still have a number of years to run and we are positioned well to win follow-on orders as they flow down from prime contractors to the supply base.
Our know-how in volume manufacture of high frequency transceivers was critical to winning this work and as we enhance our production capabilities our capacity to win and execute additional contracts of this type will increase.
We continue to develop our relationship with our main customer in this sector and to develop other clients, having won some smaller contracts with other leading, UK based, defence prime contractors. Project gestation periods in this sector are typically long, however, we are working hard to build our exposure to this marketplace and have made some good inroads in developing relationships.
The future: a new look, a new focus and fresh opportunities
When we exit Telecoms Antenna Operations, we will be a leaner more focussed organisation and we will refresh our marketing and branding to reflect this. We have recently re-launched our website and we are working hard within the industry to communicate an invigorated and contemporary image that matches our reputation for innovation in RF.
With a strong order book, the outlook for FY2020 is encouraging and our challenge through the year is to introduce additional capacity to enable further growth. The markets we serve are seeing healthy expenditures and are generally buoyant. Beyond our currently served markets we are looking to progress by targeting high growth sectors that value our IP and know-how.
Rob Smith
Chief Executive Officer
22 October 2019
Financial review
Whilst the continuing business remains profitable with numerous exciting near-term opportunities on which to capitalise, the challenging trading environment of antennas led to a disappointing loss in the period and the decision to commence a sale process for the Telecoms Antenna Operation.
Revenues
Sales revenue for the Group from continuing operations decreased in the year by 26% to £15.9m (2018: £21.6m). The decrease is a result of our previously announced strategic withdrawal from low margin telecom filter business and an exceptional short-term revenue opportunity that we benefitted from in the public safety market in FY2018. Despite the reduction in revenue it was very encouraging to see year-on-year growth in two of our core markets; mmWave telecoms and defence. Output of our market-leading Orpheus product increased significantly over the year to meet growing demand from our lead OEM customer which also enabled us to take a strong order book into FY2020. The Orpheus order book has increased by 288% at 31 May over the prior year which has subsequently increased to 1,088% at the end of September 2019.
Sales of defence products also saw year-on-year growth, where revenue to our lead customer continued to increase as throughput on two of our contracts reached full capacity. These long-term defence contracts provide more certainty over future revenues and align to our objective of broadening the markets we serve with a better quality of earnings.
The new revenue standard IFRS 15 'Revenue from Contracts with Customers' came into mandatory effect for the Group during FY2019. However, this change in the Group's revenue recognition policy has not materially impacted the value of revenue that would have been recognised under the former revenue standards, IAS 18 Revenue and IAS 11 Construction Contracts.
Operating costs
Operating costs increased in the year to £7.6m (2018: £7.0m). This was a result of enlargement of the operational team to support new opportunities and the subsequent need to increase capacity for new contract wins. This is reflected in the average headcount for the year which has increased to 100 (2018: 96).
In addition to headcount increases, we waived a debt due from an OEM customer of £0.3m relating to filter material purchased for legacy product against the customers demand forecast that never materialised which was treated as a credit loss.
EBITDA
EBITDA in the year relating to the continuing operation was £0.7m (2018: £3.6m). This reduction was a direct result of lower revenues although this was slightly offset by an improved gross margin as legacy OEM filter business was replaced by mmWave and defence contracts. Depreciation and amortisation were broadly in line with the previous year.
|
|
|
Restated |
|
|
2019 |
2018 |
|
Reconciliation of EBITDA |
£000 |
£000 |
|
Operating profit |
234 |
3,199 |
|
Depreciation |
355 |
367 |
|
Amortisation |
75 |
78 |
|
EBITDA |
664 |
3,644 |
Taxation
A large tax credit of £2.1m (2018: £0.0m) has been recognised for the year, as set out in note 7. The Group benefits from R&D tax credits in the UK as we continue to invest in the development of advanced product and process technology. An R&D tax credit of £1.4m was recognised in the year, 50% of which relates to the previous financial year, and is included in the total credit.
A deferred tax asset of £1.0m was recognised in the period as visibility of profits in the UK and USA increased as a result both of our strategy to address markets such as defence and public safety which offer longer term predictable revenues and the existence of a robust order book to be manufactured at our Sedgefield site.
Our overseas operations continue to be profitable and consequently incur corporation tax charges which amounted to £0.3m. In the USA this comes in the form of state taxes as substantial federal tax losses carried forward remain.
Discontinued operations
Following the news of consolidation in the US Mobile Network Operator market and the impact on our Telecoms Antenna Operation a strategic review was undertaken. On completion of the review, the directors decided the best outcome for shareholders would be a sale of this part of the business. Consequently, this has been accounted for as a discontinued operation and is analysed in note 5. Sales in the period were £4.6m, primarily made up of Massive MIMO antennas, with an operating loss of £3.5m. This included an amount of £1.6m which related to a Settlement Agreement with our customer for a legacy antenna supplied in 2016/17 that had a performance issue relating to a component within the antenna.
