BOU.L Regulatory News (BOU)

23 Mar 2007 08:00

Enfis Group PLC23 March 2007 23 March 2007 Enfis Group plc ("Enfis" or "the Company") First day of dealings on AIM Placing by Noble raises £4.5 million Enfis is a significant market participant in the design, development andmanufacture of intelligent high power Light Emitting Diode ("LED") arrays andlight engines that are believed to be more powerful, durable, versatile andenergy efficient than any competing lighting product currently available. Enfishas raised £4.5 million through a placing of new ordinary shares by Noble &Company Limited ("Noble") and is pleased to announce the commencement of tradingtoday in its shares on AIM (ticker ENF). The Nominated Adviser and Broker toEnfis is Noble. KEY INFORMATION • Enfis has designed, manufactured and now made commercially available high-powered, full spectrum, intelligent LED arrays, which the Directors believe will allow Enfis to benefit from the anticipated global shift from incandescent lighting to Solid State Lighting ("SSL") driven mainly by cost, energy efficiency, environmental and functionality factors, with the SSL market projected to be worth approximately US $22 billion by 2010. • The environmental and cost benefits of converting to SSL are substantial. 22 per cent. of energy used in the US is for lighting, equating to 915 Tera Watt Hours (TWH) of energy, and it is estimated that an 80% penetration of SSL into that market would result in financial savings of around US$46 billion and a reduction of CO2 emissions of 10.7 Giga Tonnes. • Architectural, entertainment and retail segments of the illumination applications market represent the most immediately penetrable markets for the Enfis light engine. These markets are projected to enjoy a compound annual growth rate of 45 per cent. between 2006 and 2011. • Since the launch of Enfis' light engine concept at the Electronica trade fair in November 2006, the Company has seen significant interest from the distributor community. Enfis has already signed eight distributors, providing coverage in Western Europe and Asia Pacific. The pipeline of interest continues to increase in these regions and a gathering momentum of interest from North America is visible. • The £4m net proceeds of the placing will be used to fund ongoing costs whilst Enfis grows its sales and will provide additional working capital. This will enable the Company to put in place infrastructure for sales and marketing as well as to purchase in-house automated process development equipment, thereby reducing time to market. • The admission to AIM will also provide scope for the continued incentivisation of its staff and create wider ownership within the Group, heighten awareness of the commercial benefit of Enfis' technology and protect IP in new products and processes. Shaun Oxenham, Chief Executive of Enfis, commented: "These funds give us the financial strength to make most of the opportunitiesthat we have identified since the Electronica trade fair in November, when wefirst unveiled our light engines and were inundated by expressions of interestand orders, and to deliver our longer term business plans. "The technology we have developed, with its increased power, efficiency andversatility, makes our light engines attractive to a wide range of customers. Weare now well placed to secure an increased share of the growing SSL market, aswell as increase our capacity, sales force and product development capability." Placing Statistics Placing Price per Placing Share 140pNumber of Ordinary Shares in issue on Admission 8,936,060Proceeds of the Placing before expenses £4.5 millionPercentage of enlarged issued share capital represented by the Placing Shares 36%Market capitalisation on Admission at the Placing Price £12.5 million Enquiries: Enfis Group plc Tel: 01792 485660Shaun Oxenham, Chief Executive OfficerGiles Davies, Chief Financial Officer Noble & Company Limited Tel: 020 7763 2200John Llewellyn-Lloyd / Graeme Bayley Pelham Public Relations Tel: 020 7743 6670Archie Berens / Philip Dennis 1. Introduction Enfis is a significant market participant in the design, development andmanufacture of intelligent high power Light Emitting Diode ("LED") arrays andlight engines. The global lighting market is shifting from traditionalincandescent lighting to Solid State Lighting ("SSL"), driven mainly by cost,energy efficiency, environmental and functionality factors, with the SSL marketprojected to be circa US $22 billion by 2010. The Company is well placed tocapture SSL market share, as well as to benefit from the market's substantialprojected growth. The Company is seeking admission to AIM and is raising fundsfor the purposes of accelerating its growth in this dynamic market. 2. Background Enfis was founded in 2001 and was initially funded by Wesley Clover Corporation,a venture capital company chaired by Sir Terry Matthews, founder of Mitel andNewbridge Networks. Enfis' initial focus was to develop semiconductor basedlight source modules and systems for the specialised medical market using thelatest advances in semiconductor optoelectronic device fabrication, thermalmanagement and optical design technologies. In January 2006, Enfis made a commercial decision to target broader marketsegments, particularly the architectural, entertainment and retail lightingsectors. In March 2006, Enfis announced a technology breakthrough in LEDlighting power density which forms the basis of Enfis' current light engine.Enfis' light engine includes one of the highest power LED arrays commerciallyavailable worldwide today and is powered by patent-pending smart arraytechnology, highly efficient intelligent electronics and thermal management. 