CustomVis plc - Interim Results

RNS Number:1401R
CustomVis plc
31 March 2008

31 March 2008

CustomVis Plc
("CustomVis" or the "Company")

Interim results for the six months ended 31 December 2007

CHAIRMAN'S STATEMENT

I am very pleased to report on the Group's activities for the first half of the
2007/08 financial year. This was a time where our technology has begun to gain
global recognition and sales interest has been growing to record levels. We have
been firm in our belief that Solid State would become the natural next
generation laser choice for the refractive surgical industry and we are seeing
clear signs that our hard work and belief is paying off.

By the end of 2007, the Group had shipped or installed 25 Pulzar Z1 lasers and
this number has increased to 27 at the time of this report. More importantly,
these lasers have now treated approximately 25,000 eyes and we have established
a sales pipeline for the next 4 months which will keep production in excess of
three lasers per month.

FINANCIAL REVIEW

The Group incurred a loss after tax of £568,056 for the six months ended 31
December 2007 (2006: £745,446), a reduction of 24 per cent. on the comparative
period last year, on sales of £514,232 (2006: £371,661), an increase of 38 per
cent. on the comparative period last year. Loss per share for the period was
0.7p (2006: loss of 1.34p), reduction of 48 per cent. on the comparative period
last year.

Group net assets at 31 December 2007 were £2.49 million (31 December 2006: £1.62
million). Net current assets at that date were £2,262,016 (2005: £1.32 million),
which included cash funds of £181,774 (2006: £550,293).

On 22 February 2008, the Group announced it had raised £2.23m (net of issue
expenses) via a placing of 73,846,700 ordinary shares at 3.25p per share to fund
ongoing operations and growth. The placing was supported by all of the Company's
major institutional investors and we were delighted to see Dr. Mukesh Jain,
Chief Operating Officer and Sales and Marketing Director, subscribe for
10,100,000 second placing shares, amounting to an investment of £328,250, in the
placing.

The placing proceeds will allow the Company to recruit further sales staff,
increase its marketing effort and provide working capital to increase production
and sales. Most importantly, it will allow the Group to conduct preliminary work
for the FDA trials in the United States, the single largest market for
refractive laser sales.

OPERATIONAL REVIEW

Since the launch of the Pulzar Z1 in June 2006 the Group has seen a significant
growth in interest from the refractive surgical community, which has allowed us
to believe we can achieve targets of three laser sales per month.

Sales come from two main sources. To date, orders have mainly come directly via
our sales team, including orders received at the many industry conferences that
CustomVis is present at. However, sales via our distribution network are
starting to grow. We now have an established distributor network in most Asian
and Middle East countries and are currently extending further into Europe. These
distributors have strong local market knowledge and relationships with local
surgeons and we anticipate will be a significant source of sales in the future.

We have been particularly excited with the progress made in new territories, for
example India, Pakistan and Philippines which has been achieved through a
dedicated focus on sales and marketing within these regions. The success of
these efforts has led the Group to pursue a greater spread of geographies in
recent months, leading us to secure sales in South America, Egypt and the Middle
East.

We have also seen a significant increase in interest from European surgeons, a
crucial market for CustomVis, and one which until now, has preferred to continue
using the excimer gas lasers which are mainly manufactured in Europe. We believe
that a strong sales pipeline will develop in this region over the next few
years.

The Pulzar Z1 laser continues to prove the advantages of solid state, with one
customer claiming world records in treatment numbers. The customer has advised
us that over 800 LASIK procedures were completed in a two week period on one
CustomVis laser, without any service or replacement of any part or consumable.
On one of these days over 90 procedures were performed.

The project to reduce the production cost of the Pulzar Z1 is progressing well,
with 10 per cent. savings achieved in the past six months. The project to
develop a new multipurpose ophthalmic laser, for which a A$2.3 million
Australian government grant was awarded, is about 50 per cent. complete. The new
low cost retinal camera is expected to be launched in June this year. The
results from the Presbyopia trial continue to look extremely promising and we
expect to submit to Australian TGA for regulatory approval to sell this
procedure in the third quarter of this calendar year.

Current Trading

Negative marketing directed at us by our excimer laser competitors has continued
to have an adverse effect on our ability to achieve our target of three laser
sales per month. However, the continuing growth of our installed base and number
of eyes treated, along with the increased sales force and improved marketing now
possible after completion of the recent fund raising, should accelerate the
sales growth. Furthermore, the pipeline of new orders continues to increase,
with six contracts signed in the past two months.

We are now seeing increasing interest in India, where we have seven lasers now
installed, Pakistan, where we have now sold two lasers, and the Philippines,
where we have two lasers installed and expect two more this year. A newly
appointed distributor for India has signed a non-binding agreement to sell 10
lasers in the next 12 months. We are also expecting significant further sales in
the next year from the Middle East and African markets.

In line with the Group's strategy to continue its focus on sales, we have been
keen to recruit a new experienced Sales Manager to support Dr. Jain. This search
has now been concluded and the new Sales Manager will join CustomVis in May, to
assist our sales effort in Europe and Asia. The Company is also looking to
appoint a sales person with refractive experience to cover the Latin America
Market.