Research and development costs ("R&D")
Total R&D costs in the year before capitalisation and amortisation of development costs were £1.2m (2018: £1.7m). The Group saw a reduction in R&D spend year-on-year as the business reorganisation in the previous year saw some of the resource classified as engineering reallocated to augment activities related to the sales function and product test development. The Group remain committed to investment in R&D for the future growth of the business through new and enhanced products to meet the expanding demands of customer programmes. Key areas of expenditure in the year included progression of the mmWave technology roadmap and product development into adjacent markets such as 5G test equipment and HAPS which we anticipate will deliver significant future revenue opportunities.
The Group capitalises its development costs in line with IAS 38 as set out in note 2 to the financial statements. A reconciliation of R&D costs before capitalisation and amortisation can be seen in the table below:
|
|
|
Restated |
|
|
2019 |
2018 |
|
Reconciliation of R&D costs |
£000 |
£000 |
|
R&D costs in income statement |
1,026 |
1,730 |
|
Capitalisation of development costs |
250 |
- |
|
Amortisation of development costs |
(38) |
(33) |
|
R&D costs before capitalisation and amortisation |
1,238 |
1,697 |
Capital expenditure
Capital expenditure of £0.4m (2018: £0.6m) related to new equipment to support and improve our operational capability to manufacture defence-related products in Sedgefield and to increase capacity at our service and repair centre in the USA.
Inventory provision
Inventory is valued at the lower of cost and net realisable value. It is the Group's policy to regularly review the carrying value of its inventories and to make a provision for excess and obsolete inventory. As at 31 May 2019, the inventory provision was £1.1m (2018: £1.2m).
Assets held for sale
IFRS 5 requires a company to present an asset held for sale where management is committed to a plan to sell a business, the asset is available for sale, an active process is in place and a sale is likely within 12 months. The directors have previously announced to shareholders the intention to undertake a sales process of the Telecoms Antenna Operation and therefore, in line with IFRS 5, the assets and liabilities relating to this area of the business have been presented as held for sale.
Warranty provision
In line with industry practice, the Group provides warranties to customers over the quality and performance of the products it sells. The Group's policy is to make a provision, calculated as a percentage of sales revenue, after reviewing costs associated with faulty products returned. As at 31 May 2019, the warranty provision was £2.2m (2018: £0.4m); the increase in provision at the year-end reflecting the Settlement Agreement with our customer for a performance issue on a legacy antenna relating to a component used.
Funding and cash flow
The Group recorded a decrease in cash and cash equivalents to £2.6m (2018: £3.8m) at the year-end due to investment activity.
Cash generation from operating activities in the year was £nil (2018: £1.8m). However, the Group invested £1.1m (2018: £1.1m) in capital expenditure and internally generated intangible assets which accounts for the reduction in the cash position. The full breakdown of this movement can be seen on the consolidated cash flow statement.
Net cash at the end of the period was £2.5m (2018: £3.6m) being £2.6m cash and cash equivalents and £0.1m of interest-bearing borrowings from the bank loan.
To provide additional cash headroom Filtronic has a £3.0m invoice discounting facility with Barclays Bank plc in the UK. As at 31 May 2019, £nil was drawn down against this facility (2018: £nil). Furthermore, the Group has an agreement with Wells Fargo Bank for an additional $4.0m invoice factoring facility to borrow against the debtors of our USA operation. As at 31 May 2019 $nil was drawn down against this facility (2018: $nil).
