25th Apr 2005 07:01
3DM Worldwide PLC25 April 2005 Press Release 25 April 2005 3DM Worldwide plc ("3DM" or "the Company") Final Results for the year ended 31 December 2004 3DM Worldwide plc (AIM:TDM), which has developed and is now exploiting apatented plastic polymer moulding process, announces its Final Results for theyear ended 31 December 2004. Highlights • turnover of £783,000 (2003: £350,000) showing increasing royalty revenues received from the Powder Impression Moulding (PIM) process• operating loss £3.27 million (2003: £2.03 million)• pre-tax loss of £4.0 million (2003: £2.2 million)• increased costs incurred in the development and installation of the first large scale robotic Alpha line Commenting on the Results, Ken Brooks, Chairman of 3DM Worldwide plc, said: "2004 was both a rewarding and challenging year for 3DM. We saw increasingrevenues from licencing of the powder impression moulding process, though therewere problems in the development and installation of a fully robotic machinedesigned for the manufacture of PIM based products. Putting these issues aside,we now have the foundations in place and the machinery to demonstrate ourprocess to potential licencees." For further information: 3DM Worldwide PLC Ken Brooks, Chairman Tel: +44 (0) 1993 [email protected] David [email protected] Tel: +44 (0) 1993 702491 www.3dmworldwide.com Media enquiries: Abchurch Henry Harrison-Topham / Ariane Comstive Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Chairman's Statement I am extremely pleased to report that 2004 saw increasing revenues received bythe Company through the licensing of the powder impression moulding process(PIM). Turnover for the Company increased to £783,000 for the year ended 31December 2004 from £350,000 in 2003. It has also been a challenging year for the Company in the development andinstallation of new machinery and a fully robotic line for the PIM process.Changes in the specifications also meant that the development of all of thelines took longer and cost more than originally anticipated. As a result, thesedelays have had a knock on effect and been responsible in delaying the Company'sother projects that have been reported on previously. I am delighted to report the successful development in the UK of three differentlines. A development line, which is designed for experimentation, is now fullyoperational in the Company's facility in Trowbridge. In addition there is thelarger automated Beta line and the fully robotic Alpha line. With the lines nowin place, we are on track with the commercialisation of the PIM process. I would like to take this opportunity to thank the whole team for all theirefforts during the past year. Ken BrooksChairman22 April 2005 Operational Review 2004 was a year of consolidation and development, and not without its problems. UK The first large scale robotic Alpha line was developed and largely built in late2004, and has now been installed in Wales. The line was initially designed formanufacturing one product. This was subsequently redesigned to facilitate themanufacture of multiple products. Its construction was managed by RoboticTechnology Systems plc (RTS), a highly regarded specialist robotics business. The original site selected for the installation of the Alpha line proved to beunsuitable due to the quality of the building and the power supply. In the end,RTS installed the line in superior premises, over and above our immediaterequirement, which also allowed the Company to modify both the power supply andAlpha line itself to cope with multiple products. In addition, this new siteenabled the Company to move the smaller Beta line to the same location. Thecurrent development line is still working in Trowbridge. The Company is now in a much stronger position to exploit the processcommercially. The Beta line is now working and the final trials on the Alphaline are progressing satisfactorily. The Company will use the Alpha machine fordevelopment and demonstration purposes to prospective licencees and will soon beable to offer 'toll' manufacturing (being initial production for trialmarketing). Discussions are at various stages with potential licencees and Headsof Terms agreed or Letters of Intent covering product development work, machineand material procurement, licence and royalty positions, signed in at least fivecases. USA The simplification of the commercial arrangements in the USA was referred to inthe 2003 accounts, and is expected to lead to a number of interesting businessopportunities. The main focus of development continues to be in the automotive sector, thoughby its nature this tends to be slow. The key developments concern magnesiumencapsulation, both for chassis and truck beds. The high speed line underdevelopment at VPTech has at last been finished and initial mould tooling hasbeen procured for testing. The commercial arrangements with Silkwood and Geomatrix also continue and theystill provide a royalty stream for the Company. Similarly, discussions continueabout the exploitation of the tyre sensor. Rest of the world and other commercial arrangements It is hoped that the Alpha line for Tanzania, which as a project is being runfrom the UK given that it is dependent on EU funding, will be able to proceed in2005. All the signals are good at this stage. There is also significant interest in licences from several geographic areas,notably China, India and Brazil. Discussions and project evaluation continue with several other parties,sometimes not as quickly as the Company might initially have hoped. As noted,generally these discussions are dependent on the