18th Sep 2006 08:45
Timestrip PLC18 September 2006 Timestrip Plc INTERIM RESULTS FOR THE 6 MONTHS ENDED 30TH JUNE 2006 Timestrip Plc is pleased to announce its unaudited interim results for the 6months to 30 June 2006. Timestrip Plc develops, manufactures and sells patented Timestrip smart labelswhich monitor for how long perishable food and other replaceable products havebeen open or in use. Key Points •Sales exceed £200,000 (2005 - £50,000) •Significant progress in Food Service markets in Europe •New orders from North America in diverse market sectors •Significant progress in Joint Development project with Henkel, a Fortune 500 Global Company •New Joint Development projects with leading packaging supplier in North America and a European cosmetics manufacturer •Imminent test launch with leading pharmaceutical product in Europe •Launch of iStripTM - a new label technology targeting pharmaceutical and food industries (see today's announcement) Paul Freedman, Timestrip's joint CEO commented:- "We are making significant progress in bringing our patented label technology toa diverse range of mass markets. We have now established a core product rangethat is being sold into multiple markets in Europe and North America with verypromising early signs of success. We continue to encourage customer funded JointDevelopment Projects, some of which have already resulted in supply contracts,and others which have the potential to generate significant revenues in themedium term. Production capacity remains a key focus for the Company as we strive to improvelead times for the assembly and implementation of new machines that are requiredto meet the evident demand for the technology. We remain confident in ourability to evolve a revenue model that combines sales from in-housemanufacturing with royalty revenues and raw material sales derived frommanufacturing licenses." For further information: Paul Freedman, Joint CEO, Timestrip 01462-440700 Shane Dolan, Biddicks 020 7448 1000 Fergus Marcroft, Evolution Securities 020 7071 4300 Chairman's Statement I am pleased to report that we have made significant advances since our lastupdate, as is evidenced by new supply contracts, new development agreements andthe launch of a new product to augment our original product, the Timestrip(R),which enables the measurement of lapsed time. Financial Results We have seen a four-fold increase in turnover for the six months to 30 June 2006of £215,932 (2005 - £50,283). At the pre-tax level the Company recorded a lossof £538,529 (2005 - £408,786 as restated) including a charge relating to FRS20(accounting for share based payments) amounting to £36,894 (2005 - £30,140 asrestated). The resultant loss per share is 0.16p (2005 - 0.21p). The liquidityposition remains healthy with cash resources of £3.4m as at the end of June. Operations As is reported in the Joint Chief Executives' statement below, we have made somesignificant advances in getting recognition and adoption of our products by anumber of different organisations. We are continuing to invest in manufacturing, engineering and R&D to enable usto meet both the present and future demands on the business, which are growingin response to the increasing awareness of our technology. I am pleased toannounce the appointment of Jonathan Steinberg as Finance Director to ourtrading subsidiary Timestrip UK Limited. Jonathan is a Chartered Accountant whohas previously worked for Reuters and BT. Additionally, our employees remain highly motivated and well incentivised todrive forward the Timestrip business and the Board wishes to thank them fortheir continued hard work and commitment. Current Trading and Prospects Timestrips are now being sold into five of our six stated mass-markets and therehas been a noticeable increase in the number of customer funded developmentprojects each of which is capable of generating substantial revenue if broughtto fruition. The Joint Chief Executives' report below provides more detail butdevelopments in European food services and US retail are particularlyencouraging. We have also announced today the launch of a new technology, theiStrip, a unique smart label that is capable of recording whether temperaturesensitive products have been accidentally frozen in transit. In particular thistechnology has significant potential for the monitoring of vaccines, wherefreezing can compromise their immunological potency. Timestrip is quite unique in its ability to deliver meaningful benefits to theconsumer (who is increasingly interested in product freshness) at the same timeas increasing sales to the manufacturer, either through better customercompliance or through the competitive edge that this packaging solutionprovides. We are looking forward with increasing optimism to the future, as wemove towards our goal of