BOU.L Regulatory News (BOU)

17 Sep 2007 07:01

Enfis Group PLC17 September 2007 ENFIS GROUP PLC ("Enfis" or "the Company") Interim results for the six months ended 30 June 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 interim results for the half year ended 30 June 2007. Operational highlights • The sign-up of 6 contracts with distributors and value added integrators (13 signed to date) • Progress in relation to the product implementation roadmap including the launch of the RGBA UNO at the PLASA conference, London in September 2007 • The establishment of a representative office in Shanghai to give Enfis a permanent base in Asia Pacific • The recruitment of an experienced manufacturing professional to implement the out-sourced manufacturing model • The joining of a research project with eight other partners to develop energy efficient solid-state light sources The period following listing has been transitional, concentrating on putting keyproducts and sales channels in place while defining and implementing anout-sourced manufacturing model. Financial summary The performance of the business continues to be in line with managementexpectations and the road map as set out at the time of admission. Revenues,gross profit and loss before tax for the 6 months to 30 June 2006 were basedaround Enfis' previous model and are no longer relevant to the continuingbusiness plan. Capital was raised to commercialise the technology advantage thatEnfis 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. Revenues aredown on the comparative period in 2006, this containing revenue from researchand development carried out on behalf of a specific customer in the medicalsector. Revenue of this type does not form a strong part of Enfis' future. Enfis' year to 31 December 2007 is expected to be dominated by its admission toAIM and simultaneous fundraising, which has provided sufficient capital tocommercialise the technology. As expected, the company is currently expendingcash and will continue to do so until sufficient revenue is secured to put it ona stable financial footing. Turnover for the period of £98,000 is slightly better than expected althoughmost of the revenue anticipated for 2007 occurs in the second half of the year.Other income of £68,000 received during the period relates to grants receivable. Gross profit is low. Although a volume manufacturing solution is in place, itcannot be implemented at current production quantities. Greater than anticipated use of cash within development and working capital hasbeen mitigated by efficiencies in treasury management and raising grant fundsleaving overall cash utilisation generally in line with forecast. Performance against road map At the time of admission, Enfis set out to establish a European distributorbase. Enfis has signed Farnell UK Ltd, RS Components Ltd and others in Europesince admission and has recently established an office in Shanghai to facilitatethe signing of both distributors and direct income deals with companies based inAsia Pacific. The relationship is now being formalised through therepresentative office as confidence in the new venture grows. The Companyforecasted the signup of 16 distributors by the end of the year and is on targetto achieve that number. The next generation of Enfis products is being introduced to the market withprototype light engines having been sent to potential customers as set out atthe time of admission. In September 2007, the Company launched its RGBA UNOdevice at PLASA, an international lighting conference in London. Further productlaunches are still on track. Shaun Oxenham, CEO of Enfis, commenting on the results said: "Outlook for the sector in general and particularly Enfis continues to beexciting. The solid state lighting environment continues to attract both directand indirect political and economic pressure to move away from the incandescentlight towards a more energy efficient alternative. Enfis is well positioned totake advantage of this opportunity. Solid state lighting is also producing a vibrant corporate market with a numberof transactions including Philips' purchase of Color Kinetics for totalconsideration of $791m and TIR Systems in June 2007 for $75m. I am extremely pleased with Enfis' progress since admission to AIM in March ofthis year, hitting all of our targets we set out to achieve. We have seen a realboost to our presence within the LED market with our recent launch of our newRGBA UNO at PLASA in London last week. Feedback has been positive and we arealready in interesting discussions promoted through our new office in Shanghai." Enquiries Enfis Group plc (www.enfis.com) Tel: +44 (0) 1792 485660Shaun Oxenham, Chief Executive OfficerGiles Davies, Chief Financial Officer Pelham PR Tel: +44 (0) 20 7743 6363Archie Berens Noble & Company