TIDMRMS
RNS Number : 9772N
Remote Monitored Systems PLC
27 September 2019
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
27 September 2019
Remote Monitored Systems plc ("Remote Monitored Systems", the
"Company" or the "Group")
Half Yearly Report to 30 June 2019
Remote Monitored Systems plc, the AIM quoted survey, inspection
and monitoring company is pleased to present its unaudited half
yearly report for the six-month period ended 30 June 2019.
OVERVIEW
-- Geocurve is continuing to focus successfully on recurring
contracts, extending its customer base, reducing debt and becoming
cash neutral
-- Geocurve's partnership with Landscope is becoming operational
with cost savings and additional sales opportunities.
-- GyroMetric achieved sales to new customers during the period,
whilst keeping tight control of costs
-- Loss after tax GBP723,954 (2018: GBP416,172)
-- 43% decrease in revenue to GBP261,854 (2018 restated:
GBP460,330). The decrease in revenue results from a slower than
expected start by Geocurve Limited ("Geocurve") to 2019 due to
remedial works required on the TEAM2100 Project
-- GBP17,500 of the GBP140,000 withheld on retention in respect
of the TEAM2100 Project was released in the period ended 30 June
2019, with the remainder expected to be released during 2H 2019
-- 15% increase in cost of sales GBP295,764 (2018: GBP256,325),
due to the additional manpower required on the TEAM2100 Project
during 1H, this manpower was released in the second half of the
year
-- 19% increase in administrative expenses GBP540,746 (2018:
GBP454,220), the increase mostly arising from operating costs in
GyroMetric Systems Limited ("GyroMetric")
-- Overall 74% increase in losses after tax GBP723,954 (2018: GBP416,172)
-- Cash balances at the period end of GBP17,707 (2018:
GBP109,381). Additional GBP100,000 raised after the period end
through the issue of Convertible Loan Notes
Trevor Brown, CEO of Remote Monitored Systems plc, commented
"Although the difficulties identified at Geocurve earlier in the
year were disappointing, we have taken decisive action to resolve
these, with the backlog on the Thames contract eliminated, costs
reduced, and Geocurve returned to operating profitability in June.
GyroMetric, whilst continuing to focus on significant opportunities
in the wind sector, has made excellent progress in identifying new
customers in industrial sectors with shorter lead times, in
addition to continuing to deliver new orders in the marine
market."
A copy of these interim financial statements is available on the
Company's website: www.remotemonitoredsystems.com
ENQUIRIES:
Remote Monitored Systems plc
Trevor Brown (Executive Director) +41 7941 55384
Nigel Burton (Non-Executive Chairman) +44 7785 234447
SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker +44 20 3470 0470
Stuart Gledhill
Jeff Keating
Caroline Rowe
Peterhouse Corporate Finance
Joint Broker +44 20 7469 0930
Lucy Williams
Fungai Ndoro
CHAIRMAN'S STATEMENT
Survey & Inspection
Geocurve
As announced on 29 March, Geocurve Limited ("Geocurve"), which
provides Survey and Inspection services principally to major
blue--chip companies and government agencies, experienced a slower
than expected start to 2019, largely as a result of the need to
dedicate more resources than expected to the Environment Agency's
Thames Estuary Asset Management 2100 (TEAM2100) programme.
The review of this contract following the departure of the
previous Managing Director identified that the Geocurve revenue
figure included in the first half of 2018 was overstated by
GBP140,000 (this had been reflected accurately in the full year
accounts to 31 December 2018). As a result, the revenue figures for
the period to 30 June 2018 shown in the Statement of Comprehensive
Income have been restated to GBP460,330 (from GBP600,330).
Work has now been completed to deliver work relating to the
GBP140,000 revenue deferred from 2018. Of this, GBP17,500 was
recognised in 1H 2019 with the remainder scheduled to be invoiced
and paid in the second half of 2019.
