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LightwaveRF PLC (LWRF)

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Thursday 22 May, 2014

LightwaveRF PLC

Half Yearly Report

RNS Number : 7594H
LightwaveRF PLC
22 May 2014
 



(For Immediate Release)

 

LightwaveRF Plc

(AIM: LWRF)

 

Interim Results for the six months ended 31 March 2014.

 

 

 

LightwaveRF plc ("LightwaveRF Plc" "the Company") British specialists in Radio Frequency technologies which has created the Lightwave RF connected home platform enabling households and business to remotely operate and control household applications including lighting, heating and security using smartphones, tablets, PC and MAC applications, is pleased to announce its results for the six months to 31 March 2014.

 

 

HIGHLIGHTS

 

•   Like for like revenue up by 250%

•   New UK distribution arrangements implemented in UK

•   $3.2M (circa £1.9M) forward order book at half year

•   Administrative expenses reduced by 7%

•   Losses substantially reduced by 70%

 

 

Commenting, Mike Lord, Chairman and CEO said:

 

"The first half of the year has seen a significant refocusing of the business with the implementation of our new UK distribution strategy complete. We are now very much focused on the further development of our technology in line with our strategy change announced last year with a related increase in our expenditure commitment in new product development. This is already being reflected by the much improved Apps launched this year and the successful implementation of our heating platform for Warwick University."

 

 

 

 

 

 

 

 

 

 

 

For further information:

          

Contacts:




LightwaveRF Plc

www.lightwaveRF.com

Mike Lord, CEO

+44 (0) 1902 500 562 



WH Ireland Limited

www.wh-ireland.co.uk

Mike Coe/Ed Allsopp (Corporate Finance)

+44 (0) 117 945 3470

Jasper Berry (Institutional Sales)

+44 (0) 20 7220 0473



 

Business Review

 

Financial Results

 

Revenue for the six months ended 31 March 2014 was £1,670,993 (H1, 2013 £476,285) a 250% increase.  The loss on operations and attributable to equity shareholders was £123,092 (H1, 2013 loss £408,938). 

 

Revenue included £119,982 of licence fee and project management fee income. (H1, 2013, £25,806)

 

Administrative expenses incurred in the day to day running of the business were £575,261 (H1, 2013        £615,530), a 7% reduction.

 

As at 31 March 2014 as reported in the statement of financial position, the company does not have distributable reserves and is unable to declare a dividend.

 

The loss per share was 1.10 pence (H1, 2013 0.111pence).

 

Overview

 

The first half of 2014 has seen significant changes to the company. The highlights were:

 

•   Like for like revenue up by 250%

•   New UK distribution arrangements implemented in UK

•   $3.2M (circa £1.9M) forward order book at half year

•   Administrative expenses reduced by 7%

•   Losses substantially reduced by 70%

 

 

Revenue reported is supported by a strong order book of $3.2M (circa £1.9M) which is scheduled for delivery in the second half of the year. We therefore expect full year sales to be in the order of £3.5M.

 

Average margins in the first half were lower at 29% due to the transfer of existing stocks to Megaman and

continued supply to existing customers at reduced margins due to the change in distribution strategy. Gross margins in the second half are expected to recover significantly. Overall gross profit was much improved at £490,539 (2013 £228,239) an increase of 115% 

 

We have continued to develop our distribution channels in the UK with the rollout to Maplin now at 180 stores. The new distribution arrangements have also been agreed with Maplin and B&Q in the period demonstrating their continued commitment. On line retail also continues with Amazon and other on line retailers. With the Megaman presence and positioning we expect these channels to build consumer sales further over the coming months.

 

We are now also turning our attention to international markets to seek to create similar distribution arrangements to Megaman in the UK. Securing agreements with the right partners takes investment and time but we do expect these efforts will start to impact next financial year.

 

Administrative expenses in the period were reduced by £40,269 or 7%. We plan on further switching this

spend to accelerate our product development and away from general administration. We plan to further develop our expertise in Radio Frequency with more software and hardware capability. This will enable the business to have a UK centred technology development team providing creativity, flexibility, focus and speed to market through the sound LightwaveRF platform we have created.



 

Product Development Strategies

 

Our focus on product, software and app development is centred around four strategies; 1. Products (covering Lighting, electrical, Eco monitoring, heating, cooling and security), 2. Apps, 3. Cloud Services/Data Mining and 4. Licencing.

