BOU.L Regulatory News (BOU)

18 Mar 2008 07:01

Enfis Group PLC18 March 2008 ENFIS GROUP PLC ('Enfis' or 'the Company') Preliminary results for the year ended 31 December 2007 Enfis, a leader in the design, development and manufacture of intelligent highpower light emitting diode (LED) arrays and smart light engines, is pleased toannounce its maiden preliminary results for the year ended 31 December 2007. Operating Highlights • Agreements signed with 16 distributors across Europe, Asia and North America • Collaboration agreement reached with eight partners to research next generation of solid state lighting product • Prototypes of latest form of light engine sent to around 60 potential customers • Establishment of a representative office in Shanghai to give Enfis a permanent base in the Asia Pacific region • US$1 million contract to supply LED arrays to a US-based dental products manufacturer • Qualification of outsource volume manufacturing model, placing the Company well for volume production • Management team strengthened through the appointments of a VP of Sales & Marketing and a VP of Manufacturing Financial Highlights • Listing on AIM in March 2007, raising £3.9 million after costs • Revenue up 39% to £307,013, in line with expectations (2006: £221,582) • Gross profit of £38,107 (2006: loss of £83,875) • Significant increase in administrative expenses to £2.3 million (2006: £1.3 million), reflecting increased expenditure on the development of product lines and sales & marketing, in line with the Company's strategy of accelerating routes to market • Loss for the year of £1.9 million (2006: £1.5 million) • Cash position as at 31 December 2007 of £2.0 million (2006: £219,000) Shaun Oxenham, Chief Executive of Enfis, commented: "We have made significant progress in 2007, achieving all of our objectives. Ourproducts are becoming increasingly attractive to a broad base of commercialusers. The funds raised from the AIM listing have enabled us to accelerate thedevelopment of our product lines and to penetrate new markets through keydistributor agreements. Enfis is now well positioned to meet the demand for itsproducts that will inevitably grow as solid state lighting becomes standard inmore and more applications. We thus remain confident of long term growth." Enquiries: Enfis Group plc Tel: 01792 485660Shaun Oxenham, Chief Executive OfficerGiles Davies, Chief Financial Officer Noble & Company Limited Tel: 020 7763 2200John Llewellyn-Lloyd / Andy Yeo Pelham Public Relations Tel: 020 7743 6679Archie Berens / Robert Koh ENFIS GROUP PLC ('Enfis' or 'the Company') Preliminary results for the year ended 31 December 2007 Chief Executive Officer's statement The year ended 31 December 2007 has been a hugely important year in thedevelopment of Enfis. Having made a commercial decision in 2006 to target broader market segments,particularly the architectural, retail and entertainment lighting sectors, Enfislisted on AIM via a placing of new ordinary shares on 23 March 2007. The placingcomprised 3,214,286 Ordinary Shares at a placing price of 140p and raised£4,500,000 gross of associated costs. The listing provided fresh capital to commercialise the technology advantagethat Enfis has within the solid state lighting sector. Emerging from a period ofresearch and development, funded by private capital, Enfis has produced a highend plug and play multi watt light engine which facilitates accelerated take upof its solid state lighting products within its target markets. Specific targets for Enfis in 2007 were to: • Establish an international distributor network for the light engine portfolio; • Produce a sales pipeline capable of developing revenues in 2008 and 2009; • Qualify the volume manufacturing solution with Far East outsource partners; • Complete the current product range. In all of these areas the Company has successfully achieved its targets and nowstands well placed for future growth. Operational Highlights Strengthening of the senior management team During the year, two new personnel were taken on to boost the senior managementteam: Dave Mudd was appointed as Vice President of Sales and Marketing and GregPitt-Nash was appointed to the role Vice President of Manufacturing. Establishment of a presence in Asia A Representative Office was established in Shanghai to facilitate the signing ofboth distributors and direct income deals with companies based in the AsiaPacific Region. Collaborative development A research project was entered into with eight other partners to produce anenergy efficient solid state light source. Product Introduction The next generation of Enfis products is being introduced to the market withprototype light engines having been sent to around 60 potential customers forintegration and evaluation. Qualification of outsource volume manufacturing model The Company has successfully implemented and qualified the outsource volumemanufacturing model. When major contracts are signed the Board believes thatEnfis is well placed for volume production. A worldwide distributor base One key element of Enfis' strategy has been the targeting of worldwidedistributors, in order to quickly get the Enfis products into the hands of usersof solid state lighting products in target markets. By the year-end, Enfis hadsigned agreements with 16 distributors across Europe, Asia and North America. Markets and Products Enfis achieved its turnover target for 2007, setting the Company up forsignificant revenue growth and providing further confidence in the Company'sability to achieve its objectives. The distributor strategy has