Michael Tyerman
Finance Director
22 October 2019
The Board
The Directors that served during the year ended 31 May 2019, and to the date of this announcement, and their respective roles are set out below:
Rob Smith (Chief Executive Officer)
Reg Gott (Chairman)
Michael Tyerman (Finance Director)
Michael Roller (Non-Executive Director)
Pete Magowan (Non-Executive Director) appointed 19 November 2018
Consolidated Income Statement
for the year ended 31 May 2019
|
|
|
|
Restated |
|
|
|
|
2019 |
2018 |
|
|
Continuing operations |
Note |
£000 |
£000 |
|
|
|
|
|
|
|
|
Revenue |
|
15,932 |
21,632 |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
|
Earnings before interest, taxation, depreciation and amortisation |
|
664 |
3,644 |
|
|
Depreciation |
|
(355) |
(367) |
|
|
Amortisation of other intangible assets |
|
(38) |
(45) |
|
|
Amortisation of development costs |
|
(37) |
(33) |
|
|
|
|
---------- |
---------- |
|
|
Operating profit |
|
234 |
3,199 |
|
|
|
|
---------- |
---------- |
|
|
Finance costs |
|
(154) |
(61) |
|
|
Exceptional finance items |
|
- |
(486) |
|
|
|
|
---------- |
---------- |
|
|
Finance costs |
|
(154) |
(547) |
|
|
|
|
---------- |
---------- |
|
|
Finance income |
|
55 |
- |
|
|
|
|
---------- |
---------- |
|
|
Profit before taxation |
|
135 |
2,652 |
|
|
Taxation |
7 |
2,099 |
62 |
|
|
|
|
---------- |
---------- |
|
|
Profit for the period from continuing operations |
|
2,234 |
2,714 |
|
|
|
|
====== |
====== |
|
|
Loss for the period from discontinuing operations |
|
(3,547) |
(1,483) |
|
|
|
|
====== |
====== |
|
|
(Loss)/profit for the period |
|
(1,313) |
1,231 |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
|
|
|
---------- |
---------- |
|
|
Basic earnings per share |
6 |
(0.63)p |
0.59p |
|
|
Diluted earnings per share |
6 |
(0.63)p |
0.59p |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
The (loss)/profit for the period is attributable to the equity shareholders of the parent company Filtronic plc.
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2019
|
|
|
2019 |
2018 |
|
|
Note |
£000 |
£000 |
|
|
|
|
|
|
(Loss)/profit for the period |
|
(1,313) |
1,231 |
|
|
|
---------- |
---------- |
|
Other Comprehensive Income Items that are or may be subsequently reclassified to profit and loss: Currency translation movement arising on consultation |
|
60 |
178 |
|
|
|
---------- |
---------- |
|
Total comprehensive income for the period |
|
(1,253) |
1,409 |
|
|
|
====== |
====== |
The total comprehensive (expense)/income for the period is attributable to the equity shareholders of the parent company Filtronic plc.
Consolidated Balance Sheet
at 31 May 2019
|
|
|
2019 |
2018 |
|
|
Note |
£000 |
£000 |
|
Non-current assets |
|
|
|
|
Goodwill and other intangibles |
8 |
1,247 |
3,904 |
|
Property, plant and equipment |
|
1,030 |
1,411 |
|
Deferred tax |
9 |
1,982 |
965 |
|
|
|
---------- |
---------- |
|
|
|
4,259 |
6,280 |
|
|
|
---------- |
---------- |
|
Current assets |
|
|
|
|
Inventories |
|
2,081 |
2,138 |
|
Trade and other receivables |
|
4,220 |
6,388 |
|
Cash and cash equivalents |
|
2,625 |
3,794 |
|
Assets held for sale |
10 |
5,046 |
- |
|
|
|
---------- |
---------- |
|
|
|
13,972 |
12,320 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
---------- |
---------- |
|
Total assets |
|
18,231 |
18,600 |
|
|
|
---------- |
---------- |
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
2,316 |
5,076 |
|
Provisions |
11 |
2,265 |
485 |
|
Deferred income |
|
81 |
360 |
|
Financial liabilities |
|
231 |
206 |
|
Liabilities directly associated with assets held for sale |
10 |
2,207 |
- |
|
|
|
---------- |
---------- |
|
|
|
7,100 |
6,127 |
|
|
|
---------- |
---------- |
|
Non-current liabilities |
|
|
|
|
Financial liabilities |
|
118 |
312 |
|
|
|
---------- |
---------- |
|
|
|
118 |
312 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
---------- |
---------- |
|
Total liabilities |
|
7,218 |
6,439 |
|
|
|
---------- |
---------- |
|
|
|
---------- |
---------- |
|
Net assets |
|
11,013 |
12,161 |
|
|
|
---------- |
---------- |
|
Equity |
|
|
|
|
Share capital |
12 |
10,789 |
10,788 |
|
Share Premium |
13 |
10,715 |
10,640 |
|
Translation Reserve |
|
(558) |
(618) |
|
Retained earnings |
|
(9,933) |
(8,649) |
|
|
|
---------- |
---------- |
|
Total equity |
|
11,013 |
12,161 |
|
|
|
====== |
====== |
|
|
|
|
|
The total equity is attributable to the equity shareholders of the parent company Filtronic plc.