OUTLOOK

The recently completed fund raising has put the Company in a strong position to
deal with the negative marketing of the old technology competitors. With a clear
focus on reducing production costs for the Pulzar Z1, increasing the sales
effort and placing lasers with new surgeons in new territories, we are very
confident of the future for CustomVis. The Board would like to thank its staff
for their continuing hard work and the shareholders for their continuing
support.

Emmanuel Rosen

Chairman

Group Profit and Loss Account
For the six months ended 31 December 2007

Notes Six months to 31 Six months to 31 Year to
December 2007 December 2006
(Unaudited) (Unaudited)
30 June

2007

(Audited)

£ £ £

Turnover 514,232 371,661 880,613

Cost of sales (238,521) (292,451) (482,917)
---------- ---------- --------

Gross profit 275,711 79,210 397,696

Administrative
expenses (994,367) (995,454) (2,111,771)

Share Based
Payments (5,282) - (107,860)

Other
operating
income 143,073 144,198 328,307
---------- ---------- --------

Operating loss (580,863) (772,046) (1,493,628)

Interest
receivable and
similar income 12,807 26,600 55,310
---------- ---------- --------

Loss on
ordinary
activities
before
taxation (568,056) (745,446) (1,438,318)

Tax on loss on
ordinary
activities 2 - - -
---------- ---------- --------
---------- ---------- --------
Loss on
ordinary
activities
after taxation
transferred to
reserves (568,056) (745,446) (1,438,318)
========== ========== ========

Loss per
Ordinary Share

Basic 3 (0.7p) (1.34p) (1.80p)
========== ========== ========

Diluted 3 (0.7p) (1.34p) (1.80p)
========== ========== ========

Statement of Changes in Equity
For the six months ended 31 December 2007

Six months to 31 December Six months to 31 December Year to
2007 (Unaudited) 2006 (Unaudited)
30 June
2007
(Audited)
£ £ £

Loss for
the
financial (568,056) (745,446) (1,438,318)
period
Currency
translation
differences
on
foreign
currency - 1,772 (17,777)
net
investments
Prior
period - - (309,155)
Adjustment ---------- ---------- --------
Total
recognised
gains and
losses
relating to
the period (568,056) (743,674) (1,765,250)
========== ========== ========

All the above figures relate to continuing activities.

Group Balance Sheet
As at 31 December 2007

Notes Six months to 31 Six months to 31 Year to
December 2007 December 2006
(Unaudited) (Unaudited)
30 June
2007
(Audited)
£ £ £
Current
assets
Stock 1,308,427 791,040 1,117,917
Debtors 1,733,266 464,365 923,481
Cash at bank
and in hand 181,774 550,293 897,399
----------- ---------- ---------
3,223,467 1,805,698 2,938,797
Non-Current
Assets
Intangible - - -
assets
Tangible 4 186,533 305,099 218,662
assets ----------- ---------- ---------
186,533 305,099 218,662
----------- ---------- ---------

Total Assets 3,410,000 2,110,797 3,157,459
----------- ---------- ---------

Current
Liabilities
Trade and
Other 497,313 489,640 618,951
Payables
Income In
Advance 197,777 - -
Directors
Advance 20,037 - -
Deferred
Warranty
Income 246,324 - -
----------- ---------- ---------
961,451 489,640 618,951
----------- ---------- ---------

Non-Current
Liabilities
Trade and
Other - - 139,861
Payables ----------- ---------- ---------
----------- ---------- ---------
Total
Liabilities 961,451 489,640 758,812
----------- ---------- ---------
Net Assets 2,448,549 1,621,157 2,398,647
=========== ========== =========

EQUITY
Issued 4,765,957 3,240,957 4,765,957
Capital
Share
premium 5 10,301,015 10,442,369 10,301,015
account
Option 5 422,297 310,750 417,015
Reserve
Foreign
currency
translation
reserve 5 127,189 146,739 127,189
Retained
Earnings 5 (13,167,909) (12,519,657) 13,212,529
----------- ---------- ---------

Total Equity 2,448,549 1,621,157 2,398,647
=========== ========== =========

Group Cash Flow Statement
For the six months ended 31 December 2007

Note Six months Six months Year to
to to
31 December 31 December 30 June
2007 2006
(Unaudited) (Unaudited)
2007
(Audited)
£ £ £
Reconciliation of operating loss
to net cash outflow from operating
activities
Operating loss (568,056) (772,046) (1,493,628)
Depreciation
and
amortisation 50,757 42,356 134,580
Share Based
Payments 5,282 1,595 107,860
Decrease in
debtors (809,785) (392,983) (852,099)
(Increase) in
stock 190,510 154,549 (173,328)
(Decrease)/Inc
rease in
creditors (202,638) 301,648 570,820
Exchange rate
differences
arising on
cash balances (136,338) 3,393 (2,092)
Other Payments 65,007 - -
----------- ---------- --------
Net cash
outflow from
operating
activities (727,554) (661,489) (1,706,887)
=========== ========== ========

