MED.L Regulatory News (MED)

29 Feb 2008 07:01

MicroEmissive Displays Group PLC29 February 2008 For Immediate Release: 29 February 2008 MicroEmissive Displays Group plc ("MED", the "Company or Group") Preliminary Results for the Year Ended 31 December 2007 MED, the AIM listed designer and manufacturer of low power light emittingpolymer displays, announces its preliminary results for the year ended 31December 2007. Highlights: •state-of-the-art manufacturing facility completed on schedule and to budget; •product shipping commenced from Dresden facility; •distribution and supply agreements signed; •eyescreenTM design-in activities underway; •successful placing raising approximately £7.5m net of expenses. Commenting on the results George Elliott, Chairman of MED said: "We aredelighted with the progress MED has made during the year and are confident thatdiscussions underway with a variety of potential customers will result insignificant volume orders being placed. We are still on track to be profitableon a month on month basis during the second half of 2008." He added: "The management team is committed to its ongoing strategy for growthand will continue to work to exploit the opportunities in our target markets tothe benefit of our shareholders. Your Board looks forward to the coming yearwith confidence." For further information, please visit www.microemissive.com contact: MicroEmissive Displays 0131 650 7764Bill Miller, Chief Executive / Graeme N Walker, Finance Director Tavistock Communications 020 7920 3150Matt Ridsdale / Andrew Dunn Arbuthnot Securities 020 7012 2000Neil Kirton / John Prior Chairman's statement Introduction I have pleasure in addressing shareholders in my first full year statement asChairman of MED and to report the results for the year ended 31 December 2007. The period under review represents another important and exciting time for MEDas the management team endeavour to create a world leader in the design,development and production of next-generation display solutions supplying therapidly growing and constantly developing global electronics industry. Significant progress has been made during the year and a series of importantmilestones have been achieved. I'd like to thank the management and staff of MEDfor their hard work and dedication and would like to congratulate them on theirexcellent achievements throughout the year. Operational Review The benefits of our revolutionary eyescreenTM product are gaining substantialindustry recognition, due to the unit's high image quality, exceptionally lowpower demands and easy integration with existing electronic products. We are establishing MED as a leading design-in display solution formanufacturers of a diverse range of electronic display products includingheadsets for the growing video eyewear market, night scopes and digital cameraviewfinders and user interface displays for industrial equipment. I am pleasedto report that eyescreenTM has been designed into a number of applications. During the year we announced a distribution and supply deal with CytechTechnology Ltd, one of the leading distributors of electronic components in HongKong and China. Cytech continues to use its extensive network and recognisedbrand to market MED's eyescreenTM technology in a wide variety of applications. Manufacturing In May 2007, MED announced that the installation process and the opening of itsvolume manufacturing site in Dresden, Germany were complete. The establishmentof our state-of-the-art clean room and the delivery of the toolset were achievedto schedule and to budget and we are now shipping product to customers. I am delighted to report manufacturing metrics are ahead of expectations as wecontinue to ramp up the volume of our manufacturing line. The manufacturingprocess we have established at Dresden allows us to maintain very high standardsof quality, ensuring MED has the necessary infrastructure to meet the growingdemand we expect to see in 2008 and beyond. Financial Review As required by the AIM rules these are the Company's first financial statementsprepared under International Financial Reporting Standards (IFRSs). The maineffect of the transition to IFRSs has been to capitalise certain developmentexpenditure which, under UK GAAP was expensed as it was incurred. Details of theaccounting policies under IFRSs and the effect of transition are included in thenotes to the financial statements. Turnover for the year was £65,000 (2006: £31,000), with an overall loss for theyear of £6.2million (2006: £6.3million). Compared with 2006, the loss for 2007includes additional salary costs and raw material costs as the Dresdenmanufacturing facility was ramping up offset by interest income and receipt of a£0.9m tax credit in respect of research and development expenditure in 2004 and2005. The Company also received a total of £2.7 million in grant income from the Stateof Saxony in respect of the capital investment in Dresden. This amount isincluded within deferred income and is being amortised over the useful life ofthe relevant assets. In addition, in order to execute our strategy for growth, the Board of MED tookthe decision to raise additional working capital and strengthen the Group'sbalance sheet. This was achieved in October 2007 with the successful placing of15,720,000 shares at a price of 50 pence per share, raising approximately £7.5million net of expenses. The successful placing demonstrates the strongcooperation we have received from our investors during the year and I would liketo thank them for their continued support. At the balance sheet date cash at bank was £6.3 million and the Company is inthe process of preparing further claims under the research and development taxcredit scheme. Outlook We are delighted with