AMO.L Regulatory News (AMO)

29 Jan 2007 07:02

Amino Technologies PLC29 January 2007 FOR IMMEDIATE RELEASE 29 January 2007 AMINO TECHNOLOGIES PLC RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2006 Amino Technologies plc ("Amino"; stock code: AMO), the Cambridge based broadbandnetwork software and systems company, announces its unaudited final results forthe year ended 30 November 2006. Key points: • Amino's leading position in the IPTV market was sustained during the year with global distribution channels and low cost manufacturing source in place, coupled with a strong brand. • The financial results for the period were: o Revenues: £25.4m (2005: £23.5m); o Gross margins: 36.3% (2005: 34.8%); o Gross profit: £9.2m (2005: £8.2m); and o Loss before tax: £1.5m (2005: profit of £64,000) reflecting increased operating costs and industry-wide issues which delayed shipments of new MPEG-4 HD set-top boxes. • Balance sheet remains strong with net cash of £14.0m (2005: £14.5m). • Shipments of AmiNET products for the period increased 32% to 413,000 (2005: 314,000). • Since the year end, board has been strengthened with the appointment of Keith Todd as non-executive Chairman and Andrew Burke as a non-executive director. On outlook, Keith Todd, Chairman stated: "The board believes that Amino is well placed to continue to grow and tomaintain a leadership position in IPTV. The board and executives are working toimprove the financial performance of the business, balancing investment withprofitable growth as we strive to establish sustained profitability." About Amino Amino Technologies plc (www.aminocom.com) designs and supplies electronicsystems, software and consultancy for IPTV (telco triple-play applications),on-demand video and in-home multimedia distribution. Amino is partnered with world-leading companies in systems integration, middleware, conditional access, silicon, head-end systems and browser technologies. CONTACTS Amino Technologies: today: 020-7367-8888Keith Todd, Chairman thereafter: 01954-234100Bob Giddy, Chief Executive www.aminocom.comStuart Darling, Finance Director Bankside: 020-7367-8888Steve Liebmann or Simon Bloomfield KBC Peel Hunt Ltd. 020-7418-8900Julian Blunt CHAIRMAN'S STATEMENT Introduction I am pleased to announce my first set of Amino Technologies plc results for theyear ended 30 November 2006, following my appointment on 2 January 2007. Whilstall involved, with hindsight, would have done some things differently over thepast years, the board and executives have done a remarkable job in getting theCompany to this point of its development; it has established a very strongposition in the IPTV market, global distribution channels, a low costmanufacturing source coupled with a very strong brand, in an industry which hascontinued to be dynamic and challenging. The task for the board and executivesis to exploit this strong position in the next phase of the IPTV marketdevelopment. Financial By way of background to the results for FY2006, it will be recalled from paststatements that the introduction of MPEG-4 products was delayed by industry-wideissues which meant that volume deliveries of Amino's AmiNET130 set-top box waspushed back from the closing months of last year and should now start from thesecond half of 2007. This had an impact last year on the product revenue mix andaverage gross profit per unit. Revenue for the year increased 8% to £25.4m (2005: £23.5m) and the revenue fromthe top 20 accounts which account for over 80% of the revenues was up 27% to£22.4m (2005: £17.6m). The Company increased its operating cost base during theyear to £11.3m (2005: £8.5m) in order to expand its distribution capability andin support of the emerging MPEG-4 market. The Company recorded a loss before taxof £1.5m (2005: profit of £0.06m). Net cash was £14.0m (2005: £14.5m). Strategy and competitive market position The core strategy remains unchanged; Amino will continue to exploit the emergingIPTV market, initially focusing on the tier 2 and 3 telcos which are deployingIPTV first and to progressively address the total market including tier 1participants through direct selling and partnerships. Today the Company has established a market leading position in terms ofworldwide set-top box shipments according to market analysts, ABI Research(further details are provided in the Chief Executive's Statement). A recentbrand survey conducted on behalf of the Company has confirmed the strength ofAmino's brand recognition as evidenced by an extensive