TIDMZYT
RNS Number : 8880Y
Zytronic PLC
14 May 2019
14 May 2019
Zytronic plc
("Zytronic" or the "Company" and, together with its
subsidiaries, "Group")
Interim Results for the six months ended 31 March 2019
(unaudited)
Zytronic plc, a leading specialist manufacturer of touch
sensors, announces its consolidated interim results for the six
months ended 31 March 2019. Comparative data is given for the six
months ended 31 March 2018, except where indicated.
Overview
-- Group revenue of GBP9.5m (2018: GBP10.6m), impacted by decrease in Gaming revenue
(partially offset by stronger revenues in other sectors)
-- Profit before tax of GBP1.4m (2018: GBP2.2m)
-- Interim dividend maintained at 7.6p per share (2018: 7.6p)
-- Basic earnings per share ("EPS") of 7.4p (2018: 11.7p)
-- Net cash of GBP12.1m (30 September 2018: GBP14.6m)
Commenting on the results, Tudor Davies, Chairman said:
"As stated in our recent trading update, whilst historically
trading in the second half has shown an improvement over the first
half, and there are several projects that should improve
performance as they come to fruition, at this stage the Board is
taking a cautious and conservative view on an increase in activity
levels from the Gaming sector in the second half."
Enquiries:
Zytronic plc
Mark Cambridge, Chief Executive
Claire Smith, Group Finance Director 0191 414 5511
N+1 Singer (Nominated Adviser
and Broker)
Aubrey Powell, Alex Bond (Corporate
Finance)
Rachel Hayes (Corporate Broking) 020 7496 3000
Notes to Editors
Zytronic is the developer and manufacturer of a unique range of
internationally award-winning and patented touch sensor products,
operating from three modern factories totaling 80,000ft(2) near
Newcastle-upon-Tyne in the United Kingdom.
Zytronic touch products employ an embedded sensing solution and
are readily configurable to enable multi-user and multi-touch touch
sensing sizes from five inches to ultra-large 85", making them an
ideal solution for system designers' specific requirements,
offering significant durability, environmental stability and
optical enhancement benefits to touch interactivity for industrial,
self-service and public access equipment.
Chairman's statement
Introduction
As announced in the trading update on 2 May 2019, we have
experienced lower than expected revenues and profitability in the
first half of this year, principally due to considerably slower
sales of our touchscreen products into the previously buoyant
Gaming sector.
Results
Revenues for the first half to 31 March 2019 were GBP9.5m (2018:
GBP10.6m), with profit before tax of GBP1.4m (2018: GBP2.2m).
The reduction in revenues was due to the decline in sales into
the Gaming market to GBP3.1m (2018: GBP4.2m) with sales to sectors
such as Financial, Vending and Signage showing an increase to
GBP5.1m (2018: GBP4.6m), and other sales including Industrial of
GBP1.3m (2018: GBP1.8m).
The Gaming revenues were affected by a slower conversion of
opportunities to orders of new design projects not replacing the
anticipated reduction in volumes from several longer running
projects, which had consisted of higher margin larger format
products. In volume terms the numbers of touchscreens sold remained
at similar levels to last year, but the number of larger panels
dropped by 35% and this change in mix contributed toward a decline
in gross margin to 34.7% (2018: 39.6%) and had a knock-on effect on
profitability.
Cash generation
Net cash generation from operating activities was GBP0.2m (2018:
GBP2.4m) as a result of a GBP1.7m increase in working capital.
Along with further investment made into capital expenditure during
the first half of GBP0.4m and with the payment of the 2018 final
dividend of GBP2.4m, this resulted in closing cash balances of
GBP12.1m (30 September 2018: GBP14.6m).
Dividend
The Directors have maintained the interim dividend at 7.6p per
share (2018: 7.6p), payable on 19 July 2019 to shareholders on the
Register on 5 July 2019.
