Hightex Group Regulatory News (HTIG)

RNS Number : 6082S

Hightex Group PLC

14 September 2010

 

 

14 September 2010

Hightex Group plc

 

 ("Hightex" or "the Group")

 

Unaudited Results for the Six Months Ended 30 June 2010

 

 

Hightex Group plc (AIM: HTIG), a leading designer and installer of large membrane roofs and façades worldwide, announces its unaudited results for the six months ended 30 June 2010.

 

Financial Highlights:

·; Turnover up 90% to €13.8 million (2009: €7.3 million)

·; Gross profit up 44% to €2.3 million (2009: €1.6 million)

·; Pre-tax profit up 432% to €636,000 (2009: €147,000)

·; All of 2010 forecasted revenues and 37.5% of 2011 forecasted revenues already secured *

·; Earnings per share of 0.24c (H1 2009 - loss per share of 0.02c)

* As per market forecasts issued by Hightex's broker

 

Operational Highlights:

·; Work advancing well on three iconic stadia: the retractable roof above the Olympic Stadium in Kiev, Ukraine; the roof over the National Stadium, Warsaw, Poland; and the entire retractable roof and fixed façade on the BC Place Stadium, Vancouver, Canada

·; In aggregate these three contracts total approximately €45.3 million

·; Company actively working on, and making good progress with, further contract leads

·; Insurance solution obtained in August for provision of bonds on all contracts, replacing need to deposit cash into blocked deposit accounts

 

Charles DesForges, Executive Chairman, commented:

"The first half of 2010 has been a very good start to the year. We have almost doubled the scale of our membrane business and significantly increased the level of profit before tax. The Directors believe that the Group has not only strengthened its performance in all areas but also its management team and look forward to the future with increased confidence."

 

 

 

For further information: 

 

Hightex Group plc
Charles DesForges, Executive Chairman	Tel: +44 (0) 20 7603 1515
Frank Molter, Chief Executive Officer Charles Sebag-Montefiore, Non-Executive Director	www.hightexworld.com

 

FinnCap
Geoff Nash - Corporate Finance	Tel: +44 (0) 20 7600 1658
Tom Jenkins, Simon Starr - broking	www.finncapitalmarkets.com

 

Media enquiries

Hudson Sandler
Charlie Jack	Tel: +44 (0) 20 7398 7706
Nathan Field	www.hudsonsandler.com

 

 

 

Chairman's statement

 

Introduction

 

Following the successful turnaround of its membrane business in 2009, Hightex is now determined to grow the business profitably and maintain its position as a global, innovative leader in the design and installation of large area architectural tensile polymer membrane roofs and façades.

 

Hightex is proud that its work on the façade of the Cape Town Stadium and the roof of the FNB Stadium in Johannesburg, were seen by hundreds of millions around the world earlier this summer as South Africa hosted the 2010 FIFA World Cup.

 

Commentary on 2010 results

 

It is pleasing to report that in the first six months of 2010, Hightex increased its revenues by 90% from €7.3 million to €13.8 million.

 

Revenues were generated mainly from work on the retractable roof above the Olympic Stadium in Kiev and the roof over the National Stadium, Warsaw, Poland (both of which are to be used for the UEFA EURO 2012, to be hosted by Poland and Ukraine) and the retractable roof and fixed façade on the BC Place Stadium, Vancouver, Canada. The aggregate value of these three contracts to Hightex is approximately €45.3 million. Revenues from other contracts booked in the period amounted to €1.7 million.

 

Gross profit rose by 44% from €1.6 million in the first half of 2009 to €2.3 million in the first half of 2010. Aggregate operating expenses, which had been dramatically reduced in the previous two years, rose by 12% from €1.26 million to €1.4 million. This controlled increase in costs is explained chiefly by the hiring of further membrane engineers and salesmen in order to handle, in a professional manner, the present and prospective increase in the scale of the membrane business.

