Ferro-alloy Re. Regulatory News (FAR)

28 Feb 2005 07:01

Farsight PLC28 February 2005 Farsight PLC Interim Results For the six months ended 30 November 2004 Farsight PLC, a provider of surveillance software and monitoring services,announces its interim results for the six months ended 30 November 2004. Highlights: • Turnover for the six months up 31.6 % to £567,000 (2003: £431,000) • Loss before taxation reduced to £189,000 (2003: loss £501,000) • New business wins • E-surveillance software receives Microsoft accreditation Enquiries: Chris Thomas, Chief Executive 01733 352435 Chairman's Statement Introduction I am pleased to present my report for the six month period ended 30th November2004, a period in which the company continued to achieve sales growth throughincreasing sales of monitoring services utilising Farsight's e-surveillancesoftware, and a new monitoring service product called "Build Secure" aimed atproviding 24 hour per day surveillance of construction sites across the UK. In the annual report for the year ended 31 May 2004 I disclosed that Farsightwould be launching a shrink wrapped e-surveillance software product which willcreate a new revenue stream for the company. I can confirm that thee-surveillance software was successfully launched at the IIPSEC show in the NECin January 2005. The challenge is to develop this revenue opportunity quicklyand to deliver fast growth to the business. We have exciting levels of interestfrom both UK and US users. Results and Dividends Turnover on continuing activities increased by 31.6% over the comparative periodto £567,000 (2003: £431,000). The operating loss on all operations was £188,000 (2003: loss of £475,000). No dividend is recommended. Trading Review Again, during the six month period to 30th November 2004, sales revenues fromremote video monitoring operations continued to increase, with annualised incomefrom monitoring contracts approaching £750,000. This represents growth ofaround 200% in the past three years. The principal driver of this growth continues to be the substantial costbenefits for customers delivered through monitored CCTV technology compared tothe increased cost of manned guarding. Farsight's business in delivering remotevideo monitoring services now has an increasingly strong and reliable salespipeline that is expected to produce continued sales growth at an average rateof £20,000 per month. The British Standard 8418 Code of Practice for CCTV monitoring operations cameinto effect in early 2005, and I am pleased to confirm that Farsight's "Observatory" monitoring centre in Peterborough passed the compliance audit inFebruary 2005. The increasingly demanding development of standards complianceis to be welcomed as it forces less professional, secondary suppliers to leavethe supply chain. The compulsory licensing of security professionals, an initiative which isdriven by the Security Industry Authority will also strengthen the stock offirst-class, monitoring suppliers and improve the professionalism of theindustry. Farsight Plc is therefore well placed to take advantage of theseevolving entry barriers to the CCTV monitoring market. The goal of delivering the highest level of service quality to our customers hasbeen supported by the launch of our customer web based portal that enablescustomers to integrate their property security operations into the Farsightservice. The benefits delivered by this web based portal have been particularlyattractive to larger corporate customers seeking greater management informationand control over their integrated security systems. Farsight has continued to invest in e-surveillance. A shrink wrapped version ofour e-surveillance software is now available for sale, and was successfullylaunched at the security industry IIPSEC trade show in January 2005. Wereceived a high level of interest from equipment manufacturers seeking tointegrate support for their equipment into the platform. This confirmed ourbelief of a need in the marketplace for a robust, open and saleable softwareproduct for use by CCTV monitoring stations. E-surveillance has also attained Microsoft certification and furtherconfirmation of demand in this market place has been supported by two confirmedorders in recent weeks from Powergen and Leicester City Council. Funding In the period the group received the remaining balance of £300,000 of the£750,000 secured convertible loan facility made available by the "concert party"investors (John Dalton, Robert Davies and Michael James). In addition, the "concert party" investors have agreed to provide guarantees tosecure a bank borrowing facility of £300,000.This facility is in the process ofbeing finalised. The directors consider that the new banking facility willprovide adequate resources for the group to enable it to continue its operationsand meet its obligations. Conclusion The half-year results finally demonstrate the