30th Jan 2006 07:01
Amino Technologies PLC30 January 2006 FOR IMMEDIATE RELEASE 30 January 2006 AMINO TECHNOLOGIES PLC RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2005 Amino Technologies plc ("Amino"; stock code : AMO), the Cambridge basedbroadband network software and systems Group, announces its unauditedpreliminary results for the year ended 30 November 2005. Following the change ofyear end in 2004, all comparatives are for the 11 month period to 30 November2004. Key points: • Turnover jumped to £23.5m (2004: £13.3m). • Shipments of AmiNET products for the period were 314,000 units (2004: 174,000). • Licence revenue of £1.3m and associated profit of £1.2m to be recognised in FY2006 and not in FY2005 as originally anticipated. • Profit before tax was £0.06m (2004: profit of £0.20m). • Basic earnings per share were 0.1p (2004: 3.0p). • Net cash balances were £14.5m (2004: £6.4m). On outlook, Grant Masom, Chairman stated: "Amino's key business metrics on customer deployments are maintaining a strongupwards momentum with a 170% increase over the past year. Our strong year-endorder backlog provides a firm foundation for a further increase in turnover inthe year to 30 November 2006 which will include material licence revenues. "Amino has an excellent suite of products and technologies together with a staffcommitted to delivering a further year of rapid growth. As the business growsand the IPTV market develops, the Board anticipates an improving visibility forfuture revenues and a successful outcome to the year." About Amino Amino Technologies plc (www.aminocom.com) designs and supplies electronic systems, software and consultancy for IPTV (telco triple-play applications), on-demand video and in-home multimedia distribution delivered through three operating divisions. Amino Communications supplies the AmiNETTM series of high performance IPTVset-top boxes and gateways for deployment in the telecommunications, broadcastand hospitality markets. Generally, AmiNET products are supplied with theIntActTM IPTV software stack pre-loaded. IntAct licenses hardware designs andthe IntActTM IPTV software stack for customer premises solutions to OEMsenabling them to supply IPTV set-top boxes and gateways for larger scaledeployments and the hospitality sector. Modelo provides systems consultancyservices. Amino is partnered with world-leading companies in systems integration, middleware, conditional access, silicon, head-end systems and browser technologies. CONTACTS Amino Technologies: 020-7367-8888 today thereafter 01954-234100Grant Masom, Chairman www.aminocom.comBob Giddy, Chief ExecutiveStuart Darling, Finance Director Bankside:Steve Liebmann or Susan Scott 020-7367-8888 CHAIRMAN'S STATEMENT Introduction Amino is pleased to present its results for the year ended 30 November 2005 incomparison with the 11 month period to 30 November 2004. A measure of theprogress made in the year is an 80% increase in unit shipments, a 77% increasein revenue, increasing profitability as the year progressed - all in a rapidlyemerging market. This has been achieved while continuing to invest heavily inthe business for the future - rather than seeking to maximise short-termresults. Over the past year, there has been widespread public commitment bytelecommunications operators ('telco') and broadcasters alike to the delivery ofIPTV services. This commitment has been seen across all geographies and allsizes of telco. Further evidence of the anticipated importance of this market isthe onset of significant M&A activity within the equipment supply chain.However, the delivered market for IPTV services is still at an early stage andstill evolving; the focus is mainly on the smaller telcos. Significantinvestment by the larger, Tier 1 telcos is slow to get under way and has yet toresult in any material revenues for equipment suppliers. The Board believes that Amino has successfully met its objectives over the pastyear. We have capitalised on the near-term revenue opportunities amongst theTier 2 and 3 telcos, while creating the parallel business models which positionthe Group to benefit from future market growth across a wide range of customersand geographies. Amino is addressing the Tier 1 telco market throughpartnerships with key systems integrators and a flexible licensing proposition.We have already announced our first major licence deal and others are innegotiation. Also, we have also continued to build on initial customerengagements for the private