Inspiration Hlt Regulatory News (IHC)

28 Sep 2006 07:00

Inditherm PLC28 September 2006 Press Release 28 September 2006 Inditherm plc Interim Results Inditherm plc ("Inditherm" or "the Company"), the provider of innovative heatingsolutions, today reports its Interim Results for the six months ended 30 June2006. Highlights • Turnover increased by 29% to £745k (2005: £579k)• Order book up 71%, providing strong platform for the second half• Pre-tax loss of £580k (2004: £682k)• Loss per share of 2.7p (2005: 3.2p)• Recurring overheads reduced to £801k (2005: £885k)• Reduced first half net cash outflow of £540k (2005: £598k)• Cash balance of £1.8m• Patents granted for core technology in China and Hong Kong• Successful sludge line trials at Severn Trent enabling opportunities within water industry• Medical sales up 300% and appointment of several new distributors• Food and Drug Administration approval for medical mattresses allows US market entry• Newly launched CosyTherm neonatal warming system ordered by the NHS Commenting on the outlook, Mark Abrahams, Chairman of Inditherm, said: "Although there has been encouraging progress made in our Medical and Industrialdivisions and some new developments in the Construction division, the rate ofgrowth at present is still insufficient to reverse the cash being consumed.Additional funding is therefore required to continue the development of thebusiness. The Board is pursuing various strategic options to secure thatadditional funding, including partnerships to open up new opportunities torealise value from our proven technology, and is satisfied that the continueddevelopment of the business is in the best interests of the shareholders." - ends - For further information, please contact:Inditherm plc Richard Harpum, Chief Executive Tel: +44 (0) 1709 761000Ian Smith, Finance Directorrharpum@indithermplc.com www.indithermplc.comismith@indithermplc.com Media enquiries:Abchurch CommunicationsJustin Heath/Louise Thornhill Tel: +44 (0)20 7398 7700justin.heath@abchurch-group.com Chairman's Statement Introduction In the first half of 2006 we have seen a 71% growth in orders over the sameperiod last year. Our focus on larger customers has started to provesuccessful, as our improved package of heating solutions gains credibility. Our search for strategic partners who may be able to enhance shareholder valuehas identified a few possible ways forward. These will be explored in detailover the next few months. Financial Review Despite the robust growth in orders the timing of a number of projects meantthat reported turnover was restricted to an increase of 29% at £745k (2005:£579k). Clearly, this strong order book gives the Company a good platform forthe second half. Recurring overheads were reduced to £801k (2005: £885k), leaving an operatingloss before exceptional items of £586k (2005: £708k) and a pre-tax loss of £580k(2004: £682k), resulting in a loss per share of 2.7p (2005: 3.2p). Exceptionalcosts of £40k were associated with handling the bid approach for the businessand search for strategic partners. Further reductions in overhead costs havebeen implemented, which will reduce the run-rate further in the second halfyear. The cuts in expenditure reduced the rate of cash burn, resulting in a net cashoutflow before management of liquid resources and financing of £540k (2005:£598k). Operational Review The business structure remained unchanged and oriented towards four marketsegments: Industrial, Medical, Construction and Sport. In April we were granted a patent from China for our core conductive polymertechnology, adding to the approvals obtained last year from the US. In Augustwe were also granted a similar patent approval from Hong Kong. Our Industrial business remained focused on process industries and waterutilities. In response to market demands for improved hygiene and fasterinstallation times, we have developed an innovative, modular pipework heatingsystem. This has been the main growth driver in the first half, with severallarger orders from leading food and confectionary manufacturers in the UK. Oneof these has now spun off into a £94k order from a European sister plant, whichwill benefit the second half. We are also taking advantage of the increasedfocus on the energy savings that Inditherm systems can provide. After disappointing progress in 2005, we saw modest growth in water utilityapplications in the first half of 2006. Following the highly successful trialsof sludge transfer line heaters with Severn Trent Water, the significantopportunity for energy and operational cost savings are now being promotedthroughout the water utility industry and should help to drive growth in thesecond half. Medical sales grew by 300% in the first