Inspiration Hlt Regulatory News (IHC)

29 Mar 2007 07:02

Inditherm PLC29 March 2007 Press Release 29 March 2007 Inditherm plc Preliminary Results Inditherm plc ("Inditherm" or "the Company") , the provider of innovativeheating solutions, today reports its Preliminary Results for the 12 months ended31 December 2006. Summary • Group turnover increased by 51% to £1,564k (2005: £1,035k) • Medical turnover up 146%: US distribution agreement with Smiths Medical and appointment of seven other new distributors • Industrial turnover up by 31% • Post-tax loss, after exceptionals & net interest income, of £1,132k (2005: £1,279k) • Loss per share 5.4p (2005: 6.1p) • Year end cash balance of £1,747k (2005: £2,363k) • Cash placing in January 2007 puts Company on firm footing for the future with a cash balance of £4,567k after the placing Commenting on the outlook, Mark Abrahams, Chairman of Inditherm, said: "We have had a strong start to 2007, with a solid order book. Our primary goalgoing forward is to reach break-even. Based upon our current prospects, I amencouraged that this can be achieved." - ENDS - For further information, please contact: Inditherm plc Richard Harpum, Chief Executive Tel: +44 (0) 1709 761000rharpum@indithermplc.com Ian Smith, Finance Directorismith@indithermplc.com www.indithermplc.com Media enquiries: Abchurch Communications Justin Heath Tel: +44 (0) 113 203 1340justin.heath@abchurch-group.com www.abchurch-group.com Chairman's Statement Introduction 2006 was a year of transformation for Inditherm. Following the introduction ofour focused strategy to expand in the Industrial, Medical and Constructionsectors, emphasising larger projects, the first signs of success started toemerge. The signing of the supply agreement with Smiths Medical, significantorders for industrial process plants and a major pre-cast concreting project,provided further encouragement. The year culminated with the launch in December of a re-financing andstrengthening of the Balance Sheet (which was approved by the shareholders at anExtraordinary General Meeting on 12 January 2007) by way of a Placing of30,000,000 new Ordinary Shares at a price of 10 pence per Placing Share.Following completion of the Placing, the issued share capital of the Companyincreased to 51,112,581 Ordinary Shares and the Group's resources increased to£4,567k immediately after the Placing. Results Turnover for the year rose by 51% to £1,564k (2005: £1,035k), mainly due togrowth in both Medical and Industrial sales. Orders received maintained the 71%growth rate reported in the first half year. The Industrial business showed continued growth in sales of 31%, which wasmainly driven by the successful introduction of our new modular pipework system,accompanied by large tank heating installations. During the year we receivedseveral larger orders for these systems from well-known confectionary and foodmanufacturers. The value drivers for these systems are substantial energyreductions, hygiene benefits and more rapid installation. Following a slowstart, towards the year end we saw an encouraging increase in work for UK waterutilities through the current Asset Management Programme (AMP4). The Medical business grew by 146%, with 165% orders growth, helped at the yearend by a stock order from Smiths Medical. Purchases by the NHS improved and theaddition of 8 new overseas distributors contributed to the sustained growth inexports. The new CosyTherm neo-natal warming product, launched towards the endof 2005, has been well received in the market and sales are growing. The Construction business made steady progress and obtained a large order forprecast concrete curing blankets. This demonstrated significant benefits forthe customer, including the ability to reduce the cement content of theconcrete. The project has acted as a valuable reference for other precastmanufacturers. The cost base was reduced by 10% during the year, with all expenditure beingtightly controlled. Overheads before exceptional costs were £1,571k (2005:£1,739k), resulting in an operating loss before exceptional costs of £1,087k(2005: £1,402k). After restructuring and exceptional costs of £152k (2005:£50k) and net interest income of £83k (2005: £138k), the post-tax loss was£1,132k (2005: £1,279k). The year end cash balance was £1,747k (2005: £2,363k). The cash placing on 15January 2007 raised a further £2.8 million net of expenses. We believe that theCompany has sufficient funds to meet our current and medium term needs. Dividends As stated in previous years, it is the Board's intention to devote the Company'sfinancial resources to business development. This intention, which the Boardbelieves is in the shareholders' best