global distributionnetwork and middleware partnerships that have supported its growth. The market today is at the start of the transition from MPEG-2 to MPEG-4technologies which offer greater data compression and require reduced internetbandwidth. The core of the 2007 market will be underpinned by the continuedsupply of MPEG-2 products supplemented by the emerging MPEG-4 market opportunityfor both standard definition (SD) and high definition (HD) products. At the same time, Amino's business model is developing. For the more establishedtier 2 and tier 3 telco markets, a conventional supplier-customer relationshipis appropriate. For large, populous, developing markets such as China and India,significant partnership agreements signed by Amino within the last three monthsdemonstrate the strength of the Company's combined offering comprising hardware,software and 'know how' to meet the requirements of set-top box supply,licensing and local manufacture. The Company has an established, effective, low cost manufacturing partnershipwithin China and continues to work with its suppliers and partners to ensurethat the product costs remain competitive. Operational delivery The Company operates in a highly dynamic market place that is still evolving.The regions of the world are adopting different combinations of suppliers tofulfil the whole service requirements and are adopting MPEG-4 and HD roll-out atdifferent paces and with different priorities. This leads to significantcomplexity and 'supply side' cost in assessing the real market opportunity to beaddressed. Amino has an extensive customer base of over 1,400 customers,including pilot projects, giving it a unique insight to the real marketdynamics. All companies face specific execution risks in such rapidly developing markets.These risks fall into three areas: sales, technology and supply. The board andexecutive are continuing to undertake reviews of aspects of these to reduce ormitigate the risks. The Amino board and executive are well placed to benefitfrom its 2006 experience and to improve the Company's execution capability. Board The non-executive representation on Amino's board has been re-constituted overthe past month with a view to providing a structure and the skills to take Aminothrough its next phase of growth. In that context, I was pleased to announce recently the appointment of AndrewBurke as a non-executive director. His extensive knowledge of the IPTV world andof tier 1 telco participants will be a great asset to the board. We have astrong board with an excellent breadth of experience to lead Amino forward. Staff The progress that the Company has made could not have been achieved without theknowledge, skill and energy of the executive team and staff. The board and Iwould like to thank them for their continued commitment to the development ofAmino. Outlook The board believes that Amino is well placed to continue to grow and to maintaina leadership position in IPTV. The board and executives are working to improvethe financial performance of the business, balancing investment with profitablegrowth as we strive to establish sustained profitability. Keith Todd CBENon-Executive Chairman CHIEF EXECUTIVE'S STATEMENT The IPTV market environment A review of the many IPTV market surveys now available confirms ourunderstanding that, whilst there are differences in view on the absolute size ofthe IPTV market, all analysts agree that there is a sustained, upward trend thatcontinues to strengthen and develop. In 2006, the driving force continued to be from the smaller, more dynamic tier 3telcos which had already adopted the proven and robust MPEG-2 technologies orfrom emerging territories that were not constrained by network legacy issues andwere willing to become MPEG-4 'early adopters'. As the new MPEG-4 technologiesbecome available and are proven to be robust, this will herald the entry of thelarger tier 2 and ultimately the tier 1 telco's. The transition to MPEG-4 creates a great deal of churn; it provides the windowof opportunity for a second wave of technology providers. Some of these newentrants provide Amino with an opportunity to develop new customers orstrengthen our already strong 'Partner Profiles'; others present new andcompetitive challenges. Either way, this new activity serves to underscore ourlong held view that IPTV remains an emerging but valuable market. The transitionto MPEG-4 has been a challenge for the entire industry, top to bottom, from thesemiconductors to encoders. As a provider of a key element within the 'IPTVecosystem', we recognise the benefits offered by MPEG-4 but will remain cautiousuntil the end-to-end solutions are thoroughly tested. 