Cash Flow Statement

Net cash
outflow from
operating
activities (727,554) (661,489) (1,706,887)
Return on
investments
and servicing
of finance 12,807 26,600 55,310
Capital
expenditure (878) (52,604) (72,456)
----------- ---------- --------

(715,625) (687,493) (1,724,033)

Financing - - 1,383,646
----------- ---------- --------
Increase/
(decrease) in
cash in the
period (715,625) (687,493) (340,387)
=========== ========== ========

Reconciliation
of net cash
flow to
movement in
net
funds/(debt) 6

(Decrease)/inc
rease in cash
in the period (715,625) (687,493) (340,387)

Net funds as
at 30 June
2007 897,399 1,237,786 1,237,786
----------- ---------- --------
Net funds at
31 December
2007 181,774 550,293 897,399
=========== ========== ========

Notes to the Financial Statements
For the six months ended 31 December 2007

1. Basis of preparation

These accounts are unaudited and do not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985. The interim results have been
prepared in accordance with the accounting policies which will be set out in the
annual report and financial statements for the year ending 30 June 2008.

The financial information relating to the year ended 30 June 2007 has been
extracted from the financial statements which have been delivered to the
Registrar of Companies. The independent auditors' report on those accounts was
unqualified.

2. Taxation

No corporation tax has been provided for in the period as the projected taxable
losses for the period and taxation losses brought forward indicate that the
Group will have no tax liability for the period.

Deferred tax assets arising from trading losses have not been recognised on the
basis that their future economic benefit is uncertain.

3. Loss per Ordinary Share

Six months to Six months to Year to
31 December 2007 31 December 2006 30 June 2007
£ £ £

Loss for the period
attributable to
shareholders (568,056) (745,446) (1,438,318)
========== ========== ========

Weighted average number
of shares in issue 95,319,148 55,582,984 80,069,148
========== ========== ========

Diluted loss per share has been calculated using the same figures as the basic
calculation. No account has been taken of options, as these potential Ordinary
Shares are not considered to be dilutive under the definitions of the applicable
accounting standards.

4. Tangible fixed assets

Plant and Furniture, Leasehold Leased Total
Machinery fittings & Improvements Assets
equipment
£ £ £ £ £

Cost
At 1 July 2007 312,734 154,549 19,234 171,141 657,658
Exchange - - - - -
differences
Additions 726 305 - 2,828 3,859
Disposals - - - - -
-------- -------- ---------- ------- -------
At 31 December
2007 313,460 154,854 19,234 173,969 661,517
-------- -------- ---------- ------- -------

Depreciation/
amortisation
At 1 July 2007 215,363 144,517 11,546 67,570 438,996
Exchange
differences (7,441) (4,993) - (2,335) (14,769)
Charge for the
period 19,479 6,896 2,009 22,373 50,757
Disposals - - - - -
-------- -------- ---------- ------- -------
At 31 December
2007 227,401 146,420 13,555 87,608 474,984
-------- -------- ---------- ------- -------

Net book value
At 1 July 2007 97,371 10,032 7,688 103,571 218,662
======== ======== ========== ======= =======

At 31 December
2007 86,059 8,434 5,679 86,361 186,533
======== ======== ========== ======= =======

5. Reserves
Share premium Option Foreign Profit and Total
account Reserve Currency Loss Account
Reserve
£ £ £ £ £

At 1 July 10,301,015 417,015 127,189 (13,212,529) (2,367,310)
2007
Loss for
the - - - (568,056) (568,056)
period
Prior
Period - - - (612,676) (612,676)
Adjustment
Share
Based - 5,282 - - 5,282
Payments --------- -------- --------- ----------- ---------
At 31
December 10,301,015 422,297 127,189 (13,167,909) (2,930,084)
2007 ========= ======== ========= =========== =========

6. Gross cash flows
Six months to Six months to Year to
31 December 31 December 30 June 2007
2007 2006
£ £ £
Returns on investments and servicing
of finance
Interest received 12,807 26,600 55,310
========== ========== =========

Capital expenditure
Payments to acquire
tangible fixed assets (878) (52,604) (72,456)
========== ========== =========
Financing
Issue of ordinary share
capital - - 1,383,646
========== ========== =========

7. Analysis of changes in net funds

At 1 Cash At 31 December 2007
July Flows
2007
£ £ £

Cash at bank and in hand 897,399 (715,625) 181,774
========== ========== =========

8. Dividends

No dividends were paid or are proposed in respect of the six months ended 31
December 2007.

9. Copies of the interim results will be sent to shareholders shortly and will
be available from the registered office of the Company, 7 Devonshire Square,
Cutlers Gardens, London EC2M 4YH and from the Company's website
www.customvis.com.

Further information:

CustomVis plc
Paul van Saarloos +61 410 497 456

John East & Partners Limited
David Worlidge +44 (0)20 7628 2200

Conduit PR
Christian Taylor-Wilkinson +44 (0)20 7429 6609

This information is provided by RNS
The company news service from the London Stock Exchange

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