Zytronic Regulatory News (ZYT)

Zytronic plc

("Zytronic" or the "Group")

Interim Results for the six months ended 31 March 2015

Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2015.

Overview

· Revenue increased to £10.0m (2014: £8.8m)

· Touch revenues account for 80% of total (2014: 77%)

· Gross profit margin improved to 39.9% (2014: 33.9%)

· Profit before tax increased by 15% to £1.6m (2014: £1.4m)

· Earnings per share ("EPS") increased to 8.7p (2014: 7.7p)

· Interim dividend increased by 10% to 3.14p per share (2014 interim dividend: 2.85p)

· Net cash increased to £7.3m (30 September 2014: £6.3m)

Commenting on the results, Chairman, Tudor Davies said:

"We are continuing to benefit from an improvement in current trading and on this basis expect to make further progress for the remainder of this year."

Enquiries:

Notes to Editors

Zytronic is the developer and manufacturer of a unique range of internationally award-winning touch sensor products.

These products employ an embedded sensing element and are based around projected capacitive technology ("PCT™") sensing. PCT offers significant durability, environmental stability and optical enhancement benefits to system designers of touch interactive, industrial, self-service and public access equipment.

During 2012, Zytronic developed new know-how to create mutual projected capacitive technology ("MPCT™") which enables multi-user and multi-touch touch sensing in ultra-large form factor sizes up to 84".

Operating from three modern factories near Newcastle-upon-Tyne in the United Kingdom, Zytronic assembles touch sensors using special glass and plastic materials, in environmentally controlled clean rooms.

Chairman's statement

Introduction

We are pleased to announce that the period has seen an increase in demand for our proprietary touchscreen products and a continuing improvement in revenues, margins and profits for the half year ended 31 March 2015.

Results

Revenues increased by 13% to £10.0m (2014: £8.8m), operating profit increased by 15% to £1.6m (2014: £1.4m), profit before tax increased by 15% to £1.6m (2014: £1.4m) and after tax of 18% (2014: 18%) resulted in profit after tax of £1.3m (2014: £1.2m). Earnings per share increased by 13% to 8.7p (2014: 7.7p).

The production efficiencies, and recent capital expenditure projects from last year, together with the increased revenues, and focus on products with our proprietary technology such as the larger format and multi-touch sensors, combined to increase gross margins to 40% (2014: 34%). However, the improvement in gross margins was, in part, offset by an increase in administration overheads, of which £0.4m (2014: £0.1m gain) arose from adverse currency movements as the US dollar exchange rate reduced to $1.5 from our hedged positions between $1.6 and $1.7.

We have continued to see increased market penetration and growth in our largest market sectors of financial (ATM machines) and vending, as well as exploit the potential for our newer multi-touch and larger format touchscreens in other niche markets which require rugged, toughened glass solutions. In particular, our showcase of the new touchscreens incorporated into table and gaming machines for the leisure markets at the most recent gaming expos in the USA and UK have resulted in considerable interest.

Cash Generation

The Group continued to generate cash with a net £2.1m being earned before the payment of £1.1m in respect of the final dividend for last year.

The Group's net cash position at 31 March 2015 was £7.3m (30 September 2014: £6.3m) after a liability of £1.4m in relation to a property mortgage.

Dividend

The Directors have declared a 10% increase to the dividend of 3.14p per share (2014: 2.85p) payable on 24 July 2015 to shareholders on the register on 10 July 2015.

Outlook

We are continuing to benefit from an improvement in current trading and on this basis expect to make further progress for the remainder of this year.

Tudor Davies B.Sc.

Chairman

19 May 2015

Consolidated statement of comprehensive income

Unaudited results for the six months to 31 March 2015

All profits are from continuing operations

Consolidated statement of changes in equity

Unaudited results for the six months to 31 March 2015

Consolidated balance sheet

Unaudited results at 31 March 2015

Consolidated cashflow statement

Unaudited results for the six months to 31 March 2015

Notes to the interim report

Unaudited results for the six months to 31 March 2015

1. Basis of preparation

The financial information in these interim statements is prepared under the historical cost convention and in accordance with international accounting standards. It does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and does not reflect all the information contained in the Group's annual report and financial statements.

The taxation charge is calculated by applying the Directors' best estimate of the annual tax rate to the profit for the period. Other expenses are accrued in accordance with the same principles used in the preparation of the annual report and financial statements.

The interim results for the six months to 31 March 2015 are not reviewed by Ernst & Young LLP and accordingly no opinion has been given.

The interim financial statements have been prepared using the same accounting policies and methods of computation used to prepare the 2014 annual report and financial statements.

The financial information for the six months to 31 March 2015 and the comparative financial information for the six months to 31 March 2014 have not been audited. The comparative financial information for the year ended 30 September 2014 has been extracted from the 2014 annual report and financial statements.

The annual report and financial statements for the year ended 30 September 2014, which were approved by the Board of Directors on 8 December 2014, received an unqualified audit report, did not contain a statement under Section 498(2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

The Group has one reportable business segment comprising the development and manufacture of customised optical products to enhance electronic display performance. Products in this reportable business segment include touch sensors, filters and other laminated products. All revenue, profits or losses before tax and net assets are attributable to this reportable business segment.

2. Basis of consolidation

The Group results consolidate the accounts of Zytronic plc and all its subsidiary undertakings drawn up to 31 March 2015.

3. Tax charge on profit on ordinary activities

The estimated tax rate for the year of 18% has been applied to the half year's profit before tax, in accordance with the ASB's statement on interim reports.

4. Earnings per share

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period. All activities are continuing operations and therefore there is no difference between EPS arising from total operations and EPS arising from continuing operations.

For the six months to 31 March 2015 and 2014

The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:

For the year to 30 September 2014

The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:

5. Provisions

Holiday pay

The holiday pay provision relates to the estimated exposure to additional costs in relation to the inclusion of overtime in holiday payments as a result of recent rulings on the interpretation of the EU Working Time Directive. The provision has since been released following the business decision to include overtime in holiday payments, which has therefore put any potential claim out of time.

Long term incentive

The provision for the long term incentive scheme relating to the Chief Executive, Group Finance Director and other management personnel is calculated based on future expectations that the bonus will be payable. Management has assessed the criteria that determines the payout and has taken a view that a proportion of the bonus should be provided for in the year ended 30 September 2014 and the half year ended 31 March 2015.

6. Dividends

The Directors propose the payment of an interim dividend of 3.14p per share (2014 interim dividend: 2.85p), payable on 24 July 2015 to shareholders on the register on 10 July 2015. This dividend has not been accrued in these interim accounts. The dividend payment will be approximately £479,000.

7. Cash and cash equivalents

For the purpose of the consolidated cashflow statement, cash and cash equivalents comprise the following:

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for variable lengths, being overnight, three months or one year (with break conditions), depending on the immediate cash requirements of the Group, and earn interest at variable rates.

At 31 March 2015 the Group had available a net £1.0m (cash less overdrawn accounts) overdraft facility from Barclays Bank plc which will fall for review in January 2016.

The fair value of cash and cash equivalents is £8.7m (31 March 2014: £6.3m).

7. Availability of the Interim Report

A copy of the interim report is available on the Company's website www.zytronicplc.com and can be obtained from the Company's registered office: Whiteley Road, Blaydon-on-Tyne, Tyne & Wear, NE21 5NJ. Copies will be sent to shareholders shortly.