2006 also witnessed the entrance of Microsoft TV ("MSTV"). Much has been writtenabout MSTV, but it is significant that even Microsoft has acknowledged that itis the television and not the PC that will be at the centre of the consumers'home network - a view that has been championed constantly by Amino. Geographically, the market has been established by the emerging economies in thePacific Rim, Russia and Eastern Europe. It is important to note that some of thekey elements (middleware, browsers, etc.) that are needed to form a completeIPTV solution have emerged from these regions. Together with the smallerindependent telco's in North America, the customers in these regions havepioneered IPTV and Amino is well positioned with them as both supplier and/ortechnology-partner. Joining the established businesses, powerful organisationsin both China and India have announced detailed plans to offer IPTV services inconjunction with Amino. Amino's market position ABI Research, a leading US-based market analyst, accredited Amino withmaintaining its market leadership position during 2006. It is worth noting thatby the end of FY 2006, just 3 years after our first volume shipment, Amino hasshipped more than 900,000 IPTV set top boxes throughout the world. ABI estimatedthat during 2006 the total shipment of IPTV set top boxes was 4.7m of whichAmino shipped 413,000. Amino achievements Amino has always emphasised that in a typical IPTV deployment, it is our suiteof set-top box technologies, (hardware, IntAct operating system and, whereappropriate, our soft-codec technologies) that provide the point of convergencefor many third party software solutions needed to form a typical 'IPTVecosystem'. Our integrated business model (hardware, software and services) also recordedsome notable successes, most recently Time Broadband in India, during the yearunder review: • Nov 06 - Amino licenses IPTV solution to Acer's subsidiary WNC in Taiwan WNC to bundle IntAct(TM) software stack soft codec technology with a range of IPTV STBs as part of an offering to IPTV operators across the Asia-Pacific region and to particular tier 1 Telco's in the European Union and North America. • Nov 06 - Partnership to Build IP STBs with Chengdu USEE Entered into a Memorandum of Understanding with Chengdu USEE Digital Technology Co. Ltd., a broadband multimedia company based in the People's Republic of China. • Nov 06 - Amino announces multi-year set-top box agreement with SES AMERICOM Largest satellite service provider in the US. • Sep 06 - Amino launches AmiNET125 New multi-codec IPTV - Internet TV platform with a Microsoft Windows Media-9 (WM9) software configuration. • Aug 06 - Amino selected for first ever Croatian IPTV deployment by Vodatel • July 06 - Amino selected for Northern Europe's first HD IPTV service - selected by Lijbrandt Telecom BV to supply its STBs for the first ever High Definition IPTV service in Northern Europe. The service was rolled out in time for World Cup football matches offering viewers greater clarity and detail. • May 06 - Amino wins North American Broadcasters (NAB) Award for Innovation in Media Amino was the only set-top box vendor selected for this award in the Content Delivery category. • Dec 05 - Amino enables Portugal's first ever IPTV service Selected by Novis, a major Portuguese Telco, for a residential service to be branded as 'Clix Smartv'. Business development, strategy and direction During the year, Amino continued to grow its overall (direct and indirect)customer base to over 1,400 as at 30 November 2006. However, the most importantmetric is the number of customers in large volume roll-out (more than 10,000units); at 19, this represents a 27% increase over the year. In FY2006, theAmino's top 20 customers contributed over 80% of total revenues. On a widermeasure, we have successfully sold Amino technologies preconfigured within thebox to more than 800 customers during 2006, with more than 300 being repeatbusiness. The ability to service this number of customers is a testament to theefficiency of our fulfilment and distribution channels. The board has recently reviewed the progress of Modelo and IntAct as separatebusiness units and has concluded that Amino's core value for, in particular, itstier 2/3 customers is the combination of its hardware design, software and