21st Mar 2007 07:02
Future Internet Technologies PLC21 March 2007 Embargoed for 7.00am, 21 March 2007 Future Internet Technologies Plc (the "Company" or "FIT") Interim Results for the six months ended 31 December 2006 and Appointment of Chief Executive The Company is pleased to report results for the six months ended 31 December2006, the appointment of a new Chief Executive and an update on the performanceof the business following the period end. Highlights • Results for the period in line with previously stated expectations • Robert Marcus joins as Chief Executive with extensive international technology sector experience • Paul Gratton reverts to Executive Chairman role • Continued strong performance from core Artilium business, post period-end • International roll-out progressing with first sale achieved in US Commenting, Paul Gratton, said: "We are now entering a new phase of growth for the business. We have continued to see strong performance from Artilium and our planned salesexpansion outside the company's core market of the Benelux region is on track,as evidenced by our first sale achieved in the US. We are also delighted by the appointment of Robert Marcus as Chief Executive.His extensive experience in the technology sector, including most recently nineyears at Microsoft, specialising latterly in international M&A, as well as hisexperience as a leader of emerging technology businesses, will bring real valueto FIT." Enquiries: Future Internet Technologies plc Via Financial DynamicsPaul Gratton, Executive ChairmanTony Lynch, Finance Director Financial Dynamics Tel: 020 7831 3113Harriet Keen/Matt Dixon Future Internet Technologies Plc (the "Company" or "FIT") Interim Results for the six months ended 31 December 2006 and Appointment of Chief Executive CHAIRMAN'S STATEMENT Introduction The results for the six months ended 31 December 2006 reflect a period ofsignificant transition for the Company to position our business to takeadvantage of the growing demand for voice integration into multiple businessapplications. Today, our core business is focused on the emerging market of providing SharedService Delivery Platform services for the telecoms industry and internetservice providers. It supplies hardware and software as well as consultancyservices. It has considerable experience in this area and, in conjunction withits partnership network, has already established installations in more than tencountries across Europe. Following the period end, the Company successfully completed a placing andcapital reorganisation and its shares were re-admitted to trading on AIM on 8January 2007. The results for the period are in line with our previously stated expectations. Update on performance Following the completion of our acquisition of the remaining 51% of ArtiliumN.V. ("Artilium") on 8 January 2007, we have continued to see strong performancefrom the business and our planned sales expansion outside the company's coremarket of the Benelux region is on track. We now have customers in Benelux, France, Germany, the UK and the US, amongothers. Our new US channel continues to develop well and we have establishedstrong commercial relationships with industry partners there. We are alsoprogressing opportunities in new markets such as North Africa and CentralAmerica. We will continue to develop relationships with existing clients including anumber of Tier 1 telecommunications operators and new partnerships with globalsystem integration groups. In addition, as announced in January 2007, we are planning to enter a new marketoffering voice solutions through "Hosting Companies" as the "Software as aService" industry trend continues to gather pace. We believe this has thepotential to provide a significant, additional revenue opportunity from theresale of voice minutes and are pleased to report that our plans in this areaare progressing well. To this end, we will today complete the acquisition of a minority stake in theSeattle based company, Chinook Hosting Corporation ("Chinook"). Chinook wasfounded in 2006 by technology professionals with experience in developing,deploying and hosting Microsoft technologies. Its vision is to create a Redmond/Seattle-based hosting company that collaborates closely with Microsoft andtechnology partners to bring a suite of products and services to market that areeasy to use, easy to sell, cutting edge and operationally stable. FIT paidapproximately £300,000 in cash for a 31% stake. In addition, FIT has the rightto acquire majority control of Chinook at a future date in certain prescribedcircumstances. As a result of the transaction, FIT will have representation onthe Chinook board. This acquisition provides us with ready access to the US hosting market andrepresents a major step ahead for our new voice solutions business. Inaddition, Chinook will also provide a platform for further sales for Artilium inthe US. We are entering a new phase of growth for the business and, assuming the currenttrend continues, we remain confident that we will achieve our goal of growingArtilium's revenue by over 50% to support the underlying growth in Artilium'sprofitability for the