21st Sep 2005 07:01
Polaron PLC21 September 2005 21 September 2005 Polaron plc Preliminary results Polaron plc, (LSE: POL) the broad-based technology group, today announces itspreliminary results for the year ended 30 June 2005. Financial Highlights • Turnover up 40% to £18.76m (2004: £13.39m) • Profit before tax, exceptional costs and goodwill amortisation increased by 25% to £1.32m (2004: £1.06m) • Profit before tax up 66% to £1.26m (2004: £0.76m) • Basic EPS up 18% to 5.3p (2004: 4.5p) • Debt at the year end of £0.71m against currently available facilities of £3.61m • Proposed final dividend of 0.9p per share (2004: 0.25p) Operational Highlights • Nanotechnology business performance encouraging: • Turnover increased 36% to £2.89m (2004: £2.12m) • Launch of the laser atom probe in July 2005 has broadened the target market to include the semiconductor industry • Significant performance improvements achieved with voltage atom probe • Three atom probes sold in the year • An encouraging pipeline of interest in the Atom Probe with 9 organisations requesting test samples • Controls business showing strong growth: • Turnover increased 51% to £14.49m (2004: £9.59m) • Acquisition of iLight Group Ltd and Rossula Ltd for £2.18m Post-period Activity • Acquisition of DMS Controls Ltd for up to £3.5m, further strengthening the Controls division • Disposal of software business FastTrak Software Publishing Ltd for approximately £0.17m • Receipt by Oxford Nanoscience of one of the Nano 50TM Awards for the 3D Atom Probe Joe Stelzer, Chief Executive Officer, commented: "I am delighted to report a year of encouraging results. The company iscontinuing to develop across all divisions and we have made a number ofacquisitions and disposals in order to consolidate the business and concentrateon delivering shareholder value throughout our two core areas: Nanotechnologyand Controls. We are in a financially strong position and I remain confidentabout the company's prospects for 2006 and beyond." Enquiries: Polaron plc Tel: 01923 495 513Joe StelzerFraser Searle Financial Dynamics Tel: 0207 831 3113Juliet Clarke/Hannah Sloane Chief Executive's Statement Introduction The year ended 30th June 2005 marks the completion of our first full financialyear as an AIM company. It has been a busy time as we continue to implement ourstrategy of delivering shareholder value through organic growth and selectivemergers and acquisitions, a strategy which has produced higher gross profitmargins and increased revenue and profits. We have acquired two businesses during the period to fit into our Controlsbusiness unit, iLight Group Ltd and Rossula Ltd. We have also disposed of someof the lower yielding assets belonging to our sensors business. The remainingswitches and sensors business, used primarily by London Underground and theaerospace markets, has come under the umbrella of the Controls business.Shortly after the period end, we completed the acquisition of DMS Controls Ltd,a specialist integrator of building management and Heating Ventilation andAirconditioning (HVAC) systems and we have today separately announced thedisposal of our software business, FastTrak Software Publishing Ltd. Following this latest disposal, Polaron has completed its transition into atechnology group with two focused businesses - Controls and Nanotechnology, eachof which is capable of delivering significant growth in value to ourshareholders. In the Nanotechnology business, we have made significant improvements in ouroriginal Atom Probe instrument and launched the next generation Laser Atom Probeused to visualise the atomic structure of silicon devices, specifically targetedat the semiconductor industry. I am pleased to report that we have met our revised performance targets for theyear. The Controls business had a particularly strong performance following theintegration of the acquisitions and careful cost control. The whole group hasperformed encouragingly given the operational strain caused by the level ofcorporate activity and the challenges that face a small company involved inleading edge research and development. Financial Review Profit and loss Turnover for 2005 grew by 40% to £18.76m (2004: £13.39m), primarily due to thegrowth in the Controls business. The acquired business contributed turnover of£5.76m in the year. Gross profit rose 56% to £8.71m (2004: £5.60m), due to anoverall improvement in gross margins from 41.8% in 2004 to 46.4% in 2005 and thegrowth in turnover. Distribution costs increased from £1.04m in 2004 to £2.34m in 2005, primarilydue to £1.19m of costs attributable to the acquired businesses. Total administrative expenses increased by £2.28m from £3.75m in 2004 to £6.03min 2005. Research and development costs increased from £0.23m in 2004 to £0.53min 2005 due to increased investment in product development and £0.21m of costsattributable to the acquired businesses. Goodwill amortisation increased from £0.09m to £0.55m in 2005, reflecting a fullyear's charge for the acquisitions completed in 2004 and the amortisationattributable to the acquisitions completed in 2005. Exceptional costs in 2005 amounted to £0.47m and related to restructuring of theacquired businesses and reorganising the enlarged Controls business.Exceptional costs in 2004 totalled to £0.21m and related to the reorganisationof the Group, prior to flotation on AIM in March 2004. Other administrative expenses in 2005 were £4.48m compared with £3.21m in 2004.The increase is primarily due to £0.77m of expenses attributable to the acquiredbusiness, an increase in depreciation and other amortisation of £0.11m and anincrease of £0.39m in other expenses. Profit before exceptional costs, taxation and goodwill amortisation increased by25% to £1.32m (2004: £1.06m). The profit on disposal of part of the pressure sensing business, which wascompleted in February 2005, amounted to £0.96 million. The net interest charge in 2005 was £0.05m compared with £0.06m in 2004. Profit before taxation increased by 67% from £0.76m in 2004 to £1.26m. Taxation on profit from ordinary activities increased from £0.26m in 2004 to£0.54m in 2005, reflecting higher profits. The taxation charge as a % of profitbefore tax in 2005 was 42.5% compared with 35% in 2004. This increase is due toincreased goodwill amortisation. Excluding goodwill amortisation, the taxationcharge as a percentage of profit before tax in 2005 was 29.6 % compared with 31%in 2004. Profit after taxation increased by 49% from £0.49m in 2004 to £0.73m. Dividendsin 2005 were £0.17m, compared with £0.03m in 2004. Profit for the financial year was £0.73m compared with £0.49m in 2004. Cash flow and facilities Net cash flow from operating activities totalled £0.81 million, compared with£0.99m in 2004. The decrease is primarily due to an increase in workingcapital. Cash outflow from capital expenditure in 2005 was £0.83 million compared with£0.29m in 2004. The increase is due to higher levels of investment in theNanotechnology business. Net cash outflow from acquisitions and disposals amounted to £0.23m in 2005,compared with £0.40m in 2004. The cash considerations paid for the twoacquisitions during 2005 amounted to £1.38m whilst the net proceeds from thedisposal of part of the pressure sensing business amounted to £1.23m. Cash inflow from financing amounted to £0.26m, compared with £1.76m in 2004.During 2005, £0.50m was drawn down from a total loan facility of £2.61m, topartly fund the acquisitions. The repayment of the capital element of financeleases totalled £0.24m in 2005 compared with £0.16m in 2004. During 2004, thecompany raised £2.56m through a share placement and used part of the proceeds torepay £0.64m of debt. Net cash outflow in 2005 was £0.42m, compared with an inflow of £0.95m in 2004. At 30 June 2005, the Group had net debt of £0.71 million, comprising net cash of£0.19m (2004 - £0.62m), other liquid resources of £Nil (2004 - £0.20m), bankloans of £0.5m (2004 - £Nil) and finance leases of £0.40m (2004 - £0.35m). At30 June 2005, the Group had undrawn committed borrowing facilities of £2.11m andin July 2005 the Group increased the overdraft facility from £1.4m to £3.0m inorder to provide additional working capital. Earnings per share and dividends Earnings per share in 2005 were 5.3p in 2005, an increase of 18% when comparedwith 2004. The Board is recommending a final dividend for the year of 0.9p (2004 - 0.25p)per ordinary share, payable to shareholders on the register on 30th September2005. This will bring the total dividends for the year to 1.2p per share. Business Review Controls Turnover for the Controls business has increased in the year by 51% to £14.49m(2004: £9.59m), and now contributes over 75% of Group revenues. Gross margin hasimproved to 48% (2004: 43%). The Controls business now comprises threedivisions: Products, Systems and Distribution. An acquisition has been made ineach area thereby increasing both product portfolio and improving the salesopportunities within a largely overlapping customer base. During the year,production has been streamlined into two production centres - Watford andCwmbran, Wales. Products The Products division of Controls comprises of a number of well known lightingcontrols brands: iLight (for architectural lighting controls); Zero88 andLightprocessor (for entertainment lighting controls) and the Polaron switch andsensors business. There has been a stream of new product launches (such as theFrog2 lighting desk and the LCM office based lighting control system) across allunits and in particular we are optimistic about the introduction of productsinto the rapidly growing 'smart home' market. The consolidation of Polaron'sarchitectural lighting control products into the iLight brand will allow us tobegin to focus on creating consumer oriented brand awareness following theintroduction of a fully customised colour LCD