half, exceeding sales for the whole of2005. Orders were up by 171% over the same period last year. Several newinternational distributors were appointed and US Food and Drug Administration(FDA) approval for medical mattresses was obtained, enabling us to enter the USmarket in the second half. Although spending by the NHS remained weak, we sawimproved progress in the UK. Following the successful launch of our new,innovative CosyTherm neonatal warming system, there has been uptake by the NHSand significant interest from around the world. In the Construction business work in conjunction with a pan-European consortiumbacked by a European R&D grant has proved that Inditherm is an ideal heat sourcefor accelerated concrete curing and is providing the data necessary to build amore compelling business case for our heating systems. Our initial focus hasbeen on the pre-cast concrete market, where we have a strong value proposition,along with potential energy savings; heating allows reduced cement content ofconcrete, without compromising strength, and guarantees production cycle timesin cold weather. A consortium with GrantRail and Sheffield Hallam University has been successfulin obtaining a £568k grant to obtain approvals for the applications of Indithermheating in new process for preheating continuously welded rails. This could holdsignificant potential for the business in the medium term. Despite vigorous marketing efforts, we have not been successful in obtainingfurther under-pitch heating orders, despite the energy savings demonstrated byour existing installations, notably at Chelsea Football Club's new TrainingAcademy, now in its second year of operation. As stated in my 2005 Statement,we do not expect any sales this year, other than modest extensions to theChelsea system. Outlook Although there has been encouraging progress made in our Medical and Industrialdivisions and some new developments in the Construction division, the rate ofgrowth at present is still insufficient to reverse the cash being consumed.Additional funding is therefore required to continue the development of thebusiness. The Board is pursuing various strategic options to secure thatadditional funding, including partnerships to open up new opportunities torealise value from our proven technology, and is satisfied that the continueddevelopment of the business is in the best interests of the shareholders. Mark AbrahamsChairman28 September 2006 Inditherm plc Unaudited consolidated profit and loss accountFor the six months ended 30 June 2006 Year 6 months 6 months ended ended ended 31-December 30-June 30-June 2005 2006 2005 £'000 £'000 £'000 1,035 Turnover 745 579 (698) Cost of Sales (530) (402) _________ _________ _________ 337 Gross profit 215 177 (1,789) Administrative expenses (841) (935) _________ _________ _________ (1,402) Operating loss before exceptional items (586) (708) (50) Exceptional administrative expenses (40) (50) (1,452) Operating Loss (626) (758) 139 Interest receivable 46 77 (1) Interest payable - (1) _________ _________ _________ (1,314) Loss on ordinary activities before taxation (580) (682) 35 Taxation credit from loss on ordinary - - activities _________ _________ _________ (1,279) Deficit for the period/year (580) (682) _________ _________ _________ (6.1)p Loss per share - basic and diluted (2.7)p (3.2)p _________ _________ _________ All amounts relate to continuing activities All recognised gains and losses are included in the profit and loss account Inditherm plc Unaudited consolidated balance sheetAs at 30 June 2006 31-Dec 30-Jun 30-Jun 2005 2006 2005 £'000 £'000 £'000 Fixed assets 43 Intangible assets 36 50 270 Tangible assets 246 284 _______ _______ _______ 313 282 334 Current assets 200 Stocks 157 215 292 Debtors 449 299 250 Investment 250 250 2,363 Cash at bank and in hand 1,819 2,984 _______ _______ _______ 3,105 2,675 3,748 (311) Creditors: amounts falling due within one year (439) (388) _______ _______ _______ 2,794 Net current assets 2,236 3,360 _______ _______ _______ 3,107 Total assets less current liabilities 2,518 3,694 - Creditors : amounts falling due after more than one - (2) year (268) Provision for liabilities and charges (259) (270) _______ _______ _______ 2,839 Net assets 2,259 3,422 _______ _______ _______ Capital and reserves - equity 211 Called up share capital 211 211 7,423 Share premium account 7,423 7,409 50 Other reserve 50 50 (4,845) Profit and loss account (5,425) (4,248) _______ _______ _______ 2,839 Shareholders' funds 2,259 3,422 _______ _______ _______ Inditherm plc Unaudited consolidated cash flow statementFor the six months ended 30 June 2006 Year Note 6 months 6 months Ended ended ended 31-December 30-June 30-June 2005 2006 2005 £'000 £'000 £'000 (1,340) Net