year ending 30 June 2007. Appointment of Chief Executive As a significant step towards achieving that goal, we are delighted to announcethe appointment of Robert Harris Marcus, 45, as Chief Executive of FIT, withimmediate effect. He brings to the position a strong record of corporate leadership and strategicthinking, particularly in the field of unified communications. Robert is aseasoned leader of emerging technology businesses. He joins FIT after nine yearsat Microsoft, where he served most recently as a director on the company's elitemergers and acquisitions team. Robert is a thought-leader in unifiedcommunications and voice-data convergence and was responsible for both areas atMicrosoft. As a Solution CEO at Microsoft, he was responsible for a portfolio ofcommunications and collaborations solutions, including the highly successfulIntranet Solution that generated an estimated $100 million worldwide. He servedas Director of Strategic Business Development and Communications in Microsoft'sworldwide partner group (the division responsible for 97% of company revenue),and led a specialist sales organisation 500+ strong in the same division. Before joining Microsoft Robert was Chief Executive of ConnectSoft, a pioneer inunified communications; General Manager of PICIS, an innovator in critical-caresoftware and the Microsoft go-to partner that helped break UNIX dominance inhealthcare; President of IMT, an emergency medical device company he founded;and European Director of ADL a medical laser systems company. There are no further details to be disclosed under Rule 17 Schedule Twoparagraph (g) of the AIM Rules in relation to Robert Marcus. Board Executive Director Tom Casaer steps down from the Board with immediate effectbut will continue to serve as a key member of the management team as ChiefMarketing Officer for the Company. Richard Armstrong has resigned as non-Executive Director of FIT and leaves theCompany with immediate effect. We are very grateful to Richard for his hardwork over the last number of years and wish him every success for the future. The board is currently undertaking a search to appoint two new Non-ExecutiveDirectors as soon as possible. Financial Results As anticipated, the Company reported a loss from continuing operations for thesix month period ended 31 December 2006 of £1.4 million (six months ended 31December 2005: loss of £452,000). After stripping out non-recurring corporateactivity costs of £0.5 million, the company's underlying operating loss for theperiod was £0.9 million. The Company also reported a loss of a further £1.33 million for discontinuedoperations related to the operating costs prior to disposal and the loss ondisposal of the consumer branded "Unified Communication Service" business,which, as previously announced, was sold on 11 September 2006. We are encouraged by the progress that we have seen in the third quarter andexpect that FIT (as enlarged by the Artilium acquisition) will, consistent withour previously stated expectations, incur a small overall loss for the year.This loss will be prior to what we estimate will total £2 million of one-offcosts for the full year due principally to the discontinued businesses andprofessional fees relating to corporate transactions incurred in the first half,described above. Paul GrattonChairman FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 CONSOLIDATED INCOME STATEMENT 6 months 6 months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 (Restated) Unaudited Unaudited Audited £'000 £'000 £'000Continuing operations Revenue 1,712 - 612Cost of sales (900) - (56) -------------- ------------ ------------Gross profit 812 - 556 Administrative expenses (2,339) (489) (2,428)Other operating expenses - - (6) -------------- ------------ ------------ Operating loss (1,527) (489) (1,878) Investment revenues 45 37 135Other gains and losses - - (698)Finance costs (5) (349) -------------- ------------ ------------ Loss before tax (1,487) (452) (2,790)Tax 44 - (152) -------------- ------------ ------------ Loss for the period from continuingoperations (1,443) (452) (2,942) ============== ============ ============Discontinued operations Loss for the period from discontinuedoperations (1,337) - (981) -------------- ------------ ------------ Loss for the period (2,780) (452) (3,923) ============== ============ ============ Attributable to:Equity holders of parent (2,641) (452) (3,159)Minority Interest (139) - (764) -------------- ------------ ------------ (2,780) (452) (3,923) ============== ============ ============ CONSOLIDATED INCOME STATEMENT (continued) 6 months 6 months Year ended ended ended 31 December 31 December 30 June Note 2006 2005 2006 (Restated) Loss per share in pence fromcontinuing operations (3) (0.67) (0.92) (1.98) ============== ============ ============Loss per share in pence fromdiscontinued operations (3) (0.69) - (0.88) ============== ============ ============ Total Loss per share in pence (3) (1.36) (0.92) (2.86) ============== ============ ============ FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 CONSOLIDATED BALANCE SHEET 31 Dec 31 Dec 30 June 2006 2005 2006 Unaudited