network delivery of IPTV in environments such ashotels and apartment complexes. Results and finance It will be recalled that Amino changed its financial year end in 2004;accordingly, the comparative figures are for an 11 month period to 30 November2004. At the time of the interim report, we highlighted the expectation of aheavy bias towards the second half of the year. Total unit shipments of AmiNetproducts for the year were 314,000 (11 months 2004: 174,000). Revenue for theyear was £23.5m (11 months 2004: £13.8m). The profit before tax was £0.06m (11months 2004: £0.20m) and the basic earnings per share were 0.1p (11 months 2004:earnings of 3.0p). As expected, during the second half year, revenue was doublethat for H1, 2005 and a profit before tax of £0.94m was achieved in H2, 2005,offsetting a loss of £0.88m in the first half. As announced on 28 November 2005, the results for 2005 had been expected toinclude a contribution to revenue and profit from the licence agreed with ASIntercom. Subsequent to the announcement of the licence agreement and theperiod-end trading update, AS Intercom identified that certain terms of thelicence must be changed, primarily in order to comply with Russian bankingregulations. These regulations required that the changes could only be reflectedin a revised licence and this was duly signed in December 2005. As a result,approximately £1.3m of revenue and £1.2m of profit will now be recognised in theresults for the year to 30 November 2006. New order intake grew strongly during the period, and over the past six months,suggesting an annualised run rate in excess of £38m. This has contributed to ahealthy order backlog entering the new financial year. Net cash balances and short term investments at the year end were £14.5m (2004:£6.4m), reflecting the share placing in May 2005 which raised £15.3m (net ofexpenses) and an increase in working capital towards the year end arising fromthe increased run rate of activity. Acquisition On 20 January 2006, Amino acquired SJ Consulting Limited, a business which willadd significantly to the group's technology and IPR, particularly in the area ofMPEG-4 decoders and digital signal processing used with IPTV set top boxes. Thetotal consideration will be approximately £1.3 million in cash and shares, withthe net cash outlay being approximately £0.4 million. Board and employees During the year, Paul Fellows, Amino's Chief Technology Officer was appointed tothe Board. I would like to thank all employees and the Board for their contributions indriving Amino forward in this rapidly evolving market. The Group has maturedrapidly over the past year and successfully met many challenges associated withfast-moving, emerging technologies and markets. This is testament to the qualityand commitment of the Amino team. Outlook Amino's key business metrics on customer deployments maintain a strong upwardsmomentum. Our strong year-end order backlog provides a firm foundation for afurther increase in turnover in the year to 30 November 2006 which will includematerial licence revenues. Amino has an excellent suite of products and technologies together with a staffcommitted to delivering a further year of rapid growth. As the business growsand the IPTV market develops, the Board anticipates an improving visibility forfuture revenues and a successful outcome to the year. Grant MasomChairman CHIEF EXECUTIVE'S STATEMENT Overview Amino's business has grown and the organisation has matured during our firstfull year as a public company. During the year, we have successfully implementedour strategy for having three independent yet synergistic business propositions,namely products, licensing and system solutions. Most notably, Amino achievedanother milestone by introducing and deploying the world's first single chipMPEG-4 (H.264) set top box ("STB"). In so doing, we have further strengthenedour leadership position. Highlights • Deployed the AmiNET124 and have several ongoing field trials. • Licensed our software stack to Philips Semiconductors for their new Nexperia chip and ported our software stack to six different semiconductor platforms. • Established our hardware and software technology with AS Intercom TV. Key business metrics Amino's key business metrics have continued to grow strongly: +------------------------------+-----------+-----------+-----------+-----------+|Number of customers |31 Dec 03 |30 Nov 04 |31 May 05 |30 Nov 05 |+------------------------------+-----------+-----------+-----------+-----------+|Large