 

I am also happy to note that the profit before tax (after the non-trading share option charge) for the six months rose to €636,000 (2009: €147,000), equivalent to an adjusted 2010 first half year profit before tax (before the share option charge) of €684,000. Earnings per share increased to 24 cents, compared with 2 cents in the first half of 2009 and 29 cents for the year 2009 as a whole.

 

Shareholders' funds rose to €11.3 million, compared with €10.8 million at 31 December 2009 and €7.5 million at 30 June 2009, partly as a result of new equity funds raised during the second half of 2009 but also because the net profit after tax for the respective periods has been added to reserves. Cash balances as at 30 June 2010 were €4.5 million, the same figure as at 31 December 2009 and greatly improved above the €1.4 million as at 30 June 2009.

 

Management team

 

The management team has been strengthened to drive Hightex forward. The team is led by Frank Molter, who was appointed Chief Executive Officer on 15 June 2010 and is responsible for leading the business and implementing its strategy. He joined the business in 2006 as Finance Director and was appointed Chief Operating Officer in April 2008.

 

Friedrich Naeher, who was appointed Head of Technical Project Management earlier this year, joined Hightex on 1 July 2010. He is responsible across the Group for all technical aspects of projects including engineering, fabrication and installation. He is a professionally registered engineer in the USA, has wide international experience on all aspects of projects and project management and joined from Ed. Züblin AG, a large German building construction and civil engineering company.

 

Rainer Schmidt has been appointed Key Account Salesman: he joined from Sto AG, a large international company making coating products and systems for buildings. Two younger salesmen have also been appointed further to strengthen this fundamental aspect of the membrane business.

 

Volker Hauch was appointed Group Financial Controller in January 2010. He has worked for Hightex since 2005 and was responsible for the preparation of the individual company and consolidated accounts for the Company's year ended 31 December 2009 and for these interim accounts.

 

 

Solar cooling business

 

Modest revenues of €175,000 in the first half of 2010 were earned from this division, which comprises a solar cooling and heating system in kit form able to be retro-fitted to many kinds of structures, such as a school, office or hotel, and managed by an innovative multi-function system controller. Hightex is now working actively on the selection of commercial and financial partners, to help develop this business into the next phase of larger scale commercialisation.

 

 

Prospects

 

The Warsaw, Kiev and Vancouver high value contracts, which were won in the second half of 2009, have a combined value of over €45 million. These place Hightex in a strong position to generate its revenues not only in 2010 as a whole but also for part of 2011.

 

Based on the revenues generated in the first six months of 2010, the Directors still have confidence of meeting the market's expectations of revenues for the full year, subject only to there being no unexpectedly severe winter weather conditions, the effect of which may stall the construction process and hence delay a proportion of revenue into 2011.

 

Additionally Hightex is working hard towards converting its long pipeline of potential projects within its traditional and strategic range of capability and focus - sports stadia, shopping malls, airports and other large area structures - into actual contract wins.

 

The pipeline is underpinned by the competitive advantages of membrane, including light weight, energy efficiency, safety and the relatively faster speed of installation. Accordingly, Hightex is increasingly regarded as a partner of choice in a growing sector of the construction industry that is fast recognising the appeal of innovative membrane technology and the advantages of light weight retractable roofs. The Board strongly believes that this trend will increase as stadium owners and developers, who are conscious that future stadia can and must be multi-purpose in order to capture wider revenue opportunities, chose membrane technology to help to create structures which can be more flexible than those using traditional materials.

 

Furthermore Hightex has worked successfully to establish partnerships for co-operation with very large international companies: these include construction companies as well as companies which manufacture or can coat the polymer membrane materials used by Hightex.

 

Hightex is now focused on four geographical areas in the world: Europe; South America; the Middle East and South East Asia. Each contains many opportunities for Hightex and some of these prospective projects are fairly immune to government or other spending cuts, not only because regular sporting fixtures must have stadia ready for use when the sporting event happens, but also as some prospective projects are located in regions where the national income has not been affected by the global downturn.

