RNS Number:9748I
Inditherm PLC
20 March 2003
INDITHERM plc
20 March 2003
Preliminary Results for the year ended 31 December 2002
Inditherm plc, the specialist heating technology company, today
announces its preliminary results for the year ended 31 December
2002. Inditherm's technology is based on an innovative flexible
polymer that heats uniformly across its entire surface powered by an
energy-efficient, low voltage charge. Current uses include heated
products for maintaining core body temperature during operations and
heated solutions and frost protection for a wide range of pipelines
and storage containers. Other products include heated inserts for
steering wheels and pizza delivery bags, plus a heating system for
pharmaceutical transportation.
Highlights
* The year saw good progress across the Group
- Industrial Solutions technology continues to gain acceptance
for many critical temperature applications and is now a preferred
solution for a growing number of companies operating in food
processing and maritime cargo vessels. Customer enquiry numbers have
increased significantly and an international network of distributors
is being established in Europe
- Medical Products successfully launched new operating theatre
and physiotherapy products with plans to establish an international
presence in 2003
- Custom Products brought new innovative solutions to the market
during the year. Orders have been received for steering wheel
inserts and production requirements received for the extended range
of heated inserts for take-away food delivery systems.
* Turnover for the year increased 43% to #683,000 (2001:
#477,000); product sales increased by 61%.
* Loss before tax was #739,000 (2001: loss #256,000), reflecting
investment in development, marketing and establishment costs to
underpin future growth.
Current Trading and Prospects
Mark Abrahams, Chairman said:
"Though trading patterns are still likely to be somewhat erratic
until the second half of this year, we are now seeing an encouraging
growth in enquiries in each of our target markets, both in the UK
and overseas. We have also been improving our manufacturing
efficiency and exercising stringent controls on our cost base to
maximise our opportunity to move into profitable operation.
"The potential for the year ahead appears encouraging, with requests
for quotations on a substantial volume of work. The result in the
short term will be dependent upon the rate at which these quotes can
be converted into production orders."
For further information:
Inditherm plc 01709 761000
Colin Tarry, Chief Executive
Keith Lees, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Ben Padovan
Chairman's Statement
Introduction
In my first report to you a year ago I stated that following the
Company's flotation on AIM in December 2001 the Board's short term
goals were to progress the commercial growth of the business, expand
our product range and develop and strengthen our relationships with
key customers. Though our initial rate of expansion was slowed
during 2002 by the general climate for capital equipment investment
in the UK, I am very pleased to be able to report to you now that we
have made good progress in each of the above areas.
Results for the year
Turnover for the year increased overall by 43% to #683,000 (2001:
#477,000). After adjusting for one-off exclusivity payments included
within both years, product sales increased by 61%. The level of
administrative expenses necessarily committed to develop the
business resulted in an operating loss of #781,000 for the year
(2001: loss #235,000) and after net interest income of #42,000
(2001: net cost #21,000) the loss before tax was #739,000 (2001:
loss #256,000). Loss per share was 6.8 pence (2001: loss 3.0 pence).
As a result of the loss for the year, together with capital
investment in our new premises, the year end net cash balance
reduced to #0.90m (2001: #2.12m).
Dividends
Last year I reported the Board's intention to devote the Company's
financial resources to business development and product range
expansion. This intention, which the Board believes to be in the
shareholders' best interests, has been pursued during 2002 and will
continue for the foreseeable future. Therefore the Board still does
not expect to declare a dividend during the Company's continuing
formative period.
Management
As announced in September 2002, as part of our succession planning
Colin Tarry, formerly Managing Director, took the role of Chief
Executive as from 1st October 2002. Pat O'Grady, the founder of the
Company, remains as an executive director in a part-time capacity,
providing guidance, support and technical advice to the Board during
the medium term.
At managerial level, some restructuring and reorganisation of
responsibilities within sales, engineering and production has been
implemented to facilitate growth.
Employees
Given the very substantial increase in enquiry and quotation levels,
we have taken on additional resource to meet our medium term
requirement. Though still small, our workforce has doubled in
numbers during the year. In our formative period much work has been
put into setting up systems and procedures to establish ourselves
for the future. On behalf of the Board I thank all our staff most
sincerely for their sustained support.
Outlook
Though trading patterns are still likely to be somewhat erratic
until the second half of this year, we are now seeing an encouraging
growth in enquiries in each of our target markets, both in the UK
and overseas. We have also been improving our manufacturing
efficiency and exercising stringent controls on our cost base to
maximise our opportunity to move into profitable operation.
In the Industrial market the Inditherm product is now receiving
considerably more customer enquiries, albeit that the nature of the
business means that it is often several months before these can be
converted into orders. Our sales and marketing activity for
Industrial products now has the additional support of a team of UK
agents and two European distributors, with further distributors
still being sought.
Following the launch of our new control unit in September 2002, our
Medical business has seen the return of heated mattress sales via
Pegasus, who are now also actively promoting the Inditherm medical
product range in Europe.