The allocation of resources to deliver this work had an adverse
impact on Geocurve's ability to undertake other work, resulting in
a 43% decrease in revenues to GBP261,854 in 1H 2019.
Geocurve underwent a major cost cutting exercise in the first
half of the year, reducing the business headcount from 14 to 8. The
business has been restructured to ensure that all remaining staff
are multi-skilled and are working to maximum efficiency, and as a
result the reduction in headcount has not impacted on the level of
service provided, or the volume of work that the business is able
to carry out.
During 1H 2019, Geocurve implemented a revised strategy. Whilst
continuing with the TEAM2100 contract, Geocurve has widened its
customer base and carried out work for smaller sub-contractors,
architects and designers as well as blue-chip contractors. As a
result of the revised strategy, Geocurve returned to trading
profitably in June.
After the period end, Geocurve announced a Joint Venture ("JV")
with Landscope Engineering Limited ("Landscope") to pool certain
assets and skills. The JV agreement with Landscope gives Geocurve
the opportunity to ensure that the Pegasus Two: Ultimate mobile
mapping equipment is utilised to its full capacity and at maximum
value. The higher value mobile mapping projects are part of a full
suite of services which, alongside Landscope, can be provided at
the highest standards, making the JV well placed to unlock many new
opportunities.
The directors believe that Geocurve's skill set and its use of
innovative technology has the potential to transform the practice
of surveying, and reflects Geocurve's continuing transition to
becoming a leading UK provider of surveying services above and
below land and water - providing a full breadth of services ranging
from manual topographic surveys to UAV, Ground Penetrating Radar,
Mobile Mapping and Hydrographic.
GyroMetric
GyroMetric develops and manufactures digital monitoring and
safeguarding systems for rotating shafts. The Gyrometric technology
uses proprietary algorithms, software and AI techniques to analyse
remotely critical drive shaft performance so as to diagnose and
predict drive system maintenance requirements before catastrophic
damage occurs. The company's technology is proven to operate
reliably in harsh environments over many years, and its products
are gaining considerable interest in several markets - marine drive
systems, oil & gas, and wind turbines - with a growing
installed base in the first of these.
The Group acquired an initial 36.9% interest in GyroMetric in
April 2018 and increased its shareholding to 57.8% in September
2018.
Although GyroMetric did not generate any revenues in 2018, sales
of GBP17,639 to new and existing customers were achieved in 1H
2019, with further orders received and invoiced since the period
end. GyroMetric continues to exercise stringent control over
costs.
During the period GyroMetric's development team completed two
key projects that are expected to open new markets and reduce
costs. The first is a Universal Bearing Monitor that can be applied
much more widely with greatly reduced installation and support
costs, and the second is a Laser Sensor that is close to production
and general availability.
GyroMetric has recently signed a contract for a technical
cooperation with a major UK supplier to the energy and
petrochemical industries to develop applications for GyroMetric's
unique systems. Also, as a result of the successful recruitment of
a Technical Sales Director in 1H 2019, a number of promising
opportunities in new sectors, where lead times are typically
shorter, are already being pursued.
As previously announced, GyroMetric will be conducting trials
for two major wind turbine manufacturers, although both trials have
been subject to unforeseen delays outside the company's control.
GyroMetric has had confirmation that it is the supplier of choice
to instrument the largest and most imminent trial which is now
expected to commence in late 2019.
GyroMetric continues to find new markets and applications for
its unique technology, some of which have become apparent only
recently. This process of exploring new applications continues
apace and we expect to provide further updates to shareholders as
matters progress. It is clear that the potential uses for
GyroMetric's remote monitoring products are already exceeding our
original expectations. The Board remains excited by the
opportunities at GyroMetric, both in the wind industry and in new
sectors.
Financial Review
Change of presentational currency to Sterling
The interim financial statements are presented in Sterling
(GBP), which is considered to be the Group's functional and
presentational currency.