 

The nature of Hightex's membrane business, which involves substantial building projects, is that signed contracts naturally do not arrange themselves in a regular timetable for Hightex. However, the Directors believe that as the business grows, the intervals between contract announcements will progressively become shorter. Nevertheless, current level of activity leads the Directors to believe that further contract wins may fall to be announced before the end of the year, and to remain excited about the extensive pipeline that is being worked on for projects thereafter..

 

The prospects for growth have been very significantly enhanced by the insurance solution obtained from a leading international trade and financing group Coface (Compagnie Française d'Assurance pour le Commerce Extérieur) for the provision of performance and warranty bonds on all contracts won. This insurance solution will significantly reduce the need to deposit cash into blocked deposit accounts and will deliver far greater flexibility to Hightex in managing its working capital resources. In addition, in order to achieve optimum purchasing conditions, Hightex has also concluded a separate agreement whereby Coface will finance all substantial costs associated with material supplies for future contracts. This will further increase working capital flexibility

 

 

Conclusion

 

In the first half of 2010, Hightex has almost doubled the scale of its membrane business and significantly increased the level of profit before tax. I warmly thank my colleagues on the Board as well as every member of staff for their considerable efforts which have contributed to this much improved performance.

 

The prospects for the Group are underpinned by existing contracted revenues which should approach €30 million in 2010 and additionally deliver some €15.3 million in 2011. New membrane contracts are being actively pursued and we are hopeful of making further announcements before the end of the year. Hightex also expects to benefit from its partnerships with very large companies working in complementary areas with whom Hightex can work as an authoritative supplier of retractable roof systems for stadia and other structures.

 

The Directors believe that the Group has strengthened its performance in all areas and look forward to the future with increased confidence.

 

 

Charles DesForges

Executive Chairman

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

	Notes	6 Months	6 Months	12 Months
		30-Jun	30-Jun	31-Dec
		2010	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
		€'000	€'000	€'000
Revenue		13,808	7,263	20,034
Cost of sales		(11,498)	(5,658)	(15,849)
Gross margin		2,310	1,605	4,185
Operating expenses:
Selling and distribution expenses		(465)	(412)	(964)
Research and development expenses		(115)	(220)	(97)
Administrative expenses		(824)	(624)	(1,657)
Earnings before interest, tax, depreciation and reorganisation costs		906	349	1,467
Depreciation and amortisation		(174)	(162)	(465)
Earnings before interest, tax and reorganisation costs		732	187	1,002
Reorganisation costs		-	-	(132)
Share option charge		(48)	-	(20)
Operating surplus		684	187	850
Interest and other income		9	18	26
Finance costs		(44)	(58)	(97)
Loss from associates		(13)	-	-
Net surplus before taxation		636	147	779
Taxation	3	(189)	(98)	(337)
Profit for the period		447	49	442

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)

 

 

Other comprehensive income
		6 Months	6 Months	12 Months
		30-Jun	30-Jun	31-Dec
		2010	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
		€'000	€'000	€'000
Exchange differences in translating foreign operations		13	(225)	(53)
Other comprehensive income for the period, net of tax		13	(225)	(53)
Total comprehensive income/(loss) for the period		460	(176)	389
Profit attributable to:
Equity holders		447	21	402
Non-controlling interests		-	28	40
		447	49	442
Total comprehensive income/(loss) attributable to:
Equity holders		460	(204)	349
Non-controlling interests		-	28	40
		460	(176)	389
Earnings/(loss) per share (cents)
Basic	7	0.24	(0.02)	0.29
Diluted	7	0.24	(0.02)	0.29

