MED.L Regulatory News (MED)

22 Feb 2006 07:01

MicroEmissive Displays Group PLC22 February 2006 Embargoed until 7am 22 February 2006 MicroEmissive Displays Group plc ("MED", "the Group" or "the Company") Preliminary Results For the full year ended 31 December 2005 MicroEmissive Displays Group plc is a designer and manufacturer of low-powerlight emitting polymer displays, which can be used in visual display headsets,night vision scopes, cameras and mobile phones. The Company floated on AIM inNovember 2004. HIGHLIGHTS • Appointment of new Chief Executive and Finance Director • Shipment of first tranche of volume order completed in December • Significant improvement in display manufacturing yields • In discussions with large manufacturers for product development opportunities • Cash balance of £8m at year end • EyescreenTM - officially launched at 3GSM, February 2006 Chief Executive of MED, Bill Miller, commented: "Since becoming CEO in October last year I have instigated a number of steps toreorganise our activities and put the business on a stronger footing. "We have reorganised our management structure culminating in the appointment ofGraeme Walker as Finance Director. As a former colleague, I am particularlyexcited about the opportunity of working closely with him again and I am pleasedthat MED will be able to benefit from his broad industry experience. Inaddition, significant senior appointments have been made in sales and marketing,as well as key technical areas. "We have worked hard to improve the yield from our manufacturing process andhave made significant progress. We have thoroughly analysed the process andimplemented significant changes to overhaul it. We continue to seek ways ofputting in place longer term volume manufacturing arrangements. "I am greatly encouraged by the interest shown in our technology and have beenactively supporting the Company's sales and marketing efforts both in Europe andthe Far East. The recent 3GSM conference in Barcelona gave MED an excellentplatform to showcase its innovative eyescreenTM technology to a substantialaudience and I remain confident of the Company's future prospects." Embargoed until 7am 22 February 2006 MicroEmissive Displays Group plc ("MED", "the Group" or "the Company") Preliminary Results For the full year ended 31 December 2005 Chairman's Statement It is my pleasure to report my first set of preliminary results as Chairman ofMED and I wish to express my delight in welcoming to the Board, Bill Miller asChief Executive and, from April, Graeme Walker as Finance Director. I also wishto thank Alan Bennie, who resigned as FD in October and Bill Campbell, whoresigned as Chief Executive in January, for their contribution to the business. The year to 31 December has been a challenging, yet rewarding, one for theCompany. We have seen a significant improvement in our manufacturing yields,culminating in December with the shipment of our first volume order. The Group recently saw its innovative technology rewarded by winning theEmerging Technology category in the Institute of Electrical Engineering (IEE) -"Innovation in Engineering Awards 2005". The IEE awards are considered theglobal benchmark for recognising and rewarding innovative organisations. Othercategory winners in 2005 included BT Research and Qinetiq, highlighting thegrowing strength of MED's business. Operational Review Our superior micro display technology eyescreenTM - is now being used by ourfirst customer in its nightscope product. Early feedback indicates that thequality and low power requirements of the product provide a significantcompetitive advantage. The progress made in manufacturing yield over the period has been significant.Difficulties in this area have constrained the business in the past. Consistentimprovement is anticipated going forward and we expect to see furtherimprovement as we scale up production. The Board continues to explore a number of opportunities to secure appropriatelong-term manufacturing arrangements. This strategy will allow the Company to retain control over the move to volume manufacturing, as it continues to move up the manufacturing yield learning curve, and benefit from the potential upside in the medium term. The Group's primary business focus continues to meet the requirements of itsexisting customer and we are confident of meeting those of new customers. In theshort term, we are successfully targeting manufacturers of a range ofapplications, such as night vision scopes, for which we have begun to seeresults. We are currently shipping evaluation samples upon request to anincreasing number of potential customers and we believe there is a definitegrowing awareness for our product as a technology to rival traditional displaytechnologies. Our micro displays offer low powered, cost competitive alternative displaytechnology, which we believe will begin to replace existing products in themarket. As part of our longer term strategy, we are currently in early stagetalks with blue chip OEMs in the US and Japan, to discuss application andtechnology development