Ferro-alloy Re. Regulatory News (FAR)

30 Nov 2005 11:00

Farsight PLC30 November 2005 FARSIGHT PLC PRELIMINARY RESULTS FOR THE YEAR TO 31 MAY 2005 Chief Executive Report Introduction I am pleased to report that during the year ended 31st May 2005 Farsight'sbusiness has continued to expand with sales revenues meeting plan. Operatingcosts are lower than last year and this, together with increased sales growthhas resulted in an improved financial result. The Board has undertaken a strategic review of the business to accelerate ittowards profitablity.In this regard the board divested itself of its continuinginvestment in the e-surveillance suite of software and has focused the businessupon delivering a high quality, managed monitoring service, utilising thee-surveillance platform. With government regulations today increasinglyaffecting the UK security industry and the increasing demand for remotemonitoring services, the Board believes that Farsight is well placed to takeadvantage of this changing operating environment. Results for the year Turnover increased by approximately 50% to £1,172,000 (2004: £777,000). The operating loss on all operations was reduced to £639,000 (2004: £1,375,000).This loss is stated after charging £265,000 in respect of the impairment ofall fixed assets (2004: impairment of goodwill £596,000). No dividend is recommended Funding The directors' have reviewed the funding requirements and have taken thefollowing measures: The financial statements include details of financial support agreed with aconcert party of investors. Prior to the 2005 financial year end Farsight Plchad drawn down the whole of its facility of £750,000 agreed with the "concertparty" investors on conditional secured convertible loans. The "concert party" investors entered into a Deed of Variation with the companyon 28th November 2005 to extend the Conditional Secured Convertible LoanAgreement for an additional period of two years to 28th November 2007.Theconversion rights into ordinary shares shall, if exercised, be subject to the "concert party" complying with the rules of the City Code on Takeovers andMergers, which, because the extension to the conversion rights has not beensubject to a Rule 9 whitewash waiver, may mean that upon exercise the concertparty is required to make a mandatory offer for the Company. The directors are satisfied that with the financial support provided sufficientfunds are available to the Group in order that a return to a net cash generatingposition can be achieved. Trading Review Developing our corporate customer base is a sales priority and the BuildSecureproduct introduced last year has been well received by a number of well knownnational house builders to whom we are increasing sales month on month. Anumber of national motor dealerships are using IP based monitoring serviceswhich is helping them to reduce loss through petty crime. Our operation has achieved the new BS8418 accreditation, the first in the UK.We have also signed up to the Security Industry Association, a new governmentbacked organisation designed to improve standards in the industry. Ouroperating staff are in the process of being trained to achieve the new licensingarrangements which must be in place by April 2006. We have applied for approvedcontractor status with the SIA and should obtain this early in 2006. These new regulatory requirements will have an impact on the security industryand are likely to be problematic to smaller or less well developed operators.Analysts suggest that some consolidation in the industry is inevitable leavingFarsight well placed to make some acquisitions to complement continued organicgrowth. Subsequent to the financial year end Intellectual Property Rights relating toe-Surveillance technologies were disposed of by the Group. An amount of £50,000was received by the Group as consideration for the disposal. Further details aregiven in the Financial Statements. Board of Directors On the 8th June 2005 Alan Wix stepped down as Chairman of Farsight Plc. Onbehalf of all shareholders and the board of Farsight Plc I would like to thankhim for his commitment and services made to the Company. On the 8th 2005 June Thomas Charles Blanchard, operations director, wasappointed to the main board. Farsight intends to seek and appoint a new Chairmanin the current financial year. Conclusion The difficult decisions made in recent years to cut costs, restructure andre-focus the business is allowing us to ensure that sales growth is effectivelysupported by efficient ongoing operations. Maintaining a fruitful long term relationship with our clients is based on theprovision of a quality service delivered by well trained staff, therefore wecontinue to invest in training and development. Our focus is the achievement of sales growth and cost containment. Ourimmediate priority is to return the company to profitability. The current yeartrading position has continued to show positive movement towards its objectiveof profitability. Chris Thomas, Chief Executive 30 November 2005 Enquiries: Chris Thomas, Chief Executive 07812 145350 Consolidated Profit and Loss Account for the year ended 31 May 2005 2005 2004 £'000 £'000 Turnover 1,172 777Cost of sales (968) (628)Gross profit 204 149Net operating expenses (578) (928)Exceptional net operating expenses (265) (596)Total net operating expenses (843) (1,524)Operating loss (639) (1,375) Interest payable and similar charges (16) (53)Loss on ordinary activities before taxation (655) (1,428)Taxation - 2Retained loss for the year (655) (1,426) Loss per ordinary share (0.214)p (0.469)p Fully diluted loss per ordinary share (0.179)p (0.437)p The group's turnover and operating loss as included in the above profit and lossaccount are classed as continuing operations of the group following therequirements of FRS 3 "Reporting Financial Performance". The group has no gains or losses other than the results for the year, and so nostatement of recognised gains or losses has been presented. There is no difference between the loss on ordinary activities before taxationand the retained loss for the year stated above and their historical costequivalents. Consolidated Balance Sheet for the year ended 31 May 2005 2005 2004 £'000 £'000Fixed assetsIntangible assets - -Tangible assets - 325 - 325Current assetsDebtors: amounts falling due within one year 340 231Cash at bank and in hand - - 340 231Creditors: amounts falling due within one year (913) (963)Net current liabilities (573) (732)Total assets less current liabilities (573) (407)Creditors: amounts falling due after one year Secured convertible loans (750) (450) Other creditors falling due after one year (189) -Provisions for liabilities and charges - - Net (liabilities) (1,512) (857) Capital and reservesCalled up share capital 7,484 7,484Share premium account 4,493 4,493Capital redemption reserve 20 20Profit and loss account (13,509) (12,854)Equity shareholders' (deficit) (1,512) (857) Consolidated Cash Flow Statement for the year ended 31 May 2005 2005 2004 £'000 £'000 Net cash outflow from operating activities (304) (262)Returns on investments and servicing of financeInterest element of finance lease payments - (41)Interest paid (11) (12) (11) (53)TaxationUnited Kingdom corporation tax paid - -Capital expenditure and financial investmentPurchase of tangible fixed assets (10) (50)Proceeds from sale of tangible fixed assets 13 17 3 (33)Net cash outflow before financing (312) (348) FinancingIssue of new share capital - 32Issue of convertible loans 300 450Capital element of finance lease payments (15) (119) Net cash inflow from financing 285 363 (Decrease)/increase in cash in the year (27) 15 Reconciliation of movements in equity shareholders' deficit at 31 May 2005 Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000 Loss for the financial year (655) (1,426) (315) (4,258)Proceeds of share capital issues (see below) - 32 - 32Net increase in shareholders' deficit (655) (1,394) (315) (4,226) Opening shareholders' funds (857) 537 (652) 3,574Closing shareholders' (deficit) (1,512) (857) (967) (652) During the previous financial year, 3,250,000 ordinary shares of 1p each wereissued for a subscription price of 1p per share. The total considerationreceived was £32,500 before expenses. Reconciliation of operating loss to net cash flow from operating activities 2005 2004 £'000 £'000 Operating loss (639) (1,375)Depreciation of tangible fixed assets 70 133Impairment of tangible fixed assets 265 -Profit on disposal of tangible fixed assets (13) (17)Amortisation of intangible fixed assets - 289Impairment of intangible fixed assets - 596(Increase)/decrease in debtors (109) 17Increase in creditors 122 95Net cash flow from operating activities (304) (262) Notes to the Preliminary Results for the year ended 31 May 2005 1. Loss per ordinary share Basic loss per share (LPS) is calculated by dividing the loss attributable toordinary shareholders, namely a loss of £655,000 (2004: £1,426,000), by305,727,072 ordinary shares. Fully diluted loss per share (LPS) is calculated by dividing the lossattributable to ordinary shareholders, namely a loss of £655,000 (2004:£1,426,000), by 365,727,072 potential ordinary shares. This includes a weightedaverage of 60,000,000 potential ordinary shares which would be issued under theconvertible loan agreement. 2005 2004 Weighted Weighted average number average of shares number of shares '000 Earnings/ '000 Per share Earnings/ Per share amount (pence) amount (pence) (loss) (loss) £'000 £'000Basic LPS (655) 305,727 (0.214) (1,426) 304,102 (0.469)Fully diluted LPS (655) 365,727 (0.179) (1,426) 326,602 (0.437) 2. Reconciliation of net cash flow to movement in net debt 2005 2004 £'000 £'000 Movement in cash in year (27) 15Cash (inflow) from change in debt (285) (331)Change in net debt resulting from cash flows (312) (316) Net (debt) at 1 June 2004 (502) (186)Net (debt) at 31 May 2005 (814) (502) 3. Analysis of net debt At 1 June Cash At 31 May 2004 Flow 2005 £'000 £'000 £'000Overdrafts (37) (27) (64)Secured convertible loans (450) (300) (750)Finance leases (15) 15 -Total (502) (312) (814) 4. Statutory Accounts The financial information contained in this announcement does not constitutestatutory accounts within the meaning of Section 240 of the Companies Act 1985.The figures for the year ended 31 May 2004 have been extracted from thestatutory accounts which have been filed with the Register of Companies andwhich are available on request from the Company Secretary. The auditor's reporton those accounts was unqualified and did not contain any statement undersection 237(2) or section 237(3) of the Companies Act 1985. The statutoryaccounts for the financial year ended 31 May 2005 have been approved by theDirectors and are available for collection at the Company's registered office orin electronic form on the company's website, www.farsight.co.uk. The auditors'report on these accounts was unqualified and did not contain any statement undersection 237(2) or section 237(3) of the Companies Act 1985. 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