Water Intel. Regulatory News (WATR)

28 Mar 2007 07:01

Qonnectis plc28 March 2007 QONNECTIS PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Qonnectis plc ("Qonnectis" or "the Company"; stock code: QTI), a market leaderin multi-utility smart metering, announces its unaudited interim results for thesix months ended 31 December 2006, a period of continued progress. Highlights: •Turnover increased by 141% to £161,185. (H1 2006: £66,983; FY 2006: £109,425); •Gross margin increased to 66% (H1 2006: 57%; FY 2006: 29%); •Significant new client wins, repeat orders continue to increase; •Strengthening key client relationships whilst founding new ones; •Production of units incorporating new technology; •Loss per share 0.23p (H1 2006: 0.25p; FY 2006: 0.51p) Commenting on the results, Chairman, Richard Taylor said: "The Company has continued to make progress. Once again turnover has increasedsharply, the gross margin has further improved, we continue to expand the clientbase and increase the level of repeat business. The monies raised during theperiod have been used to expand our marketing resources, primarily, and we arebeginning to see the benefits of this. In addition, we are excited by the paceof development of our partnership with a major UK water company for theproduction of units incorporating new technology for leakage control andmonitoring applications. The progress made in the period shows every sign ofbeing sustained in the second half of FY 2007." 28th March 2007 For further information, please contact: Qonnectis plcMichael Tapia, Chief Executive 01932 788 299 Bankside ConsultantsMichael Padley / Daniela Hale 020 7367 8888 HB Corporate 020 7510 8600Edward Hutton / Luke Cairns 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 as well as large commercial and domestic users of energyor 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. CHAIRMAN'S STATEMENT For the third year in succession Qonnectis has increased sales in the six monthsending December 31st, this time by 141% to £161,185. This is again a substantial47% increase over that reported for the previous full year ending June 30th,2006 and this trend has continued into the second half of FY 2007. Gross margin improvements have followed this upward trend, increasing to 66%, upfrom 57% for the half year ended 31 December 2005 and a dramatic improvementover the figure of 29% for the full year ended 30 June 2006. This half year has been particularly exciting for Qonnectis: •The relationship with Scottish Water has gone from strength to strength and included an order to the value of £56,000 for 'iStaq' data loggers and web services. •Towards the end of the period we announced contracts with Schlumberger Oilphase and Redditch Borough Council for multi-utility monitoring and multi-utility energy and water efficiency monitoring, respectively. These were amongst a number of new contracts won. •The "Key Account" marketing campaign launched in September 2006 continues to receive a positive response from various UK water companies. •Early in the period we raised £612,000 which has allowed us to expand the team and this in turn has created new opportunities, which we are progressing. •During the period, Qonnectis announced a partnership with a major UK water company and a £52,000 development order for an innovative product which, after successful trials, was followed after the period end by initial orders worth £73,000 for the production of units incorporating new technology for leakage control and monitoring applications. This product represents a breakthrough for leakage control and, by establishing this important relationship, a milestone for Qonnectis. A significant contribution from sales of the product is expected in the second half of the financial year and in subsequent years. With a unique offering for water and energy monitoring in the UK, Qonnectis hasnow built up an enviable list of blue chip customers and end users which weexpect will provide the engine for continued growth for the Company. Theseinclude the NHS and other emergency services organisations, Aquavitae, BAA,Allied Distillers, First Group, Associated British Ports and various Borough andCounty Councils. The period has been one of further expansion with new clients won, newinitiatives launched and new products developed. This, combined with theexpansion of the sales and marketing team in particular, bodes well for theprospects of the Company. Overall, the Board is pleased with the continuedprogress being made. Richard M Taylor Chairman QONNECTIS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Note Unaudited Unaudited Audited six months to six months to 12 months to 31 December 2006 31 December 2005 30 June 2006 £ £ £ TURNOVER 161,185 66,983 109,425 Cost of Sales (55,547) (29,043) (77,553) Gross Profit 105,638 37,940 31,872 Sales & distributioncosts (319,836) (262,813) (551,200)Administrationexpenses (270,829) (195,718) (369,542)Other operating income - - 75,952 OPERATING LOSSContinuing operations (485,027) (420,591) (812,918) Interest receivableless payable 1,858 5,198 5,972 LOSS ON ORDINARYACTIVITIES (483,169) (415,393) (806,946)BEFORE TAXATIONTax credit on