The functional and presentational currency changed with effect
from 1 January 2018 from US dollars to Sterling. The change in
functional currency reflects the fact that the Group's training and
US activities have been closed, with Geocurve and Gyrometric now
the main trading entities within the Group. The change in
functional currency has been adopted prospectively from 1 January
2018.
The change in presentational currency is considered to be a
change in the Group's accounting policies and has therefore been
accounted for retrospectively as though the presentational currency
of the Group was always Sterling. The gains/losses arising from the
changes in presentational currency have been recorded in other
comprehensive income.
Financial Overview
During the period, the Group recorded revenues of GBP261,854
compared with restated revenues of GBP460,330 for the six months to
30 June 2018. The operating loss for the six months to 30 June 2019
was GBP817,284 (Period to 30 June 2018: GBP446,907). Administrative
expenses amounted to GBP540,746 (Period to 30 June 2018:
GBP454,220), see table and the bullet points below for details in
relation to the increase in administrative expenses. The loss after
tax for the period was GBP723,954. The loss per share was 0.19
pence (2017: loss per share 0.15 pence).
-- The total revenue figure GBP261,854 for June 2019 relates to
Geocurve GBP244,175 and Gyrometric GBP17,679. The comparative
revenue figure for June 2018 was GBP460,330, which related wholly
to Geocurve. The GBP460,330 was made up of GBP298,756 revenue from
the TEAM2100 contract and GBP161,574 revenue from other customers.
In the period to June 2019, the revenue figure GBP244,175 is made
up of GBP17,500 relating to the TEAM2100 contract and GBP226,675
relating to other customers. Geocurve was unable to carry out work
for other clients for a substantial part of February 2019 due to
the requirement to carry out remedial works in relation to the
TEAM2100 contract
-- Consolidated net assets at 30 June 2019 amounted to
GBP304,582 (30 June 2018: GBP1,013,458). The decrease in net assets
is due to the additional cash requirements in the 1H 2019 and
impairments made to intangible assets at December 2018
-- Cash balances at the period end amounted to GBP17,707 (30 June 2018: GBP109,381)
-- During the period the Company raised GBP340,000 net of costs
through the issue of new shares
-- The increase in administrative costs relates to:
2018 (restated) Increase Increase
2019 (GBP) (GBP) (GBP) (%)
GBPnil,
shown as
share of
loss in
Gyrometric 139,835 associate 139,835 n/a%
---------- --------------- -------- --------
Consultancy/Contractors 2,856 46,589 (43,733) (93)%
---------- --------------- -------- --------
Other 398,055 407,631 (9,576) (2)%
---------- --------------- -------- --------
Total Administrative Expenses
(as per statement of comprehensive
income) 540,746 454,220 86,526 19%
---------- --------------- -------- --------
-- The borrowings figure relating to the Pegasus Equipment
reduced to GBP72,279 (2018: GBP333,333). The outstanding capital
owed is now less than 15% of the original acquisition cost
Consolidation of share capital
A resolution was passed at the Group's AGM on 29 June 2018 to
consolidate every 20 ordinary shares of 0.01p each in the issued
share capital of Remote Monitored Systems into one ordinary share
of 0.2p each. Thus, with effect from 2 July 2018, there were
308,676,386 New Ordinary Shares of 0.2p each ("Shares") in issue
compared with the June 2018 total of 6,173,527,709 Ordinary Shares
of 0.01p. The EPS calculated as part of the condensed consolidated
statement of comprehensive income reflects the consolidated share
capital.