Outlook
As stated in our recent trading update, whilst historically
trading in the second half has shown an improvement over the first
half, and there are several projects that should improve
performance as they come to fruition, at this stage the Board is
taking a cautious and conservative view on an increase in activity
levels from the Gaming sector in the second half.
Tudor Davies
Chairman
14 May 2019
Consolidated statement of comprehensive income
Unaudited results for the six months to 31 March 2019
Six months Six months Year to
to to
31 March 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
------------------------- ------ ----------- ----------- -------------
Group revenue 9,463 10,605 22,288
Cost of sales (6,178) (6,408) (14,047)
------------------------- ------ ----------- ----------- -------------
Gross profit 3,285 4,197 8,241
Distribution costs (182) (213) (461)
Administration expenses (1,755) (1,806) (3,639)
------------------------- ------ ----------- ----------- -------------
Group trading profit 1,348 2,178 4,141
Finance costs - (3) (21)
Finance revenue 35 27 68
------------------------- ------ ----------- ----------- -------------
Profit before tax 1,383 2,202 4,188
Tax expense 3 (193) (330) (541)
------------------------- ------ ----------- ----------- -------------
Profit for the period 1,190 1,872 3,647
------------------------- ------ ----------- ----------- -------------
Earnings per share
Basic 4 7.4p 11.7p 22.7p
Diluted 4 7.4p 11.7p 22.7p
------------------------- ------ ----------- ----------- -------------
All activities are from continuing operations.
Consolidated statement of changes in equity
Unaudited results for the six months to 31 March 2019
Called
up
share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- --------- --------
At 1 October 2018 160 8,994 17,611 26,765
Profit for the period - - 1,190 1,190
Dividends - - (2,439) (2,439)
------------------------------ -------- -------- --------- --------
At 31 March 2019 (unaudited) 160 8,994 16,362 25,516
------------------------------ -------- -------- --------- --------
Consolidated statement of financial position
Unaudited results at 31 March 2019
At At At
31 March 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- -------------
Assets
Non-current assets
Intangible assets 1,460 1,660 1,585
Property, plant and equipment 6,566 6,790 6,605
----------------------------------- ---------- ---------- -------------
8,026 8,450 8,190
---------------------------------- ---------- ---------- -------------
Current assets
Inventories 3,948 2,969 3,021
Trade and other receivables 3,856 3,562 3,738
Derivative financial assets - 28 -
Cash and short term deposits 12,060 13,730 14,626
----------------------------------- ---------- ---------- -------------
19,864 20,289 21,385
---------------------------------- ---------- ---------- -------------
Total assets 27,890 28,739 29,575
----------------------------------- ---------- ---------- -------------
Equity and liabilities
Current liabilities
Trade and other payables 978 1,030 1,446
Derivative financial liabilities 3 - 7
Accruals 591 700 767
Tax liabilities 227 175 13
----------------------------------- ---------- ---------- -------------
1,799 1,905 2,233
---------------------------------- ---------- ---------- -------------
Non-current liabilities
Government grants 13 17 15
Deferred tax liabilities (net) 562 608 562
----------------------------------- ---------- ---------- -------------
575 625 577
---------------------------------- ---------- ---------- -------------
Total liabilities 2,374 2,530 2,810
----------------------------------- ---------- ---------- -------------
Net assets 25,516 26,209 26,765
----------------------------------- ---------- ---------- -------------
Equity
Equity share capital 160 160 160
Share premium 8,994 8,994 8,994
Revenue reserve 16,362 17,055 17,611
----------------------------------- ---------- ---------- -------------
Total equity 25,516 26,209 26,765
----------------------------------- ---------- ---------- -------------
Consolidated cashflow statement
Unaudited results for the six months to 31 March 2019
Six months Six months Year to
to to
31 March 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------ ----------- ----------- -------------
Operating activities
Profit before tax 1,383 2,202 4,188
Net finance income (35) (24) (47)
Depreciation and impairment of property,
plant and
equipment 361 369 709
Amortisation, impairment and write-off
of intangible assets 205 175 438
Amortisation of government grant (3) (8) (10)
Fair value movement on foreign exchange
forward contracts (4) 26 61
Working capital adjustments
(Increase)/decrease in inventories (927) 27 (25)
Increase in trade and other receivables (118) (56) (232)
(Decrease)/increase in trade and other