volume roll-out (over | | | | ||10,000 units) | - | 5 | 11 | 15 |+------------------------------+-----------+-----------+-----------+-----------+|Small volume roll-out (over | | | | ||1,000 units) | 12 | 19 | 35 | 43 |+------------------------------+-----------+-----------+-----------+-----------+|Field trials (100 - 999 units)| 19 | 44 | 98 | 140 |+------------------------------+-----------+-----------+-----------+-----------+|Laboratory trials (10 - 99 | | | | ||units) | 14 | 94 | 163 | 217 |+------------------------------+-----------+-----------+-----------+-----------+|Total | 45 | 162 | 307 | 415 |+------------------------------+-----------+-----------+-----------+-----------+ Group development Our headcount during the year has grown to 99 yet we have managed to maintainour relatively low cost base and agility. We have been very fortunate that ourgrowth has not been limited by the availability of good and experiencedprofessionals. We have recruited a number of exceptional people during the yearwhich, we believe, reflects our leadership position. Our output of STB products almost doubled during FY 2005, and we have sufficientcapacity to exceed this growth during FY 2006. We have signed significantlicensing agreements and our Systems Business successfully concluded a number ofcontracts for the development of special software or system implementations.Together, these activities have provided the critical mass to establish threeindependent business units, each with their own dedicated sales and marketingorganisations. Strategy and business development Amino's origins lay in the development of customer premises software for IPTVapplications. The move into the provision of IPTV STBs was driven by a need todemonstrate the efficiency of Amino's software. As the IPTV market develops,Amino is progressively moving towards a mix of product and/or licensing models.Licensing is particularly attractive in those territories where tariff issuesrequire a local supply of the STB. We recognised that the early adopters, namely Tier 2 and Tier 3 telcos in theUS, Far East and Eastern Europe, would be the first to deploy IPTV. Asrecognised in several independent reports (most notably ABI Research, a leadingindustry analyst), Amino has achieved a number of successes; 14 Tier 2 or Tier 3telcos have commenced volume roll-outs of more than 10,000 Amino boxes for theirIPTV systems. According to ABI, Amino has the highest share of this early stagemarket. This is most significant, given that it has only been three years sincewe launched our first sample. During FY 2005, Amino shipped set top boxes tomore than 600 customers around the world. The Tier 1 telcos in the more mature developed markets, mainly in Europe andNorth America, show an increasing commitment to invest. Almost withoutexception, timetables are relatively long because of the complex nature oflarge-scale IPTV systems and the substantial capital expenditure required toupgrade existing telecoms infrastructure. To date, most Tier 1 operators whichhave announced plans to offer a triple play service, have delayed theirroll-outs with the most optimistic dates now projected for late 2006 or early2007. By working with the early adopters in the Tier 2 and 3 markets, Amino hasnot been unduly influenced by these larger operators delaying their plans; theactual rate of development of the market is consistent with our previousprojections. A notable exception to these delays is Sistema, a Tier 1 telco inthe Russian Federation, where our shipments during FY2005 significantly exceededthe 10,000 threshold. Against this backdrop, Amino's decision to focus initially on the numerous Tier2 and 3 customers has enabled us to develop a growing, profitable businessstream in supporting the volume deployments now being undertaken and areputation as a trusted centre of excellence in IPTV deployment. At the sametime, we have been working with the larger Tier 1 customers, developing ourroute to market through preferred partnerships with key systems integrators andequipment suppliers together with licensing to cater for local manufacture andmulti-sourcing of STB hardware. Amino's software platform is, and will remain, focused on the customer premisesequipment (CPE). We enjoy the support and endorsement of our technology partnerswho value Amino's contribution to their own proposition. As recent announcements have shown, Amino's licensing business is now beginningto develop