Post-period end events
Following the year end, the Group issued unsecured convertible
loan notes for a total of GBP100,000 (the "CLNs"). The CLNs have an
annual coupon of 6%, expire on 4 July 2020 and are convertible into
22,222,222 ordinary shares of 0.2p each in the Company at a price
of 0.45 pence per share being the closing bid price on the day
immediately prior to the date of the CLNs being issued, being 3
July 2019. The CLNs were subscribed for by the Company's directors
or companies controlled by them. In addition to the CLN
Transaction, two of the Company's Directors, Mr Brown and Mr Ryan
agreed to convert all, or substantially all, outstanding
compensation at the time amounting to approximately GBP95,000, into
a total of 21,101,715 ordinary shares of 0.2p each at a price of
0.45 pence per share. Mr Brown converted GBP24,000 of fees for
5,333,333 Shares and Mr Ryan converted GBP70,958 of fees for
15,768,382 Shares. As at 31 August 2019, the group had cash and
cash equivalents totalling GBP46,980.
Following completion of the cost reduction measures at Geocurve,
John Richardson has taken responsibility for the management and
financial oversight of Geocurve in addition to his role as a
Director of GyroMetric.
Acknowledgments
On behalf of the Board, I would like to extend our thanks to our
business partners, customers, employees and shareholders for their
continued support throughout the period.
Nigel Burton
Non-Executive Chairman
REMOTE MONITORED SYSTEMS PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 June
2019
Unaudited Unaudited
6 months 6 months
ended ended
30 30
June June
2019 2018 (restated)
Note GBP GBP
------------------------------------------------ ----- ------------ --------------------
Revenue 261,854 460,330
Cost of sales (295,764) (256,325)
------------------------------------------------ ----- ------------ --------------------
Gross (loss)/profit (33,911) 204,005
Administration expenses (540,746) (454,220)
Other Gains/(Losses) 6,900 (2,646)
Loss on foreign exchange (27) -
Depreciation (67,773) (51,893)
Impairment (181,728) (196,998)
Share option credit - 54,845
Operating Loss (817,284) (446,907)
------------------------------------------------ ----- ------------ --------------------
Finance income 3 4
Finance costs (4,031) (16,540)
Share of loss of associate accounted for
using the equity method - (32,260)
Loss before income tax (821,312) (495,703)
Income tax credit 6 97,358 79,532
------------------------------------------------ ----- ------------ --------------------
Loss for the year (723,954) (416,171)
------------------------------------------------ ----- ------------ --------------------
Other Comprehensive Income
Items that may be subsequently be reclassified
to profit or loss:
Currency translation differences (1,800) 4,936
------------------------------------------------ ----- ------------ --------------------
Total comprehensive income for the period,
net of tax (725,754) (411,235)
------------------------------------------------ ----- ------------ --------------------
Loss attributable to:
Equity holders of the parent (672,372) (411,235)
Non-controlling interests (51,582) -
Total comprehensive income attributable to:
Equity holders of the parent (674,172) (411,235)
Non-controlling interests (51,582) -
Earnings per ordinary share attributable
to owners of the parent during the period
(expressed in pence per share)
Basic and diluted 5 (0.19) (0.15)
REMOTE MONITORED SYSTEMS PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
Unaudited Unaudited
--------------------------------------- ----- ------------- -----------------
30 30
June June
2019 2018 (restated)
Note GBP GBP
--------------------------------------- ----- ------------- -------------------
Non-current assets
Intangible assets 641,039 720,028
Property, plant and equipment 7 430,016 555,408
Investments in associates 8 - 217,740
--------------------------------------- ----- ------------- -------------------
Total non-current assets 1,071,055 1,493,176
--------------------------------------- ----- ------------- -------------------
Current Assets
Inventories 10,854 -
Trade and other receivables 10 210,283 254,106
Cash and cash equivalents 17,707 424,757
--------------------------------------- ----- ------------- -------------------
Total current assets 238,844 678,863
--------------------------------------- ----- ------------- -------------------
TOTAL ASSETS 1,309,898 2,172,039
--------------------------------------- ----- ------------- -------------------
Equity attributable to owners of the
parent
Share capital 3 4,899,438 4,744,163
