28th Sep 2006 07:01
Forbidden Technologies PLC28 September 2006 28 September 2006 Forbidden Technologies plc Interim Results for the six months to 30 June 2006 Forbidden Technologies plc ("the company" or "Forbidden", AIM: FBT), through itsproprietary technologies, has developed and is marketing a range of Internetvideo editing and sharing platforms for a wide range of market segments in thewired and wireless world. In the six months to 30 June 2006 the company recorded sales of £68,228 comparedto £17,851 in the first half of the previous year. Administrative expenses were£384,760 (2005: £401,493) and the loss in the six months was £360,274 (2005:£390,929). At 30 June 2006, the balance sheet showed £655,474 of net current assets (2005:£1,328,915) and cash and liquid resources of £645,676 (2005: £1,280,451). Sales are significantly higher than in the first six months of 2005 and in fact,have exceeded the total sales achieved in the whole of the previous year (2005:£59,705). With higher sales and lower administration costs, the loss is also reduced andthe cash outflow from operating activities is consequently lower at £305,543 (H12005: £337,837). For the first time in this interim reporting period, we are obliged to implementFRS 20, the new accounting standard which requires us to reflect the 'cost' ofshare options in the profit & loss account of the company. We have included aline 'FRS 20 employee share option cost' shown within 'Operating loss'. Thisresults in an increase in the reported loss for the six months to the end ofJune 2005 by £46,007 and for the six months to the end of June 2006 by £55,638.This is a non-cash item, does not affect cash flow and is neutral to the balancesheet. Progress and prospects The Forbidden Team have just returned from the International BroadcastingConvention (IBC) in Amsterdam. It is gratifying to note that, whereas a year agovisitors to IBC were impressed by our technology, this year there was a markeddifference. Visitors looked at FORscene as a complete working product and wereprimarily interested in how it could be used in their individual businesses. Wesecured a large number of promising leads from the UK and from many othercountries and these will be followed up in the coming weeks and months. At IBC the FORscene web-based post production platform was the base for IBC'sfirst citizen journalism project which allowed attendees to contribute their ownvideo stories through their mobile phones. The news clips sent to the IBCCitizen TV base were edited daily using FORscene, which automatically formattedand compressed the video into mobile-size clips for viewers. Regular visitors to our website (http://www.forbidden.co.uk) will have seen theregular news items on customers and new markets. To summarise some of these Iwould highlight: repeat business being done with Granada; ongoing and regularuse of FORscene by BBC News 24; the first two successful FORscene projects byRyerson University in Toronto (thus training future producers and editors to useFORscene); the imaginative use of FORscene by Save the Children in webcasts andtapeless distribution for project coverage on BBC Breakfast, This Morning,Channel 4 News, Channel 5 News and Sky News. Our mobile and podcasting serviceshave recently been used by the Armed Forces and advertisers. These examples indicate the wide variety of applications of FORscene, improvingspeed and cost efficiency in different circumstances. As the speed of the internet continues to grow rapidly, the marketplace forForbidden as a key supplier of video across the world grows with it. Ouropportunity to capitalise on our technological lead expands as a consequence. In my report to shareholders for the full year results of 2005, I indicated thatwe expected significant sales increases in 2006, and that, if our expectationsof the outcome of the various pilots and projects with broadcasters arerealised, shareholders should begin to see significant change in the profile ofthe business. The increase in sales is clearly beginning. However, the degree of caution withwhich some of our potentially large customers approach changes in technology andworkflow changes has resulted in a longer gestation period than expected in somecases. Our confidence in the outcome is not diminished and we believe that thedifference in timing is a matter of months rather than years. As FORscene becomes used more widely, and with the commercial opportunitiesemerging, the Board is now reviewing a number of options including afundraising. If a fundraising is chosen, my preference is to include ourexisting shareholders - the directors personally have £1 million available. Vic Steel Chairman Enquiries: Forbidden Technologies plc 020 8879 7245 Stephen