24th Jan 2005 07:00
Amino Technologies PLC24 January 2005 FOR IMMEDIATE RELEASE 24 January 2005 AMINO TECHNOLOGIES PLC RESULTS FOR THE 11 MONTHS ENDED 30 NOVEMBER 2004 Amino Technologies plc ("Amino"; stock code : AMO), the Cambridge basedbroadband network software and systems company, announces its unauditedpreliminary results for the eleven-month period ended 30 November 2004. Key points: • These are Amino's maiden preliminary results since the IPO on AIM in June 2004. • Although still at a relatively early stage in the development of the IPTV market, Amino is able to report a profit for the period. • Turnover jumped to £13.2m (2003: £1.0m). • Shipments of AmiNET products for the period were 174,000 (2003: 11,500) • Profit before tax and exceptional items was £0.53m (2003: loss of £3.39m). • Basic earnings per share were 3.0p (2003: loss of 13.0p). • Net cash balances were £6.4m (2003: £4.3m). On outlook, Grant Masom, Chairman stated: "All our key business metrics point towards a sharp increase in sales volumes inthe year to 30 November 2005. The current year started with a strong order bookwith a substantial pipeline of significant opportunities. Based on firm deliveryschedules and forecasts received, we anticipate a substantial bias in ourresults towards the second half-year of 2005. Amino has successfully established itself as a leading supplier of IPTVtechnology at a time when the prospects are outstanding. Our challenge now is tomanage the expected growth of the business." About Amino Amino (www.aminocom.com) is a designer and supplier of electronic systems andconsultancy, specialising in products for digital broadcast and on-demand TV,IPTV (telco triple-play applications) and in-home multimedia distribution. Its range of small, low cost, high functionality set-top boxes and gatewayproducts is designed for consumer applications in telecom, satellite and digitalterrestrial broadcast markets, as well as on-demand systems for hotels andhospitality markets, healthcare, retail and education. Amino also providessystems consultancy and partners with world-leading companies in contentaggregation, middleware, conditional access and head-end systems. CONTACTS Amino Technologies: 020-7444-4140 today; thereafter 01954-234100Grant Masom, Chairman www.aminocom.comBob Giddy, Chief ExecutiveStuart Darling, Finance Director Bankside: 020-7444-4140Steve Liebmann or Susan Scott CHAIRMAN'S STATEMENT Introduction Amino is pleased to present its first annual results since its Admission to AIMin June 2004. Despite still being at a relatively early stage in thecommercialisation of IPTV (internet protocol TV) technologies and services,Amino is able to report a profit for the 11-month period as a whole. This is aconsiderable achievement given the increased level of investment that Amino hasbeen making to exploit the explosive growth potential of the marketplace. Results and finance As Amino has changed its financial year-end from 31 December to 30 November, theresults now reported are for the 11 months to 30 November 2004 (comparatives arefor the 12 months to 31 December 2003). Total shipments of AmiNet products forthe period were 174,000, up from 11,500 in 2003 resulting in turnover thatjumped from £1.0 million to £13.2 million. Turnover included the first licencesale. Profit before tax and exceptional items were satisfactory, although lower thanexpected at £0.53 million (2003: loss of £3.39 million). The results werepartially affected by the fact that the bulk of Amino's revenues are denominatedin US$ where there was continued weakness against Sterling. In addition, theBoard has made decisions over the past 6 months which affect short termprofitability but which it believes are important to build on Amino's initialmarket leadership - particularly as large scale opportunities in "tier 1" and"tier 2" telcos emerge in several countries worldwide. As of January 2005, Aminowas engaged in trials and roll-outs with 216 customers versus just 45 onlytwelve months ago. After an exceptional charge of £0.33 million (2003: £1.04 million) associatedwith the cost of Admission to AIM, the profit before tax was £0.20 million(2003: loss of £4.43 million). Basic earnings per share were 3.0p (2003: lossper share of 13.0p). Net cash balances were £6.43 million (2003: £4.25 million). Looking forward to 2005, Amino will continue to invest in building on andmaintaining our market leadership. The issues affecting short-termpredictability of shipment volumes and product mix are expected to beginsettling down as the market matures, particularly during the second half of theyear, with resulting increased efficiencies. Strategy and business development The core strategy is to position Amino as the provider of choice of technologyand products for the delivery of digital TV and on-demand content over broadbandnetworks with a primary focus on the consumer end of the system. Telcos are beginning to invest heavily in IPTV