opportunities. We are currently developing our next generation technology, which is on targetto launch in early 2007. We expect to deliver significant improvements in theoperational life of the product which we believe will accelerate the evaluationprocess of the OEMs. We continue to protect our investment in our intellectualproperty by pursuing all relevant patent opportunities. Within the next 18 months we believe we will have secured sufficientmanufacturing capabilities to make tier one companies our primary target forhigh end products. We are also looking to establish MED as a leading enablingtechnology company, as we begin to explore new routes to market, such as theimage display headset. In preparation for the next phase of MED's development, during the last sixmonths we have focused on changing our employee skill-set, and we have hired keypersonnel with relevant industry experience from a number of blue chipcompanies. The first half of 2006 will see us concentrate on ramping up oursales and marketing resource. The Group has recently returned from a very successful week at the 3GSM industryconference in Barcelona, where we officially launched our unique eyescreenTMtechnology. Our micro display was hailed as one of the hot products of the showand a range of content, including TV clips, cartoons and football matchhighlights, was demonstrated for the first time. Interest in eyescreenTM was strong and our team in Barcelona met with US andEuropean mobile device manufacturers, content owners, as well as mobileoperators, at a senior level, to discuss how best to utilise the eyescreenTM fortheir own products and services. Management As mentioned, Bill Miller joined the Company as Chief Operating Officer in Julyand in October he became Chief Executive. Bill was formerly Vice President,Motorola Semiconductors UK, where he ran the Company's UK semi-conductoroperations. Bill later became a Director of Freescale Semiconductors. Last week we announced that Graeme Walker is due to join the Company as FinanceDirector in April. Graeme, who has worked closely in the past with Bill atFreescale, will work with the Board to map out the Company's journey to volumemanufacturing and in the structuring of deals with potential manufacturingpartners. Financials Turnover for the period was £5,911 (2004: £12,443), with the overall loss forthe year at £5.18m (2004: £4.46m), up £0.72m as a result of continued productdevelopment and an increase in volume production. The Company received £234,053(2004: £157,551) from grants, and interest receivable was at £534,110 (2004:£36,229). Operating expenses were up £1.35m to £5.83m (2004: £4.48m), due to theCompany moving towards volume production. Cash at 31 December 2005 was £8.07m (2004: £12.68m), a £4.61m reduction over theyear. Outlook The Group continues to make exciting progress with its technology. Investmenthas been made into refining the manufacturing process during the period, whichwill continue going forward. The Board is confident that the ambitions set atflotation are still achievable, although the strategy continues to be refined. The shipment of the first tranche of our first volume order was a key milestonein our plans to reach full-scale volume manufacturing and has resulted inincreased awareness of our micro display product. Since December, we have had anumber of enquiries from companies operating in a wide range of markets and haveshipped evaluation samples for testing. In the longer term, it is the Group's strategy to secure appropriate externaldisplay manufacturing capabilities, retaining only a research and developmentoperation in Edinburgh, Scotland. The move will offer significant costadvantages and we hope to have achieved this by Q1 2007. The Board is currently considering a number of options in this regard. There have been key developments during the period and the Company has takenimportant steps towards the commercialisation of its technology. We are lookingforward to the future with optimism. Finally, we have seen an outstanding contribution in 2005 from the staff at MEDand I would like to take this opportunity to thank each of them for theircontinued commitment to the business. Christopher SmithChairman For further information, please contact: MicroEmissive Displays 0131 650 7764Bill Miller, Chief Executive Tavistock Communications 020 7920 3150Christian Taylor-WilkinsonMatt Ridsdale Consolidated profit and loss accountfor the year ended 31 December 2005 Note 2005 2004 £ £ Turnover 5,911 12,443 Administrative expenses (5,826,160) (4,478,535)Other operating income 234,053 157,551 -----------------------------Operating loss (5,586,196) (4,308,541) Other interest receivableand similar income 534,110 36,229Interest payable and similar charges (129,929) (187,637) ----------------------------- Loss on ordinary activities before taxation (5,182,015) (4,459,949)Tax on loss on ordinary activities - - ----------------------------- Retained loss for the yearfor equity shareholders (5,182,015) (4,459,949) ============================= Loss per ordinary shareBasic and