codeccapabilities. This has been reinforced by the recent licence deal wins whichhave been for the combination of these capabilities. We will therefore, presentAmino as a unified business, although the individual brands will be retained forthose instances where they add extra value. Going forward, we will focus on thefinancial contribution from our customer base rather than units shipped; thesources of contribution will include units supplied by Amino, licences androyalties on units manufactured and shipped by our partners. The Company is continuing to look at how best to address emerging adjacentmarkets, for example 'Internet TV', for which it has the technology know-how. Itwill, however, continue only to invest when it believes the market opportunityis real in terms of potential financial returns and that it has a credibleapproach to exportation of such opportunities. As the market matures and becomes more predictable, Amino is able to leverageits core strengths of dealing with fast moving innovative tier 2/3 customers,strong market presence, powerful brand name, and low cost manufacturing basecoupled with efficient distribution channels. In addition, the benefits of thesignificant investment made during 2006 to create our new range of higher valueMPEG-4 products are beginning to be seen. We are well positioned to focus uponthe creation of a sustainable and profitable business. Productivity improvement and risk reduction Amino has developed a huge customer base by leveraging the benefits that webring to our partners within the 'IPTV ecosystem'. However, our top 20 customersare supported within a limited number of proven ecosystems. These ecosystemshave been prioritised and a new sales strategy implemented so that customers areencouraged to select an option and procure from our preferred environment. A newcharging model is being introduced for bespoke software integrations andassociated maintenance. Amino's experience and influence is widely recognisedand we believe that our new policy will be welcomed by customers and keypartners alike. We continue to review our supply base and we have a common software footprintover four semiconductor platforms, creating a competitive bidding environment.We also plan to take advantage of the additional discounts that are available asa result of the 'volume purchasing agreements' afforded by the deals with WNC,CETC and most recently with Time BB in India. Bob GiddyChief Executive FINANCE DIRECTOR'S STATEMENT Revenue increased by 8.5% to £25.45m (2005: £23.46m) from the sale of 413,000(2005: 314,000) set-top boxes and associated engineering consultancy, supportservices revenue and licence income. Gross margins increased by 1.5% to 36.3%(2005: 34.8%) contributing to an increase in gross profit of 13.2% to £9.25m(2005: £8.17m). In the interim results announced in late July 2006, Amino noted that, after theplanned investment in the market transition from MPEG-2 to MPEG-4 technologiesand the corresponding increase in operating expenses, future increases inoperating costs (largely fixed) would reflect the growth of the business.Excluding the effects of a foreign exchange loss of £0.23m (2005: gain of£0.43m) and a provision for bad and doubtful debts of £0.39m (2005: £Nil),operating expenses increased by 19.4% as compared to an adjusted increase of62.1% in FY2005. Sales, general and administrative expenses increased by 39.1%to £7.93m (2005: £5.70m) including the foreign exchange loss and provision forbad and doubtful debts or 19.4% excluding these. Research and developmentexpenses, which are written off as incurred, increased by 19.5% to £3.36m (2005:£2.81m). At the year-end, headcount was 98 (2005: 99). The average number ofemployees during the year was 102 (2005: 90). Whilst Amino has continued to maintain credit insurance, a significantproportion of its sales are in emerging economies where credit insurance is notreadily available. The Group has been affected by the 13% reduction in the value of US dollaragainst Sterling during the year because it has significant assets denominatedin US dollars, primarily trade debtors and stock. To hedge this exposure, theGroup took out an overdraft of $15.00m during the year at an exchange rate of$1.86. This loan of £7.69m is shown in current liabilities; the correspondingsterling deposit is included within short-term investments of £9.00m. The Group recorded an operating loss of £2.04m (2005: loss of £0.34m). In orderto improve profitability, the Group is focusing on increasing