systems in order to increaserevenues in the face of intensifying competition for traditional voice and dataservices. The end-to-end market place for IPTV systems requires technologies,products and services from a variety of suppliers. A particular strength ofAmino's people and technology is the ability to partner with and rapidlyintegrate most suppliers of the different elements of the IPTV system,irrespective of the mix chosen by a particular telco. In addition to the ease ofintegration it offers, Amino's architecture allows it to develop much lower costproducts for its end customers, with increased competitiveness to their businessmodels as a result. As the market expands, Amino's challenge is to ensure thatnew customers continue to recognise the real enduring advantages that employingits technology offers. The key elements of these technology advantages are software based. At present,customers have access to Amino's technology through its own hardware products,the AmiNET series. Looking forward, it is a key element of Amino's strategy tooffer its key technology to the widest range of IPTV users possible - from thedirect provision of consumer set top boxes, through OEM arrangements, and in thelicensing of software and hardware designs to those customers wishing toincorporate the technology within other equipment. Board and employees I would like to thank all employees and the Board for their hard work insuccessfully coping with a very rapid rate of expansion and in establishingAmino as a leader in its field. Outlook The IPTV market is developing at an exceptionally fast rate and the number ofopportunities Amino is actively engaged with has grown faster than anticipated.However, the early stage of the market's development makes it difficult topredict forward delivery volumes and product mix as these depend on the speedthat customers roll out their IPTV services. In time, forward prediction willbecome more certain as our customers' programmes become more defined. All our key business metrics point towards a sharp increase in sales volumes inthe year to 30 November 2005. The current year started with a strong order bookwith a substantial pipeline of significant opportunities. Based on forwarddelivery schedules and indications received, we anticipate a substantial bias inour results towards the second half-year of 2005. Amino has successfully established itself as a leading supplier of IPTVtechnology at a time when the prospects are outstanding. Our challenge now is tomanage the expected growth of the business. Grant Masom Chairman CHIEF EXECUTIVE'S STATEMENT Overview Within a short period Amino has established itself as one of the key playerswithin the IPTV arena and is recognised as the reference point and market leaderfor client-end IPTV products and software technologies. At the outset of ourfirst period as a quoted company we set ourselves very ambitious objectives. Wesought to: •transition from a promising start-up to an established, profitable business; •develop a 3 year growth strategy to build upon and strengthen Amino's initial leadership position; •develop market awareness of Amino as a value added and innovative solutions supplier; and •gain a first class reputation for the quality of our products and services. We have achieved these goals; Amino's name is now well established throughoutour worldwide market. Company development Amino is very fortunate to have a committed and enthusiastic staff andmanagement team. Their skill and experience mix is well suited to the needs ofan international, dynamic and fast growing high-tech company. In May 2004 we expanded our international operations and opened our firstinternational office in Atlanta, Georgia, USA. An office in Hong Kong for ourAsia Pacific activities followed in September. During the course of the period the headcount has grown from 47 as of December2003 to 75 at 30 November 2004. We have strengthened our sales force, customersupport functions and the management of partner relationships with experiencedexecutives. The benefit of these recent hires will be realised during 2005. The contract manufacturing arrangements for Amino hardware products are workingwell with our Far-Eastern manufacturing partner achieving high quality and lowreturn rates. During the first-half of 2005 we expect to commence manufacturingwith a second supplier, particularly for the Americas. Business propositions We have three main business propositions: To date our primary business has been to supply to telecommunication operators ahardware and software platform (set top box) that delivers IPTV. During theeleven month FY 2004 Amino sold 174,000 units. The second element is the hospitality market to which we supply hardware andsoftware to companies that offer a complete solution to the industry. Thismarket has demonstrated Amino's capability to develop a Systems and SystemsIntegration business. Amino scopes, specifies, designs, integrates, verifies