Company number 2891064
Rob Smith
Chief Executive Officer
Consolidated Statement of Changes in Equity
for the year ended 31 May 2019
|
|
Share capital |
Share premium |
Translation reserve |
Retained earnings |
Total equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 31 May 2017 |
10,788 |
10,640 |
(796) |
(9,905) |
10,727 |
|
Profit for the year |
- |
- |
- |
1,231 |
1,231 |
|
Share based payments |
- |
- |
- |
25 |
25 |
|
Currency translation movement arising on consolidation |
- |
- |
178 |
- |
178 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
Balance at 31 May 2018 |
10,788 |
10,640 |
(618) |
(8,649) |
12,161 |
|
Loss for the year |
- |
- |
- |
(1,313) |
(1,313) |
|
New shares issued |
1 |
75 |
- |
- |
76 |
|
Share based payments |
- |
- |
- |
29 |
29 |
|
Currency translation movement arising on consolidation |
- |
- |
60 |
- |
60 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
Balance at 31 May 2019 |
10,789 |
10,715 |
(558) |
(9,933) |
(11,013) |
|
|
====== |
====== |
====== |
====== |
====== |
|
|
|
|
|
|
|
Consolidated Cash Flow Statement
for the year ended 31 May 2019
|
|
|
2019 |
2018 |
|
|
|
£000 |
£000 |
|
Cash flows from operating activities |
|
|
|
|
Profit for the period from continuing operations |
|
2,234 |
2,714 |
|
Loss for the period from discontinuing operations |
|
(3,547) |
(1,488) |
|
Taxation |
|
(2,059) |
(5) |
|
Finance income |
|
(55) |
- |
|
Finance costs |
|
154 |
547 |
|
|
|
---------- |
---------- |
|
Operating (loss)/profit including discontinuing operations |
|
(3,273) |
1,773 |
|
Share-based payments |
|
29 |
25 |
|
Profit on disposal of plant and equipment |
|
(2) |
(48) |
|
Depreciation |
|
459 |
542 |
|
Amortisation of intangible assets |
|
217 |
141 |
|
Impairment of intangible assets |
|
512 |
- |
|
Movement in inventories |
|
(348) |
111 |
|
Movement in trade and other receivables |
|
1,669 |
2,259 |
|
Movement in trade and other payables |
|
(657) |
(3,292) |
|
Movement in provisions |
|
1,780 |
(60) |
|
Change in deferred income |
|
(279) |
244 |
|
Tax (paid)/received |
|
(127) |
56 |
|
|
|
---------- |
---------- |
|
Net cash (used in)/generated from operating activities |
|
(20) |
1,751 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Cash Flow Statement
for the year ended 31 May 2019
|
|
|
2019 |
2018 |
|
|
|
£000 |
£000 |
|
|
|
|
|
|
Net cash (used in)/generated from operating activities |
|
(20) |
1,751 |
|
|
|
---------- |
---------- |
|
Cash flows from investing activities |
|
|
|
|
Capitalisation of development costs |
|
(666) |
(436) |
|
Acquisition of intangible assets |
|
(11) |
(19) |
|
Acquisition of plant and equipment |
|
(380) |
(604) |
|
Proceeds on sale of assets |
|
59 |
49 |
|
|
|
---------- |
---------- |
|
Net cash used in investing activities |
|
(998) |
(1,010) |
|
|
|
---------- |
---------- |
|
Cash flows from financing activities |
|
|
|
|
Interest paid |
|
(103) |
(61) |
|
Proceeds from bank loans |
|
- |
300 |
|
Exercise of employee share options |
|
76 |
- |
|
Proceeds from hire purchase agreements |
|
- |
301 |
|
Payment of interest-bearing borrowings |
|
(182) |
(75) |
|
|
|
---------- |
---------- |
|
Net cash (used in)/from financing activities |
|
(209) |
465 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
Movement in cash and cash equivalents |
|
(1,227) |
1,206 |
|
Currency exchange movement |
|
58 |
(10) |
|
Opening cash and cash equivalents |
|
3,794 |
2,598 |
|
|
|
---------- |
---------- |
|
Closing cash and cash equivalents |
|
2,625 |
3,794 |
|
|
|
====== |
====== |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the Preliminary Financial Information
for the year ended 31 May 2019
1 Basis of Preparation
These preliminary results have been prepared on the basis of the accounting policies which are to be set out in Filtronic plc's Annual Report and financial statements for the year ended 31 May 2019.
(a) The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 June 2018:
· IFRS 9 'Financial instruments' (effective for accounting periods beginning on or after 1 January 2018);
· IFRS 15 'Revenue from contracts with customers' (effective for accounting periods beginning on or after
1 January 2018).
Neither of the standards had a material impact on the Group's reported income or assets.
(b) There are also a number of new standards, including IFRS 16 'Leases', amendments to standards and interpretations that are effective for financial statements after this reporting period, but the Group has not adopted them early except for the adoption of some disclosures which have been applied. None of these is expected to have a material impact on the results or financial position of the Group.