19patents have been filed relating to the technology. In November 2006 at Electronica (a global trade fair in Munich for electroniccomponents, systems and applications) Enfis formally launched its range of highperformance LED light engines and arrays. Around 100 companies from all overthe world expressed a strong interest in taking the Enfis light engines to theirrespective markets under distribution agreements. Since Electronica, Enfis hassigned distribution agreements with eight of these companies in Europe and AsiaPacific, and has received nearly 30 orders for its SSL products. Enfis is innegotiation with approximately 20 further distributors and value addedintegrators with plans to recruit further distributors in North America in 2008. 3. Solid state lighting Drive for energy efficiency Climate change is widely acknowledged as being one of the most serious issuesfacing the planet and there is strong evidence that most of the warming observedis attributable to human activity, in particular to the emissions of greenhousegases. The UK government has played a leading role in global efforts to tackleclimate change and will continue to do so, with its official Kyoto Protocoltarget of a 12.5 per cent. reduction of greenhouse emissions below 1990 levelsby 2008 - 2012. The UK Government, in its 2003 Energy White Paper, set out aninternal target to reduce carbon emissions in the UK by 60 per cent. from 1990levels by 2050. In a press release on 20 February 2007, Australia's Government announcedincandescent light bulbs will be banned from sale from 2009 to help cutgreenhouse gas emissions. Malcolm Turnbull, the environment minister, said "replacing the country's incandescent bulbs could prevent up to 4 million tonnesof greenhouse gas emissions entering the atmosphere every year by 2015. Banningthe bulbs would also help cut 800,000 tonnes from Australia's current greenhousegas emissions level by 2012 and lower household lighting costs by 66 per cent." On an international scale, policy makers are looking ahead to the negotiation ofa replacement of the Kyoto Protocol, which expires in 2012, and the issue ofclimate change was once again high on the agenda at the World Economic Forum atDavos in January 2007. A rise in US investor and political demands on businessto do more to deal with environmental problems was highlighted in February 2007when Ceres, a coalition of US institutional investors and environmental groups,stepped up pressure on corporate America to do more on environmental issues bypublishing a blacklist of 10 companies it accused of failing to address climatechange and global warming. In November 2006, Walmart reinforced its commitmentto energy efficiency initiatives when it confirmed a switch to LED lighting inits refrigerator cases in 500 of its stores, with a projection of 66 per cent.energy savings justifying the estimated investment of circa US $30 million. The environmental and cost benefits of converting to SSL are substantial.According to a report by Professor Fred Schubert of Rensselaer PolytechnicInstitute published in "IOP Reports on Progress in Physics", building uponleading work by the US Department of Energy entitled "Solid-State lighting - abenevolent technology", 22 per cent. of energy used in the US is for lighting,equating to 915 Tera Watt Hours (TWH) of energy. It is estimated that an 80 percent. penetration of SSL into the US lighting market would lead to: • Reduction in energy use of 458 TWH, or 11 per cent. of the total electricity generated in the US annually • Financial savings of around US $46 billion • Reduction in energy consumption of 52 Giga Watts, equivalent to around 70 major power stations • Reduction in CO2 emissions of 10.7 Giga Tonnes Advantages of SSL technology SSL is an ideal replacement for traditional lighting for a number of reasons: • Efficiency - SSL is between three and ten times more electrically efficient (depending upon colour) than traditional light sources and more efficient to manufacture and recycle • Low requirements for maintenance - SSL devices are rugged and shock proof and have a life time in excess of 30,000 operating hours compared with traditional light sources of 1,000 operating hours. An SSL device will typically outlast the life time of the lighting fixture • Compatibility with heat sensitive environments - SSL is cool and safe to touch (circa 50 degrees celsius) compared with traditional lighting (200 degrees celsius or greater), and does not radiate heat directly towards the illumination subject • Safety - SSL uses low voltage, typically 5V to 12V, and is electrically safe as mains supply voltages of 240V can be isolated from the illumination fixtures. SSL does not emit rogue ultra violet radiation, unlike fluorescent tubes. There are no user serviceable parts, substantially reducing the risks of end user accidents • Ecologically friendly - No mercury or hazardous substances are used in the manufacture of SSL. Conversely, several drops of mercury are added to every single fluorescent tube, requiring highly inefficient processing at the end of a tube's life, practically nullifying the environmental efficiency benefits of a fluorescent tube The technology behind SSL SSL technology utilises LEDs as sources of illumination rather than electricalfilaments or gas as used in traditional lighting. The term 'solid state' refersto the fact that light from an LED is emitted by a solid object - thesemiconductor - as a consequence of converting electric current (electrons) intolight (photons), and not as a by-product of raising an object to an extremelyhigh temperature, as is the case with traditional incandescent lighting. LEDsemit light as a direct function of the current passing through them, meaningthat LEDs can emit light across the whole visible spectrum at any specificcolour desired, compared to traditional lighting hardware that can produce onlyone colour (white). In recent years the price of semiconductor material has reduced over time andefficiencies have increased, enabling the cost effective adoption of SSL intothe existing lighting market. In 2003 the cost per Lumen was around US $0.08 andtoday the cost per Lumen within the SSL market is just over US $0.03, forecastto be US $0.01 by 2011. Within the SSL market, there have been advances in luminous flux that have beenachieved by operating the chip structure at a higher level of input current, andby increasing the physical dimensions of the chip. Both methods requirespecialised packaging to remove the higher amount of heat generated within thechip. The requirement for removal of heat has historically been a limitingfactor in the advancement of LED technology. Enfis has found a solution to thisdifficult problem, allowing it to design and manufacture one of the highestpowered arrays commercially available today, and has made it the subject of someof its patents. 4. The Company's products Enfis has designed, manufactured and now made commercially available highpowered, full spectrum, intelligent LED arrays, drawing upon its 19 patents andpatent applications, know-how and other intellectual property. By the end ofFebruary 2007, Enfis had shipped 300 light engines and arrays. Enfis' lightengines combine a high powered LED array with associated controlling electronicsand heat management components. Enfis' light engines have a number ofdistinguishing features including: • High power density LED array - Enfis' products have one of the highest power density LED arrays commercially available today. Using proprietary packaging patented techniques, Enfis has developed a 0.5cm2 array using 100 LED chips, emitting over 1,000 Lumens per cm2 , and a 16cm2 array using 1,000 LED chips, emitting over 300 Lumens per cm2 • High efficiency - LEDs are renowned for their efficiency. The Enfis light engine adds to this benefit by integrating high efficiency electronics and thermal management to provide light sources which offer up to five times the efficiency of conventional incandescent light sources. In operation, it can currently produce high power light up to 30 Lumens per Watt with a technology road map predicting improvement to more than 60 Lumens per Watt in the next 24 months • Heat management - Enfis light engines are designed to remove heat effectively from the high powered LED array, increasing its reliability and power capability and reducing the specification and the need for ancillary cooling systems. Enfis has filed and pending patents covering novel cooling systems, which it will seek to integrate into future products • Digital colour spectrum - Controllable via a normal PC, over 4 billion colours can be selected with instant changeability • Fully integrated - Enfis' light engine needs only power to work so immediate user adoption is available • Intelligence - Enfis' light engine is a highly intelligent device, incorporating: • Programmability and controllability - The programmability of the Enfis light engine allows value added integrators or distributors to configure and define the working parameters of the Enfis light engine without any detailed SSL technology skills. This provides a feature rich set of options to the integrator or lighting fixture designer and enables them to develop new and exciting products quickly and efficiently. The end user can then use and control the Enfis light engine easily through the feature set made available • Network intelligence - The Enfis light engine can be controlled by a number of standard interfaces including RS-232, Bluetooth, Wi-Fi and Ethernet. Using this communication, the light engines can be part of a domain and controlled simultaneously or separately • Reliability - The Enfis light engine is constantly self monitoring, ensuring that optimum light output, colour rendering and colour temperature is maintained and that efficiency performance is guaranteed and kept in calibration of limits set by integrators. If for any reason the light engine does not perform to set criteria, it can immediately communicate to the network that it needs attention Current products Enfis currently has three fully integrated plug and play light