touchscreen that will allowlighting, audio and other integrated control systems to be controlled by asimple graphical user interface. Systems The Systems division has had some significant contract wins during the yearresulting in an order book at year end which was in excess of Systems' turnoverfor the whole year. DMS Controls was acquired shortly after the period endwith an order book of over £2.4m, which has significantly increased sinceacquisition. The strengthened order book gives us confidence that this businessunit will experience strong growth during the coming year. Distribution The Distribution division comprises the operations of Marata and Lightfactorwhich have been merged to create a more efficient distribution organisation.During 2005 the division showed a small decline in turnover over the year as aresult of the commoditisation of LCD video projectors which were the highestvolume product in previous years. Nanotechnology Turnover in the year was £2.89m (2004: £2.12m) an increase of 36%. Gross marginimproved significantly to 35% (2004: 30%). Three atom probes were sold in theyear, one to a government organisation in India, one to the National Instituteof Materials Science in Japan and one to the University of Shanghai in China.The performance of our Atom Probe continues to generate significant potentialcustomer interest both in the Far East and more recently in the USA. At thetime of writing, 9 organisations have requested test samples to be analysed andthese are currently being processed. From a technical point of view, I am pleased to able to report outstandingprogress in the development of our two types of Atom Probe: Voltage and Laser.At the half year, we reported an improvement of 25% in mass resolution at fullwidth tenth maximum (mass resolution is a measure of capability to differentiatebetween atoms of similar atomic masses). This improvement has now extended to100% and we believe our product is unique in showing a mass resolution of over1,000 for the standard Tungsten sample test. Our Laser Atom Probe, which waslaunched in July 2005 at the Semicon West exhibition in San Francisco, shows amass resolution of over 2,000 for Tungsten and 1,000 for undoped Silicon. Incombination with the further developments increasing the speed of dataacquisition to 100kHz (from less than 10kHz at the beginning of the year) and anear five fold increase in field of view (a term describing the size of thesample that can be viewed without sacrificing resolution), I believe we are wellplaced to benefit from the continued research and development intonanotechnology. Particularly relevant to the semiconductor market is the fact that the keyinsulating material for semiconductors, silicon oxide, is starting to displayits limitations at the 90nm node and as a result a range of alternatives fornext generation nodes are being developed, including 'high-k' dielectrics. It iswidely anticipated that a successful implementation of semiconductor chips withcritical dimensions below 65nm will be impossible without further development ofstrained silicon directly on insulator ("SSDOI") substrate technology.Introduction of such revolutionary technological processes into semiconductorfabrication will demand completely new metrological tools such as the Laser AtomProbe to enable control of a range of parameters inherent for multi-layer atomicscale systems like gate metal / "high-k" dielectric / strained silicon / siliconoxide/bulk silicon. I believe that the Atom Probe is now recognised as a credible instrument thatwill allow analysis of areas such as the gate oxide layer both during the R&Dstage (to allow understanding) and during production (for quantitative qualitycontrol). In recognising that we have such a groundbreaking solution but at thesame time given our small size, a limited infrastructure in the all important USmarket, we have appointed the U-Group, a Silicon Valley firm that has a strongtrack record for maximising the opportunities for leading edge technologycompanies operating in the semiconductor equipment market. I am delighted to be able to report that Oxford Nanoscience has been selected asa winner of one of Nanotech Briefs' Nano 50TM Awards for its 3D Atom Probeproduct. The Nano 50 recognizes the top 50 technologies, products, andinnovators that have significantly impacted - or will impact - the state of theart in nanotechnology Software Republishing Turnover for the Software republishing business fell by 17% to £1.39m (2004:£1.68m). Gross margins improved to 55% (2004: 51%). Whilst there were a numberof good new product releases, the poor performance of the retail channel thisyear resulted in a general decline in business activity. Shortly after theperiod end our major republishing partner Magix AG (which accounts for over 60%of turnover) terminated their relationship with us. The circumstancessurrounding this termination have resulted in the Company instructing