Water Intel. Regulatory News (WATR)

24 Mar 2006 13:33

Qonnectis plc24 March 2006 FOR IMMEDIATE RELEASE 24 March 2006 Qonnectis plc CORRECTION: INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 In the RNS announcement 3153A, released at 07:00 today, the cash at bank figurein the consolidated balance sheet at 31 December 2005 should read £364,386, not £64,386 as previously indicated. The correct version of the announcement is set out below: Qonnectis plc ("Qonnectis" or "the Company"; stock code: QTI), the telematicsand IT services provider to the utility markets, announces its unaudited resultsfor the six months ended 31 December 2005. Highlights: - Turnover increased by 157% to £66,983.(H12004:£26,050; Year to 31 Dec: £60,007) - Gross margin increased to 56% - Significant new client wins; repeat orders increasing - Sales team expanded: new products launched - Loss per share 0.25p (H1 2004: 0.36p) Commenting on the results, Chairman, Richard Taylor said: "The Company has made further progress; turnover has increased substantially,the gross margin has improved and we are continuing to win new clients whilstalso seeing increases in repeat business. The Board is pleased with the progressmade and we look for continued growth going forward." For further information, please contact: Qonnectis plc 020 8893 4766Michael Tapia, Chief Executive Bankside Consultants 020 7367 8888Sue Scott/Michael Padley NOTES TO EDITORS About Qonnectis Qonnectis' patented technologies enable the analysis of remote meter data tofacilitate water leakage control, customer profiling, and energy and watermanagement efficiency. Its products are already being used by a wide range of UKand overseas utilities including Scottish Water, Cambridge Water, Aquavitae,Generale des Eaux and Lyonnaise des Eaux as well as large commercial anddomestic users of energy or water. The iStaq family of products work by sending meter readings to Qonnectis' securedata centre via SMS text messaging over the GSM network. The data is thenaggregated and published online via utility-branded "myMeter" websites operatedby Qonnectis. The data can also be sent directly to utilities' billing systems.Customers can access real-time information via a web browser using the "myMeter"service. For more information, please visit www.qonnectis.com. Interim results for the six months ended 31 December 2005 Chairman's Statement In the Preliminary results announcement issued in December we said thatQonnectis had successfully made the transition from an innovative market entrantto a fast-growing commercial organisation with an expanding customer base ofblue-chip international clients. I am pleased to report that this trend hascontinued and turnover for the period increased by 157%, compared to the sameperiod last year, to £66,983. This follows on from the 138% full-year increasereported at the end of last year. In 2005 turnover was £60,007 so growth iscontinuing to accelerate. These increases reflect the increasing momentum fromboth further sales to existing customers and sales to new customers. Gross margin at 56% continues to show improvement from last year's 46%. Thisprimarily results from the increased opportunity to drive down costs as volumebegins to rise. Energy and water cost increases have been at the forefront of domestic agendasfor some time but the recent step increases are now beginning to percolatethrough to business customers where the quantum of savings is greater and thebenefits of the Qonnectis' solution more immediate. Historically many businesscustomers have seen such costs as 'fixed' and as a result they have receivedless attention than others on the profit and loss account (for example labour,materials). There is now a realisation that they are not fixed and can becontrolled if they can be measured easily. Qonnectis technology, particularlywith its energy meter reading every 30 minutes and online analysis, provides ameans of measuring and reducing consumption and utility costs. Whilst awareness of Qonnectis is growing, there is still massive scope forincreasing this. Your Board is addressing this through continued high profilepresence at trade exhibitions and conferences, targeted campaigns within theindustry, the imminent release of an updated web site and wider press relationsexercises. During the period the Company attained increasing levels of repeat orders fromits main utility customers, particularly in the water industry. We have alsomore recently significantly progressed a number of other sales and contractopportunities in the UK and overseas. This bodes well for the future. To build