andwarrants a System Solution for a digital pay-to-view experience that is beingmarketed by NEC under their brand name of Talia(R). The third element is to license our proprietary software and hardware to majorOEM's and tier 1 telecommunication operators. We have entered into early stagediscussions with organisations that recognise and value the commercial benefitsthat are offered by Amino's technologies, particularly our software, thatquickly and robustly integrate third party products. Our hardware licensingmodel enables our customers to drive down costs by adopting a multi-vendorcompetitive sourcing business model. Product evolution Innovation has been the key to Amino's initial success. During the period welaunched five new products including the world's first IPTV PVR (personal videorecorder) box, the AmiNET 500. We also have reduced the cost of our firstgeneration products. At IBC (Amsterdam, September 2004) and TelCo-TV (Las Vegas, November 2004) Aminodemonstrated the AmiNET 120, our next generation MPEG 4 and WM-9 (Microsoftcompatible) products. Within the near future we are planning to release severalnew products that are compliant with H.264 (now adopted as the industryreference point for MPEG 4). We have designed variants of these new productsthat are capable of supporting high definition television (HDTV). These newproducts will be available with and without PVR; hybrid options that incorporatedigital terrestrial, satellite or cable decoders are also planned. These newhybrid products will have particular appeal to the emerging tier 1 customers andmay open up licensing opportunities to the traditional satellite and cableindustry suppliers who do not have the software technology and know-how todevelop their own IPTV platforms. Another key requirement to enable the growth of IPTV is the 'Home Network'.Amino's roots were founded and nurtured in the home gateway arena. We continueto research and hone our plan to expand our product range with an affordablehome networking product range. Market research indicates that the average homehas three TV viewing stations and it is our intent that an Amino IPTV platformand associated software solution will address this opportunity. Market development We have been pleased with our penetration into those companies which have beenthe early adopters of IPTV. Generally, as in all new technologies, thesepioneers have tended to be the smaller, more nimble regional operators. Ourtechnologies and products have been evaluated, trialled and deployed in morethan 50 countries. During 2004, mainly due to the projected availability of the next generation oflow bit-rate encoders (MPEG 4, WM-9), the larger telcos started to show interestin IPTV. Triple-play (TV, data and voice) has been on their agenda for some timeand it is now becoming commercially viable on a large scale. By offeringproducts which are compliant with the latest standards, Amino has been able toenter into early stage discussions with many of these major telecommunicationsoperators within Europe, North and South America and the Far East. We havetendered for a number of opportunities, often in partnership with thetraditional telecommunications equipment suppliers. Outlook and our plans The introduction of triple-play (voice, data & video) services has become aclear goal of virtually all telecommunications operators worldwide. The tier 1players are entering the market and momentum continues to accelerate. Amino iswell established with the first generation of technologies and is sampling thenext generation of MPEG 4 and WM-9 products. Our early stage success has created a wealth of market and customer credibilitythat will enable us to offer and deliver the value added services that ourtechnology facilitates. We will continue to grow and develop the structure ofour organisation to exploit these opportunities. Bob Giddy Chief Executive Officer FINANCE DIRECTOR'S STATEMENT Results for the period The Group recorded a profit before taxation and exceptional items of £0.53m(2003: loss of £3.39m), an improvement of £3.92m over the previous period.Included in selling, general and administrative expenses is £0.33m (2003:£1.04m) of exceptional costs relating IPO legal and professional fees. Profitbefore tax was £0.20m (2003: loss of £4.43m), an improvement of £4.63m. Turnover Turnover for the eleven-month period increased to £13.25m from £1.04m from thesale of set top boxes, technology licensing and systems integration services.The Group shipped c.174,000 set top boxes (2003: 11,500). The geographical mixof sales was not as expected and the continuing weakness of the US dollarcombined to reduce average revenue per unit. The combined adverse impact ofthese factors reduced turnover and profit by £0.35m. Cost of Sales Cost of goods sold was £0.77m greater than expectations reflecting higher thanexpected sales of premium products and the deferral of implementing designchanges to cost