Tel: +44 (0) 20 7763 2200John Llewellyn-LloydGraeme Bayley NOTES TO EDITORS Headquartered in the UK, Enfis is a global leader in the design, development andmanufacture of intelligent high-power light emitting diode (LED) arrays andsmart light engines. With a long history of innovation, Enfis holds many patentsfor controlling the power and thermal management of semiconductor devices.Having conceived the technology to enable high brightness LED array products tobe realized and brought to the market, the company was recently successfullyfloated on the London Stock Exchange. Enfis products incorporate 'plug & play' electronic and thermal managementcontrols with a simple user interface straight from the box. This enablesintegrators to minimize time-to-market and the associated costs and risks. Ideally suited for architectural and entertainment lighting, industrial, medicaland dental applications, Enfis provides LED light solutions throughout thevisible spectrum, UV, IR and also single colour white and full colour changingRGBA options. The two current product ranges, the UNO and QUATTRO, come in arange of sizes from 18W to 400W. INTERIM RESULTS FOR THE 6 MONTHS TO 30 JUNE 2007 Consolidated income statement 6 months ended 30 6 months ended 30 Year ended 31 June 2007 June 2006 December 2006 (unaudited) (unaudited) (audited)Notes £000 £000 £000 Revenue 98 187 222 Cost of sales (79) (112) (305) Gross profit / (loss) 19 75 (83) Administrative expenses (1,072) (661) (1,334) Other income 68 12 46 Operating loss for the period (985) (574) (1,371) Net finance income / (cost) 94 (35) (82) Loss before taxation (891) (609) (1,453) Taxation - - - Loss after taxation (891) (609) (1,453) All activities above relate to the continuing operations of the group. Consolidated balance sheet 30 June 30 June 31 December 2006 2007 2006 (unaudited) (unaudited) (audited)Notes Assets £000 £000 £000 Non-current assets Intangible assets 184 120 121 Property, plant and equipment 211 146 191 395 266 312 Current assets Inventories 216 35 61 Trade and other receivables 200 128 318 Corporation tax receivable 1 150 1 Cash and cash equivalents 3,136 208 219 3,553 521 599 Total assets 3,948 787 911 Capital and reserves attributable to equity holders of the company Ordinary shares 894 1 2 Capital redemption reserve - - - Share premium 3,589 1,835 2,554 Preference shares (equity element) - 78 78 Share option reserve 71 184 221 Share warrants - - - Reverse acquisition reserve 2,284 - - Retained losses (3,583) (2,103) (2,913) 3 Total equity 3,255 (5) (58) Liabilities Non-current liabilities Deferred income 112 96 48 Borrowings 132 459 518 244 555 566 Current liabilities Trade and other payables 384 219 340 Borrowings 65 18 63 449 237 403 Total liabilities 693 792 969 Total equity and liabilities 3,948 787 911 Consolidated cash flow statement 6 months 6 months Year ended 30 June ended 30 June ended 31 2007 2006 December 2006 (unaudited) (unaudited) (audited)Notes £000 £000 £000 Cash outflows from operating activities 2 Cash used in operations (1,128) (609) (1,225) Interest paid (43) (44) (21) R&D tax credits received - - 149 Net cash used in operating activities (1,171) (653) (1,097) Cash flows from investing activities Purchase of property, plant and equipment (47) (34) (102) Purchase of intangible assets (131) (39) (58) Receipt of government grants 103 102 118 Interest received 49 8 9 Net cash (used)/generated from investing (26) 37 (33) activities Cash flows from financing activities Proceeds from the issuance of ordinary shares 4,147 - 482 Proceeds from borrowings - - 53 Repayments of borrowings (15) - (2) Finance lease principal repayments (17) (8) (17) Net cash generated/(used) from financial 4,115 (8) 516 activities Net increase/(decrease) in cash and cash 2,918 (624) (614) equivalents Cash and cash equivalents at the beginning of the 218 832 832 period Cash and cash equivalents at the end of the 3,136 208 218 period NOTES TO THE INTERIM FINANCIAL STATEMENTS 1 Basis of preparation This interim report has been prepared under International Financial ReportingStandards (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 policy for the reverse acquisition as set outbelow. 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 preparation of the Interim Report requires management to make estimates andassumptions that affect both the reported income and expense and the reportedassets and liabilities at the date of the Interim Report. Although theseestimates are based on management's best judgement at the date of the InterimReport, actual results may differ from these estimates. The interim financial information is unaudited but has been reviewed by theauditors and their review opinion is included in this report. The financial statements contained in this interim announcement do notconstitute accounts within the meaning of S240 of the Companies Act 1985. 