establishing Timestrip as a household name and a newstandard in product labelling. Stephen OakesChairman18th September 2006 Joint Chief Executives' Statement Operating Review We are pleased to report significant progress in the six international massmarkets in which relative expiry dates are predominantly found: Catering and Food Services A wide range of Timestrip products will shortly be on sale in Germany at theleading retailer Metro, as part of a food safety range marketed by Labellord.The food industry has been one of our initial target markets and we fully expectthis market to be an important source of ongoing revenue for the Company. In North America extensive marketing efforts by our distributor Daymark areincreasing awareness. There has been a marked increase in the number of customertrials and we remain optimistic that this will be converted into meaningfulrevenue in due course. Food Retailing There has been a sharp increase in the level of media coverage for Timestrip inNorth America, which has undoubtedly contributed to an increased volume ofinternet orders from US consumers and to an acceleration in negotiations with amajor brand name interested in the retail distribution of Timestrips. We havereceived an order from the leading home shopping channel in North America, QVC,who will feature Timestrip on their nationwide show for the first time laterthis year. It is our belief that US retail sales will begin to build in 2007,which will greatly increase the profile of the technology as an integrated smartlabel solution for consumer products and their packaging. In the UK, Timestrip retail packs continue to be sold through Ocado and JohnLewis will start to list the product next month. Widespread expansion into UKretail depends on our ongoing search for a suitable company to market anddistribute on our behalf. We continue to enjoy an excellent relationship with Nestle Food Services UK.Work has started on new product development and we are presenting Timestrip toseveral other areas of the Nestle business across Europe. Packaging and Promotions: a confidential Joint Development Agreement has beennegotiated with one of the leading packaging companies in North America, todevelop a comprehensive manufacturing process to integrate Timestrips onto foodpackaging. Negotiations are in progress with a number of European and NorthAmerican brands who are evaluating Timestrip as a promotional tool for use inconjunction with their branded products. Not only are the potential volumes inthis field significant, but this also represents an important first step towardsfull integration as a standard label. Non-food consumables We have developed a customised smart label in collaboration with Henkel, aFortune Global 500 company with market leading brands and technologies in threestrategic business areas - Home Care, Personal Care and Adhesives, Sealants andSurface Treatment. The project, funded by Henkel, commenced in February 2006 andhas successfully reached the technical milestone of delivering samples forconsumer testing. This not only demonstrates the relevance of our technology asan integrated solution for the consumer market but also represents a significanttechnical achievement. Updates will be provided on progress towardscommercialisation in due course. In addition to the ongoing success with Hamilton Beach/Febreze andBioconservacion, supply contracts have been agreed with Hygolet (washroomequipment), Dry & Store(R) (hearing devices) and Aquacure (water filtration).Previously mentioned development projects with leading household brands continueto make excellent progress. Cosmetics A joint development agreement has been signed with Strand Cosmetics a highlyregarded manufacturer of cosmetics for leading industry brands. Strand showcasedTimestrip at the recent Beyond Beauty Paris trade show where it was wellreceived and has generated some encouraging business leads. Pharmaceuticals and Medical Devices An order has been received from a leading pharmaceutical company wishing to testlaunch two products that will include Timestrips aimed at encouraging customercompliance with usage instructions. The test launch, in four countries, willtake place later this year. We have also received a trial order for the use of Timestrips on blood bags inSouth Africa, where there is currently little if any labeling to indicateremaining shelf life. Launch of iStripTM, (see full press release, 18th September 2006) a label devicethat undergoes an irreversible colour change and indicates accidental freezing.A patent application has been filed for this device which has been developed foruse on products such as vaccines, protein based pharmaceuticals, food stuffs andfertilizers. Paul Freedman Reuben IsbitskyJoint Chief Executive Officer Joint Chief Executive Officer18th September 