engines on themarket with varying levels of power output and functionality: QUATTRO - Enfis' highest-power product, the QUATTRO light engine consists of a200W, 1,000 LED chip 16cm2 array delivering over four billion digitallyselectable colours. This is one of the highest power arrays commerciallyavailable on the market today with extensive features and advanced managementcontrols. UNO - The UNO light engine consists of a 36W, 100 LED chip 0.5cm arraydelivering a single colour. This is mounted using Enfis' proprietary process ona small circuit board with associated electronics and integrated heat removalsystem. Operating from 5V-12V, the UNO has an optical feedback utility for autopower control. UNO Portable - The UNO portable is a portable version of the UNO. Applicationsinclude forensic, medical, dental and curing applications. Enfis is targeting a gross margin of 50 per cent. on standard products, andhigher on niche applications. Future products Enfis expects to launch a 1,000 Lumen full colour changeable light engine laterin 2007 and a 1,000 Lumen temperature tuneable white light engine in early 2008.The Directors believe that both of these products will have wide and appealingapplication, particularly in the retail markets. A more powerful 50W version ofthe UNO is also expected to be launched this year. 5. The market Market participants Amongst the participants in the global specialist lighting market, the Directorsbelieve that none has a product which can match the Enfis light engine in termsof plug and play functionality and power density. Many of the large lightingcompanies, such as Osram, Philips and Zumtobel, offer single chip packages.Typically, these packages are capable of being powered up to only 5W and need tobe arranged into a cluster of LEDs to compete with a more traditional lightsource. Enfis' LED arrays start at 18W of input power and, when combined withdriving and thermal management electronics, enable the advanced integrated lightengine products that Enfis offers. Smaller participants, such as Lamina Ceramics and Optodiode provide high powerLED arrays for specialist markets but have not provided the compact integratedlight engine solution around the LED array in the same manner as the Enfisapproach. Luminus Inc. specialises in high density arrays which are focused onprojection applications for consumer devices such as rear projectiontelevisions. TIR's white light changing technology has a maximum output of 35W,compared with Enfis' QUATTRO, the output of which is 200W. Larger market participants have been acquiring SSL know-how through corporateconsolidation. Philips acquired Lumileds as a result of which it gained controlof its Luxeon LED product line. General Electric acquired GELCore therebygaining control of its LED product line and customer base in signage,transportation lighting and displays. Zumtobel has made an investment in TIRSystems and also formed a joint venture with Toyoda Gosei to develop new LEDcomponents and LED lighting technology. In the specialist lighting market today there are many LED suppliers but veryfew designers who understand the thermal management, electrical interface issuesand optics of LEDs. Very few large luminaire manufacturers have in-house LEDfixture designers. As a result, most large companies have traditionallyoutsourced the design of LED fixtures. Market trends For 25 years, LEDs were only powerful enough to be used as indicator lamps andin alpha-numeric displays. In the early to mid 1990s, High Brightness LEDs ("HBLEDs") were developed with performance levels reaching the point where signageand signalling applications in the outdoor (i.e. full sunlight) environmentcould be addressed across the full colour spectrum. From 1995 through to 2005,the HBLED market grew at an average annual rate of 42 per cent. Most of thismarket growth was driven by adoption of HBLEDs in three principal applications: • Signalling - for example, traffic signals, automobile brake lights • Display of information - for example, outdoor video screens, single colour variable message signs • Backlighting - for example, automobile instrument panels, mobile phone LCD displays and keypads The market for HBLEDs in illumination applications - that is, applications inwhich the light from an LED is used to illuminate an object or surface, ratherthan being viewed directly to provide information or a signal - amounted to US$205 million in 2006, or approximately 5 per cent. of the overall HBLED market.In spite of its small share in the overall HBLED market, illuminationapplications was the fastest growing segment in 2006, and the market is forecastto grow to just under US $1 billion in 2011. The total SSL market (incorporating Lasers, HBLEDs and low power LEDs) is set togrow to US $22 billion by 2010, of which the illumination applications marketwill be US $771 million, rising to US $985 million in 2011. The Board believesthat the historic adoption of LED technology into traffic lights in the USprovides a visible precedent to this projected penetration by SSL technologyinto the global lighting market. Simple LED technology was adopted relativelyrapidly into the traffic light network in the US, with 30 per cent. convertingin the three year period to 2003. With a 140W incandescent bulb typically beingreplaced in each traffic light by LEDs consuming only 11W, this decreased USenergy costs by circa US $145 million per annum, as well as reducing the ongoingburden of maintenance and downtime. 