Sabien Tech. Regulatory News (SNT)

14 Feb 2008 07:01

Sabien Technology Group PLC14 February 2008 14th February 2008 Sabien Technology Group Plc Unaudited interim results for the period to 31 December 2007 Sabien Technology Group is pleased to announce its interim results for theperiod to 31 December 2007 Highlights: July - Dec 2007 • New orders won including Deutsche Bank and O2• Continued sales of M2G to The Royal Bank of Scotland Group• Significant new customer pipeline• Project 10 pilots commenced• First sale of M3G achieved in UK• Overseas distributors have successfully carried out their first installations of M2G in Italy and China respectively Highlights: Jan 2008 - • Orders received for £42,550 from DEFRA and The Institution of Civil Engineers Commenting on the results, Dr Clive Morton O.B.E., non-executive Chairman, said: "Since being admitted to AIM, Sabien has been building its sales pipeline and webelieve it is now well placed to becoming a significant player in the UK energyefficiency sector. The Group is continuing to win and invest in new business for its M2G and M3Gproducts and the benefits of this are being seen in the positive level ofinterest and the high number of quotations being produced for prospects. Revenues for the 6 months under review are slightly behind (£79K) those of theequivalent period for last year; however we are experiencing increased interestand orders in our product range sufficient to deliver higher levels of turnoverthan in the first half. Therefore the Board remains confident that the full yearresult will demonstrate growth over the year as a whole." Alan O'Brien, Chief Executive Officer, said: "The Group has made good progress over the period and we are seeing a consistentflow of new sales and sales enquiries for our products, both in the UK andinternationally through our distributors. Our new customer pipeline has grownsignificantly over the period as we continue to target multiple siteorganisations." For further information: Sabien Technology Group plc 020 7993 3700Alan O'Brien - Chief Executive OfficerGus Orchard Finance Director Arbuthnot Securities (NOMAD) 020 7012 2000Antonio Bossi Madano Partnership (Financial PR Advisers) 020 7593 4000Mark Way/Matthew Moth CHIEF EXECUTIVE OFFICER'S REPORT Sales Performance: • Sales during the period were £500,000 which resulted in a loss before tax of £347,000 which was in line with internal forecasts. Cash at the end of the period was £1.9 million (£2.1 million at 30 June 2007). • During the period the Group has won a number of new orders for M2G from both existing customers such as Royal Bank of Scotland and new customers including Deutsche Bank and O2. • The O2 pilot scheme alone had an average energy saving of over 20% saving a total over the period of 174 tonnes of CO2, equivalent to 47 tonnes of carbon. • We are quoting for new business with a value on average of £250k to £300k a month. Client evaluation orders range from 5 to 10 M2G units initially, although these are expected to convert to significant commercial orders over the next four to seven months. • Orders received for the period since 1 January 2008 of £42,550 from DEFRA and The Institution of Civil Engineers. • We have now delivered over 1,250 M2G units in total to RBS illustrating our competence at selling and project managing our technology into large multi-site organisations. • The first sales of the M3G air conditioning controller have been achieved. With the cooling season approaching, there is a growing interest in this product from existing and potential customers. • We are now working with some of the UK's leading Facility Management and Carbon Management Consultancies, who are promoting M2G and our air conditioning product, M3G, as part of their energy efficiency solution to their clients. • The first pilot installations of M2G in overseas territories have been achieved in Italy and China and we are in discussions to establish M2G and M3G distribution networks in North America and Europe Project 10 Our Project 10 pilots are well under way and the results will be known over thecourse of the next few months. Preliminary indications show that satisfactorysavings are already being achieved. The combined sales potential across allparticipating clients is estimated to be worth over £30 million for a fullrollout across their multi- site offices and buildings. Sabien is perfectly placed to exploit increased customer demand for reductionsin their energy bills while adhering to their corporate and socialresponsibility. Gas prices in Europe have quadrupled over the last 6 yearsshortening client payback periods and protecting our overall gross margin.Sabien Technology does not require government support or feed in tariffs todeliver positive economic returns to its customers and in today's tough spendingenvironment we remain confident about the future prospects for our business. Welook forward to reporting further progress over the coming year. About Sabien Technology * Sabien (AIM: SNT) is focused on the manufacture and sale of M2G and M3G energysaving devices which are proven to reduce energy consumption on commercialboilers and air conditioning units by up to 35%. * Sabien was set up in 2004 to commercialise M2G, an energy saving technologywhich reduces gas consumption used in commercial boilers. In September 2007,Sabien launched M3G which reduces electricity consumption in commercialair-conditioning