turnaround in Farsight's businessfortunes. The next goal is to achieve break-even and move into profitability.The company is in its strongest position for many years, and the intention isnow to increase sales quickly through a combination of a strong order book formonitored CCTV Services, and the launch of the e-surveillance software. In addition to our organic growth the Board continues to seek to increase thescale of operations via acquisition or merger. A T G Wix, Chairman21st February 2005 Consolidated profit and loss accountfor the six months ended 30 November 2004 6 months ended 30 6 months ended 30 Year ended 31 November 2004 November 2003 May (unaudited) (unaudited) 2004 (audited) Notes £000 £000 £000 Turnover 567 431 777Cost of sales (470) (314) (628)Gross profit 97 117 149Operating expenses (285) (516) (928)Exceptional net operating expenses - (76) (596)Operating loss for the period (188) (475) (1,375)Net interest payable (1) (26) (53)Loss before taxation (189) (501) (1,428)Taxation - - 2Loss after taxation (189) (501) (1,426) Basic loss per ordinary share 3 (LPS pence) (0.062)p (0.165)p (0.469)pFully diluted loss per share 3 (LPS pence) (0.052)p (0.165)p (0.437)p The results set out above relate to continuing operations. The group has no gains and losses for the period other than the results set outabove, consequently no statement of recognised gains or losses has beenpresented. Consolidated balance sheetat 30 November 2004 30 November 2004 30 November 2003 31 May (unaudited) (unaudited) 2004 (audited) Notes £000 £000 £000Fixed assetsIntangible assets - 741 -Tangible assets 289 365 325 289 1,106 325 Current assetsDebtors 339 279 231Cash at bank and in hand 73 2 - 412 281 231 Creditors: due within one year:Secured convertible loans 4 (750) - -Other (997) (1,234) (963)Net current liabilities (1,335) (953) (732)Total assets less current liabilities (1,046) 153 (407)Creditors: due after more than oneyear:Secured convertible loans 4 - - (450)Other - (117) -Net (liabilities)/assets (1,046) 36 (857) Called up share capital 5 7,484 7,452 7,484Share premium account 4,493 4,493 4,493Capital redemption reserve 20 20 20Profit and loss account (13,043) (11,929) (12,854)Equity shareholders' (deficit)/funds 9 (1,046) 36 (857) Consolidated cash flow statementfor the six months ended 30 November 2004 6 months ended 30 Year ended 31 May November 2004 (unaudited) 2004 (audited) Notes £000 £000 Net cash (outflow) from operating 6activities (185) (262)Return on investments and servicing of finance:Interest element of finance lease payment - (41) Other net interest paid (1) (12)Cash (outflow) from returns oninvestments and servicing of finance (1) (53) Capital expenditure and financialinvestmentPurchase of tangible fixed assets (2) (50)Proceeds from sale of tangible fixed assets 13 17 Cash inflow/(outflow) from capitalexpenditure 11 (33) Cash (outflow) before financing (175) (348) FinancingIssue of new share capital - 32Issue of convertible loans 300 450Repayment of capital element offinance leases (15) (119) Net cash inflow from financing 285 363 Increase in cash in the period 7 110 15 Notes to the interim reportfor the six months ended 30 November 2004 1. Basis of preparation The interim report has been prepared using accounting policies that have been consistently applied and are those used in the preparation of the financial statements for the year ended 31 May 2004 of Farsight plc. The group accounts comprise the consolidation of the accounts of the company and its subsidiary undertakings after eliminating inter company balances and transactions. The comparative data in these interim financial statements are the audited financial statements for the year ended 31 May 2004 and the unaudited management accounts for the six months ended 30 November 2003. The financial information contained in this interim announcement does not constitute statutory accounts within the meaning S240 of the Companies Act 1985. The interim results, which have not been audited, have been prepared on the basis of the accounting policies adopted by Farsight plc for the year ended 31 May 2004 as set out in the Annual Report and Accounts. Those accounts (on which the auditors gave an unqualified report) have been delivered to the Registrar of Companies. 2. Dividends No dividend has been declared or proposed for the six months ended 30 November 2004. 