successful demonstration of thelines in Wales. General Now that the trials of the Alpha line are nearing completion and the Beta linecontinues to work successfully, the Company's focus is changing to ensurecontrolled development of the business during 2005. All enquiries, and indeedwork that is well in progress, are being prioritised in terms of complexity,profit potential and long-term royalty stream. Over the last year, the Company has recruited a number of first classoperational managers and engineers, putting in place a team that now has theability to deliver on the opportunities presented to the Company. Peter OldhamManaging Director22 April 2005 Financial Review Results In 2004, turnover increased from £0.35 million to £0.78 million. Theconsolidated net operating loss was £3.27 million, up from £2.03 million in2003. Consolidated losses before tax were £4.0 million compared to losses of£2.2 million last year. Dividends and earnings per share No dividend payment is proposed. There remained 1.5 million warrants and 6.74 million shares under option at theend of the year, which produced no effect on the earnings per share. Theearnings per share were (6.02 pence) compared to (3.65 pence) in 2003. In accordance with FRS4 and UITF 17, a share option reserve has been created andcredited with £34,000, which represents the difference between the optionexercise price and the market value of the relevant shares on the date of grant. Intangible assets and research and development The Company has consistently adopted a prudent accounting policy with regard toresearch and development generally, writing all these off as expenses throughthe profit and loss account. The Company also treats all ongoing IntellectualProperty costs on the same basis. The research and development costs areexpected be recovered through licence agreements. The machine build costs arereflected in the value of the physical machinery, which the Company sold under afinancing arrangement at the end of the year. A review was undertaken during the year of the accounting treatment of theIntellectual Property, which was purchased in 2001. During the course of thisreview, the appropriateness of the non-amortisation of the Intellectual Propertyin previous accounting periods was considered. Although no revenues were generated from the use of the Intellectual Propertyduring the years 2001 to 2003, the Company carried out work during this periodto develop directly related products. In consequence, it was considered thatthe Intellectual Property was in use during those accounting periods and that,in view of this, it would have been appropriate for amortisation charges to havebeen applied. The financial statements include the effect of these Intellectual Propertyadjustments, which was to increase the reported loss for the year by £0.76million, to adjust prior years by £1.71 million and to reduce net assets as at31 December 2004 by £2.47 million. Financing In January 2004, the Company received the balancing cash from the December 2003warrant conversions and were repaid the majority of the third party outstandingdevelopment loans. Royalty income and the Krygyz Republic property asset saleprovided the balance of the cash flow. The Company contracted to sell the Alphaline in the latter part of 2004 on a phased basis linked to commissioning andthe first receipts under this sale and lease back were received in 2005.Certain machinery has been retained which the Company always intended tofinance. A facility is currently under final negotiation and is expected to bein place soon. No grants were received in 2004 though there are a number ofapplications in process that are expected to produce some grant income in 2005. Disposals The Company agreed to sell its remaining property assets in the Kyrgyz Republicfor a net cash consideration of US$1.5 million realising a loss of £0.76million. To date, US$0.75 million has been received with the balance due by 31March 2006. Until the consideration of US$1.5 million has been fully satisfied,the Company will be entitled to receive a royalty of US$0.10 per kilogram ofwool processed. As part of these arrangements, the Company's joint venture,under which it was entitled to a minimum annual royalty of US$0.1 million, wascancelled. David Shepley-CuthbertFinance Director22 April 2005 UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTYEAR ENDED 31 DECEMBER 2004 Year Ended Year Ended 31 December 31 December 2004 2003 (as restated) £'000 £'000TurnoverContinuing operations 783 350 --------------------- ------------------- 783 350 Cost of sales 48 - Gross profit 735 350 Administrative expenses (4,156) (2,649)Other operating income 152 271 --------------------- ------------------- Operating LossContinuing operations (3,269) (2,028) Loss on disposal of fixed asset investments (761) -Loss on disposal of subsidiaries - (155) --------------------- ------------------- (4,030) (2,183) Interest receivable 36 -Interest payable (8) (15) --------------------- ------------------- Loss on ordinary activities before taxation (4,002) (2,198)Tax on loss on ordinary activities - - --------------------- ------------------- Loss on ordinary activities after taxation (4,002) (2,198) --------------------- ------------------- Loss per shareBasic and diluted loss per ordinary share (6.02)p (3.65) p Loss per share excluding loss on disposal of (4.88)p (3.40)pfixed asset investments/subsidiaries --------------------- ------------------- UNAUDITED CONSOLIDATED BALANCE SHEET 31 DECEMBER 2004 31 December 31 December 2004 2003 (as restated) £'000 £'000Fixed AssetsIntangible