Custom products has received the first full production orders for
steering wheel inserts, while our customers for pizza bag and
pharmaceutical transportation inserts are currently negotiating new
supply contracts for their products.
The potential for the year ahead appears encouraging, with requests
for quotations on a substantial volume of work. The result in the
short term will be dependent upon the rate at which these quotes can
be converted into production orders.
Mark Abrahams
Chairman
Chief Executive's Review
Over the last year we have invested in the infrastructure required
to generate and support business in our various market sectors. We
have continued the process of establishing our technology in our key
markets and commenced the process of creating wider market access.
Industrial Solutions
Our technology continues to become accepted for many critical
temperature applications in the process control sector. However, the
rate of sales increase has been affected by the general capital
investment climate in the UK, resulting in a slower than projected
take up. We are building on the successful trials work completed
during the year and our products have become a preferred solution
for a growing number of companies operating in food processing and
maritime cargo vessels.
We commenced a programme of identifying and appointing distributors
and representatives that will expand our access to a broader
industrial market. In the second half of the year we appointed a UK
group to represent Inditherm in the general industrial market and
European distributors in Finland and Italy. This programme will
continue as a priority to provide a platform of increased market
access to support continued growth.
Medical Products
During the year we redesigned the control unit for the original
range of operating theatre products to provide greater capability
and to enable access to the international market. Pegasus launched
the new unit in the UK in October 2002 with plans to establish an
international presence in 2003. Following increased demand for our
products in the first quarter of 2002, sales slowed in the remainder
of the year in anticipation of the new unit launch.
Product development for Pegasus has been focused on the existing
range of products, with future developments of wound dressing and
other applications under review for 2003.
In December 2002, a new range of physiotherapy products was launched
under the brand name Speedheat. Early indications are that this
range is proving to be of benefit to the professional sporting
community in the treatment of muscle injuries and improving the
recovery time of injured players.
Custom Products
Our Custom Products group has developed new innovative solutions
that have been brought to market during the year. The development
programme for steering wheels has been completed, with initial
production orders being received in the first quarter of 2003, in
line with the time scale reported last year. Whilst at a low volume,
this initial production platform provides the baseline design that
can be used in future vehicle production.
A distribution and exclusivity agreement with Laminar Medica
commenced in October 2002. Initial production quantities have been
completed enabling Laminar Medica to launch the ActivHeat range of
heated pharmaceutical containers. Although the products have only
recently been launched, the indications are that production
requirements will become more evenly spread from mid 2003.
The range of heated inserts used for pizza delivery bags has been
extended to cover various units for a wide range of take-away food
delivery systems. Market access has been limited to trials by a
number of major companies in the home delivery market. Production
requirements are now being
received for both pizza and curry bag inserts, with a new range of
home use products planned for launch in the second quarter of
2003.
In November 2002, we established Inditherm Construction Ltd which
will be responsible for completing the development and market
exploitation of Inditherm for various concrete curing applications.
Working in conjunction with Sheffield Hallam University, School of
Construction, a programme has already commenced to research and
develop enhanced methods of controlling the concrete curing process.
Initial results have been very encouraging, although it is not
expected that we will have products to market until 2004.
Future Development
After a demanding year, where the manufacturing facility has been
relocated, staff levels increased and our operating systems brought
up to the level required to support future growth, we are looking
forward to a period of expansion and realisation of potential
business.
In the industrial sector we look forward to further expanding our
access to both national and international markets. We will remain
focused on establishing our technology as the preferred alternative
to traditional solutions, building on the growing acceptance of our
capability within major industrial groups. During 2003, we will
undertake product developments that open up new markets that require
hazardous area approval and higher operating temperatures.
We will continue to work closely with Pegasus to accelerate growth
within the international medical market for existing products and to
develop new products. Expansion into Europe and the USA will be the
priority for the relaunched operating theatre range. We expect
Pegasus to develop the Speedheat range for use in hospitals and
residential care homes.
Custom Products will concentrate on the three principal product
ranges brought to market over the last twelve months, working with
our partners to increase throughput and establish the Inditherm
technology within these fields. We will continue to explore new
opportunities as they arise, with a view to developing new products
that have the potential for high returns in future years.
Since taking the position of Chief Executive in October 2002, my
focus has been to build on the work started by Pat O'Grady, to
establish Inditherm as the preferred supplier in our core markets.
We have many opportunities and challenges ahead of us as we look
forward with confidence that Inditherm will start to realise its
full potential.
Colin Tarry
Chief Executive
Consolidated Profit and Loss Account
2002 2001
#'000 #'000
Turnover 683 477
Cost of sales (330) (193)
_________ _________
Gross profit 353 284
Administrative expenses (1,134) (519)
_________ _________
Operating loss (781) (235)
Interest receivable 49 2
Interest payable (7) (23)
_________ _________
Loss on ordinary activities
before taxation (739) (256)
Taxation credit from loss on
ordinary activities 22 44
_________ _________
Loss on ordinary activities
after taxation (717) (212)
Dividends - (3)
_________ _________
Sustained deficit for the year (717) (215)
========= =========
Loss per share - basic and diluted (6.8) pence (3.0) pence
========= =========
All amounts relate to continuing activities.