reduce the current product range. Engineering resources wereprioritised to bring forward the development of set-top-boxes that support lowbit-rate encoding to meet the expected demand from tier 1 and tier 2 serviceoperators. Operating Expenses Research and development expenses are written-off as incurred. Expenditureduring the eleven-month period of £1.44m (2003: £1.26m), represents anannualised increased investment in new technology and product development of25%. At the period end total headcount was 75 (2003: 47). The average number ofemployees during the period was 68 (2003: 42). Taxation No tax liability arises on the trading profit for the financial period becausethe Group is able to offset tax losses brought forward. At 30 November 2004 theGroup had approximately £8.87m of losses available to set against future taxableprofits, subject to agreement with the Inland Revenue. The tax credit of £1.13m is almost entirely due to the deferred tax assetestimated to be utilised in the coming financial year. Earnings per share Basic earnings per share for the period were 3.0p (2003: loss 13.0p) and dilutedearnings per share were 2.8p (2003: loss 13.0p). The increase reflects the moveto profitability of the Group plus the deferred tax credit referred to aboveunder Taxation. If the effect of the deferred tax credit is excluded, basicearnings per share would have been 0.5p (2003: loss of 14.8p). Working Capital The Group ended the period with net cash balances of £6.43m (2003: net cash of£4.25m). In the period, the Group raised £6.43m from the private placement ofordinary shares at the time of its IPO. Trade debtors of £3.60m (2003: £0.46m) reflect the substantial increase inturnover, particularly near the period end. The Group has continued to maintaincredit insurance, where possible, to cover the majority of its trade debtors.However, as expected, it has not been possible to gain insurance cover for someof our customers or on all of the exposure to those customers covered. The substantial increase in trading also resulted in a significant increase instock, including both long lead-time components and finished goods of £1.13m.Stock at the period-end amounted to £1.36m (2003: £0.23m). Pensions The Group offers all employees the opportunity to participate in a Group orpersonal pension scheme. As the Group's contribution is defined there are nocircumstances in which the Group will face a future pension liability. Foreign Exchange The Group receives the significant majority of its revenue in US dollars,substantially all of the Group's costs 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. IFRS Amino Technologies plc will have the option but not the requirement to adoptIFRS in the financial statements for the year ended November 2005. The board hasbegun considering the difference between UK accounting standards and IFRS andhas initially identified accounting for share options and research anddevelopment costs as two areas that could impact on the Group's financialstatements. Stuart Darling Finance DirectorCONSOLIDATED PROFIT AND LOSS ACCOUNT For the eleven months ended 30 November Period Year ended ended 30 November 31 December 2004 2003 Notes Unaudited Audited £ £Turnover 4 13,247,054 1,036,598Cost of sales (7,779,916) (739,911) __________ __________Gross profit 5,467,138 296,687------------------------------ Selling, general and administrative(non-exceptional expenses) (3,739,718) (2,498,774)Selling, general and administrative 5 (331,254) (1,043,400)(exceptional expenses) ------------------------------Selling, general and administrative (4,070,972) (3,542,174)expensesResearch and development expenses (1,444,513) (1,259,828)Other operating income 94,873 45,535 __________ __________Group operating profit/(loss) 46,526 (4,459,780)Interest receivable and similar income 185,625 45,501Interest payable and similar charges (35,117) (15,490) __________ __________Group profit/(loss) on ordinary activities 197,034 (4,429,769)before taxationTax on profit/(loss) on ordinary 1,130,829 540,000activities __________ __________Group profit/(loss) on ordinary activitiesafter taxation being profit/(loss) for thefinancial period 1,327,863 (3,889,769) __________ __________ Basic earnings/(loss) per 1p ordinary 6 3.0p (13.0)pshareDiluted earnings/(loss) per 1p ordinary 6 2.8p (13.0)pshares Statement of total recognised gains and losses for the period ended 30 November2004 Period Year ended ended 30 November 31 December 2004 2003 Unaudited Audited £ £Profit/(loss) for the financial period 1,327,863 (3,889,769)Exchange translation difference on consolidation (36,185) - __________ __________Total recognised gains and losses for the period 1,291,678 (3,889,769) __________ __________ All amounts relate to continuing activities. CONSOLIDATED BALANCE SHEET As at 30 November 30 November 31 December 2004 2003 Notes Unaudited Audited £ £Fixed assetsIntangible assets 186,759 32,617Tangible assets 833,884 354,710 _________ _________ 1,020,643 387,327 _________ _________Current assetsStocks 1,361,339 232,047Debtors: amounts falling due after one 161,563 82,250year ------------------------------Debtors: amounts falling due within one 6,127,561 1,447,210year ------------------------------Trade debtors subject to financing statednet of non-returnable amounts received - 190,004------------------------------ 6,127,561 1,637,214Short-term investments 430,000 3,730,000Cash at bank and in hand 5,999,752 1,214,926 _________ _________ 14,080,215 6,896,437Creditors: Amounts falling due within one (2,305,485) (2,740,346)year _________ _________Net current assets 11,774,730 4,156,091 Total assets less current liabilities 12,795,373 4,543,418Creditors: Amounts falling due after more (117,281) (141,188)than one year _________ _________Net assets 12,678,092 4,402,230 _________ _________ Capital and reservesCalled-up share capital 7 510,380 442,672Share premium account 6,571,027 -Merger reserve 16,388,755 16,098,130Profit and loss account (10,792,070) (12,138,572) _________ _________Equity shareholders' funds 8 12,678,092 4,402,230 _________ _________ CONSOLIDATED CASH FLOW STATEMENT For the eleven months ended 30 November Period Year ended ended 30 November 31 December 2004 2003 Notes Unaudited Audited £ £Net cash outflow from operating 9 (3,836,286) (4,068,455)activities Returns on investments and servicing offinanceInterest received 185,625 45,501Interest paid (35,117) (15,490) __________ __________Net cash inflow from returns on 150,508 30,011investments __________ __________ Taxation - 231,816 __________ __________ Capital expenditure and financialinvestmentPurchase of tangible fixed assets (603,340) (378,640)Purchase of intangible fixed assets (184,810) (37,494)Sale of tangible fixed assets - 2,415 __________ __________Net cash outflow for capital expenditureand financial investment (788,150) (413,719) __________ __________ Net cash outflow before use of liquidresources and financing (4,473,928) (4,220,347) __________ __________ Management of liquid resourcesDecrease/(increase) in short-term deposits 3,300,000 (2,826,502)with banks __________ __________FinancingIssue of ordinary share capital 6,999,999 7,310,098Expenses of share issue deducted from share (370,639) (398,254)premiumCash received from exercise of share 354,824 -options(Decrease)/increase in other borrowings (23,907) 176,270(Decrease)/increase in bank borrowings (1,001,523) 1,007,652 __________ __________Net cash inflow from financing 5,958,754 8,095,766 __________ __________Increase in net cash 4,784,826 1,048,917 __________ __________ Reconciliation of net cash flow to movementin net fundsOpening net funds 3,937,259 1,069,492Increase in net cash 4,784,826 1,048,917(Decrease)/increase in deposits (3,300,000) 2,826,502Decrease/(increase) in borrowings 1,001,523 (1,007,652) __________ __________Closing net funds 6,423,608 3,937,259 __________ __________ 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 has changed its period end from 31 December to 30 November in order toovercome the logistical challenges presented by the year-end holiday period.These preliminary results follow the interim results for the six months ending30 June 2004 that represented the first reported results following Amino'sadmission to the Alternative Investment Market on 9 June 2004. Hereafter, itwill report results made up to 31 May and 30 November each year. 3 Basis of preparation The consolidated financial statements of Amino Technologies plc have beenpresented under merger accounting rules. This means that the financialstatements of Amino Technologies plc and those of its wholly owned subsidiary,Amino Holdings Limited have been aggregated and presented as if the twocompanies have always been together. Accordingly, although Amino Technologiesplc acquired the entire share capital of Amino Holdings Limited on 28 May 2004in exchange for new ordinary shares of 1p each in the share capital of AminoTechnologies plc, the results of both companies are reflected in the groupfinancial statements for the period to 30 November 2004 and the correspondingamounts are presented on the same basis. The figures for the eleven-month period ended 30 November 2004 have not beenaudited. The figures for the year ended 31 December 2003 have been prepared fromthe consolidated financial statements of Amino Holdings Limited for that year.Those financial statements have been delivered to the Registrar of Companies andincluded an auditors' report, which was unqualified and did not contain astatement under Section 237 Companies Act 1985. The statutory accounts and auditopinion for the financial period ended 30 November 2004 have not yet been signedby the directors or the auditors respectively. These preliminary results for the eleven months ended 30 November 2004, whichhave been prepared in accordance with the accounting policies set out in theconsolidated financial statements of Amino Holdings Limited for the year ended31 December 2003, do not constitute statutory accounts for the purpose ofsection 240 of the Companies Act 1985. 