gross profitgenerated whilst reducing fixed operating costs. Investment in direct sales andmarketing in the Asia Pacific region and hospitality market in Europe, which didnot generate the expected financial return in FY2006, has been substantiallyreduced. Direct sales and marketing activities are now focused on the Group'score markets in Europe and North America. Recently announced partnershipagreements demonstrate that Amino is successfully addressing key emergingmarkets such as China, Asia Pacific and India in a cost effective manner. Theboard does not expect headcount to increase significantly during 2007 andexpects improvements in productivity as the number of customers deploying involume increases. Net interest received during the year was £0.54m (2005: £0.40m). A tax credit of £0.05m was received during the year. As at 30 November 2006, theGroup had approximately £13.5m of tax losses available to carry forward to setagainst future taxable profits, of which losses of £5.73m are recognised by thedeferred tax asset of £1.72m at 30 November 2006. On 20 January 2006, SJ Consulting Ltd. was acquired for a total consideration of£1.01m, represented by net assets of £0.44m and goodwill of £0.57m. Of theconsideration, £0.84m was paid in cash and £0.17m in shares, deferred over theperiod to 2009. Net assets of £26.84m (2005: £28.25m) provide the Group with a strong workingcapital base. The primary components of net assets are net cash balances of£13.97m (2005: £14.47m), trade debtors of £7.61m (2005: £10.36m) and stock of£3.81m (2005: £1.46m). The decrease in net assets of £1.41m largely reflects theloss incurred during the year (see note 9). Net cash balances of £13.97mrepresent short-term investments of £9.00m (see above), cash at bank and in handof £12.66m less a bank overdraft of £7.69m (see above). Amino is working towards obtaining the necessary legal and regulatory approvalsto undertake a reduction of capital in order to generate distributable reservesfrom which dividends may be paid and to undertake a share buy-back programme.Should the Group continue to believe that this is feasible, a proposal will beput to shareholders at the forthcoming AGM. The Group has a strong balance sheet with assets primarily made up of cash,short-term investments and trade debtors. The investments made in FY2006 (fullywritten off) in developing MPEG-4 set-top box technologies should generaterevenues in the second half of FY2007 and beyond. Looking ahead, future profitswill be sheltered by the considerable tax losses carried forward. Stuart DarlingFinance Director Consolidated profit and loss accountFor the year ended 30 November 2006 Notes Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £Turnover 3 25,447,255 23,460,756Cost of sales (16,197,987) (15,292,251) __________ __________Gross profit 9,249,268 8,168,505Selling, general and administrative expenses (7,928,884) (5,699,309)Research and development expenses (3,356,216) (2,808,771) __________ __________Group operating loss (2,035,832) (339,575)Interest receivable and similar income 623,525 418,782Interest payable and similar charges (83,506) (15,293) __________ __________Group (loss) / profit on ordinary activities (1,495,813) 63,914before taxationTax on (loss) / profit on ordinary activities 48,171 - __________ __________Group (loss)/profit on ordinary activitiesafter taxation being (loss) / profit for thefinancial period (1,447,642) 63,914 __________ __________ Basic (loss)/earnings per 1p ordinary share 4 (2.6p) 0.1pDiluted (loss)/earnings per 1p ordinary share 4 (2.6p) 0.1p Statement of group total recognised gains and losses for the year ended 30November 2006 Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £(Loss) / profit for the financial period (1,447,642) 63,914Exchange translation difference on (185,080) (22,383)consolidation __________ __________Total recognised (losses) / gains for the (1,632,722) 41,531period __________ __________ All amounts above relate to continuing activities. Consolidated balance sheet as at 30 November 2006 Notes 30 November 30 November 2006 2005 Unaudited Audited £ £Fixed assetsIntangible assets 818,408 295,297Tangible assets 1,413,734 1,023,610 _________ _________ 2,232,142 1,318,907 _________ _________Current assetsStocks 3,808,362 1,460,756 Debtors: amounts falling due after more than 6 1,914,406 190,898one yearDebtors: amounts falling due within one year 6 8,586,781 12,846,599 10,501,187 13,037,497Short-term investments 9,000,000 430,000Cash at bank and in