units. Both M2G and M3G are proven to reduce carbon and energyconsumption by up to 35% with typical pay back in fewer than two years. * With interest in 'green issues' being at an all time high for private andpublic organisations, the need to achieve both financial savings as well as animproved environmental profile is becoming increasingly important in theBoardrooms of UK PLC. * Rising energy prices also create a more immediate imperative to reduce energyconsumption and cut energy costs. The urgency to seek new solutions is mostdefinitely a growing feature of the market and consequently companies arebeginning to implement energy strategies to meet challenging energy reductiontargets. * A number of customers are already using M2G including the Royal Bank ofScotland Group, Ford Motor Company, Bank of England, Institution of MechanicalEngineers, Investec Bank and an NHS Trust. The M2G is Carbon Trust approved andqualifies for the Enhanced Capital Allowance Scheme. Unaudited Condensed Group Income Statement for the period ended 31 December 2007 Notes 6 months to 31 6 months to 31 Year to December 2007 December 2006 30 June 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Revenue 500 579 632Cost of Sales (108) (194) (147)Gross Profit 392 385 485 Other income 60 4 69Distribution costs (122) (25) (52)Administrative expenses (600) (399) (1,082)Finance costs (77) (103) (167)Loss before tax (347) (138) (747) Corporation tax recovery - - 2Loss for the period attributable to (347) (138) (745)equity holders of the parent company Loss per share in pence - basic and 2 (1.3p) (1.9p) (2.8p)diluted Unaudited Condensed Group Balance Sheet Notes 31 December 31 December 2007 2006 30 June 2007 Unaudited Unaudited Audited £'000 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 49 15 47Other intangible assets 2,444 2,577 2,511 2,493 2,592 2,558 Current assetsInventories 130 13 71Trade receivables 82 212 28Other current assets 100 63 121Cash and cash equivalents 1,909 3,042 2,148 2,221 3,330 2,368 Current liabilitiesTrade and other payables 106 420 39Short term provisions 193 277 183Total current liabilities 299 697 222 Non-current liabilitiesLong-term borrowings 437 408 422Long-term provisions 2,035 1,926 2,002Total non-current liabilities 2,472 2,334 2,424 Net assets 1,943 2,891 2,280 SHAREHOLDERS' EQUITYEquity attributable to equity holders of the parentShare capital 3 1,329 1,329 1,329Other reserves 1,611 1,604 1,601Retained earnings/(losses) (997) (42) (650)Total equity 1,943 2,891 2,280 Condensed Cash Flow statement 6 months to 6 months To Year To Notes 31 December 31 December 30 June 2007 2006 2007 £'000 £'000 £'000Cash flows from operating activitiesLoss before taxation (347) (138) (747)Adjustments for:Depreciation and amortisation 74 75 148Investment income (60) (4) (69)Interest expense 77 103 167Share based payments 10 - 104Increase in trade and other receivables (33) (254) (128)Increase in inventories (59) 59 1Increase in trade and other payables 78 273 (166)Net cash from operating activities (260) 114 (690) Cash flows from investing activitiesPurchase of property, plant and equipment (9) (14) (53)and intangible assetsFinance income 60 4 69Net cash used in investing activities 51 (10) 16 Cash flow from financing activitiesProceeds from issue of share capital - 2,841 2,826(Repayment of) long term borrowings (30) 21 (80)Net cash from financing activities (30) 2,862 2,746 Net (decrease)/increase in cash and cash equivalents (239) 2,966 2,072Cash and cash equivalents at beginning of period 2,148 76 76Cash and cash equivalents at end of period 1,909 3,042 2,148 Condensed Consolidated Statement of Changes in Equity Share Share Merger Shares to Share based Retained Total Capital Premium Reserve be issued payment Earnings Equity reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2006 1,021 - (1,021) - - 95 95 Loss for the period - - - - - (137) (137)Issue of share capital - - 250 - - - 250on mergerIssue of share capital 308 2,892 - - - - 3,200on mergerShare issue costs - (609) - - - - (609)Convertible loan - - - - 92 - - 92shares to be issued Balance at 31 December 1,329 2,283 (771) 92 - (42) 2,8912006 Loss for the period - - - - - (608) (608)Share issue costs - (15) - - - - (15)Employee share option - - - - 12 - 12scheme - value ofservices provided Balance at 1 July 2007 1,329 2,268 (771) 92 12 (650) 2,280 Loss for the period - - - - - (347) (347)Employee share option - - - - 10 - 10scheme - value ofservices provided Balance at 31 December 1,329 2,268 (771) 92 22 (997) 1,9432007 Notes to the Financial Statements 1. Basis of Preparation of Financial Information The interim financial information has not been audited or reviewed by theauditors and does not constitute statutory accounts for the purpose of Section240 of the Companies Act 1985. The financial information in this document has been prepared using accountingprinciples generally accepted under International Financial Reporting Standardsand is consistent with those used in the preparation of the most recent annualfinancial statements. The following significant principal accounting policies have been usedconsistently in the preparation of the consolidated financial information of theGroup. a) Basis of consolidation: The condensed consolidated balance sheet and income statement includes thefinancial statements of the Company and its subsidiaries at 31 December 2007.The complete consolidated