diluted loss per share 3 30.2p 56.7p ============================= There are no recognised gains or losses other than the loss for the current andpreceding financial years. Turnover and loss on ordinary activities before taxation for the current andprevious year relate wholly to continuing activities. Consolidated balance sheetat 31 December 2005 Note 2005 2004 £ £ Fixed assetsIntangible assets 1,910,039 2,129,191Tangible assets 422,543 931,629 ----------------------------- 2,332,582 3,060,820 ----------------------------- Current assetsStocks 149,940 235,500Debtors 129,007 503,944Cash at bank and in hand 8,066,034 12,678,024 ----------------------------- 8,344,981 13,417,468 Creditors: amounts falling due within one year (875,190) (1,116,588) -----------------------------Net current assets 7,469,791 12,300,880 ----------------------------- Total assets less current liabilities 9,802,373 15,361,700 Creditors: amounts falling due aftermore than one year - (377,930) ----------------------------- Net assets 9,802,373 14,983,770 ============================= Capital and reservesCalled up share capital 4 11,135,934 11,135,524Share premium account 5 8,052,201 8,051,993Merger reserve 5 6,814,164 6,814,164Profit and loss account 5 (16,199,926) (11,017,911) ----------------------------- Shareholders' funds - equity 9,802,373 14,983,770 ============================= Consolidated cash flow statementfor the year ended 31 December 2005 Note 2005 2004 £ £ Cash flow statement Cash outflow from operating activities 6 (4,415,740) (4,512,970) Returns on investments and servicing of finance 404,181 (151,408)Capital expenditure (172,009) (829,098) -----------------------------Cash outflow before financing (4,183,568) (5,493,476) Financing (428,422) 16,936,903 -----------------------------(Decrease)/increase in cash in the year (4,611,990) 11,443,427 Reconciliation of net cash flowto movement in net funds (Decrease)/increase in cash in the year (4,611,990) 11,443,427 Change in net debt resulting from cash flows 663,093 475,387 ----------------------------- Movement in net funds in the year (3,948,897) 11,918,814Net funds/(debt) at the start of the year 11,690,705 (228,109) -----------------------------Net funds at the end of the year 7 7,741,808 11,690,705 ============================= Notes to the accounts: 1. Basis of preparation The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 December 2005. 2. Financial information The financial information set out above in respect of the years ended 31 December 2005 and 31 December 2004 does not constitute the group's financial statements for those periods but has been derived from the audited statutory accounts for those years. Statutory accounts for the year ended 31 December 2004 have been delivered to the Registrar of Companies and those for the year ended 31 December 2005 will be delivered to the Registrar of Companies following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. 3. Loss per share Loss per share is calculated as follows: 2005 2004 Net loss for the financial period (£) (5,182,015) (4,459,949) ----------------------------- Weighted average number of ordinary shares 17,132,015 7,862,147 ----------------------------- Basic and diluted loss per share (pence) 30.2p 56.7p ============================= 4. Called up share capital 2005 2004 Number £ Number £AuthorisedOrdinary share of £0.65 each 29,000,000 18,850,000 29,000,000 18,850,000 ================================================ Allotted, called up and fully paidOrdinary shares of £0.65 each 17,132,206 11,135,934 17,131,575 11,135,524 ================================================ 5. Share premium and reserves Share Merger Profit premium reserve and loss account account £ £ £ At beginning of year 8,051,993 6,814,164 (11,017,911)Retained loss for the year - - (5,182,015)Premium on share issues less expenses 208 - - ----------------------------------- At end of year 8,052,201 6,814,164 (16,199,926) =================================== 6. Reconciliation of operating loss to operating cash flows 2005 2004 £ £ Operating loss (5,586,196) (4,308,541)Depreciation and amortisation 900,247 923,346Government grants (234,053) (157,551)Gain on disposal of fixed assets - (17,110)Decrease/(increase) in stocks 85,560 (235,500)Decrease/(increase) in debtors 374,937 (363,759)Increase/(decrease) in creditors 43,765 (353,855) ---------------------------------Net cash outflow from operating activities (4,415,740) (4,512,970) ================================= 7. Analysis of net funds At beginning At end of of year Cash flow Year £ £ £ Cash in hand, at bank 12,678,024 (4,611,990) 8,066,034 ---------------------------------------Debt due within one year (22,222) 22,222 -Debt due after one year (53,704) 53,704 -Finance leases (911,393) 587,167 (324,226) --------------------------------------- (987,319) 663,093 (324,226) ---------------------------------------Total 11,690,705 (3,948,897) 7,741,808 ======================================= This information is provided by RNS The company news service from the London Stock Exchange