Share premium 6,562,937 6,102,763
Other reserves (298,453) (307,954)
Translation reserve 90,381 160,350
Retained loss (10,920,366) (9,685,863)
--------------------------------------- ----- ------------- -------------------
EQUITY ATTRIBUTABLE TO OWNERS OF THE
PARENT 333,937 1,013,459
--------------------------------------- ----- ------------- -------------------
Non-controlling interests (29,354) -
--------------------------------------- ----- ------------- -------------------
TOTAL EQUITY 304,583 1,013,459
--------------------------------------- ----- ------------- -------------------
Current liabilities
Trade and other payables 793,355 623,546
Borrowings 72,279 333,333
--------------------------------------- ----- ------------- -------------------
Total current liabilities 865,633 956,879
--------------------------------------- ----- ------------- -------------------
Non-current liabilities
Other payables 31,311 -
Deferred tax liabilities 108,371 201,701
--------------------------------------- ----- ------------- -------------------
Total non-current liabilities 139,682 201,701
--------------------------------------- ----- ------------- -------------------
TOTAL LIABILITIES 1,005,315 1,158,580
--------------------------------------- ----- ------------- -------------------
TOTAL EQUITY AND LIABILITIES 1,309,898 2,172,039
--------------------------------------- ----- ------------- -------------------
REMOTE MONITORED
SYSTEMS
PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2019
Attributable to owners of the parent
---------- ----------------------------------------------------------------------------------
Retained Minority
Share Share Other Translation Loss Interests
capital premium reserves reserve (restated) Total
GBP GBP GBP GBP GBP GBP GBP
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
As at 1 January
2018
(restated) 4,512,087 5,499,946 (253,109) 155,414 (9,269,692) - 644,646
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
Loss for the period - - - - (416,171) - (416,171)
Other comprehensive
income for the
period
Currency
translation
difference - - - 4,936 - - 4,936
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
Total comprehensive
income for the
period - - - 4,936 (416,171) - (411,235)
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
Proceeds from
shares
issued
(net of costs) 189,305 441,925 - - - - 631,230
Share based
payments 42,771 77,729 - - - - 120,500
Warrants Issued - 83,163 (54,845) - - - 28,318
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
Transactions with
owners,
recognised
directly
in equity 232,076 602,817 (54,845) - - - 780,048
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
As at 30 June 2018
(restated) 4,744,163 6,102,763 (307,954) 160,350 (9,685,863) - 1,013,459
-------------------- ---------- ---------- ---------- ------------ ------------ ------------- ----------
As at 1 January 2019 4,791,746 6,330,629 (298,453) 92,181 (10,247,994) 22,228 690,337
--------------------------- ---------- ---------- ---------- -------- ------------- --------- ----------
Loss for the period - - - - (672,372) (51,582) (723,954)
Other comprehensive
income for the period
Currency translation
difference - - - (1,800) - - (23,454)
--------------------------- ---------- ---------- ---------- -------- ------------- --------- ----------
Total comprehensive
income for the period - - - (1,800) (672,372) (51,582) (725,754)
--------------------------- ---------- ---------- ---------- -------- ------------- --------- ----------
Proceeds from shares
issued
(net of costs) 107,692 232,308 - - - - 340,000
Transactions with owners,
recognised directly
in equity 107,692 232,308 - - - - 340,000
--------------------------- ---------- ---------- ---------- -------- ------------- --------- ----------
As at 30 June 2019 4,899,438 6,562,937 (298,453) 90,381 (10,920,366) (29,354) 304,583
--------------------------- ---------- ---------- ---------- -------- ------------- --------- ----------
REMOTE MONITORED SYSTEMS PLC
CONSOLIDATED STATEMENT OF CASH FLOW
For the six month period ended 30 June 2019
Unaudited Unaudited
6 months 6 months
ended ended
30 June 30 June
2019 2018 (restated)
Note GBP GBP
--------------------------------------------- ------ ----- ---------- -------------------
Cash Flows from Operating Activities
Loss for the period before tax (821,312) (495,703)
Depreciation of property, plant
and equipment 67,773 51,893
Share based payments - 120,500
Impairments 181,728 196,998
Share of loss in associate - 32,260
Finance costs 4,031 16,540
Finance income (3) (4)
Foreign exchange on operating activities 27 -