payables and provisions (648) (165) 295
-------------------------------------------------- ------ ----------- ----------- -------------
Cash generated from operations 214 2,546 5,377
Tax received/(paid) 25 (195) (573)
-------------------------------------------------- ------ ----------- ----------- -------------
Net cashflow from operating activities 239 2,351 4,804
-------------------------------------------------- ------ ----------- ----------- -------------
Investing activities
Interest received 30 27 65
Payments to acquire property, plant and
equipment (322) (103) (273)
Payments to acquire intangible assets (74) (202) (390)
-------------------------------------------------- ------ ----------- ----------- -------------
Net cashflow used in investing activities (366) (278) (598)
-------------------------------------------------- ------ ----------- ----------- -------------
Financing activities
Interest paid - (3) (21)
Dividends paid to equity shareholders
of the Parent (2,439) (2,439) (3,658)
Net cashflow used in financing activities (2,439) (2,442) (3,679)
-------------------------------------------------- ------ ----------- ----------- -------------
(Decrease)/increase in cash and cash equivalents (2,566) (369) 527
-------------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the beginning
of the period 14,626 14,099 14,099
-------------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the end of
the period 6 12,060 13,730 14,626
-------------------------------------------------- ------ ----------- ----------- -------------
Notes to the interim report
Unaudited results for the six months to 31 March 2019
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 tax 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 2019 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 2018 annual report and financial statements.
The financial information for the six months to 31 March 2019
and the comparative financial information for the six months to 31
March 2018 have not been audited. The comparative financial
information for the year ended 30 September 2018 has been extracted
from the 2018 annual report and financial statements.
The annual report and financial statements for the year ended 30
September 2018, which were approved by the Board of Directors on 10
December 2018, received an unqualified audit report, did not
contain a statement under Sections 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 2019.
3. Tax charge on profit on ordinary activities
The estimated tax rate for the year of 14% has been applied to
the half year's profit before tax, in accordance with the Auditing
Standard Board'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 2019 and 2018
Weighted Weighted
average average
number number
Earnings of shares EPS Earnings of shares EPS
31 March 31 March 31 March 31 March 31 March 31 March
2019 2019 2019 2018 2018 2018
GBP'000 Thousands Pence GBP'000 Thousands Pence
------------------------------- --------- ---------- --------- --------- ---------- ---------
Profit on ordinary activities
after tax 1,190 16,044 7.4 1,872 16,044 11.7
------------------------------- --------- ---------- --------- --------- ---------- ---------
Basic EPS 1,190 16,044 7.4 1,872 16,044 11.7
------------------------------- --------- ---------- --------- --------- ---------- ---------
The weighted average number of shares for diluted EPS is
calculated by including the weighted average number of shares under
option.
Weighted Weighted
average average
number number
Earnings of shares EPS Earnings of shares EPS
31 March 31 March 31 March 31 March 31 March 31 March
2019 2019 2019 2018 2018 2018
GBP'000 Thousands Pence GBP'000 Thousands Pence
------------------------------- --------- ---------- --------- --------- ---------- ---------
Profit on ordinary activities
after tax 1,190 16,044 7.4 1,872 16,044 11.7
Weighted average number - - - - - -
of shares under option
------------------------------- --------- ---------- --------- --------- ---------- ---------
Diluted EPS 1,190 16,044 7.4 1,872 16,044 11.7
------------------------------- --------- ---------- --------- --------- ---------- ---------
For the year to 30 September 2018
Weighted
average
number
Earnings of shares EPS
30 September 30 September 30 September
2018 2018 2018
GBP'000 Thousands Pence
----------------------------------------- ------------- ------------- -------------
Profit on ordinary activities after tax 3,647 16,044 22.7
----------------------------------------- ------------- ------------- -------------
Basic EPS 3,647 16,044 22.7
----------------------------------------- ------------- ------------- -------------
The weighted average number of shares for diluted EPS is
calculated by including the weighted average number of shares under
option.