ensured Enfis' light engines are available andsupported in as many markets as possible. This includes agreements with AMSTechnologies, a leading pan-European distributor, Digi-Key, one of the largestdistributors in the United States and Mobicon, a major distributor in Asia whichhas customers in 73 countries in the region. Product launches and demonstrationsat major lighting conferences, such as PLASA, have significantly increasedinterest in the light engines. Enfis' business model is built on a strongfoundation of distributors and achieving these targets shows the Company is wellpoised in moving forward. Our product roadmap is ahead of schedule with the RBGA UNO launched successfullyduring the PLASA conference in September 2007. In addition the new high powermini QUATTRO was made available in early 2008. These two products give Enfisfive major product lines capable of addressing multiple solid state lightingapplications, from street lighting to stadia to supermarkets. Enfis signed its first $1million dollar contract in November 2007 with a USbased dental products manufacturer, marking a milestone in the growth in thesize of the contracts the Company is receiving. The increased product lines andadvanced technology will help to maintain the momentum. A representative office has been opened in Shanghai, China, to drive revenues inthe Far East. This has helped to deliver new contracts and supports customers inthe region. Enfis sees China as a major growth region for solid state lightingproducts. Climate change initiatives and China's hunger for energy and energysaving devices are two of the many reasons why Enfis is keen to expand in theregion. Current Trading As a result of our continued efforts last year, Enfis has a significant salespipeline in place to build and maintain relationships with new and existingcustomers. As a result of this confidence and institutional demand for Enfisshares, in February 2008 we took the opportunity to raise an additional £0.54million of new money via a pre-emption placing of 446,803 new ordinary shares. Enfis is also continuing discussions with major lighting companies, havingentered into trials with two of the major European lighting manufacturers, whichwas announced in January 2008. Finally, we expect a number of luminaire companies to launch Enfis-basedproducts during 2008, which is expected to not only increase revenues but alsohave the effect of achieving further market recognition of our products. Outlook The Board continues to be pleased with the progress made by the Company and isalso encouraged by the outlook of the solid state lighting market, especiallydue to the upcoming transition to energy efficient lighting technologies.Discussions with further integrators and lighting companies are currently takingplace, which are likely to launch Enfis' range of products during the year. Legislation for the gradual phasing out of light bulbs for certain countriescomes into effect soon and we believe demand for energy efficient and non-toxiclighting products will only increase. Environmental agendas will take centrestage in the political arena and this can only stimulate sentiment towardsenvironmentally friendly products, such as those developed and supplied byEnfis. The long term prospects for Enfis are thus extremely favourable and the Boardremains confident of long term growth. ENFIS GROUP PLC ('Enfis' or 'the Company') Preliminary results for the year ended 31 December 2007 Chief Financial Officer's review The year to 31 December 2007 was dominated by the flotation of Enfis plc whichprovided capital to move the technology onto the commercialisation phase.Trading has been in line with expectations, with the year being one oftransition. As expected, the Company is currently expending cash and willcontinue to do so until a revenue stream is secured sufficient to put thebusiness on a stable financial footing. The board closely manages the Company'scash expenditure and will continue to do so up to and beyond the point thatEnfis reaches profitability. Turnover and margin Turnover for the year was in line with expectations, at £307,013. Gross marginlevels were low, reflecting small production volumes. Management believes thathigher production volumes will result in significant production efficienciessuch that a gross margin of 50% can be achieved. Administrative Expenses Significant costs were incurred on development costs to accelerate the timetaken to bring new products to market. The business continues to have asignificant development spend as the product roadmap is completed. Other factorsimpacting the overhead cost base compared with previous years were increasedspend on sales and marketing and additional professional costs associated withbeing a public company. Balance sheet Intangible assets relate to patents and development costs which have beencapitalised where the specific conditions of IAS 38 have been met. Noadditional borrowings have been entered into during the period. Cash flow The cash balance at the year end was £2m which was ahead of expectations. Sincethe year-end a small cash placing has increased the cash resources available tothe Company by an additional £0.54 million. Cash control has been tight,although more cash is tied up in working capital than was previously the case asEnfis positions itself for increased revenue activity. Whilst the listing of the Company on AIM has been the principal source of cashduring the year significant cash was also generated from treasury investment,grant income and the securing of a significant R&D tax credit. Consolidated