MED.L Regulatory News (MED)

29 Sep 2005 07:03

MicroEmissive Displays Group PLC29 September 2005 MicroEmissive Displays Group plc ("MED") Results for the six months to 30 June 2005 29 September 2005, MicroEmissive Displays plc (MED or "the Company"), a designerand manufacturer of low power microdisplays using light emitting polymers forportable consumer electronics products, announces its interim results for theperiod to 30 June 2005. Highlights • Net cash of £10.3m at 30 June 2005 (30 June 2004: £1.5m) • Pre-Tax Loss £2.6m (H1 2004: £2.1m) • Fully diluted loss per share of 15.4p (H1 2004 loss per share: 27.3p) • Appointed Bill Miller, formerly Vice-President and General Manager, Motorola UK, as Chief Operating Officer • Production of first products to commence at the turn of the year • Progressing with design of robust second generation product incorporating new solution for volume manufacturing Commenting on the results, Bill Campbell, chief executive of MED said: "It hasbeen a challenging six months for us as we have sought to resolve allmanufacturing issues ahead of moving to volume production. We have taken sometough decisions at an early stage which will be beneficial for the Company inthe long term. The support and dedication shown by all our employees to achievethese goals has been tremendous. The market for our microdisplays based on low power light-emitting plasticscontinues to expand rapidly. The interest in our technology still remainsstrong. We will be commencing limited production of our current product at theturn of the year and are working diligently to engineer MED's products for thestart-up of volume manufacturing." Enquiries MicroEmissive Displays Group plcBill Campbell CEO, Alan Bennie CFO +44 (0) 131 650 7764 Corfin CommunicationsHarry Chathli/Neil Thapar +44 (0) 207 929 8989 Chairman's Statement Overview The first six months of the year have been challenging as the Company begins thedifficult task of transitioning from pre-production of microdisplays to volumemanufacturing of its products that are designed for use in a wide range ofportable consumer electronics such as digital cameras, optical devices andultimately, mobile handsets. As highlighted in the trading statement of 3 June,the Company sought to review its display manufacturing process aftermanufacturing yields came in below our internal targets as we stepped up volume.Such problems are not uncommon where a pioneering new technology such as MED'sis moved to full commercial development. We have made considerable progress inresolving these issues over the past three months and our review has led to theidentification of a solution in which we have a high degree of confidence. Design of second generation display The preferred solution is now in the process of being incorporated into ourdesigns and is expected to result in the required specification withoutsacrificing image quality, thereby improving yields. Our confidence in thissolution has enabled us to push ahead with the design of a second generationdisplay. This process is well under way and the display is anticipated to beavailable for sample in late Q4 2006. Manufacture of this display will beintroduced at the volume manufacturing facility with availability in productionvolumes anticipated from first half of 2007. Review of manufacturing facility in Edinburgh Following the appointment in July 2004 of Bill Miller as MED's chief operatingofficer from Motorola's UK semiconductor operations, we have also re-examinedour manufacturing facility in Edinburgh. Our conclusion is that this facilitywill not be appropriate for volume manufacture of camera electronic viewfinderdisplays, our most important target market initially. Upgrading the facilitywill also be uneconomic given the additional steps necessary to improve thelevel of performance required for camera displays. Hence our plan is that allvolume manufacturing will be done in Asia. However, we intend to continuelimited manufacturing of our existing displays in Edinburgh for some productapplications and to support some process development for our second generationdisplay. Although these developments resulted in a delay to initial product shipmentsyour board considers that the implementation of these changes was betteraddressed at this time rather than when we were committed to volume production.We expect to be in a position to commence production at the turn of the year,albeit in limited quantities. Market Opportunity The key markets where we see huge potential for MED's microdisplays based onlight-emitting polymers continues to enjoy strong growth. During the first halfwe saw major electronic manufacturers introduce increasingly sophisticated,portable products into the camera, gaming, headset viewer and toy sectors. Ourtechnology is relevant to all these segments as it represents the nextgeneration of microdisplay, offering better image quality, lower batteryconsumption and lower end-product cost . These are advantages that areincreasingly important as consumer electronics makers introduce ever greaterlevel of functionality and miniaturisation. Outlook The Company continues to maintain a tight control on costs and will continue toimplement cost reduction measures. We finished the half year with £10.3m cash inthe bank, compared with £1.5m in the corresponding period last year. Lookingahead the challenge will be to ensure the development of the business does notoutstrip the available resource. Our strategy makes due allowance for this andwe will monitor such aspects constantly as the company develops. The market for our microdisplays continues to expand rapidly. The interest inour technology still remains strong. We will be commencing