 

Strategy 1 - Products

 

The business continues to introduce at pace a broad range of radio frequency controlled devices which on final launch of the new heating range will number over 100. The key step forward with the heating products is the introduction of an enhanced LightwaveRF protocol with two way communication to enable products to report on their status and to pass on commands. We now have a comprehensive range of lighting & electrical and heating products with further development underway. These will be further complemented by additional security products and new ways of Eco monitoring later in the year. We remain differentiated from our competition by the depth of our range but also our ability to control most household devices from one App.

 

Strategy 2 - Apps

 

We have already launched significantly enhanced Apps to the market during this trading period and added heating to the Apps capability. We plan to launch our first web app with more comprehensive scheduling functions for easier set up on PC, Mac and Tablet formats. We have shown our new smart watch app at the recent Gadget Show. All of these platforms will see further investment over the coming months.

 

Strategy 3- Cloud Services and Data Mining

 

Significant investment has now been made in to our web services and data capture for the University of Warwick. We can now monitor and record a range of parameters including temperature, room occupancy and window opening. We believe that this micro and macro monitoring of data and environmental control response will create more power to the LightwaveRF cloud platform with further revenue streams.

 

Strategy 4- Licensing

 

We are now actively pursuing a further broadening of the range by embedding LightwaveRF technology in partner products creating a "Connected by LightwaveRF" range of products. Not only does this accelerate the range of control available but adds a potentially new income stream from licence arrangements.

 

Outlook

 

The management team believe strongly in reinvesting in the company's technology and brand at this stage in the companies evolution. While we are fully focussed on underlying profit and cash generation from our revenues we expect to make significant commitment to continued product development investment. The year should see a turnaround in the previous losses suffered by the business.

 

 

 

 

 

 

 

 

 

 

Mike Lord

Chairman & CEO                                                                                              Date : 22 May 2014



 

 

 

Interim Accounts for the Six Months ended 31 March 2014 (unaudited)

 

The financial information contained within these accounts has been prepared by the Directors who accept responsibility for the financial information presented below and confirm that it has been properly presented in accordance with applicable law. The interim financial statements were approved by the Board of Directors on 21 May 2014 and have been prepared on the basis of the accounting policies set out in note 1. The financial information covers the six months ended 31 March 2014.

 

 

Statement of Comprehensive Income (unaudited)

 

                                                                                                                                                                                            

For the Six Months Ended 31 March 2014

6 Months

6 Months

Year Ended



31-Mar-14

31-Mar-13

30-Sep-13



£

£

£

CONTINUING OPERATIONS

Note

(Unaudited)

(Unaudited)

(Audited)

REVENUE


1,670,993

476,285

1,053,735

Cost of Sales


(1,180,454)

(248,046)

(606,219)

GROSS PROFIT


490,539

228,239

447,516

Administrative expenses


(575,261)

(615,530)

(1,212,379)

LOSS FROM OPERATIONS


(84,722)

(387,291)

(764,863)

Finance Income


-

-

29

Finance Expense


(38,370)

(21,647)

(43,839)

LOSS FOR THE PERIOD BEFORE INCOME TAX

(123,092)

(408,938)

(808,673)

Tax charge/(credit) on loss on ordinary activities

-

-

-

LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE PARENT

(123,092)

 

 

(408,938)

 

 

(808,673)

 

 

Other Comprehensive Income


-

-

-

LOSS AND TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO EQUITY SHAREHOLDERS

OF THE PARENT

 

(123,092)

(408,938)

(808,673)

LOSS PER SHARE





Basic


1.12p

0.111p

0.179p

Diluted


1.10p

0.111p

0.179p

 



 

Statement of Financial Position (unaudited)

 



As at

As at

As at



31-Mar-14

31-Mar-13

30-Sep-13



£

£

£


Note

(Unaudited)

(Unaudited)

(Audited)

ASSETS





Property, plant & equipment


6,027

9,470

7,748

Current Assets





Inventories

2

-

573,736

395,478

Trade & Other Receivables

5

538,988

348,282

350,125

Cash and cash equivalents

8

137,317

733

43,286



676,305

922,751

788,889

TOTAL ASSETS


682,332

932,221

796,637

Equity





Issued share capital

7

547,774

369,440

547,774

Share premium account


2,496,645

2,165,929

2,496,645

Reverse acquisition reserve


(100,616)

