Zytronic Regulatory News (ZYT)

13 Dec 2005 07:01

Zytronic PLC13 December 2005 For Immediate Release 13 December 2005 ZYTRONIC PLC Preliminary Results for the year ended 30 September 2005 Zytronic Plc, a leading specialist manufacturer of touchscreens and opticalfilters for electronic displays, announces its preliminary results for the yearended 30 September 2005. Highlights • Turnover increased 21% to £10.6m (2004: £8.8m); • Profit before tax increased 181% to £984,000 (2004: £350,000); • Basic earnings per share increased 176% to 4.7p (2004: 1.7p); • Final dividend proposed of 1.5p per share to give total dividend for the year of 2.0p per share (2004: Nil); • Growth in gross margin to 31.0% (2004: 29.3%) arose from the increase in sales and change in product mix with touchscreens becoming the dominant part of the business; • ZYTOUCH(R) touchscreen sales growth of 50% in 2005; • Following the successful launch of ZYPOS(R) touchscreens, a large number of substantial enquiries have been received for the point of sale and gaming markets; • ZYPOS(R) production facility commissioned in November 2005 in existing factory. New purpose built facility, to be housed in an adjacent property of 18,000 sq.ft., comes on stream in Q4 2006; • Adjacent property of 18,000 sq.ft acquired in December 2005. The cost, including conversion for the production of ZYPOS(R) touchscreens, is £1m with a further £1.5m to be invested in clean rooms, plant and equipment in H2 2006; • On outlook, Chairman John Kennair said: "The continued improvement in sales, margin and profitability, the successfullaunch of our ZYPOS(R) touchscreens, consistent substantial growth in sales ofZYTOUCH(R) touchscreens, and the strong executive management team provide asolid basis for the continued improvement of the Group's operations goingforward." Enquiries: Zytronic Plc (Today: 020 7466 5000; thereafter 0191 414 5511)John Kennair, Chief ExecutiveDenis Mullan, Finance Director Buchanan Communications 020 7466 5000Richard Darby, Isabel Podda Notes to Editors Zytronic is an industry leader in the development and manufacture of customisedoptical filters to enhance electronic display performance. It is also aninnovator in the production of specialised and transparent laminates for nichemarkets. Based on this lamination expertise, Zytronic has developed a unique range oftouchscreen products employing projected capacitive technology which enables thepointing device to sense through an anti-vandal screen in front of the display.This system offers significant benefits to electronic display manufacturers. Operating from two modern factories near Newcastle-upon-Tyne in England,Zytronic assembles touchscreens and filters, utilising special glass and plasticmaterials, in environmentally controlled clean rooms. Chairman's Statement With another year of strong sales growth, the results to 30 September 2005 haveagain shown a solid improvement in the performance of the business. Results and Trading Turnover for the year under review increased 21% to £10.6m (2004: £8.8m)resulting in a 181% increase in pre-tax profits to £984,000 (2004: £350,000) andgrowth in earnings per share of 176% to 4.7p (2004: 1.7p) The Group's cash position remains strong with cash balances at the year end of£810,000 after spending over £1m on fixed assets and reducing borrowings by£223,000. Zytouch(R) Consistent growth in the sales of ZYTOUCH(R) touchscreens in the past threeyears, with sales growth of 50% in 2005, is now one of the primary strengths ofthe business. Whilst the Group's traditional optical filter business has alsogrown in the past year, it is the strong growth in sales of touchscreens,anticipated to become more than 50% of Group sales in 2006, that will continueto drive the business forward. The change of product mix, with touchscreens becoming the dominant part of theGroup's business, has driven the strong growth of sales and the improvement ingross margins in the past three years. 