4th Oct 2007 10:23
Sabien Technology Group PLC04 October 2007 4 October 2007 Sabien Technology Group Plc Maiden Preliminary results for the 12 months ended 30th June 2007 (Unaudited) Sabien Technology Group (AIM: SNT) is focused on the manufacture and sale of M2G and M3G energy saving devices which are proven to reduce energy consumption on commercial boilers and air conditioning units by up to 35%. Highlights: • Successful admission to trading on AIM and fundraising of £3.2m gross in December 2006 • Major orders continue from largest current client, The Royal Bank of Scotland • M2G orders placed by other blue chip organisations including: Lloyds TSB, 02, Alliance & Leicester, Ford Motor Company, HM Land Registry, Institution of Mechanical Engineers, Investec Bank Current period: • Launch of Project 10 - inviting 10 large UK multi-site organisations to participate in a contracted pilot of M2G. Currently seven out of the 10 have subscribed for the pilot with further participants pending • M2G Distribution agreement signed for the following territories; China, Italy, Republic of Ireland • Launch of M3G - a product that helps reduce energy consumption (electricity) in commercial air-conditioning units by up to 35% Alan O'Brien, Chief Executive Officer of Sabien Technology Group Plc, said, "Sabien has a clear focus on generating UK sales, product suite enhancement forexample M3G for air-conditioning, and overseas licensing deals. I believe we arenow well positioned to take advantage of the opportunities of a growing marketfor energy efficient and environmentally sound technologies. "With the right team on board and with a solid financial structure, Sabien is inan excellent position to build on what has been achieved in 2007." For further information: Sabien Technology Group plc 020 7993 3700Alan O'Brien - Chief Executive OfficerGus Orchard - Finance Director Brewin Dolphin (NOMAD) 0845 270 8600Neil Baldwin/Alison Barrow Madano Partnership (Financial PR Advisers) 020 7593 4000Mark Way/Matthew Moth CHAIRMAN'S STATEMENT I am pleased to report on the results for Sabien Technology Group Plc ("Sabien","the Company" or "the Group") for the year ended 30 June 2007. This is Sabien'sfirst year as an AIM quoted company having been successfully admitted to AIM on20 December 2006 when it raised £3.2m of new money for the Company. Financial Results Turnover in the year to 30 June 2007 amounted to £632k (2006 - £3k). The lossafter taxation was £745k (2006 - £63k). Although the results for the year werebehind forecast, principally due to the delay in the admission to AIM which hadbeen planned for September 2006, the Group has had a number of successes withthe commercialisation of its M2G product including a further order placed inJune 2007 from the group's largest current customer, Royal Bank of Scotland foran additional £420,000. Over the past two years, Royal Bank of Scotland, has now placed orders totalling£1.35m for installation of M2G at its branches throughout the UK. The Group is seeking to replicate this success with other major multi-siteoperations and details of this are set out in the Chief Executive Officer'sreport. At 30 June 2007, cash and cash deposits amounted to £2.1m (2006 - £0.07m). Board, Management and People I was delighted to accept the Board's invitation to become Chairman prior toflotation. I look forward to using my experience gained in other organisationsto helping Sabien to achieve its potential as a leader in its market. Gus Orchard joined the Board in October 2006 as Finance Director to help in theflotation process and in implementation of processes for the Group goingforward. He was previously Finance Director of TransEDA Plc which he took to AIMin September 2000. Jonathan Hill who, as both a shareholder (through General Capital VentureFinance Limited) and director of Sabien Technology Limited, was instrumental inproviding the finance to enable Sabien to acquire the rights to the M2G productfrom its inventors, joined the Board prior to flotation but stepped down in July2007. I would like to express the Board's appreciation for Jonathan's andGeneral Capital's support in enabling the transition of the Group from aprivately-held venture-backed start-up to an AIM quoted company. I am pleased to welcome Karl Monaghan to the Board. Karl joined in September2007 and brings with him a wealth of experience in the City having worked therein stockbroking and investment banking firms for approximately 14 years beforesetting up his own consultancy. The Group has recruited experienced sales and operations personnel to take thebusiness forward and I and my fellow Board members have every confidence thattheir efforts will be successful. Dr Clive MortonNon-Executive Chairman4 October 2007 CHIEF EXECUTIVE OFFICER'S REPORT Introduction Sabien was set up in 2004 to commercialise an energy saving technology calledM2G which helps public sector and commercial clients reduce their carbonfootprint and energy consumption by up to 35%. With interest in 'green issues' being at an all time high, the need to achieveboth financial savings as well as an improved environmental profile is becomingincreasingly important in the Boardrooms of UK PLC. Rising energy prices also create a more immediate imperative to reduce energyconsumption and cut energy costs. The urgency to seek new solutions is mostdefinitely a growing feature of the market and consequently companies arebeginning