traction. We are in advanced discussions with a number of majorconsumer electronics product and systems integrator corporations. Theproposition is that they will use Amino's IntActTM software technology as thecore operating system for their own range of IPTV STBs. We are confident that wewill close a number of these opportunities in early 2006, which will validateour licensing model and reinforce the market leadership position that Amino hasestablished for customer premises IPTV technologies. In order to reflect these changes, Amino is now working in three principalbusiness streams in order to improve its market focus and clarity of productoffering: • Amino Communications o Supplies the AmiNETTM series of high performance IPTV set-top boxes andgateways; generally, AmiNET products are supplied with the IntActTM IPTVsoftware stack pre-loaded. o In addition to the AmiNET124 which was the world's first single chipimplementation of an MPEG-4 (H.264) STB, we are developing high definition (HD)and personal video recorder (PVR) options which will be released in early 2006.Amino Communications offers the market's widest range of MPEG-2 and MPEG-4compliant products. o During 2005, we successfully deployed the world's first single chipMPEG-2 high definition STB at a North American Tier 2 telco. o In an independent survey, Amino has been ranked top on several metrics- cost, reliability, system compatibility and user acceptance. • IntAct o Licenses hardware designs and the IntActTM IPTV software stack for customerpremises solutions to OEMs for larger scale deployments and for on-demandsystems in the hospitality sector. The acquisition of the 'Soft-Codec'technology from SJ Consulting further enhances and strengthens the businessproposition of Amino's software stack. o Amino's software stack has been ported to six different semiconductorplatforms and, in addition to the contract signed with Philips Semiconductors,we anticipate signing further similar contracts. These licences allow thesemiconductor vendor to offer their customers a proven reference design. Thisestablishes IntActTM at the heart of their customers' systems, thereby 'seeding'the market efficiently. o Amino's licensing proposition is being recognised by Tier 1 operators andtheir system integrator partners. IntActTM offers a common software platform forall of their STB suppliers, thus making their deployments agnostic in terms ofchoice of semiconductor and STB hardware design. This reduces cost, eases fieldmaintenance, facilitates field upgrades and reduces churn. • Modelo o Provides systems consultancy services. o During FY2005, Amino has supplied an integrated end-to-end solution foroperators in the Middle East and Far East. This gives operators a fast androbust route to market and will be used as the model when engaging with Tier 1system integrators. It will be an important value added service that Aminobrings to the market. Outlook and plans Building on our commanding share of the Tier 2 and 3 markets, we intend todevelop further this business as these early adopters lead the way into thevalue added applications of high definition (HD) and personal recorded (PVR)viewing. Our successes and growth have proven that this focus has been wellfounded and positions us to play a key role in future market developments. Our strong alliances with the traditional Tier 1 system integrators plus ourflexible, low cost and scalable business model makes Amino a very attractivepartner for these suppliers and operators which have stated their intention ofemulating the IPTV services offered by their smaller competitors. Putting all ofthis with our new and exciting range of MPEG-4 (H.264) products bodes very wellfor Amino's future prospects. Bob GiddyChief Executive Officer FINANCE DIRECTOR'S STATEMENT Gross profit % reduced by 6.5% to 34.8% (2004: 41.3%), reflecting volume pricingfor successful deployments, a change in duty rating applying to the import intoEurope of IPTV set-top boxes and a change in sales mix. This reduction was mostseverely felt in H1; in H2 gross profit % increased by 2% to 35.5%. The Group's operating expenses primarily relate to staff costs (55%), productengineering and travel expenditure. Sales, general and administration expensesincreased by 43% to £5.7m (11 months 2004: £4.0m) and research and developmentexpenses, which are written-off as incurred, increased by 94% to £2.8m (11months 2004: £1.4m). The primary drivers for the increased level of operatingexpenses were