interests, has been pursued during 2006and will continue for the foreseeable future. The Board therefore does notexpect to declare a dividend during the Company's continuing development period. Employees Following the recent surge in quotation activity and orders, we have respondedby promoting a number of sales and operations people, followed by a recruitmentprogramme designed to maintain our growth momentum. On behalf of the Board, I thank all our staff most sincerely for their continuedsupport. Outlook During recent months we have seen an encouraging increase in the level ofenquiries and orders. The order book at the start of the year has given us astrong start and order intake for the first quarter of 2007 is up more than 40%. Our industrial solutions are now well proven and have been embraced by severalkey customers as the way forward for process heating, mainly due to the energysaving and hygiene benefits. The supply contract with Smiths Medical is expected to drive growth in ourMedical business and will supplement the growth anticipated from both domesticand export sales of patient warming and neonatal products. The Construction business is now well-established and there is growing interestin our concrete curing products. The two year project funded by the EuropeanFP6 CRAFT grant, previously reported, is yielding excellent results, as well asorders from consortium partners. Our initial goal going forward is to reach break-even. Based upon currentprospects, I am encouraged that this can be achieved. Mark AbrahamsChairman 29 March 2007 Chief Executive's Review Overview During 2006 we focused on achieving top line growth, whilst keeping costs andcash outflow under control. We continued to focus on our three main businesssegments of Industrial, Medical and Construction, adding new products andsystems, and gaining credibility as a solutions provider with a number of majorinternational customers. The supply agreement with Smiths Medical is a major endorsement of our patientwarming technology and provides the platform for substantial growth in ourMedical business during 2007. The cash placing has given us the opportunity to invest in additional sales andtechnical resources and means that we can accelerate the growth opportunities. Industrial Sales in the Industrial segment increased by 31% over 2005, and orders by 45%,mainly due to growth in process heating orders for our new modular pipeworksystems and associated tank heaters. We received several orders for larger heating installations from well knownmanufacturers for heating chocolate, sugars and chemicals. One of these wasinstalled in Poland, where we demonstrated our ability to manage such projectsby completing ahead of schedule. The key value propositions of these modularsystems are the shortened installation time, improved hygiene, energy savings,controllability and improved production output. Energy savings as a result ofusing Inditherm, now verified by several of our customers, can be as high as 75%on a like-for-like basis. In order to retain our focus on our corecompetencies, we have chosen to subcontract areas such as pipework and claddingto competent partners, albeit at lower margins. During the year we signed a framework agreement with Yorkshire Water and carriedout successful trials for heating sewerage sludge transfer lines with SevernTrent Water. After a slow start in 2005, we are now receiving regular waterutility orders under the AMP4 Asset Management Programme. During the year we appointed more overseas distributors and since the cashplacing, have strengthened the industrial sales organisation with therecruitment of additional sales resources. Medical Medical orders increased by 165% and sales by 146%, helped by the first stockorder from Smiths Medical in December. Deliveries to Smiths have now commencedand they have now placed a further order for delivery in the second quarter. During the year we appointed eight new overseas distributors. Sales to the NHS have picked up and we are now recognised as providing a highlycost-effective solution. We have recently strengthened our UK Medical salesforce. Sales of the CosyTherm neonatal warming system have grown well and we are alsopursuing international distribution opportunities. Construction The Construction business had an encouraging year, with the successfulinstallation of a major concrete curing system for a large pre-caster. Thisreally highlighted the benefits of our system: more rapid curing, improvedhydration and early strength development, significantly reduced energy cost(typically 80% or more), the opportunity to reduce cement content, along with arange of operational benefits. Other projects included