2006 1 8th September 2006 TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006 Profit and Loss Account 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Notes Unaudited Unaudited Audited As restated As restated £ 000's £ 000's £ 000's Turnover 216 50 103Cost of sales (139) (26) (66) --------- --------- ----------Gross profit 77 24 37 Administration costs (679) (449) (1,412) --------- --------- ----------Operating loss (602) (425) (1,375) Interest payable 0 0 (5)Interest receivable 64 16 55 --------- --------- ----------Loss on ordinaryactivities before taxation (538) (409) (1,325) Taxation 0 0 94 --------- --------- ----------Loss on ordinaryactivities after taxation 4 (538) (409) (1,231) --------- --------- ----------Retained loss (538) (409) (1,231) ========= ========= ========== Basic and diluted earningsper ordinary share 5 (0.16)p (0.21)p (0.52)p TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006Statement of total recognised gains and losses 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Unaudited Unaudited Audited As restated As restated £ 000's £ 000's £ 000's Loss for thefinancial year (538) (409) (1,231) Prior yearadjustment (66) 0 0 ---------- ---------- ----------Total gains andlosses recognisedsince last financialstatements (604) (409) (1,231) ========== ========== ========== TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006 Summary Balance Sheet 30 June 30 June 31 December 2006 2005 2005 Notes Unaudited Unaudited Audited As restated As restated £ 000's £ 000's £ 000's Fixed assets Intangible assets 7, 8 6,415 6,490 6,339Tangible assets 252 312 304 ---------- ---------- ---------- 6,667 6,802 6,643 ---------- ---------- ---------- Current assets Stock 72 74 66Debtors 250 64 195Cash 3,369 1,206 2,979 ---------- ---------- ---------- 3,691 1,344 3,240 Creditors: amounts falling due withinone year (259) (122) (222) ---------- ---------- ----------Net current assets 3,432 1,222 3,018 Creditors: amounts falling due overone year (67) (138) (67) ---------- ---------- ----------Net Assets 10,032 7,886 9,594 ========== ========== ========== Capital and reserves Called-up share capital 4,200 3,593 3,603Share premium account 26,931 24,103 26,588Share options reserve 103 30 66Reserves (21,202) (19,840) (20,663) ========== ========== ==========Total Equity 10,032 7,886 9,594 ========== ========== ========== Shareholders' Funds Equity 6,488 4,342 6,050Non-equity 3,544 3,544 3,544 ---------- ---------- ---------- 10,032 7,886 9,594 ========== ========== ========== TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006 Summary Cash Flow Statement 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Unaudited Unaudited Audited As restated As restated £ 000's £ 000's £ 000's Net cash outflow fromoperating activities (382) (545) (1,294) ---------- ---------- ---------- Returns on investment andservicing of finance Interest received 64 16 55Interest paid (5) ---------- ---------- ----------Net cash outflow fromreturns on investments andservicing of finance 64 16 50 ---------- ---------- ---------- ---------- ---------- ----------Taxation recovered 0 0 80 ---------- ---------- ---------- Capital expenditure andfinancial investmentPayments to acquiretangible fixed assets (22) (108) (137)Payments to acquireintangible fixed assets (235) 0 0 ---------- ---------- ----------Net cash outflow fromcapital expenditure andfinancial investment (257) (108) (137) ---------- ---------- ---------- Acquisitions and disposalsNet cash acquired fromsubsidiary undertakings 0 43 43 ---------- ---------- ---------- ---------- ---------- ----------Net cash outflow beforefinancing (575) (594) (1,258) ---------- ---------- ---------- Financing Issue and purchase ofordinary shares 939 2,023 4,522Share issue expenses 0 (273) (273)Repayment of bank loan 0 0 (12)New short term loan 0 50 0Effect of foreign exchangerate changes 26 0 0 ---------- ---------- ----------Net cash inflow fromfinancing 965 1,800 4,237 ---------- ---------- ---------- ---------- ---------- ----------Increase in cash in theperiod 390 1,206 2,979 ========== ========== ========== TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006 Reconciliation of operating loss to net cash outflow from operating activities 6 months ended 6 months ended 12 months ended 30 June 30 June 31 December 2006 2005 2005 Unaudited Unaudited Audited As restated As restated £ 000's £ 000's £ 000's Operating loss (602) (425) (1,375)Depreciation /Amortisation 208 129 317Increase in stocks (6) (16) (8)(Increase) /Decrease in debtors (55) 69 (48)Increase /(Decrease) increditors 36 (332) (246)Share based payments 37 30 66 ---------- ---------- ----------Net cash outflowfrom operatingactivities (382) (545) (1,294) ========== ========== ========== Reconciliation of net cash flow to movement in net