EU Law (IAS Regulation EC1606/2002) requires that the consolidated financial statements of the Group for the year ended 31 May 2019 be prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted for use in the EU ('adopted IFRSs'). Whilst the information included in this preliminary announcement has been computed in accordance with adopted IFRSs, this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements in October 2019.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 May 2019 or 31 May 2018. The financial information for 2018 is derived from the statutory accounts for 2018 which have been delivered to the registrar of companies. The auditor has reported on the 2019 accounts; their report was
|
(i) unqualified |
|
(ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for 2019 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the registrar of companies in due course.
2 Segmental analysis
IFRS 8 requires consideration of the identity of the chief operating decision maker ('CODM') within the Group. In line with the Group's internal reporting framework and management structure, the key strategic and operating decisions are made by the CEO, who reviews internal monthly management reports, budget and forecast information as part of this. Accordingly, the CEO is deemed to be the CODM.
Following the reorganisation of the business in the last financial year, merging the Filtronic Broadband and Filtronic Wireless businesses, the CODM has identified one operating segment within the Group as defined under IFRS 8. In turn, this is the only reportable segment of the Group as the entities in the Group have similar products and services, production processes and economic characteristics. Therefore, there is no allocation of operating expenses, profit measures or assets and liabilities to specific commercial markets.
Accordingly, the CODM assesses the performance of the operating segment on financial information which is measured and presented in a manner consistent with those in the financial statements by reference to Group results against budget.
The Group profit measures are operating profit and EBITDA, both disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by management and the figures in the Group financial statements.
The Group has four customers representing individually over 10% of revenue each and in aggregate 86% of revenue. This is split as follows:
• Customer A - 25%
• Customer B - 24%
• Customer C - 22%
• Customer D - 15%
|
|
3 Revenue by Destination
|
Continuing operations |
Discontinuing operations |
Total |
|
||||
|
|
|
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
|
|
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
3,658 |
2,529 |
- |
- |
3,658 |
2,529 |
|
|
|
|
Europe |
4,818 |
2,588 |
- |
2,310 |
4,818 |
4,898 |
|
|
|
|
Americas |
4,913 |
13,727 |
4,504 |
53 |
9,417 |
13,780 |
|
|
|
|
Rest of the World |
2,543 |
2,788 |
134 |
- |
2,677 |
2,788 |
|
|
|
|
|
--------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
15,932 |
21,632 |
4,638 |
2,363 |
20,570 |
23,995 |
|
|
|
|
|
====== |
====== |
====== |
====== |
====== |
====== |
||
|
|
4 Split of non-current assets by location |
|
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|
|
|
|
|
|
|
|
|
£000 |
£000 |
|
|
|
|
|
|
|
United Kingdom |
1,898 |
4,797 |
|
|
|
|
|
||
|
Europe |
- |
76 |
|
|
|
|
|
||
|
Americas |
2,361 |
1,256 |
|
|
|
|
|
||
|
Rest of the World |
- |
151 |
|
|
|
|
|
||
|
|
|
--------- |
---------- |
|
|
|
|
|
|
|
|
|
4,259 |
6,280 |
|
|
|
|
|
|
|
|
|
====== |
====== |
|
|
|
|
|
|
5 Discontinuing operations
Discontinuing operations is the loss for the period relating to the Telecoms Antenna Operation which is currently held for sale. The result for the year includes the warranty provision for the Settlement Agreement as described in note 11.