Taxation - 100,297
Bad debts 1,680 -
Decrease in inventories 7,236 -
Decrease/(increase) in trade and
other receivables 44,248 (66,473)
Increase/(Decrease) in trade and
other payables 178,442 (86,542)
--------------------------------------------- ------ ----- ---------- -------------------
Cash used in operations (336,150) (130,234)
Interest expense (4,031) (16,540)
--------------------------------------------- ------ ----- ---------- -------------------
Net cash used in operating activities (340,181) (146,774)
--------------------------------------------- ------ ----- ---------- -------------------
Cash Flows used in Investing Activities
Purchases of property, plant and
equipment 7 (15,776) (536,316)
Proceeds from disposal of property,
plant and equipment 18,667 500
Investments in associates - (250,000)
Interest income 3 4
--------------------------------------------- ------ ----- ---------- -------------------
Net cash used in investing activities 2,894 (785,812)
Cash Flows from Financing Activities
(Repayments of)/Net proceeds from
borrowings (94,387) 215,526
Issue of shares, net of issue costs 340,000 631,230
--------------------------------------------- ------ ----- ---------- -------------------
Net cash generated from financing
activities 245,613 846,756
--------------------------------------------- ------ ----- ---------- -------------------
Net (decrease)/increase in cash
and cash equivalents (91,674) (85,830)
Exchange gains - 7,589
Cash and cash equivalents at beginning
of period 109,381 502,998
--------------------------------------------- ------ ----- ---------- -------------------
Cash and cash equivalents at end
of period 17,707 424,757
--------------------------------------------- ------ ----- ---------- -------------------
NOTES TO THE INTERIM RESULTS:
1. General information and accounting policies
The principal activity of Remote Monitored Systems plc ("the
Company") and its subsidiaries (together "the Group") is the
provision by Geocurve of Survey & Inspection services. The
Company also has a 58% stake in GyroMetric Systems, which
specialises in next generation digital monitoring and safeguarding
technology and services for rotating shafts.
The Company is a public limited company, incorporated and
domiciled in the United Kingdom, with its shares traded on the
London Stock Exchange's AIM. Its registered office is: Ground
Floor, Tintagel House, Kelvedon, CO5 9BP.
This announcement is for the unaudited interim results for the
period ended 30 June 2019.
The Directors approved these unaudited interim results on 27
September 2019.
2. Basis of preparation
The condensed consolidated interim financial information (the
"Financial Information") has been prepared in accordance with the
requirements of the AIM Rules for Companies. As permitted, the
Company has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this Financial Information. The Financial
Information should be read in conjunction with the annual financial
statements for the year ended 31 December 2018, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union. In the opinion
of the Directors the Financial Information for the period
represents fairly the financial position, results from operations
and cash flows for the period in conformity with generally accepted
accounting principles consistently applied.
The Financial Information set out above does not constitute
statutory accounts within the meaning of the Companies Act 2006.
The Financial Information has been prepared on a going concern
basis in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the period
ended 31 December 2018 were approved by the Board of Directors on
24 June 2019 and subsequently delivered to the Registrar of
Companies and are also available on the Group's website:
www.remotemonitoredsystems.com. The independent auditor's report on
those financial statements disclosed a material uncertainty in
relation to going concern.
The 2019 Financial Information of the Group has not been
audited.
Theses interim results are presented in Sterling rounded to the
nearest pound.
Going concern basis
The interim financial information has been prepared assuming
that the Group will continue as a going concern. As at 31 August
2019, the group had cash and cash equivalents totalling
GBP46,980.
The operational requirements of the Group comprise of
maintaining a Head Office in the UK alongside its UK operations.
The Directors have reviewed the Group's working capital forecasts
and Geocurve will be self-funding in 2019. Gyrometric requires
additional investment to achieve sales growth.