debt Increase in cash 390 1,206 2,979Cash outflow fromincrease in debt 0 0 (81)Cash inflow from newloans 0 (50) 0Loans acquired withsubsidiary 0 (88) 0 ---------- ---------- ----------Movement in netfunds 390 1,068 2,898 ---------- ---------- ---------- Opening funds 2,979 0 0 ---------- ---------- ----------Closing funds 3,369 1,068 2,898 ========== ========== ========== TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006 Notes To The Interim Results: 1. Basis of preparation The unaudited results for the six months ended 30 June 2006 have been preparedon accounting bases and policies that are consistent with those used in thepreparation of the financial statements of the company for the period ended 31December 2005, except as indicated below. The financial statements contained in this report do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Full accounts for the period ended 31 December 2005, upon which the auditorsissued an unqualified opinion, have been delivered to the Registrar ofCompanies. 2. Prior period adjustment The company has adopted FRS 20,' Share based payment', in these financialstatements. FRS 20 requires an entity to reflect in its profit or loss andfinancial position the effects of share-based payment transactions, includingexpenses associated with transactions in which share options are granted toemployees. The fair value is measured at grant date and spread over the periodduring which the employees become unconditionally entitled to the options. Thefair value is measured using the Black - Scholes formula, taking into accountthe terms and conditions upon which the options were granted. Previously costsassociated with share options have been recognised in the profit and lossaccount only in the period in which they are exercised. As a result there hasbeen a prior period adjustment that has resulted in the company's net assets andprofit and loss reserve in 2005 being reduced by £66,308 and the accountinginformation shown in this statement for the six months ended 30 June 2005 andthe 12 months ended 31 December 2005 has been restated to reflect thisadjustment. 3. Basis of consolidation The consolidated profit and loss account and balance sheet include the financialstatements of the company and its subsidiary undertakings made up to 30 June2006. 4. Taxation No taxation is expected to arise on the results for the period. 5. Loss per share The loss per share for the six months ended 30 June 2006 has been calculated onthe basis of the loss after taxation for the period of £538,529 (June 2005 -£409,376 and December 2005 - £1,231,264 as restated) and the weighted averagenumber of shares in issue during the period of 333,908,909 (2005 - 194,262,829). 6. Dividends No dividend is proposed for the period ended 30 June 2006. 7. Goodwill, patents and trademarks Goodwill, patents and trademarks are capitalised and classified as an intangibleasset on the balance sheet. The directors have concluded that goodwill arisingon the acquisition of Timestrip UK Limited should be amortised over its usefuleconomic life of 20 years. Patents and trademarks are also amortised over theiruseful economic life which is estimated to be 20 years. 8. Research and development Expenditure on research and development has previously been written off in theyear in which it is incurred. An amount of £253,000 (2005 - £Nil) has beencapitalised in the period to 30 June 2006 as it now meets the recognitioncriteria in accordance with SSAP 13, 'Accounting for Research and Development'which is also consistent with the requirements of International AccountingStandard 38, 'Intangible assets' which the company will be adopting in duecourse. 9. Share capital During the period the following shares and warrants were issued: On 10th March 2006, 250,000 Placing Warrants over Ordinary Shares of 0.02p wereissued at a price of 0.06p raising £15,000. On 28th March 2006, 58,791 "B" Warrants over Ordinary Shares of 0.02p wereissued at a price of 0.04p raising £2,352. On 28th March 2006, 251,999 Placing Warrants over Ordinary Shares of 0.02p wereissued at a price of 0.06p raising £15,120. On 9th May 2006, 14,456,409 Placing Shares over Ordinary Shares of 0.02p wereissued at a price of 0.06p raising £867,385. On 9th May 2006, 263,111 "B" Warrants over Ordinary Shares of 0.02p were issuedat a price of 0.04p raising £10,524. On 16th May 2006, 273,779 "B" Warrants over Ordinary Shares of 0.02p were issuedat a price of 0.04p raising £10,951. On 31st May 2006, 140,954 "B" Warrants over Ordinary Shares of 0.02p were issuedat a price of 0.04p raising £5,638. On 5th June 2006, 311,814 Placing Warrants over Ordinary Shares of 0.02p wereissued at a price of 0.04p raising £12,473. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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