6. Strategy Target markets The Board is currently targeting the architectural, entertainment and retailsegments of the illumination applications market, representing the mostimmediately penetrable markets for the Enfis light engine. These targetsegments are projected to represent 66 per cent. of the illuminationapplications market in 2011 and are set for a compound annual growth rate of 45per cent. between 2006 and 2011 (Source: Strategies Unlimited, January 2007).The Directors anticipate that Enfis' products will be adopted for a wide scopeof applications within each segment. Architectural lighting Architectural lighting encompasses the lighting of built-up environments wherethe integration of light sources and architectural elements is critical. Itcovers indoor as well as outdoor environments, where LEDs are likely to performbetter than other technologies in adverse weather conditions and temperaturevariations. LED lighting is ideal for architectural applications that requirecolour or design flexibility, in places that are difficult to reach andmaintain. To date, white light LEDs in the market have not produced high enough poweroutput to make them competitive with many general light sources other than asaccent lights. The Directors believe that Enfis' LED light engines have thenecessary power levels to be able to penetrate the high intensity architecturallighting markets where large buildings or spaces require high power lightsources. Typical solid-state architectural lighting fixtures include: • Wall washers • Floodlights • Accent lights • Spotlights • Path lights Retail display lighting Retail lighting requirements include both general area lighting as well asproduct-specific display lighting that enhances the appearance of particularproducts. Virtually all types of light sources have, to date, been used inretail lighting, including incandescent, halogen, fluorescent, ceramic metalhalide, fibre optic, and, most recently, LEDs. Retail display lighting with LEDs is a relatively recent development in LEDlighting, with the entry of white LEDs to the retail display lighting market inselected applications in 2006. The major early adopters include jewelleryretailers, cosmetics companies, retailers of high-end merchandise (e.g. Gucci,Tiffany) and chain grocery stores, such as Wal-Mart. Clinique specified LEDlighting for all of its new cosmetic counters in 2006. The LED retail display market is expected to enjoy robust growth in 2007 andbeyond and the Directors believe that the Enfis light engine will contribute tothis growth through its variable colour offering, high intensity light, low heatoutput and controllability. Entertainment lighting The entertainment lighting market encompasses music concerts, theatres,television studios, discos and clubs. Entertainment lighting is full of colourchanging applications. In order to generate colour, a gel filter is placed overthe light source, reducing the light output significantly. Gel filters have alimited life, fading or even melting over time, with replacement cost andmaintenance implications. Colour changing LED lights eliminate the need forthese gel filters and additional accessories. The Directors believe that most of the new fixtures in colour-changingentertainment applications are likely to be LED-based. Given the Lumen output ofLEDs to date, the number of applications in which LEDs could be used has beenlimited in large venues such as theatres, mostly being used for wall washes andconcentrated beams of colour. To date, LEDs have not been able to be used forspots or as follow spots. The Directors believe that Enfis' light engine products are ideally suited tothe entertainment lighting market, with the ability to replace existing fixturesimmediately. One 200W Enfis Quattro unit, for example, could replace a 700Whalogen spot in a theatre, providing an immediate lighting energy cost saving aswell as the benefit of digital light on demand, providing vivid, precise colourcontrol from a palette of over four billion colours. Replacement costs andmaintenance would be substantially reduced and, with the lower generation ofheat, air-conditioning requirements would also be materially lowered. Manufacturing A key aspect of Enfis' strategy is the outsourcing of manufacturing, which iscarried out in two stages. Manufacturing of arrays Enfis' arrays consist of a special Enfis-designed thermally conductive substratewith a pre-defined metal pattern. Semiconductor LED chips are placed on thesubstrate using a proprietary attachment process and bond wires are affixed alsoby a proprietary process. The LED chips are protected using a specialencapsulation process. The array is integrated into the light engine and canalso be sold as a stand alone product. Manufacturing of the arrays is referred to as packaging and consists ofmicroelectronics based assembly techniques to attach the LED chips precisely tothe substrate and also to form wire bonds precisely to the chips. The arraypackaging process is relatively complex, involving a certain amount of IP andknow-how. The