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

	Notes	30-Jun	30-Jun	31-Dec
		2010	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
		€'000	€'000	€'000
Non-current assets
Goodwill		6,722	6,627	6,722
Intangible fixed assets	4	67	73	58
Property, plant and equipment (net)	5	999	1,217	948
Deferred tax assets		2	42	1
Investments in associate	6	277	-	289
Total non-current assets		8,067	7,959	8,018
Current assets
Cash and cash equivalents		4,483	1,448	4,574
Inventories and work in progress		70	594	89
Accounts receivable		15,109	4,627	11,884
Total current assets		19,662	6,669	16,547
Total assets		27,729	14,628	24,565
Shareholders' equity
Share capital	7	2,548	2,109	2,548
Share premium account		14,634	12,352	14,634
Accumulated losses Translation reserve		(5,770) (79)	(6,667) (263)	(6,265) (92)
Total equity attributable to equity holders		11,333	7,531	10,825
Non-controlling interests		-	375	-
Total equity		11,333	7,906	10,825
Current liabilities
Trade accounts payable		4,568	2,780	2,282
Accrued liabilities and deferred income		11,023	2,664	10,615
Bank overdraft		30	85	52
Other accounts payable		619	1,042	667
Total current liabilities		16,240	6,571	13,616
Non-current liabilities
Accrued liabilities and deferred income		51	91	80
Other accounts payable		105	60	44
Total non-current liabilities		156	151	124
Total liabilities and equity		27,729	14,628	24,565

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		6 Months	6 Months	12 Months
		30-Jun	30-Jun	31-Dec
		2009	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
		€'000	€'000	€'000
Cash flows from operating activities
Operating profit/(loss) for the period:		732	187	1,002
Adjustments for:
Loss on disposal Bad debts written off		-	(1)	(11) 68
Share of net loss of associate		12	-	-
Depreciation and amortisation		174	152	465
Net operating income before working capital changes		918	338	1,524
Changes in working capital:
Decrease/(increase) in inventories		19	(460)	(105)
Increase in accounts receivable		(3,225)	(403)	(7,593)
Increase/(decrease) in accounts payable		2,422	(855)	6,124
Cash generated from/(used in) operating activities		134	(1,380)	(50)
Interest paid		(57)	(58)	(132)
Income tax paid		-	(14)	(30)
Net cash generated from/(used in) operating activities		77	(1,452)	(212)
Cash flows from investing activities
Net cash disposed with sale of subsidiary		-	-	(198)
Acquisition of property, plant and equipment		(196)	(55)	(129)
Acquisition of intangible assets		(40)	-	(267)
Proceeds from disposal of property, plant and equipment		-	-	13
Interest received		9	18	26
Net cash used in investing activities		(227)	(37)	(555)
Cash flows from financing activities
Proceeds from issuance of ordinary shares		-	1,001	4,008
Costs of issue of shares		-	(73)	(359)
Proceeds from finance lease liabilities		135	-	-
Payment of finance lease liabilities		(69)	-	(80)
Proceeds from loan		-	-	98
Repayment of loans		-	-	(435)
Net cash generated from financing activities		66	928	3,232
Net (decrease)/increase in cash and cash equivalents		(84)	(561)	2,465
Cash and cash equivalents, beginning of period/year		4,522	2,109	2,109
Effect of foreign exchange on cash and cash equivalent		15	(185)	(52)
Cash and cash equivalents, end of period / year		4,453	1,363	4,522
Cash at bank and in hand comprises:
Cash and cash equivalents		395	479	2,195
Cash lodged for advance payments		-	-	1,000
Cash lodged under performance and warranty bonds		4,088	969	1,379
Bank overdraft		(30)	(85)	(52)
		4,453	1,363	4,522

 

 

STATEMENT OF CHANGES IN CONSOLITATED SHAREHOLDERS' EQUITY (Unaudited)

 

 

 

 

