22nd Aug 2006 07:00
Lo-Q PLC22 August 2006 Lo-Q plc ("Lo-Q" or the "Company") Interim Results for the six months ending 30 June 2006 Chairman's Statement We have had a good start to the season with customer demand, on average, beingabove last year's levels. This has resulted in a turnover that has increased by72.4% and with costs having changed by only 23.1%, the loss during the firsthalf of the year has shrunk to £60,900 compared with £202,447 for the similarperiod last year. The gross value of Q-bot rentals to the end of July has risencompared with last year by 34% There have been some increases in rental charges but the revenue growth islargely due to improved penetration of Q-bots, with the proportion of guestsusing the Q-bot up considerably on 2005. The actual income level on any day,when compared with the same day last year, is greatly influenced by factors suchas weather. We had a string of rainy Saturdays just after the season started andat that point seemed to be improving only modestly. We are renting more Q-botsthis year on days with lower attendances due, we believe, to guests perceptionof not knowing what the day may be like in regard to the length of queues on therides. We think that guests do not want to take a chance of not getting a Q-botif the park turns out to be busy. This sentiment has particularly increased thesales of the more expensive gold service in the two larger parks, as the numberof gold Q-bots available is relatively small. We are encouraging Six Flags to capitalise on the opportunity in corporatesales. On one occasion 600 Q-bots were rented on a corporate outing day, througha single order. Factors that have enhanced our revenue have been the tightmanagement of the Georgia Park sales operation (which is staffed and managed byLo-Q's own staff); targeted customer selling particularly in the Georgia Park aswell as in the New Jersey Park at the weekends. Our hands-on control onmanagement and sales at the Georgia Park has produced a sales level that is 50%above the other parks. A new ride in the Georgia park has also contributed tothe enhanced revenue. The new management team that is now in place in the Six Flags Corporation hasbeen enthusiastic towards our system; with the CEO, Mark Shapiro's positivecomments to the financial analysts in New York in July, when asked about theFlash Pass system, (our operating name in the parks), being typical. Hisinterview can be reached via a link on our website - www.lo-q.com In the development lab, our team of R&D staff are working on a major systemupgrade, which will lead to a new version of our product. Built on our years ofuser experience, we are producing a system with lower infrastructure costs,simpler installation requirements, and using enhanced state-of-the art radiocommunication techniques. The new system will give users more information intheir own hands. This system is called VQ 20/20 and is expected to be trialledin the field later this year. It will feature wait times for rides beingdisplayed on the Q-bot and users will be able to book any ride that is on oursystem without having to go to the ride entrance. The Company is applying forpatents covering certain aspects of this recent R&D work. We believe that thenew system will allow us to have a greater proportion of the park guests usingthe system, and will have marked advantages over alternative competitiveproducts that are based on paper, RFID, or mobile telephones. We are pleased that we were able to announce that Dollywood, which is situatedin the Smoky Mountains of Tennessee, have agreed to install a pilot system thisautumn. The outcome of a successful pilot will be a three-year contract. Discussions continue with a number of other parks and park chains and we arestill involved in trying to secure further orders for our system. Lo-q has opted to adopt the International Financial Reporting Standards early.This has resulted in presentational changes. The comparatives and accountingtreatment are not materially different of those previously stated. This month the two millionth customer rented a Q-bot and we and we are pleasedto record this milestone. Baring any significant negative event we are on trackto meet market forecasts, which should result in the Company recording an aftertax profit for the current financial year., Contacts: Jeff McManus, Chairman: 01491 577 201 John Prior, Corporate Synergy Plc: 0207 448 4400 LO-Q PLC Consolidated Interim Income Statement Six months to Six months to Audited 15 30 Jun 2006 30 Jun 2005 months to 31 Dec 2005 £ £ £ Revenue Income derived from Q-Bot Rental 653,900 379,362 1,596,482 Cost of Sales 162,024 112,194 273,269 __________ __________ __________ Gross profit 491,875 267,168 1,323,213 Other Operating Income 0 0 75,671 Administrative expenses 554,375 469,623 1,460,747 __________ __________ __________ Operating loss (62,500) (202,455) (61,863) Interest receivable 1,772 219 2,139 Interest payable and similar charges (172) (211) (440) __________ __________ __________ Loss on ordinary activities before taxation (60,900) (202,447) (60,164) Taxation on loss on ordinary activities 0 (2,727) (29,565) __________ __________ __________ Loss on ordinary activities after taxation (60,900) (199,720) (30,599) __________ __________ __________ Earnings (loss) per share (pence)Basic EPS (0.41) (1.40) (0.21) Diluted EPS (0.39) (1.31) (0.20) All amounts relate to continuing activities There are no recognised gains or