upon this momentum we have recruited two new, very experienced, seniorsales personnel, one with a successful background in the water industry focusedon metering and leakage technology, and the other from the energy market, againwith considerable metering experience. Both new members of staff have provenability in securing high value contracts in the industry. With the technology now developed and patented, engineering effort has beenadjusted, with focus on relentlessly driving down costs, incremental additionsof functionality to the product range, and integrating the Qonnectis system withthose of major clients and complementary third parties. In response to customerfeedback we have recently introduced the "iStaq-AMR", a variant of our metercommunications solution targeted at applications for automatic meter reading forbilling purposes, on a monthly basis, particularly for water companies and as away of encouraging customer water and energy conservation in times of potentialscarcity. This product is expected, over time, to supersede manual meter readingwhich is increasingly becoming uneconomic and addresses the needs of a new,growing market segment. In the period under review Qonnectis has made further progress towards being aninternationally recognised market leader in the supply of innovative technologyto utilities. We have continued to win new customers, we have increased turnoverand improved the gross margin whilst expanding the sales arm and broadening theproduct range. The Board is pleased with the progress made and we look forcontinued growth going forward. Richard M TaylorChairman CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE 6 MONTHS ENDED 31 DECEMBER 2005 Note Unaudited Unaudited Audited six months to six months to 12 months to 31 December 31 December 30 June 2005 2004 2005 £ £ £ TURNOVER 66,983 26,050 60,007Cost of Sales (29,043) (17,845) (32,510) ------ ------ -------Gross Profit 37,940 8,205 27,497 Sales & distribution costs (262,813) (187,676) (399,583)Administration expenses (195,718) (177,897) (698,137)Other operating income - - 24,815 --------- --------- --------OPERATING LOSSContinuing operations (420,591) (357,368) (1,045,408) Interest receivable lesspayable 5,198 (6,888) (3,095) ------- --------- ----------LOSS ON ORDINARY ACTIVITIESBEFORE TAXATION (415,393) (364,256) (1,048,503)Tax credit on loss on ordinaryactivities 29,785 44,815 - ------- -------- ---------- LOSS ON ORDINARY ACTIVITESAFTER TAXATION (385,608) (319,441) (1,048,503) ------- --------- ----------- LOSS FOR THE PERIOD (385,608) (319,441) (1,048,503) Loss per share - basic 3 (0.25p) (0.36p) (0.93p) All activities derive from continuing operations. There are no differencesbetween the results as disclosed in the Profit and Loss and the results on ahistorical cost basis. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2005 Note Unaudited Unaudited Audited at at at 31 December 31 December 30 June 2005 2004 2005 £ £ £ FIXED ASSETSIntangible assets 3,628,780 3,838,638 3,733,709Tangible assets 4,875 1,139 3,514 --------- --------- --------- 3,633,655 3,839,777 3,737,223 CURRENT ASSETSStock 7,290 - 9,601Debtors 49,550 35,793 58,855Cash at bank 364,386 - 710,336 ------- ------ ------- 421,226 35,793 778,792CREDITORS: amounts falling duewithin one year (213,293) (483,312) (270,819) ------- -------- -------- 207,933 (447,519) 507,973 --------- ---------- ---------TOTAL ASSETS LESS CURRENT LIABILITIES 3,841,588 3,392,258 4,245,196 CREDITORS: amounts falling dueafter more than one year (60,000) (96,000) (78,000) --------- --------- --------- 3,781,588 3,296,258 4,167,196 CAPITAL AND RESERVES Called up share capital 4 9,658,588 8,977,636 9,658,588Share premium account 4 1,675,050 756,002 1,675,050Profit and loss account 4 (7,552,050) (6,437,380) (7,166,442) --------- ---------- ----------EQUITY SHAREHOLDERS' FUNDS 3,781,588 3,296,258 4,167,196 ========= ========= ========== CONSOLIDATED CASH FLOW STATEMENT FOR THE 6 MONTHS ENDED 31 DECEMBER 2005 Note Unaudited Unaudited Audited six months to six months to 12 months to 31 December 31 December 30 June 2005 2004 2005 £ £ £ Net cash outflow fromoperating activities 5 (360,602) (125,228) (854,739) Returns on investments andservicing of financeInterest received 9,402 268 10,687Interest paid (4,204) (7,156) (13,782) ------- -------- --------Net cash in/(out) flow 5,198 (6,888) (3,095)from returns on investments and servicing of finance Taxation 29,785 44,815 -Capital expenditurePayments to acquire fixed assets (2,331) (934) (2,693) ------ -------- -------Net cash outflow fromcapital expenditure (2,331) (934) (2,693) ------ -------- ------- Net cash outflow beforefinancing (327,950) (88,235) (860,527) FinancingIssue of share capital - - 1,600,003Repayment of other longterm loan (18,000) (18,000) (36,000) -------- -------- ---------Net cash (outflow)/inflow fromfinancing (18,000) (18,000) 1,564,003 -------- -------- ---------(Decrease)/increase in cashin the period 6 (345,950) (106,235) 703,476 ========= ======== ========= 1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements have been prepared under the historical costconvention, and have been prepared in accordance with applicable accountingstandards. The interim financial information has been prepared on the basis ofaccounting policies consistent with those applied in the 2005 financialstatements. The early stage of development of the Group's business is such that there can beconsiderable unpredictable variation in the amount of revenue and timing andamounts of cash flows. The directors have projected cash flow information forthe period to 31 December 2006. The directors are working towards bringing theGroup to a level of profitable trading. In doing so, they are assessing, on aregular basis, cost levels, sales activities and research and developmentexpenditure. There is inherent uncertainty as to the realisation of the forecasts. Thedirectors consider that in preparing the financial statements they have takeninto account the uncertainty and all information that could reasonably beexpected to be available. On this basis, the directors have formed a judgementat the time of approving the financial statements that they consider itappropriate to prepare these financial statements on the going concern basis.The financial statements do not include any adjustments that would result shouldthe going concern basis of accounting no longer be appropriate. 2. FINANCIAL INFORMATION These accounts are not the statutory accounts of the Group. The statutory groupaccounts of Qonnectis plc for the year ended 30 June 2005 were filed with theRegistrar of Companies in January 2006. The interim report contains financialinformation on the year ended 30 June 2005 which constitutes non-statutoryaccounts for the purposes of section 240 of the Companies Act 1985. The auditorsprovided an emphasis of matter on their opinion on these accounts on the basisof the ability of Qonnectis Plc to continue as a going concern as detailed innote 1. The numbers in the interim financial statements to 31 December 2005 areneither reviewed nor audited. 3. LOSS PER SHARE Unaudited Unaudited Audited six months to six months to 12 months to 31 December 31 December 30 June 2005 2004 2005BasicNet loss forthe period (385,608) (319,441) (1,048,503) Loss per share: (0.25p) (0.36p) (0.93p) ======= ======= ========= 4. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Called up Share Profit Total share premium and loss capital account account £ £ £ £ GroupAt 1 July 2005 9,658,588 1,675,050 (7,166,442) 4,167,196Loss for the period - - (385,608) (385,608) --------- --------- ----------- ---------At 31 December 2005 9,658,588 1,675,050 (7,552,050) 3,781,588 ========= ========= =========== ========= 5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW Unaudited Unaudited Audited six months to six months to year to 31 December 31 December 30 June 2005 2004 2005 £ £ £ Operating loss (420,591) (357,368) (1,045,408)Depreciation 970 2,450 1,835Amortisation of intangible assets 104,929 104,929 209,857Decrease / (increase) in stock 2,311 - (9,601)Decrease / (increase) in debtors 9,305 6,388 (16,674)Decrease / (increase) in creditors (57,526) 118,373 5,252 -------- -------- --------- (360,602) (125,228) (854,739) ========= ========= ========= 6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Unaudited Unaudited Audited six months to six months to year to 31 December 31 December 30 June 2005 2004 2005 £ £ £ (Decrease)/increase in cash in theperiod (345,950) (106,235) 703,476 Cash outflow from decrease in debt 18,000 18,000 36,000 -------- -------- -------Movement in net debt in the period (327,950) (88,235) 739,476Net funds/(debt) at start of period 596,336 (143,140) (143,140) -------- --------- ------- Net funds/(debt) at end of period 268,386 (231,375) 596,336 ======== ========= ======= 7. ANALYSIS OF NET DEBT At At 1 July Movement 31 December 2005 2005 £ £ £ Cash 710,336 (345,950) 364,386 ------- --------- ------- 710,336 (345,950) 364,386 Loan (114,000) 18,000 (96,000) --------- -------- -------- 596,336 (327,950) 268,386 ========= ========= ======== ENDS This information is provided by RNS The company news service from the London Stock Exchange