Symphony Env. Regulatory News (SYM)

30 Sep 2005 07:00

Symphony Plastic Technologies PLC30 September 2005 For Immediate Release 30 September 2005 SYMPHONY PLASTIC TECHNOLOGIES PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 Symphony Plastic Technologies plc ("Symphony" or "the Group"), the degradableplastics company, announces its interim results for the six months ended 30 June2005. HIGHLIGHTS • Sales up 11% to £4.95 million (2004: £4.45 million) • Gross profits stable at £1.00 million (2004: £1.05 million) • Loss before tax of £0.30m (2004 loss: £0.08m) • Fundamental strategy review completed Commenting on the results, Nirj Deva, Chairman of Symphony, said: "The trading results reflect limited progress in sales and the adverse effectsof exceptional raw material price fluctuations. Whilst many exciting andsignificant prospects continue to develop, the Board is not satisfied with theslow rate at which actual sales and margins have been growing. The conclusion ofthe Somerfield contract has added to the significance of this. The Boardtherefore has undertaken a thorough and fundamental review of our strategy and,as a result, some material changes are now being implemented. We remainconfident that considerable potential exists in the fast growing environmentalpolymers market and that the foundations which have been laid to date willprovide a solid base on which the Company will be able to build." For further information, please contact: SymphonyMichael Laurier, CEO Tel: 020 8207 5900Ian Bristow, FD Citigate Dewe RogersonPatrick Toyne-Sewell/ Ged Brumby Tel: 020 7638 9571 Notes to Editors Symphony develops and supplies environmentally responsible plastic packagingproducts and additives which are distributed both in the UK and internationally.The Group's main technology, d2w(R), allows plastic to degrade totally andsafely, leaving only water, a minimal amount of carbon dioxide and trace amountsof non-toxic biomass. The current d2w(R) product range now includes additives,carrier bags, refuse and waste sacks, mailing wrap, stretch film, aprons, andpackaging films. Symphony has a diverse customer base in the UK and a growing overseasdistribution network. Further information on Symphony can be found atwww.symphonyplastics.com and product information at www.degradable.net. CHIEF EXECUTIVE'S REVIEW The initial six months of 2005 saw continued volatility in raw material prices.In most cases we were successfully able to pass these increases on to ourcustomers albeit on a staggered basis, thus resulting in a reduction of margins.During the period the Group increased its investments in marketing and in salessupport personnel with the specific aim of improving sales and operatingmargins, whilst continuing the process of product and market diversification. Following our victory in the High Court, the Court of Appeal granted EPI theright to appeal. That Hearing has now been delayed from October to December 2005with the judgment expected some time early in 2006. A total of £870,000 is nowsecured in Court against our legal costs for this action. We remain confidentthat the Appeal Court will uphold the Judgment of the High Court. In March the Group raised a further £1.8 million to cover the costs of the legalcase, strengthen the balance sheet and provide additional working capital. Trading Results Sales increased by 11% to £4.95 million. Gross profits were stable at £1.00million (2004: £1.05 million). Overhead costs increased to £1.13 million from£0.96 million as a result of increased spending on sales and marketingactivities. Distribution costs, however, fell as a percentage of total sales dueto improvements in our supply chain system. Operating losses increased to £0.26million from £0.06 million. Although the losses widened compared to the same period last year, they havereduced significantly from the second half of 2004. The loss per share increased to 0.52 pence (2004: loss per share of 0.19 pence). Outlook & Current Trading The level of interest in degradable plastics is higher than ever but the pace ofthis being converted into actual sales and profits has been well below the levelwe would find satisfactory. The significance of this has been accentuated by theconclusion of our contract to supply carrier bags to Somerfield. As a result,the Board has undertaken a very comprehensive review of its strategy. A number of material changes are now being implemented as a result of thisprocess. In addition to positive strategies