The Company plans to raise further funds by a placing of
ordinary shares. Should a placing not take place in a timely
manner, the Directors will need to immediately raise additional
funds in order to be able to continue as a going concern. The
ability of the Company to raise additional funds is dependent upon
investor appetite and, if necessary, the Directors' ability to
obtain alternative sources of funding.
The Directors have a reasonable expectation that the Company
will be able to raise sufficient funding to allow it to cover its
working capital for a period of twelve months from the date of
approval of the interim financial information. It is for this
reason they continue to adopt the going concern basis of
accounting.
Risks and uncertainties
The Board continuously assesses and monitors the key risks
facing the business. The key risks that could affect the Group's
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Group's
2018 Annual Report and Financial Statements. The Group is exposed
to market risks (including foreign exchange risk and price risk),
credit risk and to a limited extent, interest rate risk and
liquidity risk.
Critical accounting estimates and judgements
The preparation of Financial Information in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the end of the reporting
period. It also requires management to exercise its judgement in
the process of applying the Group's Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial
Information, are disclosed in Note 4 of the Group's 2018 Annual
Report and Financial Statements.
Accounting Policies
There have been no changes to the Group's accounting policies,
presentation and methods of computation in this Financial
Information compared to those which were applied in the preparation
of the Group's Annual Financial Statements for the year ended 31
December 2018.
3. Share capital
On 17 January 2019 the Company issued 53,846,154 new ordinary
shares of 0.2p each at a price of 0.65p per share raising
GBP350,000. Nigel Burton subscribed GBP100,000 for 15,384,615
shares and Trevor Brown also subscribed GBP100,000 for 15,384,615
shares.
4. Directors' Transactions
The directors of the Company who participated in the January
2019 Open Offer were as follows:
-- Nigel Burton subscribed GBP100,000 for 15,384,615 shares
-- Trevor Brown subscribed GBP100,000 for 15,384,615 shares
5. Earnings per share
Basic earnings per share have been calculated by dividing the
loss attributable to equity holders of the Company after taxation
by the weighted average number of shares in issue during the
period. There is no difference between the basic and diluted
earnings per share as the effect on the exercise of options and
warrants would be to decrease the earnings per share.
6 months ended 6 months
30 June 2019 ended 30 June
2018 (restated)
Basic and Diluted GBP GBP
----------------------------------- --------------- --------------------
Loss after taxation (723,954) (416,171)
----------------------------------- --------------- --------------------
Weighted average number of shares 383,338,924 278,963,225
Earnings per share (pence) (0.19) (0.15)
----------------------------------- --------------- --------------------
6. Tax
No income tax charge was recognised in the statement of
comprehensive income due to losses incurred.
6 months ended 6 months
30 June 2019 ended 30
June 2018
(restated)
Income tax GBP GBP
-------------------------- -------------- --------------
Current tax
UK Corporation tax credit - -
-------------------------- -------------- --------------
Deferred tax
Current year 97,358 79,532
-------------------------- -------------- --------------
Tax credit 97,358 79,532
-------------------------- -------------- --------------
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to the profits/(losses) of the consolidated
entities as follows:
6 months ended 6 months ended 30 June 2018 (restated)
30 June 2019
GBP GBP
----------------------------------------------- -------------- -----------------------------------------
Loss before tax (821,312) (495,703)
----------------------------------------------- -------------- -----------------------------------------
Tax at the applicable rate of 19% (2018: 19%): (156,049) (94,184)
Effect of:
Fixed asset timing differences 97,358 79,532
Net tax effect of losses carried forward 156,049 94,184
----------------------------------------------- -------------- -----------------------------------------
Tax credit for the year 97,358 79,532
----------------------------------------------- -------------- -----------------------------------------
The tax rate used is the standard rate of corporation tax in the
UK 19% as all US operations have been closed.