supplying curing blankets for rapid runway repairs at amajor UK airport. Other Activities Our standard product lines, notably vessel heaters and heating pads for pizzaand curry bags, have continued to grow during the year, providing a good baseload of work. Whilst our existing under-pitch heating installations continue to operate welland we continue to pursue those opportunities that arise from time to time, thisis no longer a key area of focus, due to the sporadic nature of this market. Operations Our efforts to reduce overhead spend continued throughout the year, withsubstantial reductions being achieved. Despite the additional headcount now inplace, our first quarter overheads in 2007 are 13% lower than the same period in2006 and 9% lower than in 2005. Our project management capabilities were put to the test on a number of largeprojects and in each case, we were able to delight our customers by completingthe work on or ahead of schedule. Product Development Product development work continued in all main business sectors during the year.Further improvements were made to our Industrial products, notablyenhancements and options for our modular pipework systems. There were ongoing improvements made to our Medical products and some newproducts based upon our proven technology are also in the pipeline. The concrete curing R&D project under the European FP6 CRAFT programme,previously reported, has gone well, further validating the technology andproviding valuable technical data. Cooperation agreements are being negotiatedwith some members of the trans-European consortium. During the year we formed a partnership with Grant Rail and Sheffield HallamUniversity to develop a system for heating railway track, so that it can bewelded more easily. This was supported by a Yorkshire Forward grant. Initialfield test results have been encouraging. Outlook The agreement with Smiths Medical provides an excellent platform for growth.Medical production rates have been increased to meet our commitments. Based upon enquiries and recent order flow, Industrial sales are expected toexceed the growth rate seen last year, mainly due to the market acceptance ofour modular pipework and tank heating technology. It appears that Inditherm isno longer seen as a high risk purchase, and we are now moving from technical tocommercial acceptance. The growing interest in energy savings and the greateremphasis on hygiene among food manufacturers are also expected to drive demand.More widespread deployment of standard products will facilitate growth ininternational sales through our distributor network. Water utility workcontinues to rise and with more field sales people now in place, we intend topursue the all the major Water Utilities throughout the UK. Now that we have some good reference sites, the Construction sector is expectedto see significant growth in 2007, particularly for pre-cast concrete curingapplications. Our initial goal is to reach break-even as fast as possible and our entire teamis focused on achieving this. The challenges facing Inditherm in 2007 remain considerable but so are theopportunities. We have started the year with a substantial order book which hasgiven us a solid start to the year. Richard HarpumChief Executive 29 March 2007 Preliminary announcement of results for the year ended 31 December 2006Consolidated profit and loss account 2006 2005 £'000 £'000 Turnover 1,564 1,035 Cost of Sales (1,155) (698) Gross Profit 409 337 Administrative expenses (1,648) (1,789) Operating loss before exceptional costs (1,087) (1,402)Exceptional costs (152) (50) Operating loss (1,239) (1,452) Interest receivable 84 139Interest payable (1) (1) Loss on ordinary activities before taxation (1,156) (1,314) Tax credit from loss on ordinary activities 24 35 Sustained deficit for the year (1,132) (1,279) Loss per share-basic and diluted (5.4)p (6.1)p All amounts relate to continuing activities. All recognised gains and losses are included within the profit and loss account. Preliminary announcement of results for the year ended 31 December 2006Consolidated balance sheet 2006 2005 As Restated £'000 £'000 £'000 £'000 Fixed Assets Intangible Assets 29 43 Tangible Assets 209 270 238 313 Current Assets Stocks 121 200 Debtors 291 292 Investment - 250 Cash at bank and in hand 1,747 2,363 2,159 3,105 Creditors: amounts falling due within one year (583) (311) Net current assets 1,576 2,794 Total assets less current liabilities 1,814 3,107 Provision for liabilities (107) (268) Net assets 1,707 2,839 Capital and reserves Called up share capital 211 211 Share premium 7,423 7,423 Other reserves 50 50 Share based payment reserve 60 60 Profit and loss account (6,037) (4,905) Shareholders' funds 