2003 2004 2005 £'000 £'000 £'000 Sales 5,690 8,756 10,590 Gross profit 1,615 2,569 3,278 Gross profit % 28.4% 29.3% 31.0% ZYPOS(R) Following the successful launch of our new range of ZYPOS(R) touchscreens inSpring 2005, a large number of substantial enquiries have been received for thepoint of sale and gaming markets with samples being supplied from the pilotproduction plant. A ZYPOS(R) production facility has now been established(commissioned in November 2005) in the existing factory, which the Directorsanticipate will be adequate to meet demand until the new purpose built facilitycomes on stream in the October/December quarter of 2006. This new facility willbe housed in a property, acquired in December 2005, which extends toapproximately 18,000 square feet and adjoins the existing facility. The cost ofthe property, including conversion for use for the production of ZYPOS(R)touchscreens, is approximately £1 million and will be funded by means of amedium term loan. A further £1.5 million will be invested in clean rooms andplant and equipment in the second half of the 2006 calendar year, funded by theGroup's cash resources and asset finance. The Group has accepted the offer of a £600,000 Government grant which will bepayable over four years dependent on the timing of capital investment and jobcreation. The Directors anticipate that sales of ZYPOS(R) touchscreens will begin toimpact on the business towards the end of the 2006 financial year. Management I would like to express my thanks to all employees, and in particular theExecutive Directors of the trading company who are largely responsible for theimprovement in operations and consequently, the successful results for 2005. Dividend The Directors recommend a final dividend of 1.5p per share payable on 24 March2006 to shareholders on the Register of Members on 10 March 2006 which,following the dividend of 0.5p per share paid in June 2005, will bring the totaldividend for the year to 2p per share. Outlook The continued improvement in sales, margin and profitability, the successfullaunch of our ZYPOS(R) touchscreens, consistent substantial growth in sales ofZYTOUCH(R) touchscreens, and the strong executive management team provide asolid basis for the continued improvement of the Group's operations goingforward. John M. KennairChairman 13 December 2005 Group profit and loss accountfor the year ended 30 September 2005 2005 2004 Unaudited Audited Notes £'000 £'000Group turnover 10,590 8,756 Cost of sales 7,312 6,187Gross profit 3,278 2,569 Distribution costs 140 121Administration expenses 2,137 2,078 2,277 2,199Group operating profit 1,001 370Interest payable (33) (26)Interest receivable 16 6Profit on ordinary activities before taxation 984 350 Tax charge on profit on ordinary activities 3 (310) (114)Profit on ordinary activities after taxation 674 236 Ordinary dividends on equity shares 4 (286) -Retained profit for the year 388 236 Earnings per share - basic 5 4.7p 1.7pEarnings per share - diluted 5 4.6p 1.6p Group balance sheetat 30 September 2005 2005 2004 Unaudited Audited £'000 £'000Fixed assets Intangible assets 2,133 2,172Tangible assets 2,494 2,155 4,627 4,327Current assets Short term property investment - 75Stocks 1,201 1,084 Debtors 2,641 1,873 Cash at bank and in hand 810 1,171 4,652 4,203Creditors: amounts falling due within one year 2,093 1,569Net current assets 2,559 2,634 Total assets less current liabilities 7,186 6,961 Creditors: amounts falling due after more than one year 161 394Provisions for liabilities and charges Deferred tax 239 172 6,786 6,395Capital and reserves Called up share capital 143 143Share premium 6,215 6,212Profit and loss account 428 40Equity shareholders' funds 6,786 6,395 Group statement of cashflowsfor the year ended 30 September 2005 2005 2004 Unaudited Audited Notes £'000 £'000Net cash inflow from operating activities 6a 939 520 Return on investments and servicing of finance Interest received 16 6Interest paid (12) -Interest element of finance lease rental payments (21) (26)Net outflow from returns on investments and servicing of finance (17) (20) Taxation Corporation tax paid (28) - Capital expenditure and financial investment Payments to acquire intangible fixed assets (209) (164)Payments to acquire tangible fixed assets (830) (237)Receipt from sale of short term property investment 75 -Net outflow from capital expenditure and financial investment (964) (401) Equity dividends paid (71) - Net cash (outflow)/inflow before financing (141) 99 Financing Receipt from new bank loan - 250Issue of ordinary share capital 3 -Repayment of bank loan (83) -Net repayments of capital element of finance lease (140) (132)Net (outflow)/inflow from financing (220) 118(Decrease)/increase in cash (361) 217 Reconciliation of net cashflow to movement in net funds (Decrease)/increase in cash (361) 217Receipt from new bank loan - (250)Repayment of bank loan 83 -Net repayments of capital element of finance lease 140 132Movement in net funds (138) 99 Net funds at beginning of year 554 455Net funds at end of year 6b 416 554 Notes 1. Basis of preparation The preliminary results have been prepared under the historical cost conventionand in accordance with applicable accounting standards. The preliminary resultshave been prepared on the basis of the accounting policies set out in theGroup's statutory accounts for the year ended 30 September 2004. 2. Basis of consolidation The Group results consolidate the accounts of Zytronic plc and all itssubsidiary undertakings drawn up to 30 September 2005. 3. Tax charge on profit on ordinary activities 2005 2004 Unaudited Audited £'000 £'000Current tax:UK corporation tax (251) (38)Corporation tax over-provided in prior years 8 6Total current tax (243) (32)Deferred tax:Origination and reversal of timing differences (67) (82)Group deferred tax (67) (82)Tax charge on profit on ordinary activities (310) (114) Factors affecting current tax charge: Profit on ordinary activities multiplied by standard rate of UK corporation tax of 30% (2004: 30%) (295) (105)Expenses not deductible for tax purposes (includes amortisation of goodwill and licences) (86) (80)Deferred revenue expenses and tax credits 47 43Accelerated capital allowances 67 13Effects of small company/marginal rates of UK corporation tax 16 25Utilisation of brought forward tax losses - 66Adjustments in respect of prior years 8 6Total current tax (243) (32) 4. Dividends The directors propose a final dividend for the year ended 30 September 2005 of1.5p per share (2004: Nil per share) payable on 24 March 2006 to shareholders onthe Register of Members on 10 March 2006. Following the interim dividend of 0.5p per share (2004: Nil) paid on 29 June2005, this will bring the total dividend for the year to 2p per share (2004: Nilper share). 5. Earnings per share The calculations of earnings per share are based on a profit after taxation of£674,000 (2004: £236,000) and a basic and diluted weighted average of 14,292,242and 14,594,284 shares in issue respectively (2004: basic and diluted weightedaverage of 14,291,539 and 14,338,685 shares in issue respectively). 6. Notes to the group statement of cashflows (a) Reconciliation of operating profit to net cash inflow from operatingactivities: 2005 2004 Unaudited Audited £'000 £'000Operating profit 1,001 370Depreciation 427 402Amortisation 246 229Gross cash inflows 1,674 1,001(Increase)/decrease in stocks (117) 2Increase in debtors (767) (747)Increase in creditors 149 264Net cash inflow from operating activities 939 520 (b) Analysis of net funds: 2004 Cashflows 2005 Audited Unaudited Unaudited £'000 £'000 £'000Cash at bank and in hand 1,171 (361) 810Bank loan (250) 83 (167)Finance lease (367) 140 (227)Net Funds 554 (138) 416 7. Report and accounts The above unaudited results do not represent statutory accounts. The auditreport is yet to be signed. The audited accounts will be mailed to shareholdersshortly and will be available from the registered office at Patterson Street,Blaydon on Tyne, Tyne & Wear, NE21 5SG. The results for the year ended 30 September 2004 have been extracted from the2004 accounts of Zytronic plc. The 2004 accounts, which have been filed withthe Registrar of Companies, received an unqualified audit report and did notcontain a statement under Section 237(2) or (3) of the Companies Act 1985. 8. AGM Date It is intended that the AGM will take place at the Company's offices atPatterson Street, Blaydon on Tyne, Tyne & Wear, NE21 5SG on Tuesday 28 February2005 at 2pm. Notice of the AGM will be sent to shareholders with the financialstatements. This information is provided by RNS The company news service from the London Stock Exchange