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, and the unaudited management accounts, prepared underIFRS, for the six months ended 30 June 2006. 2 Cash used in operations 6 months ended 6 months ended Year 30 June 2007 30 June 2006 ended 31 (unaudited) (unaudited) December 2006 (audited) £000 £000 £000 Loss before income tax (891) (609) (1,453)Adjustments for:- Depreciation 25 19 43- Amortisation - intangibles 70 15 33- Amortisation - grant income (68) (12) (47)- Share based payments 71 38 76- Finance (income) / cost (94) 36 82Changes in working capital:- Inventories (155) - (26)- Trade and other receivables (118) (42) (31)- Trade and other payables 32 (54) 98Cash used in operations (1,128) (609) (1,225) 3 Movement in Shareholders funds Ordinary Deferred Capital Preference Share Share Reverse Retained Total share share redemption shares premium option acquisition losses capital capital reserve (equity reserve reserve element) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At the 2 - - 78 2,554 221 - (2,913) (58)beginning ofthe period inEnfis Limited Conversion of - 300 - (78) - - - - 222preferenceshares Redemption of - (300) 300 - - - - - -deferred shares Share for share 572 - - - - - (572) - -exchange (EnfisGroup plc withEnfis Limited) Reverse (2) - (300) - (2,554) - 2,856 - -Acquisitionadjustments AIM listing 322 - - - 4,178 - - - 4,500(Issue of newshares) Expenses - - - - (589) - - - (589)incurred onissue of newshares Share option - - - - - (221) - 221 -valuation Loss for the - - - - - 71 - (891) (820)period At the end of 894 - - - 3,589 71 2,284 (3,583) 3,255the period inEnfis Group plc(consolidated) 3 Movement in Shareholders funds (continued) Conversion of preference shares On 16 March 2007, the holders of the 300,000 10 per cent cumulative fixeddividend preference shares exercised their option to convert these shares into acombination of ordinary equity shares and deferred equity shares in EnfisLimited. The conversion rights applicable to the preference shares entitled the holder toconvert the preference shares in the ratio of 344 preference shares, for 100ordinary shares and 3,439 deferred ordinary shares in Enfis Limited. The deferred ordinary shares were redeemed from the holder on 16 March 2007 fora consideration of £1. The nominal value of the deferred ordinary sharesredeemed has been transferred to a capital redemption reserve. The redemption of the deferred ordinary shares was facilitated through the freshissue of two new ordinary shares on 16 March 2007. Share for share exchange On 16 March 2007, the entire issued share capital of Enfis Limited was acquiredby Enfis Group plc. The consideration payable in respect of this transactionwas settled via a share for share exchange, whereby three ordinary shares inEnfis Group plc were exchanged for each allotted share in Enfis Limited. AIM Listing Enfis Group plc listed on AIM on 23 March 2007, the placing comprised 3,214,286Ordinary Shares at a placing price of 140p and raised £4,500,000 gross ofassociated costs. Independent review report to Enfis plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidated interimbalance sheet as at 30 June 2007 and the related consolidated interim statementsof income, cash flows and changes in shareholders' equity for the six monthsthen ended and related notes. We have read the other information contained inthe interim report and considered whether it contains any apparent misstatementsor material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the AIM Rulesfor Companies which require that the financial information must be presented andprepared in a form consistent with that which will be adopted in the company'sannual financial statements. This interim report has been prepared in accordance with the basis set out inNote 1. As disclosed in note 1, the next annual financial statements of thecompany will be prepared in accordance with IFRSs as adopted by the EuropeanUnion. The accounting policies are consistent with those that the directorsintend to use in the next annual financial statements. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the AIM Rules for Companies and for no other purpose.We do not, in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whosehands it may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. PricewaterhouseCoopers LLPChartered AccountantsCardiff Notes: (a) The maintenance and integrity of the Enfis Group plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site. (b) Legislation in the United Kingdom governing the preparation anddissemination of financial information may differ from legislation in otherjurisdictions. This information is provided by RNS The company news service from the London Stock Exchange