(100,616)

(100,616)

Retained Losses


(4,210,244)

(3,689,412)

(4,087,152)

Total Equity


(1,266,441)

(1,254,659)

(1,143,349)

Current liabilities





Trade & other payables


1,544,285

1,567,801

1,365,207

Loans & borrowings

6

404,488

609,729

570,104

Total current liabilities


1,948,773

2,177,530

1,935,311

Non current liabilities





Loans & borrowings

6

-

9,350

4,675

Total Equity & Liabilities


682,332

932,221

796,637

 

Statement of Changes in Shareholders' Equity (unaudited)

 


 Reverse

 Retained



 Acquisition

 Earnings/

 Total


 reserve

 (Losses)

 Equity


£

£

£

As at 1 October 2012

(100,616)

(3,278,478)

(843,725)

Loss for the period and total comprehensive income

-

(410,934)

(410,934)





As at 31 March 2013

(100,616)

(3,689,412)

(1,254,659)

Loss for the period and total comprehensive income

-

(397,740)

(397,740)

Shares Issued

-

-

535,000

Share Issue Costs

-

-

(25,950)





As at 1 October 2013

(100,616)

(4,087,152)

(1,143,349)

Loss for the period and total comprehensive income

-

(123,092)

(123,092)





As at 31 March 2014

(100,616)

(4,210,244)

(1,266,441)

 

 

Statement of Cashflows (Unaudited)



As at


As at


As at



31-Mar-14


31-Mar-13


30-Sep-13


 Note

£

(Unaudited)


£

(Unaudited)


£

(Audited)

Cash flow from operating activities







Loss before tax


(123,092)


(408,938)


(808,673)

Adjusted for:







Depreciation


1,722


3,097


3,757

Impairment of Trade debtors


20,857





Loss on disposal of property,

plant and equipment

-


-


1,062

Investment income


-


-


(29)

Exchange (losses)/gains


(30,002)


25,028


(250)

Interest expense

3

16,504


21,647


43,839

Decrease/(Increase) in inventories


395,478


(104,473)


73,785

Decrease in trade and other receivables


(209,720)


(58,233)


(60,076)

Increase in trade and other payables


179,077


414,132


211,537

Cash absorbed by operations


250,823


(107,740)


(535,048)

Finance costs


(16,504)


(21,647)


(43,839)



234,318


(129,387)


(578,887)

Cash flows from investing activities







Finance revenue


-


-


29



-


-


29

Cash flows from financing activities







Proceeds from issue of shares


-


-


509,050

Repayment of bank borrowings


(4,675)


(4,167)


(9,350)

Interest paid on borrowings




(508)


-

Repayment of convertible loan note


-


(5,161)


(5,161)



(4,675)


(9,836)


494,539

Net inc./(dec.) in cash and cash equivalents


229,643


(139,223)


(84,319)

Cash and cash equivalents at start of period


(92,326)


(8,007)


(8,007)

Cash and cash equivalents at end of period         8

137,317


(147,230)


(92,326)

 



 

Notes to the comprehensive financial statements

 

1. Accounting policies

 

Basis of accounting

 

The principal accounting policies adopted in the preparation of the interim financial statements are set out below.

 

In the preparation of this Interim Report there have been no changes to the accounting policies applied and disclosed in the annual financial statements for the year ended 30 September 2013.

 

The interim report has been prepared in accordance with the recognition and measurement principles that are consistent with International Financial Reporting Standards (IFRSs) as endorsed by the European Union using accounting policies that are expected to be applied for the financial year ending 30 September 2014.

 

The financial information in this interim report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

 

The financial information for the year ended 30 September 2013 does not constitute the full statutory accounts for that period, but is derived from those accounts.

 

The Annual Report and Financial Statements for 2013 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statements for 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.

 

 

Going concern

 

The group and company's business activities together with the factors likely to affect its future development, performance and financial position are set out in the reviews contained in the Statutory Accounts to 30 September 2013 on pages 4 - 13.  In addition, note 18 to those financial statements includes the group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments, and its exposure to credit risk, exchange risk and liquidity risk. 