income statementfor the year ended 31 December 2007 2007 2006 £ £ Revenue 307,013 221,582Cost of sales (268,906) (305,457)Gross profit / (loss) 38,107 (83,875) Administrative expenses (2,308,737) (1,333,609)Other income 140,235 46,031Operating loss (2,130,395) (1,371,453) Finance income 124,215 10,380Finance costs (40,685) (92,037) 83,530 (81,657) Loss before tax (2,046,865) (1,453,110) Income tax credit 181,812 -Loss for the year (1,865,053) (1,453,110) Attributable to:Equity holders of the company (1,865,053) (1,453,110) Earnings per share for loss attributable to theequity holders of the Company- basic (22.7p) (27.3p)- diluted (20.4p) (23.6p) The results relate to continuing operations. Consolidated balance sheetsAs at 31 December 2007 2007 2006 £ £AssetsNon current assetsProperty, plant and equipment 235,351 190,767Intangible assets 399,934 121,133 635,285 311,900Current assetsInventories 277,876 61,429Trade and other receivables 211,862 317,456Corporation tax receivable - 975Cash and cash equivalents 1,999,424 218,782 2,489,162 598,642Total assets 3,124,447 910,542 Capital and reserves attributable to equity holders of theCompanyOrdinary shares 893,606 1,820Capital redemption reserve - -Share premium 3,585,446 2,553,992Preference shares - 77,792Share option reserve 61,749 221,254Reverse acquisition reserve 2,283,667 -Share warrants - 30Retained losses (4,425,358) (2,913,068)Total equity 2,399,110 (58,180) LiabilitiesNon-current liabilitiesDeferred income 65,748 47,377Borrowings 106,105 518,260 171,853 565,637Current liabilitiesTrade and other payables 495,046 339,871Borrowings 58,438 63,214 553,484 403,085Total liabilities 725,337 968,722 Total equity and liabilities 3,124,447 910,542 Cash flow statementfor the year ended 31 December 2007 2007 2006 £ £Cash flows from operating activitiesCash used in operations (2,236,731) (1,224,571)Interest paid (40,685) (20,554)Tax received 182,787 148,764Net cash used in operating activities (2,094,629) (1,096,361) Cash flows from investing activitiesPurchase of property, plant and equipment (103,567) (102,483)Purchase of intangible assets (380,657) (58,410)Receipt of government grants 154,604 118,600Interest received 124,215 9,259Net cash used in investing activities (205,405) (33,034) Cash flows from financing activitiesProceeds from the issuance of ordinary shares 4,143,890 482,267Proceeds from borrowings - 52,763Repayments of borrowings (30,300) (2,525)Finance lease principal repayments (32,914) (16,788)Net cash generated from financial activities 4,080,676 515,717 Net increase / (decrease) in cash and cash equivalents 1,780,642 (613,678)Cash and cash equivalents at the beginning of the year 218,782 832,460Cash and cash equivalents at the end of the year 1,999,424 218,782 Notes to the preliminary announcement 1. Basis of Preparation The unaudited results above do not amount to statutory accounts within themeaning of Section 240 of the Companies Act 1985. These results have beenprepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies that have been used are consistent with those used inthe preparation of the IFRS financial statements for the period ended 31December 2006 of Enfis Limited, as disclosed in the Admission Document to AIM,together with the accounting policies for the reverse acquisition and researchand development expenditure set out below. A detailed analysis of the adjustments arising on the conversion of thepreviously reported UK GAAP figures of Enfis Limited to those now reported underIFRS accounting principles is set out in the Admission Document to AIM. The audited accounts for the year ended 31 December 2006 have been delivered tothe Registrar of Companies. The Annual Report and Financial Statements for theyear ended 31 December 2007 will be delivered to the Registrar of Companiesfollowing the Annual General Meeting. Copies will be available to the public atthe Company's registered office: Technium II, Kings Road, Swansea Waterfront,Swansea SA1 8PJ. Reverse Acquisition Under IFRS3, Business Combinations, the group reconstruction that took placeduring the period has been accounted for as a reverse acquisition. Although theconsolidated information presented in this report has been issued in the name ofthe legal parent, Enfis Group plc, it represents in substance a continuation ofthe financial information of the legal subsidiary, Enfis Limited. The followingaccounting treatment has been applied in respect of the reverse acquisition: 1. The assets and liabilities of the legal subsidiary Enfis Limited arerecognised and measured in the consolidated financial information at theirpre-combination carrying amounts, without restatement to fair value; 2. The retained (loss) and other equity balances recognised in theconsolidated financial information reflect the retained earnings and otherequity balances of Enfis Limited immediately before the business combination.However, the equity structure appearing in the consolidated financialinformation reflects the equity structure of the legal parent, Enfis Group plc,including the equity instruments issued to the shareholders of Enfis Limited toeffect the business combination; and 3. Comparative numbers presented in the consolidated financial informationare those reported for the legal subsidiary Enfis Limited. The comparativefinancial information comprises the audited financial statements for the yearended 31 December 2006 prepared under IFRS. 2. Dividends The Directors do not recommend the payment of a dividend. This information is provided by RNS The company news service from the London Stock Exchange