Enfis arrays are designed in-house using semi automatic productionmethods which can produce small pre-production quantities. Once the design isfinalised it is sent to a low volume subcontractor to prove the process for massmanufacture. Part of the proceeds of the Placing will be used to purchaseprototyping equipment to take this proving process in-house and reduce theoverall time to market. There is a global market of providers for theoutsourcing of the array packaging process. Enfis aims to establish threesources of qualified manufacturing partners for the packaging process, allowingit to scale appropriately from small batches to mass manufacture and also toensure disaster scenarios are fully covered. Enfis currently has an approved capacity for up to 200 UNO LED arrays per monthvia a single source sub-contractor and is currently working with three otherpackaging houses which will provide a capacity in excess of 1,000 UNO LED arraysper month by June 2007. This capacity will allow Enfis to meet and exceed itspredicted sales pipeline of the UNO product until March 2008, given currentsales forecasts. Once predicted sales volumes exceed these levels the productwill be transferred to higher volume subcontractors who are not currentlyaccessible due to the lower volume of production required at this time. When utilising outsource partners, consideration of leakage of IP is important.Enfis performs detailed audits of each sub-contractor and scrutinises theprocesses for protection of IP within each. In most cases, Enfis specifiesmanufacturing and assembly areas that are secure and specific, with shadedwindows and guarded entry to protect against unauthorized viewing. Thesub-contractors offer dedicated floor space, equipment, engineers and supplychain management to protect Enfis' proprietary drawings, materials and products. Manufacturing of light engines The LED array is combined with Enfis' intelligent proprietary electronics andthermal management to form the Enfis smart light engine. The light engineassembly process is similar to the process of assembly of a PC motherboard andmicroprocessor and uses advanced components based on industry standards anddesigned with years of experience concerning the boundaries of the LED lightengine performance. All design aspects are performed internally. Enfis currently has an approved capacity for up to 300 UNO light engines permonth via a single source sub-contractor, which is projected to grow to inexcess of 1,000 UNO light engines per month. Enfis is currently working withthree other assembly houses which will each provide a capacity in excess of1,000 light engines per month when qualified. This capacity will allow Enfis tomeet and exceed its predicted sales pipeline of the UNO product until March2008, given current sales forecasts. Once predicted sales volumes exceed theselevels the product will be transferred to higher volume subcontractors who arenot currently accessible due to the lower volume of production required at thistime. Routes to market Enfis sees three routes to market for its products. Initial sales activities of the Company are focused upon the large electronicsand optoelectronics catalogue distribution companies. This is in order to makethe Enfis light engine products as widely available to the market and at thedisposal of as many lighting designers and lighting engineers as possible. Theimmediate focus on this route to market is intended to serve as an announcementof the emergence of high output LED light engines and that a step change to highoutput multi-Watt SSL is underway. Since November 2006, the Company has enteredinto eight distributor agreements, which is increasing the advertisement of itsproducts within distributor catalogues. Enfis' products are already listed oncertain companies' websites, including Cutter in Australia and RS Components inthe UK. The Company intends to establish distributor bases in the UK and Europethis year, the Far East next year and in North America the year following. The second route to market is via the value added integrators (the luminairedesigners). The value added integrators typically may have only 20 products intheir portfolio. However, they understand the technology and market placeintimately and seek to secure strategic contract wins for their product range.These contract wins may be less regular than those achieved by the cataloguecompanies but are likely to be larger in volume and value. Thirdly, Enfis will seek strategic R&D tie ups with the major lightingmanufacturers such as GE, Sylvania and Ushio. Enfis believes that theserelationships will move more towards licensing opportunities for the Enfis lightengine technology. Enfis intends to support the catalogue distributors andvalue added integrators through marketing and education activities run with thedistributors' and integrators' customer bases. 