All recognised gains and losses are included within the profit and loss account.
Consolidated Balance Sheet
2002 2001
#'000 #'000 #'000 #'000
Fixed assets
Intangible assets 84 97
Tangible assets 386 21
_________ ________
470 118
Current assets
Stocks 63 64
Debtors 282 381
Investment 250 -
Cash at bank and in hand 897 2,118
________ _______
1,492 2,563
Creditors: amounts falling due
within one year (435) (597)
________ ________
Net current assets 1,057 1,966
________ ________
Total assets less current liabilities 1,527 2,084
Creditors: amounts falling due
after more than one year (46) (2)
________ ________
Net assets 1,481 2,082
======== ========
Capital and reserves - equity
Called up share capital 105 104
Share premium 2,800 2,685
Other reserve 50 50
Profit and loss account (1,474) (757)
________ ________
Shareholders' funds 1,481 2,082
======== ========
Consolidated Cash Flow Statement
2002 2001
#'000 #'000 #'000 #'000
Net cash outflow from
operating activities (855) (89)
Returns on investments and
servicing of finance
Interest received 49 2
Interest paid (2) (22)
Interest element of hire purchase
payments (5) (1)
Preference dividend paid - (3)
_______ _______
Net cash inflow/(outflow) from returns on
investments and servicing of finance 42 (24)
Taxation - 27
Capital expenditure and financial investment
Purchase of tangible fixed assets (318) (4)
Sale of tangible fixed assets 10 -
Purchase of current asset investment (250) -
_______ _______
Net cash outflow from capital expenditure
and financial investment (558) (4)
_______ _______
Net cash outflow before management
of liquid resources and financing (1,371) (90)
Management of liquid resources
Decrease/(increase) in cash on short-term deposit 1,158 (2,000)
Financing
Issue of shares 125 3,330
Expenses paid in connection
with share issues (9) (749)
Redemption of preference shares - (220)
Related party loan - (68)
Capital element of hire purchase
payments (37) (4)
Movement on factoring account 64 (24)
_______ _______
Net cash inflow from financing 143 2,265
_______ _______
(Decrease)/increase in cash (70) 175
======= =======
Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
#'000 #'000
Operating loss (781) (235)
Depreciation and amortisation 63 18
Loss on disposal of fixed assets 3 -
Decrease in stocks 1 13
Decrease/(increase) in debtors 121 (315)
(Decrease)/increase in creditors (262) 430
_______ _______
Net cash outflow from operating activities (855) (89)
======= =======
Analysis of changes in net funds
Other 31
1 January non-cash December
2002 Cashflow changes 2002
#'000 #'000 #'000 #'000
Cash at bank in hand 2,118 (1,221) - 897
Overdraft - (7) - (7)
Less: deposits treated as
liquid resources (2,000) 1,158 - (842)
_______ _______ _______ _______
118 (70) - 48
Factoring account (5) (64) - (69)
Obligations under hire purchase
contracts (10) 37 (110) (83)
Term deposits 2,000 (1,158) - 842
_______ _______ _______ _______
2,103 (1,255) (110) 738
======= ======= ======= =======
Reconciliation of net cash flow to movement in net funds/(debt)
2002 2001
#'000 #'000
(Decrease)/increase in cash in year (70) 175
Cash (inflow)/outflow from (increase)/decrease in debt (27) 96
Cash (inflow)/outflow from (decrease)/increase in liquid resources (1,158) 2,000
_______ _______
(Decrease)/increase in net funds from cashflows (1,255) 2,271
Inception of hire purchase contracts (110) -
_______ _______
Movement in net funds in the year (1,365) 2,271
Net funds/(debt) at the beginning of the year 2,103 (168)
_______ _______
Net funds at the end of the year 738 2,103
======= =======
NOTES
1 The figures for the year ended 31 December 2002 are an extract
from the accounts for that year which will be filed with the
Registrar of Companies and on which the auditors have given an
unqualified report. The results for the year ended 31 December
2001 have been extracted from the full accounts for that period
which have been delivered to the Registrar of Companies and on
which the auditors gave an unqualified report.
2 The calculation of loss per ordinary share is based on the loss
for the year of #717,000 (2001: loss of #212,000) and the
weighted average number of shares in issue during the year of
10,486,691 (2001: 7,110,098). The share options are anti-
dilutive due to the loss in the year.
3 Copies of the 2002 Annual Report and Accounts will be sent to
all shareholders. Copies will be available from the Company
Secretary at Inditherm plc, Inditherm House, Houndhill Park,
Bolton Road, Wath upon Dearne, Rotherham, S63 7JY.
This information is provided by RNS
The company news service from the London Stock Exchange
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