financial statements incorporate the financialstatements of the Company and entities controlled by the Company (itssubsidiaries) made up to 30 June each year. Control is achieved where theCompany has the power to govern the financial and operating policies of aninvestee entity so as to obtain benefits from its activities. Except as noted below, the financial information of subsidiaries is included inthe consolidated financial statements using the acquisition method ofaccounting. On the date of acquisition the assets and liabilities of therelevant subsidiaries are measured at their fair values. All intra-Group transactions, balances, income and expenses are eliminated onconsolidation. Accounting for the Company's acquisition of the controlling interest in SabienTechnology Limited: The Company's controlling interest in its directly heldsubsidiary, Sabien Technology Limited, was acquired through a transaction undercommon control, as defined in IFRS 3 Business Combinations. The Directors notethat transactions under common control are outside the scope of IFRS 3 and thatthere is no guidance elsewhere in IFRS covering such transactions. IFRS contain specific guidance to be followed where a transaction falls outsidethe scope of IFRS. This guidance is included at paragraphs 10 to 12 of IAS 8Accounting Policies, Changes in Accounting Estimates and Errors. This requires,inter alia, that where IFRS does not include guidance for a particular issue,the Directors may also consider the most recent pronouncements of other standardsetting bodies that use a similar conceptual framework to develop accountingstandards. In this regard, it is noted that the UK standard FRS 6 addresses thequestion of business combinations under common control. In contrast to IFRS 3, FRS 6 sets out accounting guidance for transactions undercommon control which, as with IFRS 3, are outside the scope of that accountingstandard. The guidance contained in FRS 6 indicates that merger accounting maybe used when accounting for transactions under common control. Having considered the requirements of IAS 8, and the guidance included in FRS 6,it is considered appropriate to use a form of accounting which is similar topooling of interest when dealing with the transaction in which the Companyacquired its controlling interest in Sabien Technology Limited. In consequence, the Consolidated Financial Statements for Sabien TechnologyGroup Plc report the result of operations for the year as though the acquisitionof its controlling interest through a transaction under common control hadoccurred at 1 October 2005. The effect of intercompany transactions has beeneliminated in determining the results of operations for the year prior toacquisition of the controlling interest, meaning that those results are onsubstantially the same basis as the results of operations for the year after theacquisition of the controlling interest. Similarly, the consolidated balance sheet and other financial information havebeen presented as though the assets and liabilities of the combining entitieshad been transferred at 1 October 2005. The Group has taken advantage of section 131 of the Companies Act 1985 and hasdebited the difference arising on the merger with Sabien Technology Limited to amerger reserve. Seasonality: The business of the Group is not seasonal and there are nosubstantial and recurring variations between the results in the firsthalf-yearly period compared to the second half-year. b) Fixed asset investments Fixed assets investments are stated at cost less any provision for impairment invalue. c) Deferred consideration Deferred consideration is discounted from the anticipated settlement date at theGroup's weighted average cost of capital. d) Compound financial instruments Compound financial instruments issued by the Group comprise convertible loannotes. The liability component of the instrument is initially recorded at thefair value of a similar instrument which does not have an equity component. Thedifference between the net proceeds and the fair value is recorded as the equitycomponent and recognised directly in equity. Subsequent to initial recognition,the liability component is measured at amortised cost using the effectiveinterest method and the amortisation charge arising recorded in the profit andloss for the period 2. Earnings per share (EPS) The calculation of the basic earnings per share is based on the earningsattributable to the ordinary shareholders, divided by the weighted averagenumber of shares in issue in the period. Due to the loss incurred in the period under review, the dilutive securitieshave no effect as at 31 December 2007. 6 months ended 6 months ended Year to 30 June 31 December 2007 31 December 2006 2007 £'000 £'000 £'000 Earnings for the period (347) (138) (745) Weighted average number of shares in issue 26,570,511 7,318,392 26,570,511 Earnings per share - basic (1.3p) (1.9p) (2.8p) 3. Share capital The Company's authorised and issued ordinary share capital, at the date of thisBalance Sheet is: Amount Number of Ordinary Shares Authorised £2,500,000 50,000,000Issued and fully paid £1,328,526 26,570,511 4. Seasonality The business of the Group is not seasonal and there are no substantial andrecurring variations between the results in the first half-yearly periodcompared to the second half-year. This information is provided by RNS The company news service from the London Stock Exchange