27 Jun 2013 07:00
JSJS DESIGNS PLC
(AIM: JSJS)
Interim Results for the six months ended 31 March 2013
JSJS Designs ("JSJS" or "the Company"), the provider of innovative home automation technologies, announces interim results for the six month period to 31 March 2013.
CORPORATE HIGHLIGHTS
·; Like for like revenue up by 48%
·; Trading margins up from 32% to 45%
·; Operating expenses down 6.6% with further savings in second half
·; Successful fundraising
·; Significant new product introductions
Commenting, Mike Lord, Chairman and CEO said:
"This has been a formative six months for the business with significant progress on our base revenues, improvements in trading margins and a real focus on right-sizing the administrative costs in the business. This together with significant customer acquisition of big brands, positions the company for further improvements in the second half and to set an expectation of profitability in FY2014".
Contacts: | |
JSJS Designs Plc | www.jsjsdesigns.com |
Mike Lord, CEO | +44 (0) 1902 500 562 |
WH Ireland Limited | www.wh-ireland.co.uk |
Mike Coe | +44 (0) 117 945 3470 |
CHAIRMAN & CEO STATEMENT
Financial Review
Sales
Sales in the six months to 31 March 2013 included £527,761 of one off revenues relating to the B&Q store rollout (including £300,000 royalty from Siemens). The first six months of this financial year therefore showed like for like revenues increasing from £320,163 to £476,285, an increase of 48%. This underpins the continued improvement in sales traction driven by both new account acquisition and the development of existing accounts.
This also reflects the increased product awareness especially in the electrical trade driven by promotions on our LightwaveRF.com website and also by the significant exposure given to it by Screwfix. We expect this awareness to increase further as a result of both our own improved market collateral and the development of high street retail presence in 140 Maplin stores which we announced recently. This is demonstrated by us now passing 10,000 active users of our online services.
Margin
Product trading margin has significantly increased to 44.9% (FY2012 - 32%) in the first half. Gross profit generation from sales was £202,433 in the first six months versus £177,916 in the first six months of FY2012. This is stated after netting out licence fee income.
Administrative Expenses
A significant amount of effort has been expended in reducing core overhead costs to ensure that the business can reach profitability more quickly. This has been achieved by a mixture of outsourcing and IT investment. Administration expenses were impacted during the first six months by £82,082 of Creditors revaluation due to foreign exchange movements (£14,125 uplift in the first half of FY2012). Underlying administrative costs were therefore £530,351 FY2013 versus £568,035 in the same period last year on a like for like basis, a 6.6% decrease. Most of these savings were achieved in Quarter 2 and I anticipate that administrative costs will be in the region of £420k in the second half.
Product Introductions and Developments
The company has focused on four main product areas namely: Lighting and Electrical, Heating and Air Conditioning, ECO Monitoring, Security and Home Alerts. The most developed of these categories is Lighting and Electrical which advanced further in the first half with the introduction of wireless dimmer switches, inline relays and LED drivers which are all compatible with the Lightwave RF protocol. The roll out of these new products is still on-going and we believe will have further impact on sales in the second half of the year. The major introductions in this category are now complete.
Our much awaited heating products are, as previously announced, scheduled for release in Quarter 4. This is a groundbreaking range which will allow consumers to control their heating requirements on a radiator by radiator basis both increasing control of the home environment but also we believe driving significant potential cost savings. The added benefit of controlling home climate whilst on the move will add further to this. In addition, we believe it will meet the criteria of the Government Green Deal and have significant attraction for utility companies.
We have now begun to develop the next generation of ECO Monitoring products which will allow consumers to see energy usage on an appliance by appliance basis and interact with that usage to save themselves further expense.
We have also introduced a new range of devices to help consumers react to in-house events and have the house automatically respond in a pre-determined fashion. This could be as simple as turning a radiator off when a window is opened or a complicated sequence of events that may happen when the front door is opened to set the house up for the user's return. This will be further supplemented by phone alerts as well as IP cameras and finally, by integrating with home security systems, to provide responsive and informative smart technology. We hope to see the introduction of this full product range by the end of FY2014.