	Share capital	Share premium	Accum-ulated losses	Share option charge	Translation reserves	Non-controlling interests	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balances at 1 January 2009	1,776	11,757	(6,687)	-	(39)	347	7,154
Issued during the period	333	668	-	-	-	-	1,001
Costs of issue of shares	-	(73)	-	-	-	-	(73)
Profit for the period	-	-	21	-	-	28	49
Currency translation differences	-	-	-	-	(225)	-	(225)
Balances at 30 June 2009	2,109	12,352	(6,666)	-	(264)	375	7,906

 

Issued during the period	439	2,568	-	-	-	-	3,007
Costs of issue of shares	-	(286)	-	-	-	-	(286)
Profit for the period	-	-	381	-	-	12	393
Deconsolidation	-	-	-	-	-	(387)	(387)
Currency translation differences	-	-	-	-	172	-	172
Share option charge	-	-	-	20	-	-	20
Balances at 31 December 2009	2,548	14,634	(6,285)	20	(92)	-	10,825

Profit for the period	-	-	447	-	-	-	447
Currency translation differences	-	-	-	-	13	-	13
Share option charge	-	-	-	48	-	-	48
Balances at 30 June 2010	2,548	14,634	(5,838)	68	(79)	-	11,333

 

 

 

1. General information

 

Hightex Group plc ("Hightex") was incorporated in England on 28 June 2006. Since that date, Hightex acquired its interests in its subsidiaries (together "the Group") such that Hightex is now the holding company for the Group. The principal activity of the Group is the design, supply and assembly of polymer membrane structures for use in engineering and construction of technically advanced buildings.

 

The consolidated financial information is presented in Euros (€), unless otherwise stated.

 

2. Basis of preparation

 

This Interim condensed consolidated statement is unaudited and does not constitute statutory financial statements. The Interim condensed consolidated statement incorporates the results of the Group for the period from 1 January 2010 to 30 June 2010. The results for the year ended 31 December 2009 have been extracted from the statutory financial statements for Hightex for the year ended 31 December 2009 which are prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union. The interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2009.

 

The interim consolidated financial statements for the six months ended 30 June 2010 have been prepared in accordance with IAS 34, Interim Financial Reporting.

 

The group had contingent liabilities of €4,088,000 (31 December 2009: €2,379,000) under contracted performance and warranty bonds and advance payments.

 

The operations of Hightex are based on international projects and are therefore not affected by seasonal variations.

 

The income statement has been prepared according to the 'Cost of sales' method of allocating costs to projects (1 January 2009 to 30 June 2009: 'Total cost' method but the comparative figures have been re-stated to reflect this change). The prior year figures were adjusted. This affects the allocation between the gross margin and the operating expenses of the Group, but not the operating result. The effect of the restatements on the 2009 results (the comparative figures shown in the 2009 accounts) is as follows:

 

	Previously reported	Adjustment	Restated
HY 2009	€000	€000	€000
Gross margin	2,663	(1,058)	1,605
Other operating expenses	(2,476)	1,058	1,418
Operating result	187	-	187

 

 

The same accounting policies, presentation and methods of computation have been followed in these unaudited interim financial statements as those which were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2009.

 

The Interim financial information for the six months ended 30 June 2010 was approved by the directors on 13 September 2010.

 

 

 

3. Taxation

 

	30-Jun	30-Jun	31-Dec
	2010	2009	2009
	€'000	€'000	€'000
	(Unaudited)	(Unaudited)	(Audited)
Deferred taxation	1	(84)	(107)
Current taxation	(190)	(14)	(230)
Corporate taxation charge	(189)	(98)	(337)

 

4. Intangible assets

 

 Movements in the cost, amortisation and net book value of assets are as follows:

 

			Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)	Year ended 31 December 2009 €'000 (Audited)
			€'000	€'000	€'000
As at beginning of period			888	770	770
Additions			40	-	129
Disposal			-	-	(11)
As at period end			928	770	888
Amortisation			(861)	(697)	(830)
Carrying amount			67	73	58

 

5. Property, plant and equipment (unaudited)

 

 