1,707 2,839 Preliminary announcement of results for the year ended 31 December 2006Consolidated cash flow statement 2006 2005 £'000 £'000 £'000 £'000 Net cash outflow from operating activities (983) (1,340) Returns on investments and servicing offinance Interest received 84 139 Interest element of hire purchase (1) (1) payments Net cash inflow from returns on investments 83 138and servicing of finance Taxation 24 35 Capital expenditure and financial investment Purchase of tangible fixed assets (19) (60) Sale of Investment bonds 284 - Net cash outflow from capital expenditure and 265 (60)financial investment Net cash outflow before management of liquid (611) (1,227)resources and financing Management of liquid resources Decrease in cash on short-term deposit 695 1,208 Financing Issue of shares - 14 Capital element of hire purchase (5) (14) payments Net cash outflow from financing (5) - Increase/(Decrease) in cash 79 (19) Reconciliation of operating loss to net cash outflow from operating activities 2006 2005 £'000 £'000 Operating loss (1,239) (1,452)Profit on disposal of current asset investment (34) -Depreciation and amortisation 94 92Loss on disposal of fixed assets - 5Decrease in stocks 79 24Decrease in debtors 1 215Increase/(decrease) in creditors 277 (220)Decrease in provisions (161) (4) (983) (1,340) Analysis of changes in net funds 01-Jan Cashflow 31-Dec 2006 2006 £'000 £'000 £'000 Cash at bank and in hand 2,363 (616) 1,747Less: Term deposits treated as liquid resources (2,364) 695 (1,669) (1) 79 78 Obligations under hire purchase contracts (5) 5 -Term deposits 2,364 (695) 1,669 2,358 (611) 1,747 Reconciliation of net cash flow to movement in net funds 2006 2005 £'000 £'000 Increase/(decrease) in cash in year 79 (19)Cash outflow from decrease in debt 5 14Cash inflow from decrease in liquid resources (695) (1,208) Decrease in net funds from cash flows (611) (1,213) Net funds at the beginning of the year 2,358 3,571 Net funds at the end of the year 1,747 2,358 NOTES 1 The preliminary results have been prepared under the historical cost convention, in accordance with applicable Accounting Standards in the United Kingdom and with the company's accounting policies as set out in the financial statements for the year ended 31 December 2005 with the exception of the adoption of FRS 20 in the year. The preliminary results were approved by the Board on 28 March 2007 and are unaudited. The financial information contained in this unaudited preliminary announcement statement does not constitute accounts as defined by Section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2005 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 237 (2) or Section 237 (3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2006 and the auditors report thereon will be finalised based on the information in this preliminary announcement and will be delivered to the Registrar of Companies following the company's AGM. 2 The calculation of loss per ordinary share is based on losses of £1,132,000 (2005: £1,279,000) and on a weighted average of 21,112,581 (2005: 21,073,948) ordinary shares in issue during the year. The share options are anti-dilutive due to the loss in the year. 3 Copies of the 2006 Annual Report and Accounts will be sent to all shareholders. Copies will be available from the Company Secretary at Inditherm plc, Inditherm House, Houndhill Park, Bolton Road, Wath upon Dearne, Rotherham, S63 7LG. 4 On 15 January 2007 the company issued 30,000,000 new ordinary shares of 1p each for a consideration of 10p per share. The company received £2.8m net of expenses. 5 Exceptional costs of £152k arose during the year. £75k has been provided for the costs of upgrading patient warming systems to include additional safety features to detect damage to the product caused by misuse or storage in a method contrary to operating instructions. £57k arose as a result of the Corporate finance work associated with pursuing strategic options to secure additional funding. £20k was incurred as compensation for loss of office. 6 In accordance with FRS 20 the fair value of equity settled share-based payments to employees are determined at the date of grant and have been charged against profit over the period the options have vested. The accounts for the relevant period (2004) have been restated and a share based payment reserve of £60,000 has been created. The adoption of FRS 20 represents a change in accounting policy the impact of which has been to reduce net assets at 31 December 2005 and 2006 by £60,000. There was no impact on reported profit in either year. This information is provided by RNS The company news service from the London Stock Exchange