REG - Feedback PLC - Half Yearly Report

Tue Feb 7, 2012 2:00am EST

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RNS Number : 9068W
Feedback PLC
07 February 2012
 



 

 

7 February 2012

Feedback plc

("Feedback", the "Company" or the "Group")

 

Interim Report for the six months ended 30 November 2011

 

KEY POINTS

 

·      Turnover £4.1 million (2010 - £3.6 million)

·      Profit before tax £0.35 million (2010 - loss £0.12 million)

·      Earnings per share 0.30p (2010 - loss 0.13p)

 

Executive Chairman's Statement

In a challenging trading environment we have made good progress against our key objectives of returning the Group to growth and profitability.

 

Turnover has increased to £4.1 million, up 13% on the equivalent period last year. Profit before tax of £348,000 includes the release of a legacy stock provision of £402,000, without which the Group's like-for-like operations would have delivered a break-even result. Bank overdrafts were £444,000 (2010: cash and cash equivalents £379,000) which were higher than management's expectations primarily due to the one-off costs associated with restructuring the existing business, start-up expenses for the new Black Box division and the necessary investment in business systems and raw materials needed to manage and meet increased demand.

 

Our order intake and pipeline have benefited from increased sales focus and attention to account management. The improvements in business systems, which have been in process for a number of years, are now fully operational and, along with restructuring the pre-production operations, have allowed us to take better control of throughput resulting in shorter lead times and more accurate production planning.

 

In our Data business we remain pleased with the strength of our relationships with existing partners and are encouraged by our ability to create differentiation and attract new customers with our Nohmad product line. We continue to invest heavily in product development and account management.

 

Our Black Box business commenced operations in June 2011 with a strategy to develop and build data-centric electronics products for our customers' markets. Initial products have now been launched and we look forward to reporting on further progress in the second half of the year.

 

Order intake for the period in our Instruments business is up by over 20% compared with the previous year. However, the slow pace at which some international education projects progress means we continue to suffer the legacy effect of previous years' under-investment in sales activity. In the US, Feedback Inc. has reviewed its sales agents, replaced a number, and strengthened our business in key East and West coast markets.

 

Our UK and International markets remain difficult to predict in both their general economies and our specific areas of activity but we are now better positioned to take advantage of opportunities as and when they arise.

 

The external environment apart, we have made fundamental changes to the way in which the Group operates and our turnaround has started. We recognise the challenges of the markets within which we operate and we continue to explore all opportunities to maximise shareholder value whilst realising our strategic goals.

 

Nick Shepheard

Chairman and Chief Executive

 

7 February 2012

 

 

For further information contact:

 

Feedback plc

Tel: 01892 653 322

Nick Shepheard




Merchant Securities Limited (Nominated Adviser and Broker)

Simon Clements/Lindsay Mair

Tel: 020 7628 2200



 

 

UNAUDITED CONSOLIDATED INCOME STATEMENT

 

 



6 months to

30 November 2011

6 months to

30 November 2010

Year to

31 May

2011


 

£'000

£'000

£'000






Revenue


4,100

3,618

6,308

Cost of sales


(2,363)

(2,070)

(3,969)



-------------

-------------

-------------

Gross profit


1,737

1,548

2,339






Other operating expenses

2

(1,389)

(1,662)

(3,170)



-------------

-------------

-------------

Operating profit/(loss)


348

(114)

(831)






Finance costs


-

(4)

(9)



-------------

-------------

-------------

Profit/(loss) before tax


348

(118)

(840)






Tax expense


(1)

(18)

(22)



-------------

-------------

------------

Profit/(loss) for the period attributable to the





equity shareholders of the parent


347

(136)

(862)






Other comprehensive income/(expense)





Translation differences on overseas operations


9

(14)

(36)



-------------

-------------

-------------

Total comprehensive income/(expense) for the period


356

(150)

(898)



======

======

======











Basic and diluted earnings per share

3

0.30p

(0.13)p

(0.79)p

 

 



UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 


Share

Share

Capital

Retained



Capital

Premium

Reserve

Earnings

Total


£000

£000

£000

£000

£000







Balance at 31 May 2010

273

633

300

2,341

3,547







Total comprehensive income for the period

-

-

-

(150)

(150)


-----------

------------

-----------

-------------

-------------

Balance at 30 November 2010

273

633

300

2,191

3,397







Total comprehensive expense for the period

-

-

-

(748)

(748)


-----------

------------

-----------

-------------

-------------

Balance at 31 May 2011

273

633

300

1,443

2,649







Total comprehensive income for the period

54

218

-

356

628


-----------

------------

-----------

--------------

-------------

Balance at 30 November 2011

327

851

300

1,799

3,277


======

======

======

=======

======

 



UNAUDITED CONSOLIDATED BALANCE SHEET

 

 

 


30 November 2011

30 November 2010

31 May

2011

 


£'000

£'000

£'000

ASSETS





 





Non-current assets





Property, plant and equipment


1,490

1,600

1,505

Intangible assets


738

775

732

Deferred tax asset


133

156

134

 


-------------

-------------

-------------

 


2,361

2,531

2,371

 


-------------

-------------

-------------

Current assets





Inventories


1,468

1,100

1,030

Trade receivables


1,265

1,020

930

Other receivables


309

149

233

Cash and cash equivalents


-

379

9

 


-------------

-------------

-------------

 


3,042

2,648

2,202

 


-------------

-------------

-------------

Total assets


5,403

5,179

4,573

 


======

======

======

 





LIABILITIES





 