	Leased assets	Tooling equipment	Fixtures, fittings & equipment	Total
	€'000	€'000	€'000	€'000
Cost
At 1 January 2009	448	1,050	934	2,432
Additions during the period	-	10	45	55
Disposals during the period	-	(39)	-	(39)
Foreign exchange adjustment	-	(38)	(2)	(40)
At 30 June 2009	448	983	977	2,408
Additions during the period	-	54	158	212
Disposals during the period	-	-	(85)	(85)
Foreign exchange adjustment	4	39	4	47
Consolidation	(81)	(502)	(82)	(665)
At 31 December 2009	371	574	972	1,917
Additions during the period	135	15	46	196
Disposals during the period	(187)	-	-	(187)
Foreign exchange adjustment	5	1	1	7
At 30 June 2010	324	590	1,019	1,933
Accumulated depreciation
At 1 January 2009	305	243	510	1,058
Provided during the period	44	47	54	145
Foreign exchange adjustment	(1)	(11)	-	(12)
At 30 June 2009	348	279	564	1,191
Provided during the period	31	61	66	158
Eliminated during the period	-	-	(85)	(85)
Foreign exchange adjustment	4	13	2	19
Consolidation	(81)	(202)	(31)	(314)
At 31 December 2009	302	151	516	969
Provided during the period	43	35	65	143
Eliminated during the period	(187)	-	-	(187)
Foreign exchange adjustment	5	1	3	9
At 30 June 2010	163	187	584	934
Net book value
At 30 June 2010	161	403	435	999
At 31 December 2009	69	423	456	948
At 30 June 2009	100	704	413	1,217

 

 

6. Investment in an associate

 

 

 

			Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)	Year ended 31 December 2009 €'000 (Audited)
			€'000	€'000	€'000
As at beginning of period			289	-	-
Additions			-	-	289
As at period end			289	-	289
Provision for diminution in value			(12)	-	-
Carrying amount			277	-	289

 

 

The Group has a 40% interest in Metal System Sp z.o.o, Poland ('MSK'), which is a private entity, engaged in the manufacturing of steel and aluminium structures and components and incorporated in Poland. This company was formerly 60% owned and accounted for as a subsidiary company.

 

The following table illustrates the summarised financial information of the Group's investment in its associate company, MSK:

 

Share of associate's balance sheet			Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)	Year ended 31 December 2009 €'000 (Audited)
			€'000	€'000	€'000
Non-current assets including goodwill			102	-	108
Current assets			255	-	263
Current liabilities			(38)		(64)
Non-current liabilities			(42)	-	(18)
Equity			277	-	289

 

 

Share of the associate's revenue and profit:			Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)	Year ended 31 December 2009 €'000 (Audited)
			€'000	€'000	€'000
Revenue			218	-	-
Loss			(13)	-	-

7. Share capital and earnings per share

 

a) Issued share capital (unaudited)

 

				Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)		Year ended 31 December 2009 €'000 (Audited)
				€ '000	€ '000	€ '000
	Issued:
	187,847,389 (2009: 187,847,389) Ordinary shares of 1 penny each			2,548	2,548	2,548

 

 

 

b) Share options and warrants (unaudited)

 

On 30 June 2010 and as at the date of this document, Hightex had outstanding options over 6,450,000 ordinary shares. None of these options can be exercised until 21 September 2012 and they will expire on 21 September 2019. The options are subject to certain performance conditions.