4 Turnover Turnover is wholly attributable to the Group's principal activities ofdeveloping enabling technologies and providing flexible and rapidly deployabledesigns to manufacturers and vendors of set top boxes, home gateways and othercommunications devices. The analysis of turnover by destination is set outbelow. Period Year ended ended 30 November 31 December 2004 2003 Unaudited Audited £ £United Kingdom and Europe 5,001,383 385,548North America 6,467,504 412,747Asia Pacific and Africa 1,778,167 238,303 _________ _________ 13,247,054 1,036,598 _________ _________ 5 Exceptional expenses Included in selling, general and administrative expenses is an amount of£331,254 (Year ended 31 December 2003: £1,043,400) in respect of exceptionalcosts incurred by Amino Technologies plc. These exceptional costs primarilyrelate to legal and professional fees incurred as a result of the admission ofAmino Technologies plc to the Alternative Investment Market on 9 June 2004. Afurther £370,639 of costs relating to the admission were charged against theshare premium account (see note 9). Exceptional costs incurred of £1,043,400 in the year ended 31 December 2003 werein respect of exceptional accrued bonuses for directors, for preparing thecompany for a successful flotation. 6 Earnings/(loss) per share Period Year ended ended 30 November 31 December 2004 2003 Unaudited Audited £ £ Earnings/(loss) attributable to shareholders 1,327,863 (3,889,769) _________ _________ Weighted average number of shares (Basic) 43,662,984 29,975,156 _________ _________ Weighted average number of shares (Diluted) 48,174,055 _________ The calculation of basic earnings/(loss) per share is based on profit/(loss)after taxation and the weighted average of ordinary shares of 1p each in issueduring the period. 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. There is nodilutive effect in respect of previous years since the Group made a loss in theyear ended 31 December 2003. 7 Called-up share capital Ordinary shares of 1p each 30 November 31 December 2004 2003 Unaudited Audited £ £AuthorisedNominal value 1,000,000 460,000 _________ _________ Number 100,000,000 46,000,000 _________ _________ Allotted, called-up and fully-paidNominal value 510,380 442,672 _________ _________ Number 51,038,052 44,267,219 _________ _________ Share issues On 31 January 2004, the Company allotted 937,500 shares of 1p each at 32p pershare to Walbrook Trustees (Guernsey) Limited, trustees of the AminoCommunications Employee Benefit Trust, consideration for which was satisfied byway of an interest free loan of £300,000 from Amino Holdings Limited. On 9 June 2004, the Company allotted 5,833,333 ordinary shares of 1p each at120p per share for cash consideration of £6,999,999 and was admitted to theAlternative Investment Market in order to provide increased credibility andbalance sheet strength. The net proceeds of the private placement amounted to£6,629,360 after costs of £370,639 (see note 6). Share options The Company operates share options schemes for employees and certain formeremployees of group companies. Substantially all 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 31 December 2004 2003 Unaudited Audited No. No.Shares held by the Employee Benefit Trust 3,455,961 5,500,000 _________ _________ Subsisting OptionsCurrent and former employees 4,434,503 4,302,441Other options granted including non-executive 238,812 178,812directors _________ _________ 4,673,315 4,481,253 _________ _________ 8 Reconciliation of movements in shareholders' funds 30 November 31 December 2004 2003 Unaudited Audited £ £Opening shareholders' funds 4,402,230 1,494,998Profit/(loss) for the period 1,327,863 (3,889,769)Other recognised gains and losses relating to the (36,185) -periodIssue of ordinary share capital - capital 67,708 120,545Issue of ordinary share capital - share premium 6,941,666 -Issue of ordinary share capital to Employee Benefit (300,000) (1,277,500)TrustExpenses of share issue (370,639) -Exercise of employee share options 354,824Reversal of share compensation charge - 12,098Movement on merger reserve 290,625 7,941,858 _________ _________ 12,678,092 4,402,230 _________ _________ 9 Reconciliation of operating loss to net cash outflow from operatingactivities 30 November 31 December 2004 2003 Unaudited Audited £ £Operating profit/(loss) 46,526 (4,459,780)Share compensation charge - 12,098Depreciation and amortisation charge (including loss 154,834 94,850on disposals)Increase in stocks (1,129,292) (173,874)Increase in debtors (3,085,128) (1,097,421)Increase in creditors 212,959 1,555,672Foreign exchange movement (36,185) - _________ _________Net cash outflow from continuing operating (3,836,286) (4,068,455)activities _________ _________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMO.L