limited production ofour current product by the turn of the year and working diligently to engineerMED's products for the start-up of volume manufacturing thereafter. Consolidated profit and loss account For the 6 months to 30 June 2005 Note 6 months to 6 months to Year to 31 30 June 30 June December 2005 2004 2004 Unaudited Unaudited Audited £000 £000 £000 Turnover - 5 12 Administrative expenses (2,993) (2,025) (4,478)Other operating income 107 52 158 -------- -------- --------Operating loss (2,886) (1,968) (4,308) Interest receivable andsimilar income 321 13 36Interest payable and similarcharges (78) (98) (187) -------- -------- --------Loss on ordinary activitiesbefore taxation (2,643) (2,053) (4,459)Tax on loss on ordinary - - -activities -------- -------- --------Loss on ordinary activitiesafter taxation (2,643) (2,053) (4,459) Net additional finance costson non equity shares - (193) - -------- -------- --------Retained loss for the period (2,643) (2,246) (4,459) ======== ======== ======== Loss per ordinary share 3Basic and diluted loss pershare 15.4p 27.3p 56.7p ======== ======== ======== There are no recognised gains or losses other than the loss for the current andpreceding financial periods and, accordingly, no separate statement of totalrecognised gains and losses has been presented. Consolidated balance sheetat 30 June 2005 As at 30 June As at 30 June As at 31 2005 2004 December 2004 Unaudited Unaudited Audited Note £000 £000 £000 £000 £000 £000 Fixed assetsIntangible assets 2,025 1,801 2,129Tangible assets 693 1,134 932 ------- ------- ------- 2,718 2,935 3,061Current assetsStock 296 332 235Debtors 227 143 504Cash at bank andin hand 10,313 1,511 12,678 ------ ------- ------- 10,836 1,986 13,417Creditors: amountsfalling due withinone year (1,205) (1,485) (1,116) ------ ------- ------- Net current assets 9,631 501 12,301 ------- ------- ------- Total assets lesscurrent liabilities 12,349 3,436 15,362 Creditors: amountsfalling due aftermore than one year (8) (692) (378) ------- ------- -------Net assets 12,341 2,744 14,984 ======= ======= ======= Capital and reservesCalled up sharecapital 11,135 6,794 11,135Share premiumaccount 4 8,052 4,562 8,052Merger reserve 4 6,814 - 6,814Other reserves - 556 -Profit and lossaccount 4 (13,660) (9,168) (11,017) ------- ------- -------Shareholders'funds - equity 12,341 2,744 14,984 ======= ======= ======= Consolidated cash flow statementFor the 6 months to 30 June 2005 6 months to 30 6 months to 30 Year to 31 December June 2005 June 2004 2004 Unaudited Unaudited Audited Note £000 £000 £000 Cash flowstatement Cash outflowfrom operatingactivities 5 (2,241) (2,129) (4,513) Returns oninvestmentsand servicingof finance 243 (85) (151) Capitalexpenditure (117) (222) (829) ------- -------- -------Cash outflowbeforefinancing (2,115) (2,436) (5,493) Financing (250) 2,712 16,936 ------- -------- -------(Decrease)/increasein cash inthe period (2,365) 276 11,443 ======= ======== ======= Reconciliationof net cashflow tomovement innet funds 6 (Decrease)/increasein cash inthe period (2,365) 276 11,443 Change in debtresulting fromcash flows 358 (52) 476 ------- -------- -------Movement innet funds inthe period (2,007) 224 11,919 Net funds/(debt)at the startof the period 11,691 (228) (228) ------- -------- -------Net funds/(debt)at the end ofthe period 9,684 (4) 11,691 ======= ======== ======= Notes to the accounts: 1. The interim financial information has been prepared on the basis ofaccounting policies consistent with those applied in the accounts for the yearended 31 December 2004. The information is unaudited and does not comprise thestatutory accounts of the group. The statutory accounts of MicroEmissiveDisplays Group plc for the year ended 31 December 2004 have been filed with theregistrar of companies. KPMG Audit Plc have reported on the statutory accounts;their report was unqualified and did not contain any statement under section 237 of the Companies Act 1985. 2. This report was approved by the board of directors on 29 September 2005. 3. Loss per share Loss per share is calculated as follows: Six months Six months Year to to to 30 June 30 June 31 December 2005 2004 2004 £000 £000 £000 Net loss for the financial period (2,643) (2,043) (4,459) ======== ======== ========= Number Number Number Weighted average number ofordinary shares 17,131,705 7,476,888 7,862,147 ======== ======== ========= Basic and diluted loss per share 15.4p 27.3p 56.7p ======== ======== ========= 4. Share premium and reserves Share Merger Profit & Loss Premium Account reserve Account £000 £000 £000At beginning of period 8,052 6,814 (11,017)Retained loss for period - - (2,643) --------- -------- ---------At end of period 8,052 6,814 (13,660) ========= ======== ========= 5. Reconciliation of operating loss to operating cash flows Six months Six months Year to to 30 June to 30 June 31 December 2005 2004 2004 £000 £000 £000 Operating loss (2,886) (1,968) (4,308)Depreciation and amortisation 460 425 923Government grants (107) (52) (157)Gain on disposal of fixed assets - - (17)(Increase)/decrease in stocks (61) (332) (236)(Increase)/decrease in debtors 277 (3) (364)(Decrease)/increase in creditors 76 (199) (354) --------- -------- ---------Net cashoutflow fromoperating activities (2,241) (2,129) (4,513) ========= ======== ========= 6. Analysis of net funds At 1 Cash At 30 January flow June 2005 2005 £000 £000 £000 Cash in hand and at bank 12,678 (2,365) 10,313Debt due after one year (22) 22 -Debt due within one year (54) 54 - Finance leases (911) 282 (629) -------- ------- --------Total 11,691 (2,007) 9,684 ======== ======= ======== This information is provided by RNS The company news service from the London Stock Exchange