7. Property, plant and equipment
There were no material fixed asset movements in the current
period. In the previous period ended 30 June 2018, the Pegasus Two
Ultimate Mobile Mapping Equipment and Backpack were purchased for
GBP500,000 and UAV equipment for GBP18,427.
8. Investment in associates
6 months ended 6 months ended 30 June 2018
30 June 2019
GBP GBP
---------------------------------------- -------------- ------------------------------
1 Jan 217,740 -
Additions - 250,000
Share of loss (10,012) (32,260)
Reclassification to subsidiary (note 9) (207,728)
30 Jun - 217,740
---------------------------------------- -------------- ------------------------------
Nature of investment in associates during 2018:
Name of entity Registered office % ownership interest Measurement method
address
------------------ --------------------- -------------------- ------------------
GyroMetric Systems Dockholme Lock 36.9% Equity
Limited Cottage, 380 Bennett
Street, Long Eaton,
Nottingham, NG10
4JF
------------------ --------------------- -------------------- ------------------
9. Acquisition of subsidiary undertakings
The Company gained control of GyroMetric Systems Limited in
September 2018. The control was gained by two separate
transactions, the first in April 2018, acquiring 36.9% of
Gyrometric System's share capital for a cash consideration of
GBP250,000. The second transaction in September 2018, acquired
20.9% of Gyrometric System's share capital by allotting 23,791,304
new shares in RMS plc at 1.15p, at a total cost of GBP273,600. RMS
plc now has a total controlling holding in Gyrometric Systems of
57.8%.
On acquisition
(GBP)
Purchase consideration
Cash 250,000
Shares (23,791,304 shares @ 1.15p) 273,600
--------
523,600
Non-controlling interest 60,975
Fair value of net assets acquired (see
below) (144,491)
Share of loss in associate (42,272)
Intellectual property (73,000)
---------------
Goodwill 324,812
---------------
The fair value of net assets and liabilities arising from the
acquisition are as follows:
On acquisition
GBP
Cash and cash equivalents 141,439
Property, plant and equipment 706
Inventory 7,079
Trade and other receivables 16,253
Trade and other payables (14,873)
Director loans (6,113)
---------------
Net assets acquired 144,491
---------------
If new information obtained within one year from the acquisition
date about the facts and circumstances that existed at the
acquisition date identifies adjustments to the above amounts, or
any additional provisions that existed at the acquisition date,
then the acquisition accounting will be revised.
10. Trade and Other Receivables
Included within the trade and other receivables balance of
GBP210,283 is GBP21,000 owing from TEAM2100 in respect of the
Thames Project. The restated comparative amount, after adjusting
for the GBP140,000 identified as an audit adjustment in 2018, is
GBP55,383 owing from TEAM2100 in respect of the Thames Project.
11. Dividends
No dividend has been declared or paid by the Company during the
6 months ended 30 June 2019 (2018: nil).
12. Events after the reporting period
In July 2019 Trevor Brown and Paul Ryan agreed to convert all,
or substantially all, outstanding compensation amounting to
approximately GBP95,000, into a total of 21,101,715 ordinary shares
of 0.2p each at a price of 0.45 pence per share. Trevor Brown
converted GBP24,000 of fees for 5,333,333 Shares and Paul Ryan has
converted GBP70,958 of fees for 15,768,382 Shares.
In July 2019, the Directors also issued unsecured convertible
loan notes for a total of GBP100,000. The convertible loan notes
have an annual coupon of 6%, expire on 4 July 2020 and are
convertible into 22,222,222 ordinary shares of 0.2p each in the
Company ("Shares") at a price of 0.45 pence per share. Mr Trevor
Brown and Dr Nigel Burton both subscribed to GBP33,333 convertible
loan notes and Mr Paul Ryan subscribed to GBP33,334.
12. Approval of the interim financial information
The condensed Financial Information were approved by the Board
of Directors on 27 September 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFVIATIDFIA
(END) Dow Jones Newswires
September 27, 2019 06:44 ET (10:44 GMT)
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