lawyers tocommence proceedings for breach of contract. Given this and the decliningturnover the business was sold to its management team for approximately £170,000payable in cash, of which £100,000 is due upon completion and the balancepayable over 5 years. Outlook Following a number of key acquisitions and disposals, Polaron is now ideallyplaced to capitalise on two exciting parallel business opportunities: Controlsand Nanotechnology. During the year, we have significantly grown the Controlsbusiness and, given the large order backlog, I am confident that this growthwill continue. Our 3D Atom Probe continues to provide hitherto unavailableanalytical information that will play an important role in the emergingNanotechnology revolution. As a result, I am confident that our numerous salesprospects will result in orders, although the timing of them remains difficultto predict. Finally, I would like to thank all staff and advisers for their hard work andcontinued commitment during the year. Joe StelzerChief Executive Officer CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2005 Note Continuing operations Discontinued Total Total operations Acquisitions 2005 2005 2005 2005 2004 £'000 £'000 £'000 £'000 £'000 Turnover: Group and share of joint 5,763 11,614 1,387 18,764 13,387ventureless: share of joint venture turnover - - - - (485) --------- --------- --------- --------- ---------Group Turnover 2 5,763 11,614 1,387 18,764 12,902Cost of sales 3,186 6,245 625 10,056 7,303 --------- --------- --------- --------- ----------Gross profit 2,577 5,369 762 8,708 5,599 Distribution expenses 1,191 790 354 2,335 1,040Administrative expensesResearch and development costs 206 325 - 531 230Goodwill amortisation 219 329 - 548 94Exceptional items 472 - - 472 214Other administrative expenses 774 3,339 368 4,481 3,214 --------- --------- --------- --------- ---------Total administrative expenses 1,671 3,993 368 6,032 3,752Other operating income 4 6 - 10 1 --------- --------- --------- --------- ---------Group operating profit/(loss) (281) 592 40 351 808Share of operating profit in joint - - - - 10venturesProfit on disposal of part of pressure 11 - 960 - 960 -sensing business --------- --------- --------- --------- ---------Profit on ordinary activities before (281) 1,552 40 1,311 818interest and taxation --------- --------- ---------Interest receivable and similar income 5 4Interest payable and similar charges (55) (65) --------- --------Profit on ordinary activities before 2 1,261 757taxationTaxation on profit on ordinary 7 536 264activities --------- --------Profit on ordinary activities after 725 493taxationMinority interest - (2) --------- --------Profit for the financial year 725 491Dividends 167 34 --------- ---------Retained profit for the year 558 457 ========= =========Earnings per share - pence 3Basic 5.3 4.5Diluted 5.2 4.5Dividend per share - penceFinal 0.9 0.25Interim 0.3 - Certain comparative amounts for 2004 have been reanalysed, refer note 1 GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES There are no recognised gains or losses other than the profit for the year. CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 Note 2005 2004 £'000 £'000Fixed Assets Intangible assets 4,201 2,254 Tangible assets 3,072 2,675 Fixed asset investments 11 1 ---------- ---------- 7,284 4,930Current Assets Stocks 2,219 1,637 Debtors 4,091 3,402 Cash at bank and in hand 196 916 ---------- ---------- 6,506 5,955 Creditors: amounts falling due within one 3,898 2,894year ---------- ---------- Net current assets 2,608 3,061 ---------- ---------- Total assets less current liabilities 9,892 7,991 Creditors: amounts falling due after more than one 726 207year Provision for liabilities and charges 130 106 ---------- ---------- 856 313 ---------- ---------- 9,036 7,678 ========== ========== Capital and Reserves Called up share capital 1,386 1,340 Shares to be issued 72 72 Share premium account 4,067 4,067 Revaluation reserve 1,465 1,465 Other reserves 433 (321) Profit and loss account 1,613 1,055 ---------- ----------Shareholders' funds - equity 8 9,036 7,678 ========== ========== CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2005 2005 2004 Note £'000 £'000 Net cash inflow from operating 4 813 992activities Dividends received from joint ventures - 36and associated undertakingsNet cash outflow from returns on (50) (60)investments and servicing of finance Taxation Corporation tax paid (512) (281) Capital expenditure Payments to acquire tangible fixed (375) (237) assets Payments to acquire intangible fixed (526) (47) assets Proceeds from disposal of tangible 83 - fixed assets Payments to acquire fixed asset (10) (1) investments ---------- ----------Net cash outflow from capital (828) (285)expenditure Acquisitions and disposals Purchase of interests in subsidiary 9 (1,381) (368) companies Proceeds from disposal of part of 11 1,232 - pressure sensing business Net overdrafts acquired