Unaudited Audited Note £'000 £'000 £'000 Non-current assetsGoodwill 2,697 - 2,697Intangible assets 808 - 837Property, plant and equipment 496 - 170Deferred tax asset 161 - 119Investments - 18 - -------------- ------------ ------------ 4,162 18 3,823 -------------- ------------ ------------ Current assetsInventories 21 - 118Trade and other receivables 7,395 53 1,925Cash at bank and in hand 1,075 8,329 1,911 -------------- ------------ ------------ 8,491 8,382 3,954 Total assets 12,653 8,400 7,777 ============== ============ ============Current liabilitiesTrade and other payables 2,486 13 2,849Obligations under finance leases - - 4Provisions 410 - 425 -------------- ------------ ------------ 2,896 13 3,278 -------------- ------------ ------------ Non-current liabilitiesDeferred tax liabilities 140 - 180 -------------- ------------ ------------ Total liabilities 3,036 13 3,458 ============== ============ ============ Net assets 9,617 8,387 4,319 ============== ============ ============ CONSOLIDATED BALANCE SHEET (continued) 6 months 6 months Year ended ended ended 31 Dec 31 Dec 30 June NoteEquityCalled up share capital (4) 2,452 1,761 1,769Share premium account 16,385 8,940 9,033Capital redemption reserve 4,493 4,493 4,493Option to acquire minority interest (1,611) - (1,611)Translation Reserve 249 - 2Share warrant reserve 336 336 336Profit and loss account (12,629) (7,143) (9,849) -------------- ------------ ------------Equity attributable to equity holdersof parent 9,675 8,387 4,173Minority Interest (58) - 146Total equity 9,617 8,387 4,319 ============== ============ ============ Total liabilities and equity 12,653 8,400 7,777 ============== ============ ============ FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 CONSOLIDATED CASH FLOW STATEMENT 6 months 6 months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 Unaudited Unaudited Audited Notes £'000 £'000 £'000 Net cash used in operating activities (5) (8,286) (204) (1,732) Investing activitiesInterest received 44 37 135Sale of investments - - 21Purchases of property, plant and equipment (541) - (34)Purchase of investments - - (691)Acquisition of subsidiary - - (4,370) ---------- ---------- ----------Net cash (used in)/from investingActivities (497) 37 (4,939) ---------- ---------- ---------- Financing activitiesRepayments of obligations underfinance lease - - (5)Proceeds on issue of shares 8,035 7,944 8,046 ---------- ---------- ---------- Net cash from financing activities 8,035 7,944 8,041 ---------- ---------- ---------- Net increase in cash and cashequivalents (748) 7,777 1,370 Cash and cash equivalents atbeginning of period 1,911 552 552Effect of foreign exchange rate changes (88) - (11) ---------- ---------- ---------- Cash and cash equivalents atend of period 1,075 8,329 1,911 ============== ============ ============ FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 NOTES TO THE CONSOLIDATED ACCOUNTS 1. Significant accounting policies Basis of accounting The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with IFRSsadopted by the European Union and therefore comply with Article 4 of the EU IASRegulation. The financial statements have been prepared on the historical cost basis. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe Company and the entity controlled by the Company (its subsidiary beingArtilium). Control is achieved where the Company has the power to govern thefinancial and operating policies of an investee entity so as to obtain benefitsfrom its activities. Minority interests in the net assets of consolidated subsidiaries are identifiedseparately from the Group's equity therein. Minority interests consist of theamount of those interests at the date of the original business combination andthe minority's share of changes in equity since the date of the combination.Losses applicable to the minority in excess of the minority's interest in thesubsidiary's equity are allocated against the interests of the Group except tothe extent that the minority has a binding obligation and is able to make anadditional investment to cover the losses. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. 2. Discontinued Activities During the period, the Company disposed of its retail unified communicationoperation. Trading activity and cashflows relating to this discontinuedoperation have been separately disclosed on the face of the Income Statement andnotes to the Cashflow Statement for the six months ended 31 December 2006.Comparatives have also been restated to reflect the discontinued operation. 3. Loss per share The company is currently loss making and therefore the effect of the warrants onissue is anti-dilutive. As a result, diluted earnings per share is the same asbasic earnings per share. Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 Unaudited Unaudited Audited £'000 £'000 £'000LossLoss for the purposes of basic loss per sharebeing net loss attributable to equity holders ofthe parent (2,641) (452) (3,159) ============== ============ ============ Number Number NumberNumber of sharesWeighted average number of ordinary sharesfor the purposes of basic earnings per share 193,942,290 49,093,485 110,552,747 ============== ============ ============ 4 Share capital 31 December 31 December Year ended 2006 2005 30 June 2006 Unaudited Unaudited Audited £'000 £'000 £'000Fully paid ordinary shares:Authorised:1,050,676,947 (2005: 1,050,676,947) ordinaryshares of 1 pence each 10,507 10,507 10,507 ============== ============ ============Issued and fully paid:245,249,000 (2005: 176,050,006) ordinaryshares of 1 pence each 2,452 1,761 1,769 ============== ============ ============ 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited No. '000 £'000 £'000 No. '000 £'000 No. '000 Fully paid ordinary shares:Balance at beginning of period: 176,900 1,769 161 16,050 16,050 161Shares issued by placement - - 1,600 160,000 160,000 1,600Shares issued by warrant conversion 68,349 683 - - 850 8 ---------------------------------------------------------------------Issued and fully paid at endof period: 245,249 2,452 1,761 176,050 176,900 1,769 ===================================================================== Fully paid ordinary shares carry one vote per share and carry the rights todividends. 5 Notes to the consolidated cash flow statement Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2006 2005 Restated Unaudited Unaudited Audited £'000 £'000 £'000 Loss from continuing operations (1,443) (452) (2,942)Loss from discontinued operations (1,337) - (981) Adjustments for:Investment revenues (44) (37) (135)Impairment of investment - - 698Tax - - 152Depreciation of property, plant and equipment 156 - 31Amortisation of intangible assets 90 - 60Share based payment expense - 336 336Gain on disposal of property, plant and equipment - - (14)Increase / (decrease) in provisions (15) - 425 --------------- ------------ ------------ Operating cash flows before movements inworking capital (2,593) (153) (2,370) Decrease in inventories 97 - (34)Increase in receivables - continuing operations (6,337) (48) (316)Decrease/(Increase) in receivables - discontinuedoperations 825 - (825)Increase/(Decrease) in payables - continuingoperations 409 (3) 1,475(Decrease)/Increase in payables - discontinuedoperations (687) - 687 Cash used in operations (8,286) (204) (1,380) Income taxes paid - - (352) --------------- ------------ ------------ Net cash used in operating activities (8,286) (204) 1,732 =============== ============ ============ Cash and cash equivalents (which are presented as a single class of assets onthe face of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. 6 Events after the balance sheet date Completion of the acquisition of Artilium N.V. and the placing of 3,000,000 newordinary shares took place upon re-admission of the Company's shares for tradingon AIM on 8 January 2007. In addition, a consolidation of 5 shares of 1 pence each into one share of 5pence each was completed. The ordinary shares accordingly now have a par valueof 5 pence. The outstanding series 2 warrants of the Company were alsoadjusted for the consolidation with the number being reduced by a factor of 5and the exercise price increasing from 15p to 75p. 7 Related party transactions The Company disposed of its consumer branded "Unified Communication Service"business, on 11 September 2006 to Flasktent Limited. Flasktent Limited iscontrolled by Robert Bonnier, through Cold Investments Limited, a significantshareholder of FIT at 31 December 2006. Revenue for the year included sales of IT hardware for £160,000 to FlasktentLimited. A profit of £14,000was earned on these transactions. 8 Status of these accounts The interim accounts for the six months ended 31 December 2006 are unaudited.The financial information set out in this statement does not constitutestatutory accounts within the meaning of the Companies Act 1985. The comparativefigures for the year ended 30 June 2006 are not the statutory accounts for thatyear but are abridged from those accounts which have been reported on by theCompany's auditors and delivered to the registrar of Companies. The report ofthe former auditors was unqualified and did not contain a statement undersection 237(2) or (3) of the Companies Act 1985. The comparative figures havebeen represented in an IFRS format, however, are not in compliance with IAS 34 'Interim Financial Reporting'. 9 Further Copies Copies of the interim results are available from the Company's registered officeat 7th Floor, City Point, One Ropemaker Street, London, EC2Y 9AW. INDEPENDENT REVIEW REPORT TO FUTURE INTERNET TECHNOLOGIES PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 31 December 2006 which comprises the profit and lossaccount, the balance sheet, the cash flow statement and related notes 1 to 9.We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare also responsible for ensuring that the accounting policies and presentationapplied to the interim figures are consistent with those applied in preparingthe preceding annual accounts except where any changes, and the reasons forthem, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2006. Deloitte & Touche LLPChartered Accountants London21 March 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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