Non-current liabilities





Deferred tax liabilities


199

217

198

 


-------------

-------------

------------

Current liabilities





Trade payables


707

924

909

Other payables


776

641

817

Bank overdrafts


444

-

-

 


-------------

-------------

------------

 


1,927

1,565

1,726

 


-------------

-------------

------------

Total liabilities


2,126

1,782

1,924

 


-------------

-------------

------------

Net assets


3,277

3,397

2,649

 


======

======

======

 





EQUITY





 





Capital and reserves attributable to the Company's equity shareholders





Called up share capital


327

273

273

Share premium account


851

633

633

Capital reserve


300

300

300

Retained earnings


1,799

2,191

1,443

 


-------------

-------------

------------

Total equity


3,277

3,397

2,649

 


======

======

======

 





 

 

 



UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

 

 

 

6 months to

30 November 2011

6 months to

30 November 2010

Year to

31 May

2011

 

£'000

£'000

£'000

 




Cash flows from operating activities




Profit/(loss) before tax

348

(118)

(818)

Adjustments for:




Finance charges

-

4

-

Depreciation and amortisation

204

188

565

Foreign exchange difference

9

(13)

(36)

(Increase)/decrease in inventories

(438)

200

270

(Increase)/decrease in trade receivables

(335)

559

956

(Increase)/decrease in other receivables

(76)

26

(8)

Decrease in trade payables

(202)

(35)

(357)

Decrease in other payables

(41)

(225)

(111)

 

--------------

--------------

--------------

Net cash (used in)/generated from operating activities

(531)

586

461

 

--------------

--------------

--------------

Cash flows from investing activities




Interest received

-

-

-

Purchase of tangible fixed assets

(36)

(35)

(98)

Purchase of intangible assets

(158)

(193)

(370)

 

--------------

--------------

--------------

Net cash used in investing activities

(194)

(228)

(468)

 

--------------

--------------

--------------

Cash flows from financing activities




Interest paid

-

(4)

(9)

Proceeds from issuance of ordinary shares

272

-

-

 

--------------

--------------

--------------

Net cash generated from financing activities

272

(4)

(9)

 

--------------

--------------

--------------

 




Net movement in cash and cash equivalents

(453)

354

(16)

Cash and cash equivalents at beginning of period

9

25

25

 

--------------

--------------

--------------

Cash and cash equivalents at end of period

(444)

379

9

 

=======

=======

=======

 

 

 

 

FEEDBACK PLC

 

NOTES TO THE UNAUDITED INTERIM REPORT

 

 

1.

BASIS OF PREPARATION






The consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as endorsed by the European Union ("IFRS") and expected to be effective at the year end of 31 May 2012. The accounting policies are unchanged from the financial statements for the year ended 31 May 2011.

 

The information set out in this interim report for the six months ended 30 November 2011 does not comprise statutory accounts within the meaning of section 434 of The Companies Act 2006. The results for the period ended 31 May 2011 are based on the published accounts for that period on which the auditors gave a report which did not contain statements under section 498 of the Companies Act 2006.  The accounts for the period ended 31 May 2011 have been filed with the Registrar of Companies.

 

This interim report was approved by the directors on 7 February 2012.

 



 

2.

SIGNIFICANT EVENTS

 



 


Profit before tax of £348,000 includes the release of a legacy stock provision of £402,000.  Management consider the release of the provision appropriate following investment in the Group's stock and production management systems which have improved stock reporting.

 



 

3.

EARNINGS PER SHARE

 



 


The earnings per share for the six months ended 30 November 2011 is based on the Group profit on ordinary activities after taxation of £347,000 (2010: loss £136,000) attributed to the weighted average of 130,946,746 Ordinary Shares (2010: 109,146,176), being the weighted average number of shares in issue

 

 

4.       SHARE ISSUE

 

During the period the Group issued 21,800,000 new ordinary 0.25 pence shares at a subscription price of 1.25 pence per share to certain Directors of the group, Institutional and other investors.

 

Following the issuance of 10,158,755 of the shares to Directors, the Directors have the following shareholdings: 

 


No. of Subscription Shares

Shareholding following Admission

Percentage holding of enlarged issued share capital





David Barton (Non-executive Director)

     2,621,204

     15,744,871

               12.02

John Westcott (Non-executive Director)

     1,537,551

       5,999,287

      4.58

Nick Shepheard (Executive Chairman)

     5,000,000

       5,000,000

      3.82

Mark Bird (Group Sales Director)

     1,000,000

       1,000,000

      0.76

 

 



 

INDEPENDENT REVIEW REPORT TO FEEDBACK PLC

 

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 30 November 2011 which comprises the Consolidated Income Statement, the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the Notes to the Unaudited Interim Report.  We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report, including the conclusion, has been prepared for and only for the Company for the purpose of meeting the requirements of the AIM Rules for Companies and for no other purpose.  We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

Directors' Responsibilities

The interim financial report, is the responsibility of, and has been approved by the directors.  The directors are responsible for preparing and presenting the interim financial report in accordance with the AIM Rules for Companies.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the European Union.  The condensed set of financial statements included in this interim financial report has been prepared in accordance with the measurement and recognition criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements, as adopted by the European Union.

 

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

 

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 30 November 2011 is not prepared, in all material respects, in accordance with the measurement and recognition criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the European Union, and the AIM Rules for Companies.

 

haysmacintyre

Chartered Accountants

Fairfax House

15 Fulwood Place

London

WC1V 6AY                                                                                                                                      

 

7 February 2012

 

 

 


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