cash outflow from operating activities 4 (569) (645) Returns on investments and servicing of finance 139 Interest received 46 77 (1) Interest element of hire purchase payments - (1) _______ _______ _______ 138 Net cash inflow from returns on investments and 46 76 servicing of finance 35 Taxation - - Capital expenditure (60) Purchase of tangible fixed assets (17) (29) ________ ________ ________ (60) Net cash outflow from capital expenditure (17) (29) ________ ________ ________ (1,227) Net cash outflow before management (540) (598) of liquid resources and financing Management of liquid resources 1208 (Increase)/decrease in cash on short term deposit 5 606 703 Financing 14 Issue of Shares - - (14) Capital element of hire purchase payments (4) (8) ________ ________ ________ - Net cash outflow from financing (4) (8) ________ ________ ________ (19) Increase/(decrease) in cash 5 62 97 ________ ________ ________ Inditherm plc Notes to the interim report 1. Basis of preparation The interim report has been prepared using accounting policies consistent withthose adopted in the statutory accounts of the group for the year ended 31December 2005 except where any changes, and the reasons for them, are disclosed. 2. Taxation No corporation tax has been provided for in the period due to the projectedresult for the period not exceeding the losses brought forward. Deferred tax assets arising from accelerated capital allowances and tradinglosses have not been recognised on the basis that their future economic benefitis uncertain. 3. Exceptional administrative expenses Included within administrative expenses is an amount of £40k in respect ofthe costs associated with handling the bid approach for the business and searchfor strategic partners. The £50k incurred in the six months ended 30 June 2005was in respect of severance payments. 4. Reconciliation of operating loss to net cash outflow from operatingactivities: Year 6 months 6 months ended ended ended 31-December 30-June 30-June 2005 2006 2005 £'000 £'000 £'000 (1,452) Operating loss (626) (758) 5 Loss on disposal of fixed assets - - 92 Depreciation and amortisation 47 45 24 Decrease in stock 43 9 215 Decrease/(Increase)in debtors (157) 208 (220) (Decrease)/Increase in creditors 133 (147) (4) Decrease in provisions (9) (2) _______ _______ _______ (1,340) Net cash outflow from operating activities (569) (645) ________ ________ ________ Inditherm plc 5. Reconciliation of net cash flow to movements in net funds Year 6 months 6 months ended ended ended 31-December 30-June 30-June 2005 2006 2005 £'000 £'000 £'000 (19) (Decrease)/ Increase in cash in year/period 62 97 14 Cash outflow from decrease in debt 4 8 (1,208) Cash outflow from decrease in on short term deposit (606) (703) _______ _______ _______ (1,213) Decrease in net funds from cashflows (540) (598) _______ _______ _______ 3,571 Net funds brought forward 2,358 3,571 _______ _______ _______ 2,358 Net funds carried forward 1,818 2,973 _______ _______ _______ 6. Analysis of changes in net funds 01-Jan Cash 30-Jun 2006 flow 2006 £'000 £'000 £'000 Cash at bank and in hand 2,363 (544) 1,819 Less: deposits treated as liquid resources (2,364) 606 (1,758) _______ _______ _______ (1) 62 61 Obligations under hire purchase contracts (5) 4 (1) Term deposits 2,364 (606) 1,758 _______ _______ _______ 2,358 (540) 1,818 _______ _______ _______ Inditherm plc 7. Reconciliation of movement in shareholders' funds Year 6 months 6 months ended ended ended 31-December 30-June 30-June 2005 2006 2005 £'000 £'000 £'000 (1,279) Loss for the period/year (580) (682) 14 Issue of Shares including Share Premium - - _______ _______ _______ (1,265) Net movement in shareholders' funds (580) (682) 4,104 Opening shareholders' funds 2,839 4,104 _______ _______ _______ 2,839 Closing shareholders' funds 2,259 3,422 _______ _______ _______ 8. Loss per share The calculation of loss per share is based on losses of £580k (31 December 2005:£1,279k, 30 June 2005: £682k) and on a weighted average number of shares of21,112,581 (31 December 2005: 21,073,948, 30 June 2005: 21,069,980) in issue forthe period. The outstanding share options are anti-dilutive due to the loss in the period. 9. Copies of this interim report are available from the Company's registeredoffice. 10.The interim financial information for the period ended 30 June 2006 isunaudited and does not constitute statutory accounts within the meaning ofSection 240 of the Companies Act 1985. The financial information for the yearended 31 December 2005 is derived from the statutory accounts. Full accountswere delivered to the Registrar of Companies with an unqualified audit report. This information is provided by RNS The company news service from the London Stock Exchange