hand 12,658,769 14,038,271 _________ _________ 35,968,318 28,966,524Creditors: amounts falling due within one year 7 (11,323,294) (1,964,581) _________ _________Net current assets 24,645,024 27,001,943 Total assets less current liabilities 26,877,166 28,320,850 Creditors: amounts falling due after more than 7 (36,299) (71,285)one year _________ _________Net assets 26,840,867 28,249,565 _________ _________ Capital and reservesCalled-up share capital 8 582,630 582,630Shares to be issued 8 171,000 -Share premium account 21,807,240 21,807,240Merger reserve 16,388,755 16,388,755Profit and loss account (12,108,758) (10,529,060) _________ _________Total shareholders' funds 9 26,840,867 28,249,565 _________ _________ Consolidated cash flow statement for the year ended 30 November 2006 Notes Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £Net cash inflow / (outflow) from operating 10 459,334 (7,154,539)activities Returns on investments and servicing of financeInterest received 551,491 418,782Interest paid (9,506) (15,293) __________ __________Net cash inflow from returns on investments andservicing of finance 541,985 403,489 __________ __________ Taxation - - __________ __________ Capital expenditure and financial investmentPurchase of tangible fixed assets (723,894) (479,085)Purchase of intangible fixed assets (173,652) (216,689) __________ __________Net cash outflow for capital expenditure and (897,546) (695,774)financial investment __________ __________ Acquisitions net of cash acquired (617,702) - Net cash outflow before use of liquid resources (513,929) (7,446,824)and financing __________ __________ Management of liquid resources(Increase) / decrease in short-term deposits (8,570,000) -with banks __________ __________FinancingIssue of ordinary share capital - 15,840,250Expenses of share issue deducted from share - (534,637)premiumCash received from exercise of share options 53,024 224,329(Decrease) in other borrowings (30,124) (38,455)Increase / (decrease) in bank borrowings 8,064,516 (6,144) __________ __________Net cash inflow from financing 8,087,416 15,485,343 __________ __________(Decrease) / increase in cash (996,513) 8,038,519 __________ __________Reconciliation of net cash flow to movement innet fundsOpening net funds 14,468,271 6,423,608(Decrease) / increase in cash (996,513) 8,038,519Increase in deposits 8,570,000 -(Increase) / decrease in borrowings (8,064,516) 6,144Exchange adjustments (8,888) - __________ __________Closing net funds 13,968,354 14,468,271 __________ __________ Notes 1 Basis of preparation The figures for the year ended 30 November 2006 have not been audited. Thefigures for the period ended 30 November 2005 have been extracted from, but donot constitute, the consolidated financial statements of Amino Technologies plcfor that period. Those financial statements have been delivered to the Registrarof Companies and included an auditors' report, which was unqualified and did notcontain a statement under Section 237 Companies Act 1985. The statutory accountsfor the financial year ended 30 November 2006 have not yet been signed by thedirectors or the auditors of the Company. 2 Accounting policies These preliminary results for the year ended 30 November 2006, which have beenprepared in accordance with the accounting policies set out in the consolidatedfinancial statements of Amino Technologies plc for the year ended 30 November2005, do not constitute statutory accounts for the purpose of section 240 of theCompanies Act 1985. 3 Turnover segmental analysis Turnover is wholly attributable to the Group's principal activity. In theopinion of the directors, the Group currently has only one class of business.The analysis of turnover by destination is set out below. Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £Geographical analysisUnited Kingdom, Europe and Africa 13,244,131 9,903,108Americas 11,892,181 10,988,350Asia Pacific 310,943 2,569,298 _________ _________ 25,447,255 23,460,756 _________ _________ 4 (Loss)/earnings per share Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £ Earnings attributable to shareholders (1,447,642) 63,914 _________ _________ Weighted average number of shares (Basic) 55,832,244 52,126,170 _________ _________ Weighted average number of shares (Diluted) n/a 54,482,187 _________ _________ The calculation of basic (loss)/earnings per share is based on (loss)/profitafter taxation and the weighted average number of ordinary shares of 1p each inissue during the period. For diluted (loss)/earnings per share, the weighted average number of ordinaryshares in issue is adjusted to assume conversion of all dilutive potentialordinary shares. The group has only one category of dilutive potential ordinaryshare options: those share options where the exercise price is less than theaverage market price of the company's ordinary shares during the period. Thereis no dilutive effect in respect of the year ended 30 November 2006 as the Groupwas loss making. 