to implement energy strategies to meet challenging energy reductiontargets. A number of customers are already using M2G including an NHS Trust, a range ofcommercial blue chip clients and a leading high street bank. The M2G is CarbonTrust approved and qualifies for the Enhanced Capital Allowance Scheme. Our strategy Sabien's strategy is focused on targeting large multi-site companies tasked byshareholders and management to reduce and manage their carbon footprint andenergy consumption. In the UK, we market and sell direct to our clients using our in-house businessdevelopment and marketing teams and are currently setting up our UK indirectsales channels. Our strategies for Europe, North America and Asia, centre solely on issuingproduct licences to businesses to market and sell our products in these regionsand since the year end we have signed non-exclusive distribution agreements inChina, Italy and the Republic of Ireland. The Directors estimate that the installed commercial boiler base in China isover 100 million and over 26 million in Italy. Both of these markets representsignificant opportunities for the Company. Operational Progress As we have previously stated, as a result of our later than expected Admissionto AIM, the Group had to delay the recruitment of our business development teamwith a consequent slower pick up in revenues than we had anticipated. In spite of this timing issue, the fundamentals of our business remain strongand appealing. In M2G we have a world class product. We are gaining blue chipclients and are experiencing a positive level of new sales enquiries from bothwithin the UK and internationally. We have launched a number of initiatives which we believe will help drive salesand technology acceptance in the next financial year and beyond. While somecustomers are happy to make environmentally driven improvements, irrespective ofcost, most businesses want to know that there is also going to be an economicand fiscal benefit from adopting Sabien's technology. Current period Project 10 On the back of the demand for both economic and environmental improvements,Sabien launched Project 10 in the summer. Focusing on our core market, we invited 10 multi-site blue chip clients toparticipate in a contracted three month pilot. It is very pleasing that wealready have seven clients confirmed and three pending for the project. I am confident that M2G will deliver demonstrable savings and that we shallbegin to see the benefits of this project during the course of the nextfinancial year. M3G In October 2007, Sabien completed an agreement to licence M3G, a product thathelps reduce energy consumption (electricity) in commercial air-conditioningunits by up to 35%. This a complementary product to M2G with the same targetmarket of large, multi-site organisations using air-conditioning systems. Webelieve M3G fits well with our overall strategy to support companies with theircarbon management through energy reduction. Staff I would like to pay tribute to all our people for their contributions to thebusiness so far this year. It has been a major task for the team to respond tothe issues brought about by the delays in coming to the market. Throughout thistime, their contribution to mobilising the business plus helping to win some newand repeat orders from some very notable clients has been magnificent. Outlook With the right team on board and with a solid financial structure, Sabien is inan excellent position to build on what has been achieved in 2007. With a focus on generating UK sales, product suite enhancement, including M3Gfor air-conditioning and overseas licensing deals, I believe we are now wellpositioned to take advantage of the opportunities of a growing market for energyefficient and environmentally sound technologies. Alan O'Brien Chief Executive Officer 4 October 2007 Consolidated Income Statement For the year ended 30 June 2007 2007 2006 Notes £'000 £'000 Revenue 632 3Cost of sales (147) (9)Gross profit 485 (6) Other income 3 69 3Distribution costs (52) -Administrative expenses (1,083) (63)Finance costs 4 (167) (7)Loss before tax 2 (747) (73) Corporation tax 5 2 10Loss for the year attributable to equity holders of the parent (745) (63)company Loss per share in pence - basic and diluted 6 (2.8) (0.3) Consolidated and Company Balance SheetAs at 30 June 2007 Group Company 2007 2006 2007 2006 Notes £'000 £'000 £'000 £'000 ASSETSNon-current assetsProperty, plant and equipment 47 1 - -Other intangible assets 2,511 2,652 - -Investment in subsidiaries - - 2,385 -Total non-current assets 2,558 2,653 2,385 - Current assetsInventories 71 72 - -Trade receivables 28 - - -Current tax recoverable - - - -Other current assets 121 21 254 -Cash and cash equivalents 2,148 76 2,111 -Total current assets 2,368 169 2,365 - Current liabilitiesTrade and other payables 39 - 5 -Short term provisions 183 464 41 -Total current liabilities 222 464 46 - Non-current liabilitiesLong-term borrowings 422 336 422 -Long-term provisions 2,002 1,927 2,002 -Total non-current liabilities 2,424 2,263 2,424 - Net Assets 2,280 95 2,280 - EQUITY AND LIABILITIESEquity attributable to equity holders of theparentShare capital 1,329 1,021 1,329 -Other reserves 1,601 (1,021) 2,371 -Retained earnings/(losses) (650) 95 (1,420) -Total equity 2,280 95 2,280 - The comparative numbers for 2006 for the Group are as at 30 June 2006 whereasthose for the Company are as at 30 September 2006. Consolidated