the development of new MPEG4 products and support of Tier 1telecommunications customers throughout the development of their IP-TV systems.These investments are unlikely to generate a significant financial return until2007. Bank interest received during the year was £0.4m (11 months 2004: £0.2m). At the year-end total headcount was 99 (2004: 75). The average number ofemployees during the year was 90 (2004: 68). Whilst the board plans to continueto grow headcount, particularly in the areas of customer support andengineering, significant improvements in productivity are expected as the numberof customers deploying in volume increases. Revenue per head increased by 36% to£0.26m (11 months 2004: £0.19m) There was no taxation charge in the year. At 30 November 2005, the Group hadapproximately £10.8m of losses available to carry forward to set against futuretaxable profits, subject to agreement with the Inland Revenue. Net assets increased by £15.5m to £28.2m (2004: £12.7m) reflecting the placingof 7.2m new ordinary shares at £2.20 each in May 2005. Net current assets increased by £15.2m to £27.0m (2004: £11.8m) providing theGroup with a strong working capital base. The principal components of net assetsare trade debtors of £10.4m (2004: £3.6m) and cash balances of £14.5m (2004:£6.4m). The exceptionally high level of trade debtors at the year-end wasgenerated by high sales in November arising from the shipment of orderspreviously delayed by a shortage of a single source component. The Group has continued to maintain credit insurance, where possible, to coverthe majority of its trade debtors. The Group receives the significant majority of its revenue in US dollars.Substantially all of the Group's cost of sales are paid in US dollars and themajority of the Group's operating costs are paid in pounds sterling. To date theGroup has relied upon the natural hedge created by this combination to managethe foreign currency exposure but will consider using financial instruments asrequired. Stuart DarlingFinance Director CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 30 November 2005 Notes Year 11 months ended Ended 30 November 30 November 2005 2004 Unaudited Audited £ £Turnover 5 23,460,756 13,247,054Cost of sales (15,292,251) (7,779,916) __________ __________Gross profit 8,168,505 5,467,138 --------- ---------Selling, general and administrative(non-exceptional expenses) (5,699,309) (3,739,718)Selling, general and administrative(exceptional 6 - (331,254)expenses) --------- --------- Selling, general and administrative expenses (5,699,309) (4,070,972)Research and development expenses (2,808,771) (1,444,513)Other operating income - 94,873 __________ __________Group operating (loss)/profit (339,575) 46,526Interest receivable and similar income 418,782 185,625Interest payable and similar charges (15,293) (35,117) __________ __________Group profit on ordinary activities beforetaxation 63,914 197,034Tax on profit on ordinary activities - 1,130,829 __________ __________Group profit on ordinary activities aftertaxation being profit for the financial 63,914 1,327,863period __________ __________ Basic earnings per 1p ordinary share 7 0.1p 3.0pDiluted earnings per 1p ordinary shares 7 0.1p 2.8p Statement of total recognised gains and losses for the year ended 30 November2005 Year 11 months ended ended 30 November 30 November 2005 2004 Unaudited AuditedProfit for the financial period 63,914 1,327,863Exchange translation difference on consolidation (22,383) (36,185) __________ __________Total recognised gains for the period 41,531 1,291,678 __________ __________ All amounts relate to continuing activities. CONSOLIDATED BALANCE SHEETAs at 30 November 2005 Notes 30 November 30 November 2005 2004 Unaudited Audited £ £Fixed assetsIntangible assets 295,297 186,759Tangible assets 1,023,610 833,884 _________ _________ 1,318,907 1,020,643 _________ _________Current assetsStocks 1,460,756 1,361,339-------------------------- ------- --------- ---------Debtors: amounts falling due after morethan one year 190,898 161,563Debtors: amounts falling due within oneyear 8 12,846,599 6,127,561-------------------------- ------- --------- --------- 13,037,497 6,289,124Short-term investments 430,000 430,000Cash at bank and in hand 14,038,271 5,999,752 _________ _________ 28,966,524 14,080,215Creditors: Amounts falling due within oneyear (1,964,581) (2,305,485) _________ _________Net current assets 27,001,943 11,774,730 Total assets less current liabilities 