|
|
|
Restated |
|
|
2019 |
2018 |
|
|
£000 |
£000 |
|
|
|
|
|
Revenue |
4,638 |
2,363 |
|
|
====== |
====== |
|
Material cost of goods sold |
3,393 |
1,417 |
|
|
---------- |
---------- |
|
Wages and salaries |
1,770 |
1,457 |
|
Social security costs |
274 |
331 |
|
Pension costs |
245 |
155 |
|
|
---------- |
---------- |
|
Staff costs |
2,289 |
1,943 |
|
|
---------- |
---------- |
|
Amortisation of development costs |
141 |
62 |
|
Amortisation of other intangible assets |
1 |
1 |
|
Impairment of intangible assets |
512 |
- |
|
Depreciation |
104 |
175 |
|
|
---------- |
---------- |
|
Depreciation and amortisation |
758 |
238 |
|
|
---------- |
---------- |
|
Exceptional warranty charge |
1,584 |
- |
|
Other expenses |
121 |
191 |
|
|
---------- |
---------- |
|
Total operating costs |
4,752 |
2,372 |
|
|
---------- |
---------- |
|
Operating loss |
(3,507) |
(1,426) |
|
Taxation |
(40) |
(57) |
|
|
---------- |
---------- |
|
Loss for the period from discontinuing operations |
(3,547) |
(1,483) |
|
|
====== |
====== |
6 Earnings/(loss) per share
|
|
Continuing operations |
Discontinuing operations |
Total Group |
|
|
|
||||||
|
|
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
|
|
|
|||
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|||
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|||
|
Profit/(loss) for the period |
2,234 |
2,657 |
(3,547) |
(1,426) |
(1,313) |
1,231 |
|
|
|
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
000 |
000 |
000 |
000 |
000 |
000 |
|
|
|
|||
|
Basic weighted average number of shares |
207,578 |
206,910 |
207,578 |
206,910 |
207,578 |
206,910 |
|
|
|
|||
|
Dilution effect of share options |
3,370 |
3,219 |
- |
3,219 |
- |
3,219 |
|
|
|
|||
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|||
|
Diluted weighted average number of shares |
210,948 |
210,129 |
207,578 |
210,129 |
207,578 |
210,129 |
|
|
|
|||
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
||
|
Basic earnings/(loss) per share |
|
1.06p |
1.28p |
(1.71)p |
(0.69)p |
(0.63)p |
0.59p |
|
|
|
||
|
Diluted earnings/(loss) per share |
|
1.06p |
1.28p |
(1.71)p |
(0.68)p |
(0.63)p |
0.59p |
|
|
|
||
|
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
|
||
7 Taxation
The reconciliation of the effective tax rate is as follows:
|
|
|
2019 |
|
2018 |
|
|
|
£000 |
|
£000 |
|
(Loss)/profit before taxation |
|
(3,372) |
|
1,226 |
|
|
|
====== |
|
====== |
|
|
|
2019 |
|
2018 |
|
|
|
£000 |
|
£000 |
|
Profit before taxation multiplied by standard rate of corporation tax in the UK |
(19%) |
(640) |
19% |
319 |
|
Disallowable items |
7% |
231 |
9% |
157 |
|
Income not taxable |
0% |
6 |
(1%) |
(18) |
|
Deferred tax asset not recognised |
23% |
777 |
14% |
237 |
|
Impact of rate change on deferred tax |
- |
- |
9% |
143 |
|
Enhanced R&D tax credit |
(19%) |
(628) |
(4%) |
(67) |
|
Adjustment in respect of prior year - R&D tax credit |
(22%) |
(728) |
(14%) |
(243) |
|
Foreign tax not at UK rate |
4% |
138 |
11% |
188 |
|
Recognition of deferred tax asset previously unrecognised |
(7%) |
(244) |
(6%) |
(93) |
|
Recognition of deferred tax asset from prior year |
(29%) |
(971) |
(37%) |
(628) |
|
|
--------- |
--------- |
--------- |
--------- |
|
Taxation |
(62%) |
(2,059) |
0% |
(5) |
|
|
====== |
====== |
====== |
====== |
The main rate of UK corporation tax for the financial year was 19%. This will reduce to 17 percent from 1 April 2020. The US Federal Corporate tax rate was 21%. The deferred tax assets recognised in the year have been calculated at the rates expected to be in existence in the period of reversal.
8 Goodwill and other intangibles
|
|
Goodwill |
Other intangibles (core technology) |
License agreement |
Software costs |
Development costs |
Total |
|||
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|||
|
Cost |
|
|
|
|
|
|
|||
|
At 1 June 2017 |
3,235 |
10,884 |
160 |
567 |
286 |
15,132 |
|||
|
Additions |
- |
- |
- |
19 |
436 |
455 |
|||
|
Disposals |
- |
- |
- |
(30) |
- |
(30) |
|||
|
Currency translation movement |
- |
- |
- |
(13) |
- |
(13) |
|||
|
|
--------- |
---------- |
--------- |
---------- |
---------- |
---------- |
|||
|
At 31 May 2018 |
3,235 |
10,884 |
160 |
543 |
722 |
15,544 |
|||
|
Additions |
- |
- |
- |
11 |
666 |
677 |
|||
|
Reclassification to assets held for sale |
(2,261) |
- |
(160) |
(27) |
(1,038) |
(3,486) |
|||
|
Currency translation movement |
- |
- |
- |
15 |
- |
15 |
|||
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
--------- |
|||
|
At 31 May 2019 |
974 |
10,884 |
- |
542 |
350 |
12,750 |
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|||
|
Amortisation |
|
|
|
|
|
|
|||
|
At 1 June 2017 |
- |
10,884 |
48 |
515 |
95 |
11,542 |
|||
|
Disposals |
- |
- |
- |
(30) |
- |
(30) |
|||
|
Currency translation movement |
- |
- |
- |
(13) |