losses other than those within the profit and loss account LO-Q PLC Consolidated Balance Sheet Six months to Six months to Audited 31 Dec 30 Jun 2006 30 Jun 2005 2005 £ £ £ Non-Current AssetsProperty, Plant and Equipment 16,298 27,646 18,304 __________ __________ __________ Current AssetsInventories 258,681 202,566 208,124 Trade and other receivables - Trade receivables 456,880 547,296 43,484 - Other receivables 8,654 15,747 2,717 - Corporation tax 32,477 9,897 30,114 Receivables falling after one yearCash and cash equivalents 105,140 39,597 637,429 __________ __________ __________ 861,832 815,103 921,868 __________ __________ __________ Total Assets 878,131 842,749 940,172 Equities And LiabilitiesCalled up share capital 147,658 143,478 143,478Share premium account 4,982,067 4,971,617 4,971,617Capital reserve 12,473 12,473 12,473Profit and loss account (4,374,929) (4,645,014) (4,318,964) __________ __________ __________ Total Equity 767,269 482,554 808,604 __________ __________ __________ Current LiabilitiesTrade Accounts Payable 29,282 71,869 12,860Taxes Payable 18,951 16,254 15,166Provisions & Other Liabilities 62,629 272,072 103,542 __________ __________ __________ Total Current Liabilities 110,862 360,195 131,568 __________ __________ __________ Total Liabilities & Equity 878,131 842,749 940,172 __________ __________ __________ LO-Q PLC Consolidated cash flow statement Six months to Six months to Audited 15 months 30 Jun 2006 30 Jun 2005 to 31 Dec 2005 £ £ £ Net cash (outflow)/inflow from operating activities (543,927) (104,216) 331,868 __________ __________ __________ Returns on investments and servicing of financeInterest received 1,772 219 2,139Interest paid (172) (211) (440) __________ __________ __________ Net cash inflow from returns on investments and 1,600 8 1,699servicing of finance __________ __________ __________ TaxationCorporation tax (paid)/received (2,363) 34,592 41,213 __________ __________ __________ Capital expenditure and financial investments (7,163) (1,895) (3,921) __________ __________ __________ Cash (outflow)/inflow before use of liquid resources (551,854) (71,511) 370,859and financing FinancingNet cash inflow from shares issue 14,630 0 0 __________ __________ __________ (Decrease)/Increase in cash (537,224) (71,511) 370,859 __________ __________ __________ LO-Q PLC Notes to the consolidated cash flow statement Reconciliation of operating loss to net cash flow from operating activities Six months to Six months to Audited 15 months to 30 Jun 2006 30 Jun 2005 31 Dec 2005 £ £ £ Operating loss (62,500) (202,455) (61,863)Depreciation charges 9,169 15,838 38,545Loss on sale of tangible fixed assets (1,771)Decrease/(increase) in stock (50,557) 2 (9,676)Decrease/(increase) in debtors (419,333) (168,363) 345,486(Decrease)/increase in creditors (20,706) 250,762 21,147 __________ __________ __________ Net cash movement from operating activities (543,927) (104,216) 331,868 Reconciliation of net cash flow to movement in net debt Six months to Six months to Audited 15 months to 30 Jun 2006 30 Jun 2005 31 Dec 2005 £ £ £ (Decrease)/Increase in cash for the period (537,224) (71,511) 370,859Exchange translation 4,935 13,756 7,273 __________ __________ __________ Movement in net funds (532,289) (57,754) 378,132 Net funds at beginning of period 637,429 97,352 259,297 __________ __________ __________ Net funds at end of period 105,140 39,597 637,429 __________ __________ __________ Notes to the Interim Statements 1. These accounts have been prepared in accordance with the InternationalFinancial Reporting Standards (IFRS) and show the effects of changes fromGenerally Accepted Accounting Practice (GAAP) previously adopted in theAccounts. The interim statement for the six months are unaudited and do not constitutestatutory accounts for the purpose of the Companies Acts. The accounts for theyear ended 31st December 2005 have been filed with the Registrar of Companiesand the auditors' report on those accounts was not qualified. 2. The adjustment necessary to reflect the changes to IFRS are as follows: 2.1 Share-based incentive payments The company has from time to time issued share options to its staff as anincentive with options always based on the then current market place price. Thefair value of employee share plans has been calculated using a Black Scholesmodel. In accordance with IFRS 2 'Share-based payment' the resulting cost ischarged to the income statement over the vesting periods of the plans. The valueof the charge is adjusted to reflect the expected and actual levels of optionsvesting. IFRS 2 has been applied to all grants of equity instruments after 7thNovember 2002 that were unvested as at 1st January 2005. The calculation of the share options issued to the employees has resulted in avalue which is not material for the financial statement therefore no adjustmenthas been made. 2.2 IAS 21 deals with the accounting for foreign currency and has had no impacton the translation of the overseas operation. 3. Due to corporation tax loses available no tax charge has been provided. 4. Earnings per share have been calculated on the profits for the period aftertaxation and 14,699,837 shares in issue. The diluted earnings per sharecalculation is based on 15,674,599 5. The directors have not declared an interim dividend. No dividend is shown inthe income statement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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