All of these products will be supported by extensive improvements to our range of both of IOS, Android and Web Apps. Roll out of these Apps will commence in Quarter 4 and continue with progressive improvements throughout the next 12 months with the objective of providing a range of state of the art services to support our home automation products. We intend to develop these Apps into "paid for" App enhancements and concierge services by the end of FY2014 creating a recurring revenue stream for the business.
Outlook
The second half of the year has begun with the announcement of the roll out to 140 Maplin stores between now and the end of our financial year. We expect this on-going account development and other potential new streams of business to result in a much improved financial performance over the coming 6 months. The administrative expense reduction has significantly reduced our break even turnover level and we expect to improve our margins further with the introduction of the heating range.
In April 2013 we completed a fundraising by way of a placing of new ordinary shares that raised gross proceeds of £535,000. The net proceeds of the Placing are being used to fund the Company's working capital requirements and product development. As always with a growing business working capital management will remain key to ensuring success for the future and we will be looking at stock financing tools to supplement our existing invoice discounting facilities to ensure a smooth transition to profitability which we expect to achieve in FY2014.
Mike Lord
Chairman & CEO
26 June 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||||
For the Six Months Ended 31 March 2013 | |||||||
Note | 6 Months 31/03/13 (Unaudited) | 6 Months 31/03/12 (Unaudited) | Year Ended 30/09/12 (Audited) | ||||
£ | £ | £ | |||||
REVENUE | 476,285 | 847,924 | 1,109,305 | ||||
Cost of sales | (248,046) | (370,008) | (571,330) | ||||
GROSS PROFIT | 228,239 | 477,916 | 537,975 | ||||
Administrative expenses | (615,530) | (555,896) | (1,297,733) | ||||
LOSS FROM OPERATIONS | (387,291) | (77,980) | (759,758) | ||||
Finance Expense | (21,647) | (10,900) | (28,170) | ||||
Finance Income | - | 83 | 26,485 | ||||
LOSS BEFORE INCOME TAX | (408,938) | (88,797) | (761,443) | ||||
Tax charge/(credit) on loss on ordinary activities | - | - | - | ||||
RETAINED LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE PARENT | (408,938) | (88,797) | (761,443) | ||||
Basic and diluted loss per share | 1 | (0.00111) | (0.00024) | (0.00207) | |||
GROUP STATEMENT OF FINANCIAL POSITION |
6 Months 31/03/13 (Unaudited) | 6 Months 31/03/12 (Unaudited) | Year Ended 30/09/12 (Audited) | |||||
As at 31 March 2013 | ||||||||
£ | £ | £ | ||||||
ASSETS | ||||||||
Non-current assets | ||||||||
Property, plant and equipment | 9,470 | 15,414 | 12,567 | |||||
9,470 | 15,414 | 12,567 | ||||||
Current assets | ||||||||
Inventories | 573,736 | 319,748 | 469,263 | |||||
Trade and other receivables | 348,282 | 396,197 | 290,049 | |||||
Cash and cash equivalents | 733 | 133,934 | 28,194 | |||||
922,751 | 849,879 | 787,506 | ||||||
Total assets | 932,221 | 865,293 | 800,073 | |||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Issued share capital | 369,440 | 369,440 | 369,440 | |||||
Share premium account | 2,165,929 | 2,165,929 | 2,165,929 | |||||
Reverse acquisition reserve | (100,616) | (100,616) | (100,616) | |||||
Retained losses | (3,689,412) | (2,598,727) | (3,278,478) | |||||
Total equity | (1,254,659) | (163,974) | (843,725) | |||||
Current liabilities | ||||||||
Trade and other payables | 1,734,463 | 564,815 | 1,153,670 | |||||
Loans & borrowings | 443,067 | 464,452 | 476,103 | |||||
Total liabilities | 2,177,530 | 1,029,267 | 1,629,773 | |||||
Non current liabilities | ||||||||
Loans & borrowings | 9,350 | - | 14,025 | |||||
Total non current liabilities | 9,350 | - | 14,025 | |||||
Total Equity and Liabilities | 932,221 | 865,293 | 800,073 | |||||
GROUP STATEMENT OF CASHFLOWS |