- |
(13) |
|||
|
Provided in year |
- |
- |
15 |
31 |
95 |
141 |
|||
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
--------- |
|||
|
At 31 May 2018 |
- |
10,884 |
63 |
503 |
190 |
11,640 |
|||
|
Provided in year |
- |
- |
14 |
24 |
179 |
217 |
|||
|
Impairment of intangible assets |
- |
- |
- |
- |
512 |
512 |
|||
|
Reclassification to assets held for sale |
- |
- |
(77) |
(25) |
(779) |
(881) |
|||
|
Currency translation movement |
- |
- |
- |
15 |
- |
15 |
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|||
|
At 31 May 2019 |
- |
10,884 |
- |
517 |
102 |
11,503 |
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|||
|
Carrying amount at 31 May 2017 |
3,235 |
- |
112 |
52 |
191 |
3,590 |
|||
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
--------- |
|||
|
Carrying amount at 31 May 2018 |
3,235 |
- |
97 |
40 |
532 |
3,904 |
|||
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
--------- |
|||
|
Carrying amount at 31 May 2019 |
974 |
- |
- |
25 |
248 |
1,247 |
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|||
|
|
|
|
|
|
|
|
|
||
|
8 Goodwill and other intangibles (continued)
Reconciliation of other intangible assets |
Group |
Company |
||
|
|
2019 |
2018 |
2019 |
2018 |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
Amortisation of license agreement |
14 |
15 |
- |
15 |
|
Amortisation of software costs |
24 |
31 |
15 |
13 |
|
|
--------- |
---------- |
--------- |
---------- |
|
Amortisation of other intangible assets |
38 |
46 |
15 |
28 |
|
|
====== |
====== |
====== |
====== |
The Company accounts include the software costs of £19,000 (2018: £25,000). The RET licence has been moved from the Company to Filtronic Wireless Inc. (2018: £97,000).
Goodwill and other intangibles relate to the acquisition of Isotek (Holdings) Limited. Goodwill is allocated to the Wireless cash generating unity (CGU) and this CGU represents the lowest level within the Group at which the goodwill is monitored for internal management purposes. The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill may be impaired.
The carrying value of intangible assets and goodwill has been assessed for impairment by reference to its value in use. Value in use was determined by discounting the future cash flows generated from the continuing use of the unit. The calculation of the value in use was based on the following key assumptions:
· Budgets incorporating cash flows have been prepared to 31 May 2020 based on past experience, actual operating results, known future cash flows and estimates of future cash flows;
· Cash flows for a further 3 years have been extrapolated from the year to 31 May 2020. A revenue growth factor of 3 percent was applied to the projections together with cost inflation of 3 percent. A perpetuity factor has been applied based on the year to 31 May 2024;
· The Group's discount rate of 12 percent (2018: 12 percent) was applied in determining the recoverable amount of the unit, being the estimated weighted average cost of capital for the Filtronic Wireless CGU.
Based on this testing the directors do not consider any of the goodwill or intangible assets to be impaired, even allowing for a reasonable degree of sensitivity to the underlying assumptions, including the discount rate. However, following a review of the goodwill calculation an allocation to assets held for sale of £2.3m has been made as part of IFRS 5 accounting given the filter know-how utilised within the integrated antenna products.
The licence agreement relates to a Remote Electrical Tilt (''RET'') licence to enable the use of RETs in the antenna products.
The accounting policy for intangible assets relating to the capitalisation of development costs is set out in notes 1 and 2.
9 Deferred tax
|
|
2019 |
2018 |
|
|
£000 |
£000 |
|
|
|
|
|
Opening balance |
965 |
1,015 |
|
Tax losses recognised |
971 |
93 |
|
Effect of change in UK corporation tax rate |
- |
(42) |
|
Effect of charge overseas corporation tax rate |
- |
(101) |
|
Effect of exchange rate movement |
46 |
- |
|
|
--------- |
--------- |
|
Deferred tax assets |
1,982 |
965 |
|
|
====== |
====== |
Deferred tax assets within the UK and US have been recognised as the Directors consider that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries in the Group and the reversal of temporary differences. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such deductions are reversed when the probability of future taxable profits improves.
10 Assets held for sale
It was announced in December 2018 that a strategic review would be conducted of the Telecoms Antenna business. The directors are now committed to a plan to try and sell this part of the business with a process now in place. Consequently, this part of the business is presented as a disposal group held for sale.