the progress MED has made during the period and areconfident that discussions underway with a variety of potential customers willresult in significant volume orders being placed. We are still on track to beprofitable on a month on month basis during the second half of 2008. With the advances in mobile technology, media on the move, mobile game play andthe wider industrial applications open to eyescreenTM, MED is gainingrecognition as an innovator and eyescreenTM is increasingly being seen as theleading edge solution. The management team is committed to its ongoing strategy for growth and willcontinue to work to exploit the opportunities in our target markets to thebenefit of our shareholders. Your Board looks forward to the coming year withconfidence. George Elliott Chairman Consolidated income statement For the year ended 31 December 2007 2007 2006 £000 £000Continuing operationsRevenue 65 31 Changes in inventories of finished goods and work in progress 213 (150)Raw materials and consumables used (2,009) (1,530)Employee benefits costs (2,774) (2,414)Depreciation and amortisation expenses (721) (666)Other expenses (1,871) (1,720) ----------------Operating loss (7,097) (6,449) ---------------- Financial income 140 238Financial expenses (152) (45) ----------------Net finance income (12) 193 ---------------- Loss before income tax (7,109) (6,256) Income tax 883 - ----------------Loss for the period attributableto equity holders of the company (6,226) (6,256) ---------------- Loss per ordinary share (pence)Basic and diluted loss per share (pence) 13.1 26.4 ---------------- Consolidated balance sheet As at 31 December 2007 2007 2006 £000 £000 AssetsProperty, plant and equipment 5,673 4,830Intangible assets 2,020 1,720 ----------------Total non-current assets 7,693 6,550 ---------------- Inventories 213 -Trade and other receivables 266 3,370 Cash and cash equivalents 6,293 2,344 ----------------Total current assets 6,772 5,714 ----------------Total assets 14,465 12,264 ---------------- LiabilitiesLoans and borrowings 380 97Trade and other payables 927 1,005Deferred income 380 188 ----------------Total current liabilities 1,687 1,290 ---------------- Loans and borrowings 367 77 Deferred income 2,098 2,212 ----------------Total non-current liabilities 2,465 2,289 ----------------Total liabilities 4,152 3,579 ----------------Net assets 10,313 8,685 ---------------- EquityShare capital 11,558 11,401Share premium 20,149 12,789Translation reserve 60 (17)Merger reserve 6,814 6,814Retained earnings (28,268) (22,302) ----------------Total equity attributable to equity holders of the company 10,313 8,685 ---------------- Consolidated statement of cash flows For the year ended 31 December 2007 Group Company 2007 2006 2007 2006 £000 £000 £000 £000 Cash flows from operating activitiesLoss for period (6,226) (6,256) (2,859)(11,801)Adjustments for:Depreciation 466 382 - -Amortisation of intangible assets 255 284 - -Foreign exchange movement (366) (16) - -Equity settled share based payment transactions 260 154 164 70Amortisation of grant income (188) (96) - -Development expenditure capitalised (57) - - -Net finance income (60) (193) (17) -Income tax income (883) - - - -------------------------------Operating loss before changes in working capital (6,799) (5,741) (2,712)(11,731) ------------------------------- (Increase)/decrease in inventories (213) 150 - -Decrease/(increase) in trade and other receivables 704 (3,241) (34) 11(Decrease)/increase in trade and other payables (78) 2,854 (117) 116Interest paid (80) (45) - -Interest received 140 238 17 -Income tax received 883 - - - -------------------------------Cash used by operations (5,443) (5,785) (2,846)(11,604) ------------------------------- Cash flows from investing activitiesInward investment grant received 2,667 - - -Acquisition of property, plant and equipment (1,007) (4,660) - -Acquisition of intangible assets (358) (17) - -Investment in new subsidiary - - - (1,029) -------------------------------Net cashflow from/(used in) investing activities 1,302 (4,677) - (1,029) ------------------------------- Cash flows from financing activitiesProceeds from issue of share capital 7,517 5,002 7,517 5,002Secured loan received 1,000 - 1,000 -Repayment of borrowings (330) - (330) -Repayment of finance leases (97) (262) - - -------------------------------Net cash from financing activities 8,090 4,740 8,187 5,002 ------------------------------- Net increase/(decrease) in cash and cash equivalents 3,949 (5,722) 5,341 (7,631)Cash and cash equivalents at start 2,344 8,066 522 8,153 -------------------------------Cash and cash equivalents at end 6,293 2,344 5,863 522 ------------------------------- Notes to the consolidated financial statements 1. Financial information This preliminary announcement was authorised by the Board on 28 February 2008 The financial information set out in this announcement for the years ended 31December 2007 and 2006 does not constitute the Group's statutory accounts forthese years within the meaning of Section 240 of the Companies Act 1985. Thestatutory accounts for 2006, which were prepared under UK GAAP, have beendelivered to the Registrar of Companies, and those for 2007, prepared underaccounting standards adopted by the EU will be delivered in due course. Theauditors have reported on those financial statements. The auditors' reports were(i) unqualified; (ii) did not include references to matters to which theauditors drew attention by way of emphasis without qualifying their reports; and(iii) did not contain statements under section 237(2) or (3) of the CompaniesAct 1985. 2. Basis of preparation The financial information set out in this announcement has been prepared on thehistorical cost basis and in accordance with International Financial ReportingStandards and their interpretations as adopted by the European Union ("adoptedIFRS"). 