loss onordinary activities - 29,785 - LOSS ON ORDINARYACTIVITES AFTER (483,169) (385,608) (806,946)TAXATION LOSS FOR THE PERIOD (483,169) (385,608) (806,946) Loss per share - basic 3 (0.23p) (0.25p) (0.51p) All activities derive from continuing operations. There are no differencesbetween the results as disclosed in the profit and loss account and the resultson a historical cost basis. QONNECTIS PLC CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2006 Note Unaudited Unaudited Audited at at at 31 December 2006 31 December 2005 30 June 2006 £ £ £ FIXED ASSETSIntangible assets 3,418,923 3,628,780 3,523,852Tangible assets 9,204 4,875 5,916 3,428,127 3,633,655 3,529,768CURRENT ASSETSStock 21,246 7,290 19,209Debtors 118,044 49,550 99,331Cash at bank 166,070 364,386 10,410 305,360 421,226 128,950CREDITORS: amountsfalling due within oneyear (220,406) (213,293) (256,468) 84,954 207,933 (127,518) TOTAL ASSETS LESSCURRENT LIABILITIES 3,513,081 3,841,588 3,402,250 CREDITORS: amountsfalling due after morethan one year (24,000) (60,000) (42,000) 3,489,081 3,781,588 3,360,250 CAPITAL AND RESERVESCalled up share capital 4 10,270,588 9,658,588 9,658,588Share premium account 4 1,675,050 1,675,050 1,675,050Profit and loss account 4 (8,456,557) (7,552,050) (7,973,388) EQUITY SHAREHOLDERS'FUNDS 3,489,081 3,781,588 3,360,250 Approved by the board on 23 March 2007. QONNECTIS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Note Unaudited Unaudited Audited six months six months 12 months to to to 31 December 2006 31 December 2005 30 June 2006 £ £ £ Net cash outflow fromoperating activities 5 (440,739) (360,602) (664,961) Returns on investments and servicing of financeInterest received 4,547 9,402 12,445Interest paid (2,689) (4,204) (6,473) Net cash in/(out)flow from returns oninvestments andservicing of finance 1,858 5,198 5,972Taxation - 29,785 -Capital expenditurePayments to acquirefixed assets (4,518) (2,331) (4,937) Net cash outflow fromcapital expenditure (4,518) (2,331) (4,937) Net cash outflowbefore financing (443,399) (327,950) (663,926) FinancingIssue of sharecapital 612,000 - -Repayment of otherlong term loan (18,000) (18,000) (36,000) Net cashinflow/(outflow) fromfinancing 594,000 (18,000) (36,000) Increase/(Decrease)in cash in the period 6 150,601 (345,950) (699,926) QONNECTIS PLC NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The interim results have been prepared on a basis consistent with the accountingpolicies set out in the Qonnectis plc financial statements for the year ended30 June 2006. 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 2007. 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 2006 were filed with theRegistrar of Companies, following the AGM on 25 January 2007. The interim reportcontains financial information on the year ended 30 June 2006 which constitutesnon-statutory accounts for the purposes of section 240 of the Companies Act1985. The auditors provided an emphasis of matter on their opinion on theseaccounts on the basis of the ability of Qonnectis plc to continue as a goingconcern as detailed in note 1. The numbers in the interim financial statementsto 31 December 2006 are neither reviewed nor audited. 3. LOSS PER SHARE Unaudited Unaudited Audited six months to six months to 12 months to 31 December 2006 31 December 2005 30 June 2006 £ £ £BasicNet loss for the period (483,169) (385,608) (806,946)Weighted average numberof shares 208,408,023 157,408,023 157,408,023 Loss per share: (0.23p) (0.25p) (0.51p) 4. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Called up Share Profit Total share capital premium and loss account account £ £ £ £GroupAt 1 July 2006 9,658,588 1,675,050 (7,973,388) 3,360,250Shares issued in the period 612,000 - - 612,000Loss for the period - - (483,169) (483,169) At 31 December 2006 10,270,588 1,675,050 (8,456,557) 3,489,081 5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW Unaudited Unaudited Audited six months to six months to year to 31 December 2006 31 December 2005 30 June 2006 £ £ £ Operating loss (485,027) (420,591) (812,918)Depreciation 1,230 970 2,535Amortisation ofintangible assets 104,929 104,929 209,857Decrease / (increase) instock (2,037) 2,311 (9,608)Decrease / (increase) indebtors (18,713) 9,305 (40,476)(Decrease) / increase increditors (41,121) (57,526) (14,351) (440,739) (360,602) (664,961) 6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Unaudited Unaudited Audited six months to six months to year to 31 December 2006 31 December 2005 30 June 2006 £ £ £ Increase/(Decrease) incash in the period 150,601 (345,950) (699,926) Cash outflow fromdecrease in debt 18,000 18,000 36,000 Movement in net debt inthe period 168,601 (327,950) (663,926)Net funds/(debt) at startof period (67,590) 596,336 596,336 Net funds/(debt) at endof period 101,011 268,386 (67,590) 7. ANALYSIS OF NET DEBT At Movement At 1 July 2006 31 December 2006 £ £ £ Cash 10,410 155,660 166,070Bank overdraft - (5,059) (5,059)Loan falling due within one year (36,000) - (36,000)Loan falling due after one year (42,000) 18,000 (24,000) (67,590) 168,601 101,011 This information is provided by RNS The company news service from the London Stock Exchange