The accounting standard, IFRS 5, dictates that a disposal group should be valued at the lower of carrying value or fair value less costs. At 31 May 2019, the disposal group is stated at carrying value and is comprised of the following assets and liabilities:
|
|
2019 |
2018 |
|
|
£000 |
£000 |
|
Goodwill and other intangible assets |
2,605 |
- |
|
Property, plant and equipment |
237 |
- |
|
Inventory |
406 |
- |
|
Trade and other receivables |
1,798 |
- |
|
|
------------ |
------------ |
|
Assets held for sale |
5,046 |
- |
|
|
======= |
======= |
|
|
|
|
|
Trade and other payables |
2,207 |
- |
|
|
------------ |
------------ |
|
Liabilities held for sale |
2,207 |
- |
|
|
======= |
======= |
11 Provision
|
Warranty provision |
2019 |
2018 |
|
|
£000 |
£000 |
|
|
|
|
|
Opening balance |
425 |
475 |
|
Used during the year |
(11) |
(18) |
|
Released unused during the year |
(45) |
(79) |
|
Charge for the year |
1,836 |
47 |
|
|
--------- |
--------- |
|
Closing balance |
2,205 |
425 |
|
|
====== |
====== |
The provision for warranty relates to the units sold during the last two financial years. The provision is based on estimates made from historical warranty data.
The warranty charge in the year relates to performance issues of antenna product seen in the field that were shipped in 2016/17 and settles the warranty costs relating to field returns in the affected areas. A settlement agreement has been agreed with the customer which obliges the Group to contribute towards costs of $2.0m (£1.6m). This finalises the liability with the customer under this warranty claim and will be paid in four instalments with the final payment being made in December 2020.
|
Dilapidation provision |
2019 |
2018 |
|
|
£000 |
£000 |
|
|
|
|
|
Opening balance |
60 |
70 |
|
Released unused during the year |
- |
(10) |
|
|
--------- |
--------- |
|
Closing balance |
60 |
60 |
|
|
====== |
====== |
|
|
|
|
The Group leases facilities at five sites in the UK, US, China and Sweden with each lease requiring the site to be restored to its original condition.
|
Total provision |
2019 |
2018 |
|
|
£000 |
£000 |
|
|
|
|
|
Warranty provision |
2,205 |
425 |
|
Dilapidation provision |
60 |
60 |
|
|
--------- |
--------- |
|
Total provision |
2,625 |
485 |
|
|
====== |
====== |
12 Share Capital
|
|
|
|
|
|
Ordinary shares of 0.1p each issued and fully paid |
|
|
|
Number |
£000 |
|
|
|
|
|
At 1 June 2017 and 31 May 2018 |
206,910 |
10,788 |
|
Exercise of share options |
1,219 |
1 |
|
|
-------------- |
--------- |
|
At 31 May 2019 |
208,129 |
10,789 |
|
|
======== |
====== |
Holders of the ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at meetings of the Company.
13 Share Premium
|
|
|
£000 |
|
|
At 1 June 2017 and 31 May 2018 |
|
10,640 |
|
|
Exercise of share options |
|
75 |
|
|
|
|
----------- |
|
|
At 31 May 2019 |
|
10,715 |
|
|
|
|
======= |
|
14 Dividends
The Directors are not proposing to pay a dividend for the year ended 31 May 2019 (2018: £nil).
15 Analysis of net cash/(debt)
|
|
1 June 2018 |
Cash Flow |
Other Changes |
31 May 2019 |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
Cash and cash equivalents |
3,794 |
(1,227) |
58 |
2,625 |
|
Interest bearing borrowings |
(217) |
100 |
- |
(117) |
|
|
--------- |
--------- |
--------- |
--------- |
|
|
3,577 |
(1,127) |
58 |
2,508 |
|
|
====== |
====== |
====== |
====== |
15 Analysis of net cash/(debt) (continued)
|
|
|
|
|
|
|
|||||
|
Reconciliation of cash flow to movement in net cash/(debt) |
|
|
2019 |
2018 |
|
|||||
|
|
|
|
£000 |
£000 |
|
|||||
|
Movement in cash and cash equivalents |
|
|
(1,227) |
1,206 |
|
|||||
|
Cash flow from decrease/(increase) in debt financing |
|
|
100 |
(217) |
|
|||||
|
Effect of exchange rate fluctuations |
|
|
58 |
(10) |
|
|||||
|
|
|
|
---------- |
---------- |
|
|||||
|
Movement in net cash |
|
|
(1,069) |
979 |
|
|||||
|
Net opening cash |
|
|
3,577 |
2,598 |
|
|||||
|
|
|
|
---------- |
---------- |
|
|||||
|
Net closing cash |
|
|
2,508 |
3,577 |
|
|||||
|
|
|
|
====== |
====== |
|
|||||
16 Forward looking statements
The Chairman's letter and Chief Executive Officer's statement include statements that are forward looking in nature. These are made by the Directors in good faith based on the information available to them at the time of their approval of this report. Such statements are based on current expectations and are subject to a number of risks and uncertainties, including both economic and business risk factors that could cause actual events or results to differ materially from any expected future events referred to in these forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standard, the Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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