3. Significant accounting policies Intangible assets Research and development Expenditure on research activities, undertaken with the prospect of gaining newscientific or technical knowledge and understanding, is recognised in the incomestatement as incurred. Where a product is technically feasible, production and sale are intended, amarket exists and sufficient resources are available to complete the project,development costs are capitalised and amortised on a straight line basis overthe estimated useful life of the respective product. The Group believes itscurrent process for developing products is essentially completed when workingsamples are produced and available to ship which confirms technical feasibilityof the products to be manufactured and sold to the commercial marketplace. Whereno internally generated intangible asset can be recognised, developmentexpenditure is recognised as an expense in the period in which it occurs. 4. Loans and borrowings Group 2007 2006 £000 £000 Current liabilitiesCurrent portion of secured loan 330 -Current portion of finance lease liabilities 50 97 -------------- 380 97 -------------- Non-current liabilitiesSecured loan 340 -Finance lease liabilities 27 77 -------------- 367 77 -------------- Terms and debt repayment schedule The loan is secured over the assets of the Company and is repayable over thirtysix monthly instalments. 5. Loss per share Basic and diluted loss per share The calculation of basic loss per share at 31 December 2007 was based on theloss attributable to ordinary shareholders of £6,226,000 (2006: £6,256,000) anda weighted average number of ordinary shares outstanding during the year ended31 December 2007 of 47,397,000 (2006: 23,666,000), calculated as follows: Loss attributable to ordinary shareholders 2007 2006 £000 £000 Loss for the period (6,226) (6,256) -------------- Weighted average number of ordinary shares 2007 2006 000 000 Issued ordinary shares at 1 January 43,632 17,132Effect of shares issued in October 2006 - 6,534Effect of shares issued in October 2007 3,765 - --------------Weighted average number of ordinary shares at 31 December 47,397 23,666 -------------- At 31 December 2007 there were 3,897,990 (2006: 2,373,349) options outstandingwith an average exercise price of 10 pence (2006: 26 pence) which are notincluded in the calculation of diluted earnings per share because they areanti-dilutive at these dates. 6. Explanation of transition to IFRSs As stated in note 1, these are the Group's first consolidated financialstatements prepared in accordance with IFRSs. The following disclosures arerequired in the year of transition. The last financial statements under UK GAAPwere for the year ended 31 December 2006 and the date of transition to IFRSs wastherefore 1 January 2006. Reconciliation of equityGroup Effect of Effect of transition transition UK GAAP to IFRSs IFRSs UK GAAP to IFRSs IFRSs Note 1 January 2006 31 December 2006 £000 £000 £000 £000 £000 £000AssetsProperty, plant and equipment a 1,910 - 1,910 4,907 (77) 4,830Intangible assets a 423 - 423 1,643 77 1,720 ------------------------------------------------------------------Total non-current assets 2,333 - 2,333 6,550 - 6,550 ------------------------------------------------------------------Inventories 150 - 150 - - -Trade and other receivables 129 - 129 3,370 - 3,370Cash and cash equivalents 8,066 - 8,066 2,344 - 2,344 ------------------------------------------------------------------Total current assets 8,345 - 8,345 5,714 - 5,714 ------------------------------------------------------------------Total assets 10,678 - 10,678 12,264 - 12,264 ------------------------------------------------------------------ LiabilitiesInterest-bearing loans and borrowings - - - 77 - 77Deferred income - - - 2,400 - 2,400 ------------------------------------------------------------------Total non-current liabilities - - - 2,477 - 2,477 ------------------------------------------------------------------ Interest-bearing loans and borrowings 324 - 324 97 - 97Trade and other payables 552 - 552 1,005 - 1,005Provisions ------------------------------------------------------------------Total current liabilities 876 - 876 1,102 - 1,102 ------------------------------------------------------------------Total liabilities 876 - 876 3,579 - 3,579 ------------------------------------------------------------------Net assets 9,802 - 9,802 8,685 - 8,685 ------------------------------------------------------------------EquityIssued capital 11,136 - 11,136 11,401 - 11,401Share premium 8,052 - 8,052 12,789 - 12,789Reserves 6,814 - 6,814 6,814 - 6,814FX reserve - - - ( 17) - (17)Retained earnings (16,200) - (16,200) (22,302) - (22,302) ------------------------------------------------------------------Total equity 9,802 - 9,802 8,685 - 8,685 ------------------------------------------------------------------ Note to the reconciliation of equity a Computer software costs were capitalised as tangible fixed assets under UK GAAP. In accordance with IFRS computer software costs are capitalised as intangible assets. This resulted in the reclassification from property, plant and equipment to intangible assets. Reconciliation of profit for 2006 There are no differences between the Profit and Loss account as reported underUK GAAP and IFRSs for the company for the peroid ending 31 December 2006. Reconciliation of cash flows for 2006 There are no adjustments to the cash flow statements for the Group or for theCompany for the year ended 31 December 2006 as a result of the transition fromUK GAAP to IFRSs. This information is provided by RNS The company news service from the London Stock Exchange