7. Historical financial information The following summarises Enfis' financial performance, showing the actualresults for 2004 - 2006. The results for 2004 were prepared under GenerallyAccepted Accounting Principles in the United Kingdom (UK GAAP), while theresults for 2005 and 2006 are reported under the basis of InternationalFinancial Reporting Standards (IFRS). Year ended 31 December Year ended 31 December Year ended 31 December 2004 2005 2006 £'000 £'000 £'000 Turnover 256 370 222Gross profit / (loss) 150 79 (84)Loss before tax (292) (920) (1,453) 8. Current trading and prospects Since the launch of Enfis' light engine at Electronica in November 2006, and thepositive reception of the product, Enfis has seen significant interest from thedistributor community. Enfis has already signed eight distributors, providingcoverage in Western Europe and Asia Pacific; the pipeline of interest continuesto increase in these regions and a gathering momentum of interest from NorthAmerica is visible. The forward business is in line with the Directors'expectations and the management will continue to develop the Company's productsand channels to market. 9. The Board The Directors of the Company are: • Simon Gibson, Chairman and Non-Executive Director (aged 49) - Simon was the co-founder and president of Ubiquity Software Plc recently acquired by Avaya for £77m, and is Chief Executive of Wesley Clover Corporation, a significant shareholder in Enfis • Shaun Oxenham, Chief Executive Officer (aged 38) - Shaun has 15 years' experience of creating and managing business ventures in developing and leading edge environments. Prior to joining Enfis in January 2002, Shaun was Managing Director (Europe) of Ubiquity Software Corporation • Giles Davies, Chief Financial Officer (aged 39) - Giles is a qualified chartered accountant who began his career with KPMG. Prior to joining Enfis in January 2006, Giles was the Group Finance Director of Tinopolis plc and previously was UK Finance Manager at Dorling Kindersley plc • Gareth Jones, Chief Technology Officer (aged 38) - Gareth joined the Enfis Board in February 2002 and was appointed Chief Technology Officer in June 2002. Gareth is responsible for the scientific and technical direction of Enfis, setting the research and development plan and providing technical and market input for the product roadmap strategy. Prior to joining Enfis, Gareth was the Product Manager at IQE plc with responsibility for major aspects of all the laser and LED product business • Drew Nelson, Non-Executive Director (aged 52) - CEO of IQE plc, an AIM listed company formed from the merger of QED with EPI, which he founded, in 1998. IQE was listed on AIM in 2000 and had a market capitalisation on 14 March 2007 of £73.1 million • Ron Jones, Non-Executive Director (aged 58) - Ron Jones is a founder and Executive Chairman of Tinopolis plc, one of the UK's largest television production companies and listed on AIM and had a market capitalisation on 14 March 2007 of £36.5 million. He was previously with Arthur Andersen & Co where he qualified as a Chartered Accountant and became a partner in that firm, leaving in 1988 • John Thynne, Non-Executive Director (aged 75) - Previously a senior official at the DTI and formerly a director of Newbridge Networks Corporation, a NYSE listed company, and a number of other Wesley Clover Corporation and Celtic House Investment Partnership companies 10. Share option schemes To date, 1,096,350 options have been granted under the share option schemesoperated by the Company. Excluding these 1,096,350 options, the maximum numberof Ordinary Shares over which options may be granted under the share optionschemes shall represent approximately 12 per cent. of the Company's issuedOrdinary Share capital on the date of grant, with the Company's remunerationcommittee retaining discretion over the granting of such options. The currentintention of the remuneration committee is to grant options amounting toapproximately six per cent. of the Company's issued Ordinary Share capital, atthe Placing Price, to the executive Directors (comprising two per cent. to eachof Shaun Oxenham, Giles Davies and Gareth Jones (subject to vestingconditions)), and retain options up to an additional circa six per cent. of theCompany's issued Ordinary Share capital for future grants to other members ofstaff. 11. Dividend policy As Enfis is in the early stages of its growth and business, it is not possible,at this stage, to pay a dividend. If the Company's business becomes profitableand distributable reserves become available, the Directors will review thedividend policy. 12. Reasons for the Placing and Admission The Placing comprises 3,214,286 Ordinary Shares at the Placing Price of 140p perOrdinary Share. The Company will raise gross proceeds before expenses (assumingfull subscription of the Placing Shares under the Placing) of £4.5 million. ThePlacing is not being underwritten. The Directors believe that the admission to trading on AIM and the Placing willbe beneficial to the Company because it will: • Raise the profile of the Company • Fund the ongoing costs of the Company whilst it grows its sales and provide the Company with additional working capital • Enable the Company to put in place infrastructure for sales and marketing • Enable the Company to purchase in-house prototyping equipment, thereby reducing time to market • Provide scope for the continued incentivisation of its staff and create wider ownership within the Company • Heighten the commercial benefit of Enfis' technology lead • Protect IP in new products and processes This information is provided by RNS The company news service from the London Stock Exchange