Weighted
average
number
Earnings of shares EPS
30 September 30 September 30 September
2018 2018 2018
GBP'000 Thousands Pence
------------------------------------------------ ------------- ------------- -------------
Profit on ordinary activities after tax 3,647 16,044 22.7
Weighted average number of shares under option - - -
------------------------------------------------ ------------- ------------- -------------
Diluted EPS 3,647 16,044 22.7
------------------------------------------------ ------------- ------------- -------------
5. Dividends
The Directors propose the payment of an interim dividend of 7.6p
per share (2018: 7.6p), payable on 19 July 2019 to shareholders on
the Register on 5 July 2019. This dividend has not been accrued in
these interim accounts. The dividend payment will be approximately
GBP1.2m.
Six months Six months Year to
to 31 March to 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------------- ------------- ------------- --------------
Ordinary dividends on equity shares
Final dividend of 15.2p per ordinary share
paid on
9 March 2018 - 2,439 2,439
Interim dividend of 7.6p per ordinary share
paid on
20 July 2018 - - 1,219
Final dividend of 15.2p per ordinary share
paid on
22 February 2019 2,439 - -
--------------------------------------------- ------------- ------------- --------------
2,439 2,439 3,658
--------------------------------------------- ------------- ------------- --------------
6. Cash and cash equivalents
Six months Six months Year to
to 31 March to 31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- --------------
Cash at bank and in hand 12,060 13,730 14,626
-------------------------- ------------- ------------- --------------
For the purpose of the consolidated cashflow statement, cash and
cash equivalents comprise the following:
Six months Six months Year
to 31 March to 31 March to 30
September
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- -------------- -------------- ------------
Cash at bank and in hand 5,991 11,382 8,580
Short term deposits 6,069 3,030 6,046
Bank overdraft - (682) -
-------------------------- -------------- -------------- ------------
12,060 13,730 14,626
-------------------------- -------------- -------------- ------------
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 2019 the Group had available a net GBP1.0m (cash
less overdrawn accounts) overdraft facility from Barclays Bank plc,
which will fall for review in September 2019.
The fair value of cash and cash equivalents is GBP12.1m (2018:
GBP13.7m).
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
and Wear NE21 5NJ. Copies will be made available to shareholders
shortly. A copy of the presentation made to institutional investors
is also available on the Company's website.
Corporate information
Websites:
www.zytronicplc.com
www.zytronic.co.uk
www.zytronic-inc.com
www.zytronic.cn
www.zytronic.jp
Secretary
Claire Smith
Email: claire.smith@zytronic.co.uk
Registered office
Whiteley Road
Blaydon-on-Tyne
Tyne and Wear
NE21 5NJ
Tel: 0191 414 5511
Fax: 0191 414 0545
Registration number
3881244
Stockbroker and Nominated Adviser
N+1 Singer
One Bartholomew Lane
London
EC2N 2AX
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Auditor
Ernst & Young LLP
Citygate
St James' Boulevard
Newcastle-upon-Tyne
NE1 4JD
Bankers
Barclays Bank plc
71 Grey Street
Newcastle-upon-Tyne
NE99 1JP
Handelsbanken
8 Keel Row
The watermark
Gateshead
NE11 9SZ
Santander Corporate Banking
Baltic Place
South Shore Road
Gateshead
NE8 3AE
Yorkshire Bank
131-135 Northumberland Street
Newcastle-upon-Tyne
NE1 7AG
Regions Bank
2653 Marietta Hwy
Canton, GA
30114
USA
Solicitors
Ward Hadaway
Sandgate House
102 Quayside
Newcastle-upon-Tyne
NE1 3DX
Muckle LLP
Time Central
32 Gallowgate
Newcastle-upon-Tyne
NE1 4BF
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END
IR CKNDDFBKDOPD
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