and Company Cash Flow Statement For the year ended 30 June 2007 Group Company 2007 2006 2007 £'000 £'000 £'000 Cash flows from operating activitiesLoss before taxation (747) (73) (1,420)Adjustments for:Depreciation and amortisation 148 2 -Impairment provision - - 1,228Finance income (69) (3) (65)Finance expense 167 7 150Transfers to equity reserves 104 - 12Increase in trade and other receivables (128) (10) 20Decrease in inventories 1 (56) -Increase in trade and other payables 1 450 45 Cash generated from operations (523) 317 (30)Interest paid (167) (7) -Corporation taxes paid - (44) -Net cash outflow from operating activities (690) 266 (30) Cash flows from investing activitiesAcquisition of subsidiary company - - (500)Acquisition of intellectual property - (778) -Purchase of property, plant and equipment (53) (1) -Finance income 69 3 65Net cash generated by/(used in) investing activities 16 (776) (435) Cash flows from financing activitiesProceeds from issue of share capital 2,826 - 2,576(Repayment of)/proceeds from long term borrowings (80) 438 -Equity dividends paid - (31) -Net cash from financing activities 2,746 407 2,576 Net increase/(decrease) in cash and cash equivalents 2,072 (103) 2,111Cash and cash equivalents at the beginning of the year 76 179 -Cash and cash equivalents at the end of the year 2,148 76 2,111 Notes to the Financial Statements 1. Basis of Preparation The results for the year are preliminary and unaudited. While the financial information included in this interim announcement has beencomputed in accordance with International Financial Reporting Standards (IFRS),this announcement does not itself contain sufficient information to comply withIFRS. The full financial statements of the company will be prepared inaccordance with IFRS, International Accounting Standards and theirinterpretations issued or adopted by the International Accounting StandardsBoard as adopted for use in the European Union. No adjustments have beenrequired to restate opening balances from UK GAAP to IFRS. The financial statements have been prepared on the historical cost basis. Theconsolidated financial statements are presented in £'000 unless otherwisestated. The preliminary announcement was approved by the Board of Directors on 4 October2007. 2. Basis of Consolidation Business combinations involving entities under common control fall outside thescope of IFRS and are consolidated using merger accounting under which the groupincorporates the assets and liabilities of the entities at the amounts recordedin the books of the entities. No goodwill arises on consolidation and anydifference arising from the use of merger accounting is included in equity as amerger reserve. The consolidated financial information incorporates the combined companies'results as if the companies had always been combined. Consequently thefinancial information includes the full period results of Sabien TechnologyLimited even though the combination did not occur until December 2006.Corresponding amounts in the financial information also incorporate the fullperiod results of Sabien Technology Limited. In respect of other business combinations fair values are attributed to the netassets acquired. Goodwill, which represents the difference between the purchaseconsideration and the fair value of the net assets acquired, is capitalised andsubject to an impairment review at least annually or more frequently if eventsor changes in circumstances indicate that the goodwill may be impaired. 3. Loss before tax The loss before tax is stated after charging: Year ended 30 June Year ended 30 June 2007 2006 £'000 £'000 Depreciation of owned tangible fixed assets 6 1Amortisation of intangible assets 142 3Operating lease rentals - land and buildings 20 - 4. Finance income Year ended 30 June Year ended 30 June 2007 2006 £'000 £'000Interest receivable 69 3 5. Finance expense Year ended 30 June Year ended 30 June 2007 2006 £'000 £'000Interest payable 167 7 6. Corporation tax Year ended 30 June Year ended 30 June 2007 2006 £'000 £'000Current tax (2) (10)Deferred tax - -Total tax recovery for the year (2) (10) The tax recovery for the year can be reconciled to the loss per the income statement as follows: Loss before tax (747) (73)Tax on loss on ordinary activities at standard UK corporation (142) (14)tax rate of 19% (2006: 19%)Expenses not deductible for tax purposes 8 2Capital allowances in excess of depreciation (1) -Other short term timing differences 27 2Unrelieved tax losses 110 -Current tax recovery (2) (10) No provision has been made to recognise a deferred tax asset as futureprofitability is uncertain. 7. Loss per share The calculation of loss per share is based on the loss for the year attributableto equity holders of £745k (2006: £63k) and a weighted average number of sharesin issue during the period of 26,570,511 (2006: 20,416,664) 8. The financial information above for the years ended 30 June 2006 and 2007 inrespect of which the accounting policies are consistent, does not constitute thestatutory financial statements for those years. It is anticipated that theannual report and accounts for the year ended 30 June 2007 will be posted toshareholders on or around 11 October 2007. Copies will be available from theCompany Secretary, Sabien Technology Group Plc, 34 Clarendon Road, Watford,Herts WD17 1JJ and on the Company's website, www.sabien-tech.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sabien Tech.