6 Months 31/03/13 (Unaudited) | 6 Months 31/03/12 (Unaudited) | Year Ended 30/09/12 (Audited) | |||||
For the Six Months Ended 31 March 2012 | ||||||||
£ | £ | £ | ||||||
Cash flow from operating activities | ||||||||
Loss before tax | (408,938) | (88,797) | (761,443) | |||||
Adjusted for: | ||||||||
Depreciation | 3,097 | 1,986 | 4,833 | |||||
Investment income | - | (83) | (89) | |||||
Exchange gains | 25,028 | - | (19,294) | |||||
Interest expense | 21,647 | 10,900 | 28,170 | |||||
Increase in inventories | (104,473) | (43,517) | (193,032) | |||||
(Increase)/Decrease in trade and other receivables | (58,233) | 169,629 | 278,148 | |||||
Increase in trade and other payables | 414,132 | (1,002,523) | 497,909 | |||||
Convertible Loan Note | - | 464,452 | ||||||
Gains on loans settled in shares | - | - | (7,104) | |||||
Decrease in unissued share capital | - | 5,000 | - | |||||
Cash absorbed by operations | (107,740) | (482,953) | (171,902) | |||||
Finance costs | (21,647) | (10,900) | (13,410) | |||||
Net cash outflow from operating activities | (129,387) | (493,853) | (185,312) | |||||
Cash flows from investing activities | ||||||||
Purchase of property, plant and equipment | - | (13,775) | (13,775) | |||||
Finance revenue | - | 83 | 89 | |||||
Net cash outflow from investing activities | - | (13,692) | (13,686) | |||||
Cash flows from financing activities | ||||||||
Proceeds from issue of shares | - | 680,570 | 500,000 | |||||
Expenses of share issues | - | (53,500) | ||||||
Proceeds from bank borrowings | - | - | 25,000 | |||||
Repayment of bank borrowings | (4,167) | - | (3,997) | |||||
Interest paid on borrowings | (508) | - | (678) | |||||
Interest paid on convertible loan notes | - | - | (8,332) | |||||
Repayment of convertible loan note | (5,161) | - | (335,411) | |||||
Net cash used in financing activities | (9,836) | 627,070 | 176,582 | |||||
Net decrease in cash and cash equivalents | (139,223) | 119,525 | (22,416) | |||||
Cash and cash equivalents at start of period | (8,007) | 14,409 | 14,409 | |||||
Cash and cash equivalents at end of period | (147,230) | 133,934 | (8,007) | |||||
Notes to the financial information
1. The basic loss per share is calculated by dividing the loss for the financial period attributable to shareholders by the weighted average number of shares in issue.
6 Months 31/03/13 (Unaudited) | 6 Months 31/03/12 (Unaudited) | Year Ended 30/09/12 (Audited) | ||||
The weighted average number of shares were; | ||||||
Weighted average number of ordinary shares | 369,440,435 | 363,124,982 | 367,286,223 | |||
Effect of outstanding options shares | - | (12,579) | - | |||
Adjusted weighted average number of ordinary shares | 369,440,435 | 363,112,403 | 367,286,223 | |||
Basic and diluted loss per share | (0.00111) | (0.00024) | (0.00207) | |||
2. While the financial information included in this announcement has been computed in accordance with International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The full financial statements of the Company will be prepared in accordance with IFRS, International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board as adopted for use in the European Union.
3. The financial information shown for the six month period ended 31 March 2013 and the six month period ended 31 March 2012 has not been audited or reviewed by the auditors, or extracted from audited information. The financial statement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.
4. The directors have not declared a dividend for the period ended 31 March 2013.
This statement was approved by the Board of Directors on 26 June 2013. Copies of this statement will be available free of charge from the Company's Registered Office at The Birmingham Science Park Aston, Faraday Wharf, Holt Street, Birmingham B7 4BB 11-15 William Road, London, NW1 3ER and the Company's website, www.jsjsdesigns.com
The directors of JSJS Designs plc accept responsibility for this announcement.