with subsidiary 9 (79) (34) companies ---------- ----------Net cash outflow from acquisitions and (228) (402)disposals Equity dividend paid (76) (616) ---------- ----------Cash outflow before use of liquid resources (881) (616)Management of liquid resources Decrease/(increase) in short term 200 (200) deposits Financing New loans/(loans repaid) 500 (640) Shares issued, net of costs - 2,563 Capital element of finance leases repaid (242) (161) ---------- ----------Net cash inflow from financing 258 1,762 ---------- ----------(Decrease)/increase in cash 5,6 (423) 946 ========== ========== NOTES TO THE FINANCIAL STATEMENT 1 Basis of preparation This preliminary announcement has been prepared on the basis of the accountingpolicies as set out in the annual financial statements for the year ended 30June 2005. There have been no changes in accounting policies since 2004 whichhave a material impact on the reported results. Certain items included in administrative expenses and cost of sales have beenreclassified to better reflect the true nature of the expense in the currentyear's presentation. The effect in 2004 is to increase distribution costs andresearch and development costs by £446,000 and £204,000, respectively, andreduce cost of sales and administrative expenses by £174,000 and £476,000,respectively. There is no effect on operating profit as a result of the abovereclassifications. 2 Segmental analysis by class of business: 2005 2004 £'000 £'000TurnoverControls 14,485 9,593Nanotechnology 2,892 2,118Software republishing 1,387 1,676 --------- --------- 18,764 13,387 ========= =========Joint venture - 485Group 18,764 12,902 --------- --------- 18,764 13,387 ========= =========Profit/(loss) before taxControls 1,678 1,094Nanotechnology (457) (414)Software republishing 40 77 --------- --------- 1,261 757 ========= =========Joint venture - 10Group 1,261 747 --------- --------- 1,261 757 ========= ========= 3 Earnings per share The basic and diluted earnings, being profit after tax and minority interests,are £725,000 (2004 - £491,000). 2005 2004 £'000 £'000 Weighted average number of shares - basic 13,758,080 10,805,830Weighted average number of shares - diluted 13,862,327 10,874,973 Earnings per share - penceBasic EPS 5.3 4.5Diluted EPS 5.2 4.5 4 Reconciliation of operating profit to net cash inflow from operating activities 2005 2004 £'000 £'000 Operating profit 351 808Amortisation of intangible fixed assets 599 108Depreciation of tangible fixed assets 319 247(Profit)/loss on disposal of fixed assets (10) 4Increase in stocks (184) (196)(Increase)/decrease in debtors (1,357) 101Increase/(decrease) in creditors 1,041 (80)Other non cash items 54 - ---------- ----------Net cash inflow from operating activities 813 992 ========== ========== 5 Analysis of net debt As at 1 Cash flow Acquisitions, Other non As at 30 July 2004 excluding cash cash items June 2005 and overdrafts £'000 £'000 £'000 £'000 £'000Net cash:Cash at bank and in hand 716 (520) - - 196Bank overdrafts (97) 97 - - - --------- (423)Debt due within one year - - - - -Debt due after one year - (500) - - (500)Finance Leases (346) 242 (41) (259) (404) --------- (258)Other liquid resources 200 (200) - - - --------- --------- --------- --------- --------- 473 (881) (41) (259) (708) ========= ========= ========= ========= ========= 6 Reconciliation of net cash flow to movement in net debt 2005 2004 £'000 £'000 (Decrease)/increase in cash (423) 946Cash (inflow)/outflow from changes in net debt (258) 801Cash (inflow)/outflow from changes in liquid (200) 200resources --------- ---------Movement in net debt resulting from cash flows (881) 1,947 --------- ---------Finance leases acquired from subsidiary undertakings (41) -Inception of finance leases (259) (119) --------- ---------Movement in net debt (1,181) 1,828Opening net funds/(debt) 473 (1,355) --------- ---------Closing net (debt)/funds (708) 473 ========= ========= 7 Taxation on profit on ordinary activities 2005 2004 £'000 £'000UK corporation taxCurrent tax on profits for the year 503 317Adjustment in respect of prior years (22) - ---------- ----------Total current tax 481 317 Deferred taxAccelerated capital allowances and other timing 55 (53)differences ---------- ----------Taxation on profit on ordinary activities 536 264 ========== ========== 8 Reconciliation of movement in shareholders' funds 2005 2004 £'000 £'000Profit for the year 725 491Dividends (167) (34) ---------- ----------Retained profit 558 457Shares issued, net of issue costs - 2,563Shares issued in respect of acquisitions 800 1,851Shares to be issued as future consideration - 72 ---------- ---------- 1,358 4,943Opening shareholders' funds 7,678 2,735 ---------- ----------Closing shareholders' funds 9,036 7,678 ========== ========== 9 Acquisition of subsidiary undertakings iLight Group Limited On 1 September 2004 the Company acquired 100% of share capital of iLight GroupLtd, which contains the market