5 Acquisition On 20 January 2006, the Company purchased 100% of the issued share capital of SJConsulting Limited for a total consideration of approximately £1.0m. The Companyoperates in the UK providing network software and systems solutions. The goodwill arising on the acquisition of SJ Consulting Limited is beingamortised on a straight line basis over 10 years. The directors estimate thatthe book values underlying the business acquired approximate to the fair valueof the underlying assets. Book value and fair value £SJ Consulting Limited acquisitionTangible fixed assets 11,051Debtors 227,713Cash 216,449Creditors (19,376) _________Net assets acquired 435,837Goodwill 569,314 _________Consideration 1,005,151Consideration satisfied by:Shares to be issued (300,000 ordinary shares of 1p 171,000each)Cash 834,151 _________ 1,005,151 _________ The shares to be issued are dependent upon continued service of the keyemployees and are valued at the year-end market price. 6 Debtors As at As at 30 November 30 November 2006 2005 Unaudited Audited £ £Amounts falling due after more than one year:Other debtors 195,406 190,898Deferred tax 1,719,000 - _________ _________ 1,914,406 190,898 _________ _________Amounts falling due within one year:Trade debtors 7,610,249 10,356,334VAT recoverable 103,044 36,871Deferred tax - 1,719,000Other debtors 6,471 6,958Prepayments and accrued income 867,017 727,436 _________ _________ 8,586,781 12,846,599 _________ _________ Other debtors comprise rent deposits. 7 Creditors Amounts falling due within one year As at As at 30 November 30 November 2006 2005 Unaudited Audited £ £Bank loans and overdrafts 7,690,415 -Other loans 47,485 42,623Trade creditors 2,558,223 1,100,453Taxation and social security 202,740 166,029Corporation tax 18,707 48,171Accruals and deferred income 805,724 607,305 _________ _________ 11,323,294 1,964,581 _________ _________ Bank loans and overdrafts are secured by a fixed and floating charge over theassets of Amino Communications Limited. The interest rate on the loan is 0.85%over the US Dollar Base Rate. Amounts falling due after more than one year As at As at 30 November 30 November 2006 2005 Unaudited Audited £ £Other loans 36,299 71,285 _________ _________ Other loans comprise unsecured borrowings from a third party at a fixed interestrate of 4.56% (2005: 4.56%). 8 Called-up share capital As at As at 30 November 30 November 2006 2005 Unaudited Audited £ £Authorised100,000,000 (2005: 100,000,000) ordinary shares of 1p 1,000,000 1,000,000each _________ _________Allotted, called up and fully paid58,263,052 (2005: 58,263,052) ordinary shares of 1p 582,630 582,630each _________ _________ In respect of the acquisition of SJ Consulting Limited, the Company has thecontingent obligation to issue 300,000 ordinary shares of 1p each (see note 5). 9 Reconciliation of movements in shareholders' funds Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £Opening shareholders' funds 28,249,565 12,678,092(Loss) / profit for the period (1,447,642) 63,914Exchange differences on consolidation (185,080) (22,383)Issue of ordinary share capital - capital - 72,250Issue of ordinary share capital - share premium - 15,768,000Shares to be issued 171,000 -Expenses of share issue - (534,637)Exercise of employee share options 53,024 224,329 _________ _________Closing shareholders' funds 26,840,867 28,249,565 _________ _________ 10 Reconciliation of operating (loss)/profit to net cash inflow/ (outflow) fromoperating activities Year Year to 30 to 30 November November 2006 2005 Unaudited Audited £ £ Operating (loss) (2,035,832) (339,575)Depreciation and amortisation charge 564,675 397,510(Increase) in stocks (2,347,606) (99,417)Decrease / (increase) in debtors 2,836,057 (6,748,373)Increase / (decrease) in creditors 1,618,232 (342,301)Exchange adjustments (176,192) (22,383) _________ _________Net cash inflow / (outflow) from continuing operating 459,334 (7,154,539)activities _________ _________ This information is provided by RNS The company news service from the London Stock Exchange