assets 12,590 13,509Tangible assets 2,642 470Investments 565 3,423 -------------------- ------------------- 15,797 17,402 Current AssetsDebtors 2,070 3,762Cash at bank 86 700 -------------------- ------------------- 2,156 4,462 Creditors: amounts falling due within one year (1,721) (2,102) -------------------- ------------------- Net current assets 435 2,360 -------------------- ------------------- Total assets less current liabilities and netassets 16,232 19,762 -------------------- ------------------- Capital and reservesCalled-up equity share capital 1,668 1,651Share premium account 29,958 29,573Share option reserve 34 -Profit and loss account (15,428) (11,462) -------------------- ------------------- Equity shareholders' funds 16,232 19,762 UNAUDITED CONSOLIDATED CASH FLOW STATEMENTYEAR ENDED 31 DECEMBER 2004 Year Ended Year Ended 31 December 31 December 2004 2003 (as restated) £'000 £'000 Net cash outflow from operating activities (2,266) (1,587) Returns on investments and servicing of financeInterest received 36 -Interest paid (8) (15) Net cash inflow/(outflow) from returns on 28 (15)investments and servicing of finance Capital expenditure and financial investmentPurchase of tangible fixed assets (2,371) (192)Payments to acquire investments (1,322) (2,459)Receipts from investments 2,296 - Net cash outflow from capital expenditure and (1,397) (2,651)financial investment Net cash outflow before financing (3,635) (4,253) --------------------- Acquisitions and disposalsReduction in cash on disposal/acquisition of - (16)subsidiaries (3,635) (4,269) FinancingIssue of equity share capital 3,301 4,731 --------------------- ------------------- Net cash flow from financing 3,301 4,731 --------------------- ------------------- (Decrease)/Increase in cash (334) 462 --------------------- ------------------- UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESYEAR ENDED 31 DECEMBER 2004 Year Ended Year Ended 31 December 31 December 2004 2003 (as restated) £'000 £'000 Loss for the financial year (4,002) (2,198)Currency translation differences on foreign currency 36 - Total recognised gains and losses relating to the (3,966) (2,198)year Prior year adjustment - see note 6 (1,710) Total gains and losses recognised since last annual (5,676)report Of the prior year adjustment, £760,000 relates to the previous year and £950,000relates to earlier years. UNAUDITED RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Year Ended Year Ended 31 December 31 December 2004 2003 (as restated) £'000 £'000 £'000 £'000 Loss for the financial period (4,002) (2,198)New equity share capital 17 179Premium on new equity share capital 7,647 385Movement in share option reserve 34 -Movement in reserves due to foreign 36 -exchange differences 472 7,826 Net (reduction) increase to funds (3,530) 5,628Opening shareholders' funds - as restated 19,762 14,134 Closing Shareholders' funds 16,232 19,762 NOTES TO THIS PRELIMINARY ANNOUNCEMENT 1. The calculation of earnings per share is based on the loss of £4,001,850 (2003: £2,198,197) and on 66,469,702 Ordinary shares (2003: 60,155,360) in issue. 2. The financial statements have been prepared on the basis of the accounting policies set out in the Group's statutory accounts for 2003 except that royalties are accounted for on an accruals basis and the change of accounting treatment for intellectual property referred to in note 6 below. The comparatives of the cash flow statement have been restated to reanalyse certain cash flows. 3. The financial information set out above does not constitute the company's statutory accounts within the meaning of section 240 of the Companies Act 1985. The 2004 figures are based on unaudited accounts for the year ended 31 December 2004. The auditors do not expect to issue a qualified report on the statutory accounts which will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and which will be delivered to the Registrar of Companies following the company's annual general meeting. 4. The 2003 comparatives are derived from the statutory accounts for 2003 which have been delivered to the Registrar of Companies and received an unqualified audit report and did not contain a statement under the Companies Act 1985, s237(2) or (3). 5. This statement will be made available online at www.3dmworldwide.com and copies will be made available at the Company's registered office, Unit 4, Manor Farms Barns, Witney Road, Finstock, Chipping Norton OX7 3DG. 6. The directors have reviewed the accounting treatment of the intellectual property, which was purchased in 2001. During the course of this review, the directors have considered the appropriateness of the non-amortisation of the intellectual property in previous accounting periods. The directors note that although no revenues were generated from the use of theintellectual property during the years 2001 to 2003, the company carried outwork during this period to develop directly related products. In consequence,the directors consider that the intellectual property was in use during thoseaccounting periods and that, in view of this, it would have been appropriate foramortisation charges to have been applied. These financial statements include the effect of adjustments to incorporateamortisation charges. The effect of these adjustments is to increase thereported loss for the year ended 31 December 2004 by £760,000 (year ended 31December 2003: £760,000) and to reduce net assets as at 31 December 2004 by£2,470,000 (31 December 2003: £1,710,000). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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