 

Based on our current expectations on the continuing progress of product range development, extending our partner distribution in other parts of the world, and our ability to manage the short-term payments of the group the directors consider that the Group will have adequate funding resources to continue in operational existence for the foreseeable future. Accordingly, we continue to adopt the going concern basis in preparing the annual report and accounts. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

 



 

2. Impairments

 



 As at


 As at


 As at



31-Mar-14


31-Mar-13


30-Sep-13



 £


 £


 £



  (Unaudited)


  (Unaudited)


  (Audited)

Provision against trade receivables loan


20,857


-


-

 

 

 

3. Finance

 



 6 Months


 6 Months


 Year Ended



31-Mar-14


31-Mar-13


30-Sep-13



 £


 £


 £



  (Unaudited)


  (Unaudited)


  (Audited)

Finance expenses







Bank loan interest


                     508


            508


        (4,492)

Convertible loan interest


                  5,206


         6,900


       (13,800)

Bank charges


                10,790


       14,239


       (25,547)



                16,504


       21,647


       (43,839)








Finance income







Bank interest


 -


 -


              29



 -


 -


              29

 

 

4. Earnings per share

 

From continuing operations

 



 As at


 As at


 As at



31-Mar-14


31-Mar-13


30-Sep-13



 £


 £


 £



(Unaudited)


(Unaudited)


  (Audited)

Numerator







Loss used for calculation of basic and diluted earnings per share


             (123,092)


        (408,938)


         (808,673)

The weighted average number of shares were:







Denominator







Weighted average number of ordinary shares


10,995,480


369,440,435


452,487,626

Effect of Outstanding options shares


212,048


-


-



11,207,528


369,440,435


452,487,626

Basic loss per share


(1.12)p


(0.111)p


(0.179)p

Diluted loss per share


        (1.10)p


      (0.111)p


      (0.179)p

 

 

 

 

 

 

5. Trade and other receivables

 

















 As at


 As at


 As at



31-Mar-14


31-Mar-13


30-Sep-13



 £


 £


 £



  (Unaudited)


  (Unaudited)


  (Audited)








Amounts falling due within one year:






Trade receivables


414,151


257,176


269,634

Other receivables


20,561


33,311


18,326

Prepayments & Accrued Income


104,276


57,795


62,165



538,988


348,282


350,125

 

All receivable balances are in sterling.  A provision of £20,857 has been made against the trade receivable loan due to non-payment of the current outstanding balances due.

 

 

6. Borrowings

 

The carrying value (which is a reasonable approximation to fair value) of borrowings analysed by lender is as follows:



 As at


 As at


 As at



31-Mar-14


31-Mar-13


30-Sep-13



 £


 £


 £



  (Unaudited)


  (Unaudited)


  (Audited)








Non-current







Bank loan


-


9,350


4,675

Current







Convertible loan note


395,139


452,417


425,141

Bank loan


9,350


9,350


9,350

Invoice discounting facility


-


147,962


135,613



404,488


609,729


570,104

Total loans and borrowings


404,488


619,079


574,779

 

 

Long term borrowings of £395,139 are secured five year loan notes and carry an interest rate of 3% . The balance of loans outstanding carry interest at 9%.

 

The company has no other borrowing facilities.

 

 



 

7. Share capital

 


 As at

 As at

 As at


31-Mar-14

31-Mar-13 

30-Sep-13


 £

 £

 £

Authorised Share Capital

(Unaudited)

(Unaudited)

(Audited)

1,000,000,000 Ordinary Shares of 0.1p each

1,000,000

1,000,000

1,000,000





Post consolidation from 3 April 2014




20,000.000 Ordinary shares of 5p each

1,000,000

-

-





Allotted, Issued and fully paid




Ordinary Share Capital brought forward

547,774

369,440

369,440

Issue of ordinary shares




Issue for cash

-

-

178,334


547,774

369,440

547,774





 

 

 

8. Cash & Cash Equivalents

 








 As at


 As at


 As at


31-Mar-14


31-Mar-13


30-Sep-13


 £


 £


 £


(Unaudited)


(Unaudited)


  (Audited)







Cash Available on demand

 137,317


 733


 43,286

Invoice discounting facility

 -  


 (147,963)


 (135,612)


 137,317


 (147,230)


 (92,326)

 


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