28,320,850 12,795,373Creditors: Amounts falling due after morethan one year (71,285) (117,281) _________ _________Net assets 28,249,565 12,678,092 _________ _________ Capital and reservesCalled-up share capital 9 582,630 510,380Share premium account 21,807,240 6,571,027Merger reserve 16,388,755 16,388,755Profit and loss account (10,529,060) (10,792,070) _________ _________Equity shareholders' funds 10 28,249,565 12,678,092 _________ _________ CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 November 2005 Notes Year 11 months ended ended 30 November 30 November 2005 2004 Unaudited Audited £ £Net cash outflow from operating activities 11 (7,154,539) (3,836,286) Returns on investments and servicing offinanceInterest received 418,782 185,625Interest paid (15,293) (35,117) __________ __________Net cash inflow from returns on investments 403,489 150,508 __________ __________ Taxation - - __________ __________ Capital expenditure and financial investmentPurchase of tangible fixed assets (479,085) (184,810)Purchase of intangible fixed assets (216,689) (603,340) __________ __________Net cash outflow for capital expenditure andfinancial investment (695,774) (788,150) __________ __________ Net cash outflow before use of liquidresources (7,446,824) (4,473,928)and financing __________ __________ Management of liquid resourcesIncrease in short-term deposits with banks - 3,300,000 __________ __________FinancingIssue of ordinary share capital 15,840,250 6,999,999Expenses of share issue (534,637) (370,639)Cash received from exercise of share options 224,329 354,824Decrease in other borrowings (38,455) (23,907)Decrease in bank borrowings (6,144) (1,001,523) __________ __________Net cash inflow from financing 15,485,343 5,958,754 __________ __________Increase in net cash 8,038,519 4,784,826 __________ __________ Reconciliation of net cash flow to movement innet fundsOpening net funds 6,423,608 3,937,259Increase in net cash 8,038,519 4,784,826Decrease in deposits - (3,300,000)Decrease in borrowings 6,144 1,001,523 __________ __________Closing net funds 14,468,271 6,423,608 __________ __________ NOTES TO THE PRELIMINARY RESULTSYear ended 30 November 2005 1 Group structure The Group comprises the following companies: Amino Technologies plc, a public limited company formed on 24 March 2004 to actas the new holding company for the Amino group. Under a share-for-sharereorganisation effected in May 2004, the Company acquired the entire issuedshare capital of Amino Holdings Limited. Amino Holdings Limited, formed in 1996, and formerly the holding company of theGroup. It is now an intermediate holding company, which owns the entire issuedshare capital of Amino Communications Limited and Amino Communications, L.L.C. Amino Communications Limited, formed in 1998, and the principal trading companyof the Group. Amino Communications, L.L.C., a US limited liability company established on 1March 2004 to facilitate sales and customer support in the US market. 2 Accounting reference date The Group changed its year-end to 30 November in 2004. The results now reportedare for the year ended 30 November 2005. The comparative results are for the 11month period ended 30 November 2004. 3 Basis of preparation The figures for the year ended 30 November 2005 have not been audited. Thefigures for the period ended 30 November 2004 have been extracted from but donot constitute the consolidated financial statements of Amino Technologies plcfor that period. Those financial statements have been delivered to the Registrarof Companies and included an auditors' report, which was unqualified and did notcontain a statement under Section 237 Companies Act 1985. The statutory accountsfor the financial year ended 30 November 2005 have not yet been signed by thedirectors or the auditors of the Company. 4 Accounting policies These preliminary results for the year ended 30 November 2005, which have beenprepared in accordance with the accounting policies set out in the consolidatedfinancial statements of Amino Technologies plc for the year ended 30 November2004, do not constitute statutory accounts for the purpose of section 240 of theCompanies Act 1985. 