directed at specific products andmarkets, this also includes changes in management responsibilities, reductionswhere relevant in staff numbers and reductions in all cost categories. As a partof this process, Director's salaries have been reviewed. We remain confident that the investment and work undertaken to date to establishawareness of degradable plastics will prove profitable. In the meanwhile we arewholly committed to speeding up the conversion of the increasing potential intoprofits and to develop other compatible markets and activities. Michael LaurierChief Executive SYMPHONY PLASTIC TECHNOLOGIES PLCCONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 30 June 2005 Six months to Year ended Six months to 30 June 2005 31 December 2004 30 June 2004 £'000 £'000 £'000 £'000 £'000 £'000 Turnover 4,946 8,855 4,449 Cost of sales (3,949) (7,013) (3,404) Gross profit 997 1,842 1,045 Distribution costs (130) (283) (139) Administrative expenses - other (1,128) (2,054) (964)Administrative expenses - Exceptional item - (100) -Administrative expenses (1,128) (2,154) (964) Operating loss (261) (595) (58) Net interest (39) (132) (26) Loss on ordinary activities before taxation (300) (727) (84) Tax on loss on ordinary activities - 105 - Loss for the financial year transferred from (300) (622) (84)reserves Basic and diluted earnings per share in pence (0.52)p (1.31)p (0.19)p There were no recognised gains or losses other than the loss for the period. SYMPHONY PLASTIC TECHNOLOGIES PLCCONSOLIDATED BALANCE SHEET As at 30 June 2005 30 June 31 December 30 June 2005 2004 2004 £'000 £'000 £'000 Fixed assets Intangible assets 20 15 9Tangible assets 258 203 196Investments 16 16 16 294 234 221Current assets Stock 616 380 518Debtors 3,886 3,397 2,594Cash at bank and in hand 453 1 226 4,955 3,778 3,338 Creditors: amounts falling due within one year (2,444) (2,763) (2,368) Net current assets 2,511 1,015 970 Total assets less current liabilities 2,805 1,249 1,191 Creditors: amounts falling due after more than one (83) (41) (28)year 2,722 1,208 1,163 Capital and reservesCalled up share capital 634 513 453Share premium account 10,809 9,116 8,593Other reserves 823 823 823Profit and loss account (9,544) (9,244) (8,706) 2,722 1,208 1,163 SYMPHONY PLASTIC TECHNOLOGIES PLCCONSOLIDATED CASH FLOW STATEMENT For the six months ended 30 June 2005 Six months Year Six months to ended to 30 June 31 December 30 June 2005 2004 2004 £'000 £'000 £'000 Net cash outflow from operating activities (see below) (1,083) (1,049) (216) Returns on investments and servicing of financeInterest received 1 - -Interest paid (37) (128) (24)Finance lease interest paid (3) (5) (2) Net cash outflow from returns on investments and (39) (133) (26)servicing of finance Taxation - 105 - Capital expenditure and financial investmentPurchase of tangible fixed assets (85) (15) (3)Purchase of intangible fixed assets (6) (8) (8)Receipts from sale of fixed assets 11 4 4 Net cash outflow from capital expenditure and financial (80) (19) (7)investment FinancingIssues of equity share capital 121 60 -Share premium on issue of equity share capital 1,718 565 -Share issue expenses (25) (42) -Capital element of finance lease rentals (13) (22) (11)Inception of finance leases 61 - - Net cash (outflow)/inflow from financing 1,862 561 (11) (Decrease)/increase in cash 660 (535) (260) Net cash outflow from operating activities £'000 £'000 £'000 Operating loss (262) (595) (58)Depreciation and amortisation 21 49 22Loss on disposal of fixed assets (1) 7 6Decrease/(increase) in stocks (236) 213 75(Increase)/decrease in debtors (488) (1,286) (444)Increase/(decrease) in creditors (117) 563 183 Net cash outflow from operating activities (1,083) (1,049) (216) NOTES TO THE INTERIM ACCOUNTS 1. BASIS OF PREPARATION The interim financial statements have been prepared on the basis of theaccounting policies set out on pages 8 and 9 of the 2004 Annual Report, and areunaudited. The comparative figures for the year ended 31 December 2004 have beenextracted from the Group's latest published accounts which contain anunqualified audit report and which have been filed with the Registrar ofCompanies. 2. LOSS PER SHARE The calculation of basic loss per share is based on a loss for the perioddivided by the weighted average number of shares in issue during the period of57,481,867 (2004 FY 47,526,432; 2004 H1: 45,282,880). This information is provided by RNS The company news service from the London Stock Exchange