leading lighting control companies' iLight Ltdand Zero 88 Lighting Ltd. The total consideration was £1,700,000 comprising£1,000,000 in cash and the balance was satisfied by the issue of 389,250 shares. Rossula Limited On 17 December 2004 the Company acquired 100% of the share capital of RossulaLtd, the holding company for Lightfactor Sales Limited and Light Processor Ltdwhich are two leading UK entertainment products companies. The totalconsideration was £350,000 comprising £250,000 in cash and the balance wassatisfied by the issue of 67,340 shares in January 2005. In calculating the goodwill arising on acquisition, the book values of theconsolidated net assets of ilight Group Limited and Rossula Ltd have beenassessed and fair value adjustments have been made to these book values. Theprovisional fair values are summarised in the following table: iLight Group Rossula Limited Limited £'000 £'000 Intangible fixed assets 10 -Tangible fixed assets 180 31 Stocks 341 309Debtors 1,371 450Cash - 1 Creditors (1,588) (844)Bank overdraft (36) (43)Finance lease creditors (33) (8)Deferred tax assets 22 8 ---------- ----------Provisional fair value of net assets/(liabilities) acquired 267 (96)Goodwill 1,537 473 ---------- ---------- 1,804 377 ========== ==========Satisfied by;Shares 700 100Cash 1,000 250 ---------- ---------- 1,700 350Other acquisition costs 104 27 ---------- ----------Cost of investment 1,804 377 ========== ========== 10 Exceptional items In 2005, the exceptional costs arose in relation to the reorganisation of thebusinesses acquired during the year and included redundancy costs, relocationcosts and fixed assets write downs. In 2004, the exceptional costs primarily related to the compensation for theloss office in respect of the previous Chairman of the Company. 11 Profit on disposal of part of pressure sensing business On 3 February 2005, the Group sold part of its pressure sensing businessinterests ("the Business Interests") for £1.3 million, payable in cash, toMeasurement Specialities, Inc. ("MSI"), a designer and manufacturer of sensorsand sensor based consumer products based in New Jersey, USA. The BusinessInterests comprise the stock, design rights and global distribution rights forthe industrial pressure sensor product range. 12 Post balance sheet events Acquisition of DMS Controls Ltd ("DMS") On 20 July 2005, the company acquired the entire issued share capital of DMS fora maximum total consideration of £3.5m. The initial consideration payable is£1.2 million in cash. A further £800,000 to be satisfied in shares will bepayable on the achievement of pre-tax profits of £400,000 for the period ending30th June 2006. A further maximum consideration of £1.5million will be payablesatisfied by loan notes and shares upon achieving further pre-tax profits growthto a total of £700,000 or up to £1million if such profits growth does not occuruntil the period ending 30th June 2007. DMS provides solutions over a number of disciplines - building managementsystems, HVAC, fire detection systems, voice alarm and public address, CCTV,Access control and associated maintenance services. It is the largest UKinstaller of Automated Logic Corporation building management systems product inthe UK and is an accredited Trend building management system technology centre.DMS has a large portfolio of clients including Royal Bank of Scotland, RochePharmaceuticals, Cable & Wireless, Fujitsu, Hilton Hotels and the BBC. Sale of FastTrak Software Publishing Limited ("FastTrak") On 21 September 2005, the company signed a binding agreement to sell the entireissued share capital of FastTrak to its management team for approximately£170,000 payable in cash, of which £100,000 is due upon completion and thebalance payable over 5 years. Interest is payable at 2.5% above LIBOR on theoutstanding annual balance of the deferred consideration. As a result of thedisposal the results of FastTrak for the year ended 30 June 2005, have beenpresented as a discontinued operation. 13 Financial Information The financial information set out above does not constitute the company'sstatutory financial statements for the years ended 30 June 2005 or 2004, but isderived from the audited financial statements for the year ended 30 June 2005.Statutory financial statements for 2005 will be delivered to the Registrar ofCompanies following the company's annual general meeting. The auditors havereported on those financial statements; their report was unqualified and did notcontain statements under s237(2) or (3) Companies Act 1985. 14 Annual Report The Annual Report, which will contain the audited financial statements, will beissued to shareholders in due course and will be available to members of thepublic from the Company's registered office at 26 Greenhill Crescent, WatfordBusiness Park, Watford, Herts. WD18 8XG. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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