 

On 30 June 2010 and as at the date of this document, Hightex had outstanding warrants to subscribe for 1,878,750 new ordinary shares as follows:

 

	Number of warrants	Exercise price per share	Expiry date
Issued in connection with the Placing of March 2006	1,128,750	€0.1107419	01-Dec-10
Issued in December 2009 in connection with the Placing in that month	750,000	7.0 cents	31-Dec-12

 

 

c) Earnings per share (unaudited)

 

(i) Basic

 

Basic earnings per share is calculated by dividing the profit attributable to equity holders of Hightex by the weighted average number of ordinary shares in issue during the period:

 

·; Profit attributable to equity holders of Hightex: € 447,000 (2009: €21,000)

·; Weighted average number of ordinary shares in issue: 187,847,389 (2008: 124,441,001)

·; Basic earnings per share: 0.24 cents (2009: 0.02 cents)

 

 

(ii) Diluted

 

Diluted earnings per share is calculated by adjusting the weighted number of ordinary shares in issue to assume conversion of all potential dilutive options over ordinary shares during the period:

 

·; Profit attributable to equity holders of the Group:  €447,000

·; Weighted average number of ordinary shares for the purpose of basic earnings per share : 187,847,389

·; Shares deemed to be issued for no consideration: 108,191

·; Weighted average number of shares for the purpose of diluted earnings per share: 187,955,580

·; Diluted earnings per share : 0.24 cents

 

In 2009, no potential ordinary shares were considered dilutive, as profit per share would decrease had the warrants in issue been exercised. This is in accordance with IAS 32.

 

 

8. Dividend

 

The directors do not propose the payment of an interim dividend.

 

9. Business Segments

 

 The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker as defined in IFRS 8, in order to allocate resources to the segment and to assess its performance. In contrast, the predecessor Standard (IAS 14 Segment Reporting) required an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity's "system of internal financial reporting to key management personnel" serving only as the starting point for the identification of such segments. As a result, following the adoption of IFRS 8, the identification of the Group's reportable segments has changed.

 

 

 

	Membrane Business	Metal-working Business	Solar Business	Consolidation	Total
	€'000	€'000	€'000	€'000	€'000
External revenue	13,642	-	165	-	13,807
Internal revenue	1,409	-	10	(1,419)	-
Total revenue	15,051	-	175	(1,419)	13,807
Depreciation and amortisation	(160)	-	(14)	-	174
Interest revenue	9	-	-	-	9
Interest expense	(44)	-	-	-	(44)
Loss from associates	-	(13)	-	-	(13)
Earnings before tax (EBT)	745	(13)	(127)	(i) 31	636
Income tax	(189)	-	-	-	(189)
Assets	(ii) 32,188	276	266	(iii) (6,454)	26,276
Liabilities	19,362	-	2,082	(iii) (6,502)	14,942

 

Notes

(i) Exchange rate difference due to elimination of inter-company accounts.

(ii) The assets of membrane business include the goodwill on consolidation of €6,627,000.

(iii) Elimination of inter-company accounts.

 

10. Related party transactions

 

10.1 Amounts due at period end

 

 

 

	Six months ended 30 June 2010 €'000 (Unaudited)	Six months ended 30 June 2009 €'000 (Unaudited)
	€'000	€'000
David Walker	105	98
Frank Molter	119	78
KM Immobilien	157	83
Charles DesForges & Associates	22	47
Charles Sebag-Montefiore	8	67
Metal System Sp z.o.o, Poland	99	-
	510	373

 

10.2 Other related party disclosures

 

Adjacent factory building in Rimsting: An amount of €83,000 (30 June 2009: €83,000) was paid to KM Immobilien for the rent of the adjacent factory building in Rimsting under a lease which expires on 30 September 2012. This factory building is owned by KM Immobilien, a company controlled by F. Molter and K-M.A. Koch. F. Molter was a director throughout 2010. With effect of 1 July 2010 the annual lease was reduced due to the reduction of the rental area.

Karen Walker and Hightex UK Limited: An amount of €2,500 (30 June 2009: €2,500) was paid to Karen Walker, the wife of David Walker, as remuneration for her services as Company Secretary of Hightex UK Limited during the period.

 

Metal System Sp z.o.o, Poland: An amount of €15,000 (30 June 2009: nil) was paid to MSK for material and services rendered during the period.

 

 

 

11. Post balance sheet events

 

No post balance sheet events have occurred.

 

 

 

-END-

This information is provided by RNS

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