Feedback Regulatory News (FDBK)

14 Dec 2005 07:01

Feedback PLC14 December 2005 FEEDBACK PLC Interim Statement for the six months ending 30 September 2005 Chairman's Interim Statement During the first six months of the year the Group produced an operating profitbefore reorganisation costs and pension adjustments of £186,100 which is animprovement of £154,000 compared with the corresponding period in 2004. This isan encouraging performance which reflects the progress made as a result ofrestructuring which has taken place across the Group during the past 2 years (atan exceptional cost of £139,300 in 2004). After taking into account the pensionscheme adjustments to comply with FRS17, which are described in the Notes to theInterim Statement, the result for the period was a loss of £32,600 (2004:profit of £197,800 which included a one time gain of £480,000 associated withthe closure of the defined benefit pension scheme). The deficit in the now closed defined benefit pension scheme continues to be anenormous drain on the Group's resources notwithstanding the variation incontributions agreed with Opra (now replaced by The Pensions Regulator). Thesituation is being reviewed with the Group's professional advisors and we willkeep shareholders abreast of any noteworthy developments. Feedback Instruments has seen a significant improvement during the period as aresult of the appointment of new senior personnel in Manufacturing, Developmentand Sales, reduced costs and a more clearly defined strategic plan. The level ofroutine business is encouraging and, although securing larger orders continuesto be slow due to changing political and economic circumstances in various partsof the world, prospects for the latter part of this year are in line withbudget. Feedback Data and its German subsidiary continue to trade profitably. A newmanagement structure has been introduced and there is a revitalised focus onboth the traditional core business and the Access Control markets. New productsare being introduced and efforts are being made to increase the company'spenetration in the European market. Feedback Incorporated had a very disappointing first half year after a brightstart. We are addressing the reasons for the weak sales performance. Prospectsfor the second half of the year are more satisfactory. Dividends The company was unable to pay a dividend on its Cumulative ConvertibleRedeemable Preference Shares due to the continued lack of distributablereserves. Outlook Current trading is somewhat better than it was at this time last year. Prospectsare encouraging but the timing of the receipt of some significant orders is, asalways, difficult to accurately predict. The general financial position of theGroup is compromised by the pension situation. David HardingChairman SUMMARISED PROFIT AND LOSS ACCOUNT 6 months to 6 months to Year to 30 Sept 2005 30 Sept 2004 31 March 2005 £'000s £'000s £'000s Restated Restated Unaudited Unaudited Audited Turnover 4,090.8 5,813.1 9,179.2 Operating profit before reorganisation costsand pension adjustments 186.1 32.1 97.0Reorganisation costs - (139.3) (139.3)Gains on settlements and curtailments arisingon closure of pension scheme - 480.0 480.0Other pension adjustments 0.6 36.9 32.0 Operating profit 186.7 409.7 469.7Net interest payable (80.3) (57.9) (143.1)Other finance costs (139.0) (154.0) (310.0) (Loss) / profit on ordinary activities beforetaxation (32.6) 197.8 16.6 Tax on ordinary activities - - 39.2 Retained (loss) / profit for the period (32.6) 197.8 55.8 Basic and diluted loss per share (0.27)pBasic earnings per share 1.64p 0.46pDiluted earnings per share 1.48p 0.46p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Loss) / profit for the period (32.6) 197.8 55.8Currency translation differences on foreigncurrency net investments 32.1 (31.6) (55.1)Actual return less expected return on pensionscheme assets 827.0 (231.0) 74.0Experience gains and losses arising from schemeliabilities - (497.0) (494.0)Changes in assumptions underlying the presentvalue of the scheme liabilities (1,025.0) - (352.0) Total losses relating to the period (198.5) (561.8) (771.3)Prior year adjustment (7,156.0) - - Total recognised losses since the last annualreport (7,354.5) (561.8) (771.3) SUMMARISED BALANCE SHEET 6 months to 6 months to Year to 30 Sept 2005 30 Sept 2004 31 March 2005 £'000s £'000s £'000s Restated Restated Unaudited Unaudited Audited Fixed Assets 516.9 566.4 526.3 Current AssetsStock 1,218.3 1,013.7 1,210.7Debtors 1,758.9 2,718.8 1,753.6Cash at bank and in hand 682.5 428.9 760.4 3,659.7 4,161.4 3,724.7 Creditors: amounts falling due within one year (1,639.9) (1,935.8) (1,734.0) Net current assets 2,019.8 2,225.6 1,990.7 Total assets less current liabilities 2,536.7 2,792.0 2,517.0 Creditors: amounts falling due after more than one (1,555.3) (1,593.6) (1,517.2)yearBorrowings (612.9) (671.9) (561.5)Convertible Redeemable Cumulative PreferenceShares (778.2) (838.1) (830.4)Dividend Reserve (164.2) (83.6) (125.3) Net assets excluding pension liability 981.4 1,198.4 999.8 Pension liability (8,315.0) (8,247.0) (8,187.0) Net liabilities including pension liability (7,333.6) (7,048.6) (7,187.2) Ordinary share capital 1,234.1 1,204.6 1,208.4 Share premium account 410.2 379.8 383.7Revaluation reserve 379.7 369.4 379.7Capital reserve 299.9 299.9 299.9Profit and loss account (9,657.5) (9,302.3) (9,458.9) Reserves (8,567.7) (8,253.2) (8,395.6) Shareholders' funds (7,333.6) (7,048.6) (7,187.2) CASH FLOW STATEMENT 6 months to 6 months to Year to 30 Sept 2005 30 Sept 2004 31 March 2005 £'000s £'000s £'000s Restated Restated Unaudited Unaudited Audited Net cash inflow from operating activities 19.1 611.6 964.7 Returns on investments and servicing of finance (33.8) (10.0) (38.2)Corporation tax recovered - - 28.7Capital expenditure (13.8) (10.6) (22.5)Financing (15.0) (15.0) (59.6) (Decrease) / increase in cash (43.5) 576.0 873.1 Reconciliation of operating profit to net cash flowfrom operating activities Operating profit 186.7 409.7 469.7Depreciation of tangible fixed assets 23.2 43.1 76.7Sale of tangible fixed assets - - 19.9Exchange difference 32.0 (93.5) 9.9(Increase) / decrease in stock (7.6) 678.7 481.7(Increase) / decrease in debtors (5.3) 1,300.4 2,236.9Decrease in creditors (0.9) (996.8) (1,340.1)Pension - current service cost - 116.0 116.0Pension - gains on settlements and curtailments - (480.0) (480.0)Pension contributions paid (209.0) (366.0) (626.0) Net cash inflow from operating activities 19.1 611.6 964.7 Notes to the Interim Statement Basis of the Report The interim figures for the six months to 30 September 2005, which areunaudited, have been prepared on the basis of the accounting policies set out inthe Annual Report for the year ended 31 March 2005, except where these policieshave changed in respect of Financial Reporting Standard 17 - RetirementBenefits, and Financial Reporting Standard 25 - Financial Instruments, as notedbelow. The financial information contained in this Interim Statement does notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985. The restated results for the year ended 31 March 2005 are based uponthe published accounts for that period on which the auditors gave an unqualifiedreport under Section 235 of the Companies Act and which have been filed with theRegistrar of Companies. Due to the changes in accounting policies, comparative figures for 30 September2004 and 31 March 2005 have been restated. Accounting Policies The Group's policy for pension scheme accounting changed during the period inorder to comply with the full provisions of FRS17. Additionally, as aconsequence of the introduction of FRS25, preference shares and the relateddividend reserve are now reclassified as liabilities. As a result preferenceshare dividends payable are now accounted for as interest payable. Comparativefigures have been restated accordingly to reflect these changes and their effecton the accounts have been as follows: 6 months to 6 months to Year to 30 Sept 2005 30 Sept 2004 31 March 2005 £'000s £'000s £'000s Profit and loss accountIncrease in interest payable: pension (139.0) (154.0) (310.0) dividends (46.7) (47.9) (104.9)Decrease in pension expense 388.2 822.1 1,139.0Increase in profit on ordinary activities for the financialperiod 202.5 620.2 724.1 Statement of total recognised gains and lossesRecognition of change in pension fund liability duringthe period (198.0) (728.0) (772.0)Derecognition of SSAP24 provision at 1 April 2005 1,031.0 - -Recognition of pension fund liability at 1 April 2005 (8,187.0) - -Decrease in gains and losses (7,354.0) (728.0) (772.0) Total decrease in gains and losses (7,151.5) (107.8) (47.9) Balance SheetReclassification of preference shares & dividend reserve (942.4) (921.7) (955.7)Recognition of pension liability (8,315.0) (8,247.0) (8,187.0)Derecognition of SSAP24 provision 1,210.1 974.1 1,031.0Decrease in net assets (8,047.3) (8,194.6) (8,111.7) Loss per Share The loss per share for the six months ended 30 September 2005 is based on theGroup loss on ordinary activities after taxation of £32,600 (2004 - restatedprofit of £197,800) attributable to 12,294,532 (2004 - 12,045,846) ordinaryshares, being the weighted average number of shares in issue. The dilutedearnings per share is calculated allowing for the full conversion of thePreference Shares. Going Concern The Group has committed bank facilities through to 31 July 2006 and the supportof a former director, who has provided a long-term loan to the parent company.Based on this support and the bank facilities, the directors anticipate that theGroup will continue to have sufficient resources to meet its financialliabilities as they fall due. On this basis the directors have prepared theinterim statement on a going concern basis. Copies of the interim statement will be mailed to shareholders, and will beavailable from the company's website from 14 December 2005. Independent review report to Feedback plc Introduction We have been instructed by the company to review the financial information whichcomprises the Summarised Profit and Loss Account, the Statement of TotalRecognised Gains and Losses, the Summarised Balance Sheet, the Cash FlowStatement and the Notes to the Interim Statement and we have read the otherinformation in the interim statement and considered whether it contains anyapparent misstatements or material inconsistencies with the financialinformation. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim statement and for no other purpose. Wedo not, therefore, in producing this report, accept or assume responsibility forany other purpose or to any other person to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Directors' responsibilities The interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with the AIMMarket Rules which require that the accounting policies and presentation appliedto the interim figures must be consistent with those that will be adopted in thecompany's annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board as if that Bulletin applied. 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 accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly we do not express an audit opinion on the financial information. 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 September 2005. BAKER TILLY Chartered AccountantsHanover House18 Mount Ephraim RoadTunbridge WellsKentTN1 1ED 14 December 2005 This information is provided by RNS The company news service from the London Stock Exchange