5 Turnover Turnover is wholly attributable to the Group's principal activity of developingenabling technologies and providing price competitive, flexible and rapidlydeployable designs to manufacturers and vendors of set top boxes, home gatewaysand other communications devices. The analysis of turnover by destination is setout below. Year 11 months ended ended 30 November 30 November 2005 2004 Unaudited Audited £ £United Kingdom and Europe 9,903,108 5,001,383North America 10,988,350 6,467,504Asia Pacific and Africa 2,569,298 1,778,167 _________ _________ 23,460,756 13,247,054 _________ _________ 6 Exceptional expenses Exceptional expenses incurred of £331,254 in the period ended 30 November 2004were in respect of selling, general and administrative expenses. Theseexceptional expenses primarily related to legal and professional fees incurredas a result of the admission of Amino Technologies plc to the AlternativeInvestment Market on 9 June 2004. A further £370,639 of exceptional expensesrelating to the admission were charged against the share premium account (seenote 9). 7 Earnings per share Year 11 months ended ended 30 November 30 November 2005 2004 Unaudited Audited £ £Earnings attributable to shareholders 63,914 1,327,863 _________ _________ Weighted average number of shares (Basic) 52,126,170 43,662,984 _________ _________ Weighted average number of shares (Diluted) 54,482,187 48,774,055 _________ _________ The calculation of basic earnings per share is based on profit after taxationand the weighted average of ordinary shares of 1p each in issue during theperiod. For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive potential ordinaryshares. The group has only one category of dilutive potential ordinary shareoptions: those share options where the exercise price is less than the averagemarket price of the company's ordinary shares during the period. 8 Debtors 30 November 30 November 2005 2004 Unaudited Audited £ £Trade debtors 10,356,334 3,602,001VAT recoverable 36,871 56,232Deferred tax 1,719,000 1,719,000Other debtors 6,958 23,196Prepayments and accrued income 727,436 727,132 _________ _________ 12,846,599 6,127,561 _________ _________ 9 Called-up share capital Ordinary shares of 1p each 30 November 30 November 2005 2004 Unaudited AuditedAuthorisedNominal value £1,000,000 £1,000,000 _________ _________Number 100,000,000 100,000,000 _________ _________Allotted, called-up and fully-paidNominal value £582,630 £510,380 _________ _________ Number 58,263,052 51,038,052 _________ _________ Share issues On 17 May 2005 Amino Technologies plc allotted 7,200,000 ordinary shares of 1peach at 220p per share for cash consideration of £15,840,000 in order toincrease the working capital base of the Group and enable it to take advantageof the increased opportunities for growth. The net proceeds of the privateplacement amounted to £15,305,363 after costs of £534,637. Share options The Company operates share options schemes for employees and certain formeremployees of group companies. The majority of options granted under theseschemes will be satisfied out of ordinary shares of 1p each issued to anEmployee Benefit Trust set up in February 2003. 30 November 30 November 2005 2004 Unaudited Audited No. No.Shares held by the Employee Benefit Trust 2,502,265 3,455,961 _________ _________ Subsisting OptionsCurrent and former employees and non-executivedirectors 3,886,307 4,434,503Other options granted 118,812 238,812 _________ _________ 4,005,119 4,673,315 _________ _________ 10 Reconciliation of movements in shareholders' funds 30 November 30 November 2005 2004 Unaudited Audited £ £Opening shareholders' funds 12,678,092 4,402,230Profit for the period 63,914 1,327,863Other recognised losses relating to the period (22,383) (36,185)Issue of ordinary share capital - capital 72,250 67,708Issue of ordinary share capital - share premium 15,768,000 6,941,666Issue of ordinary share capital to Employee BenefitTrust - (300,000)Expenses of share issue (534,637) (370,639)Exercise of employee share options 224,329 354,824Movement on merger reserve - 290,625 _________ _________ 28,249,565 12,678,092 _________ _________ 11 Reconciliation of operating (loss)/profit to net cash outflow from operatingactivities 30 November 30 November 2005 2004 Unaudited Unaudited £ £Operating (loss)/profit (339,575) 46,526Depreciation and amortisation charge (includingloss on disposals) 397,510 154,834Increase in stocks (99,417) (1,129,292)Increase in debtors (6,748,373) (3,085,128)(Increase)/decrease in creditors (342,301) 212,959Foreign exchange movement (22,383) (36,185) _________ _________Net cash outflow from continuing operatingactivities (7,154,539) (3,836,286) _________ _________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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