3. Loss per ordinary share 6 months ended 30 6 months ended 30 Year ended 31 November 2004 November 2003 May (unaudited) (unaudited) 2004 (audited) £000 £000 £000 Loss attributable to ordinaryshareholders (189) (501) (1,426) '000 '000 '000 Weighted average number ofordinary shares (Basic LPS) 305,727 302,447 304,102 Weighted average number ofordinary shares (Fully dilutedLPS) 365,727 302,447 326,602 pence pence pence Basic LPS (0.062) (0.165) (0.469) Fully diluted LPS (0.052) (0.165) (0.437) Basic loss per share (LPS) for the six months period ended 30 November 2004 iscalculated by dividing the loss attributable to ordinary shareholders namely aloss of £189,000 by the weighted average number of shares (305,727,072 ordinaryshares). Fully diluted loss per share (LPS) for the six months period ended 30 November2004 is calculated by dividing the loss attributable to ordinary shareholders by365,727,072 potential ordinary shares. This includes a weighted average of 60million potential ordinary shares which would be issued under the convertibleloan agreement. For the calculation of fully diluted LPS for the comparative period of the yearended 31 May 2004 the weighted average number of shares includes 22.5 millionpotential ordinary shares which would be issued under the convertible loanagreement (6 months ended 30 November 2003: Nil). 4. Secured convertible loans On 28 November 2003 the company negotiated a conditional secured convertibleloan facility of up to £750,000 with a "concert party" of investors in thecompany (John Dalton, Robert Davies and Michael James). Subsequent to thefacility being granted secured convertible loans amounting to £450,000 wereissued to the "concert party" during the year ended 31 May 2004 and the balanceof £300,000 was issued during the period ended 30 November 2004. The loans aresecured by a debenture dated 28 November 2003 giving fixed and floating chargesover the assets of Farsight plc, and its subsidiary undertakings FarsightSecurity Limited and e-surveillance Software Limited, and by cross companyguarantees in respect of each of these companies. The secured convertible loansare non interest bearing. The "concert party" investors have an option to convert the outstanding balanceof the secured loans into ordinary shares at a conversion price of 1p per shareat any time prior to the second anniversary of the date of the agreement (ieprior to 28 November 2005). If that option is not exercised then the securedloans fall due to be repaid on the second anniversary of the date of theagreement (ie on 28 November 2005). Any ordinary shares of 1p each issuedpursuant to a conversion of the loans will rank pari passu with the existingissued ordinary share capital of the company. 5. Called up share capital 30 November 2004 30 November 2003 31 May 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Allotted, called up and fully paid305,727,072 ordinary shares of1p each (30 November 2003: 302,477,072, 31 May 2004:305,727,072) 3,057 3,025 3,057 Deferred shares of 1p each 4,427 4,427 4,427 7,484 7,452 7,484 The deferred shares carry no voting rights, no rights to dividends or otherdistributions and on a winding up holders of deferred shares will only be paidout once the holders of ordinary shares have been paid all the capital on theirshares together with an aggregate premium of £100,000,000. 6. Reconciliation of operating loss to net cash flow from operating activities 6 months ended 30 Year ended 31 November 2004 May 2004 (unaudited) (audited) £000 £000 Operating loss (188) (1,375)Amortisation of goodwill - 289Impairment charge in respectof goodwill - 596Depreciation charge in respect oftangible fixed assets 38 133Profit on disposal of tangible fixed assets (13) (17)(Increase)/decrease in debtors (108) 17Increase in creditors 86 95Net cash (outflow) from operatingactivities (185) (262) 7. Analysis of net debt At Cash flow At 30 31 May 2004 for the 6 November (audited) months ended 2004 30 November (unaudited) 2004 (unaudited) £000 £000 £000 Cash at bank and in hand - 73 73Overdrafts (37) 37 - (37) 110 73 Secured convertible loans (450) (300) (750)Finance leases (15) 15 - (465) (285) (750) Net debt (502) (175) (677) 8. Reconciliation of net cash flow to movement in net debt 6 months ended Year ended 30 November 31 May 2004 (unaudited) 2004 (audited) £000 £000 Movement in cash in the period 110 15Cash inflow from change in debt (285) (331) Change in net debt resulting fromcash flows (175) (316)Net debt at beginning of period (502) (186) Net debt at end of period (677) (502) 9. Movement in equity shareholders' (deficit)/funds 6 months ended 6 months ended Year ended 30 November 30 November 31 May 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 At the beginning of the period (857) 537 537Issue of new shares - - 32Loss for the period (189) (501) (1,426)At the end of the period (deficit)/funds (1,046) 36 (857) On 29 December 2003, 3,250,000 ordinary shares of 1p each were issued for asubscription price of 1p per share. The total consideration received was £32,500before expenses. 10. Circulation A copy of this announcement is available from the Company Secretary, TheObservatory, Leofric Square, Vicarage Farm Road, Peterborough, Cambridgeshire,PE1 5TP. A copy of the announcement is also posted on the company's websitewww.farsight.co.uk This information is provided by RNS The company news service from the London Stock Exchange