Streater, Chief Executive Greg Hirst, Business Development Director College Hill 020 7457 2020 Corinna Dorward/Adrian Duffield Profit and loss account for the six months ended 30 June 2006 Unaudited (Restated) (Restated) half year to 30 June Unaudited Unaudited 2006 half year to year to £ 30 June 31 December 2005 2005 £ £Turnover 68,228 17,851 59,705Administrative expenses before FRS 20 employee (384,760) (401,493) (874,637)share option costFRS 20 employee share option cost (55,638) (46,007) (101,199)Administrative expenses (440,398) (447,500) (975,836)Operating loss (372,170) (429,649) (916,131) Interest receivable 11,896 38,720 54,605Loss on ordinary activities before taxation (360,274) (390,929) (861,526)Tax on loss on ordinary activities - - 34,948Loss for the period (360,274) (390,929) (826,578)Basic and diluted loss per ordinary (0.48p) (0.52p) (1.09p)0.8 pence share Reconciliation of movements in shareholders' funds for the six months ended 30 June 2006 Unaudited (Restated) (Restated) half year to 30 June Unaudited Unaudited 2006 half year to year to £ 30 June 31 December 2005 2005 £ £Loss for the period (360,274) (390,929) (826,578)FRS 20 employee share option cost 55,638 46,007 101,199Net reduction in shareholders' funds (304,636) (344,922) (725,379)Opening shareholders' funds 967,098 1,692,477 1,692,477Closing shareholders' funds 662,462 1,347,555 967,098 A statement of recognised gains and losses has not been included as part of thisInterim Report as the Company made no gains or losses in the year other than asdisclosed in the Profit and Loss Account. The results stated above are all derived from continuing operations Balance sheet as at 30 June 2006 Unaudited Unaudited Unaudited as at as at as at 30 June 30 June 31 December 2006 2005 2005 £ £ £Fixed assetsTangible assets 6,988 18,640 9,729Current assetsDebtors 117,751 167,481 172,592Cash and liquid resources 645,676 1,280,451 876,919 763,426 1,447,932 1,049,511Creditors: amounts falling due within one year (107,953) (119,017) (92,142)Net current assets 655,474 1,328,915 957,369Net assets 662,462 1,347,555 967,098 Capital and reservesCalled up share capital 605,300 605,300 605,300Share premium account 2,925,375 2,925,375 2,925,375Capital contribution reserve 125,000 125,000 125,000Profit and loss account (2,993,213) (2,308,120) (2,688,577)Equity shareholders' funds 662,462 1,347,555 967,098 This Interim Report was approved by the Board of Directors on 27 September 2006and was signed on their behalf by: Stephen Streater Director Cash flow statement as at 30 June 2006 Unaudited (Restated) (Restated) half year to 30 June Unaudited Unaudited 2006 half year to year to £ 30 June 31 December 2005 2005 £ £Reconciliation of operating loss to netcash outflow from operating activitiesOperating loss (372,170) (429,649) (916,131)FRS 20 employee share option cost 55,638 46,007 101,199Depreciation charges 6,988 11,484 25,541Decrease/(increase) in debtors (11,810) 768 (4,618)Increase/(decrease) in creditors 15,811 33,553 19,353Net cash outflow from operating activities (305,543) (337,837) (774,656) Cash flow statementCash outflow from operating activities (305,543) (337,837) (774,656)Returns on investment and servicing of finance 17,122 23,787 64,130Taxation 61,425 - -Capital expenditure (4,247) (14,312) (19,458)Cash outflow before management of liquid resources (231,243) (328,362) (729,984)Management of liquid resources 231,243 338,128 729,984Financing - - -Increase/(decrease) in cash in the period - 9,766 - Reconciliation of net cash flowto movement in net fundsIncrease/(decrease) in cash in the period - 9,766 -Cash outflow from liquid resources (231,243) (338,128) (729,984)Movement in net funds in the period (231,243) (328,362) (729,984)Net funds at the start of the period 876,919 1,606,903 1,606,903Net funds at the end of the period 645,676 1,278,541 876,919 Notes forming part of the financial statements 1. Basis of preparation The Interim Report for the six months ended 30 June 2006 and 2005 is unauditedand does not constitute statutory accounts within the meaning of Section 240 ofThe Companies Act 1985. It has been prepared under the historical costconvention and on a basis consistent with the accounting policies for the yearended 31 December 2005 except as noted below. The results for the year ended 31 December 2005 and the balance sheet of thatdate are an extract from the statutory financial statements for that year, whichhave been filed with the Registrar of Companies and on which the Company'sauditors gave an unqualified report and did not contain a statement underSection 237 (2) or (3) of that Act. As explained below, these results havehowever been adjusted following the adoption of FRS 20 and these adjustmentshave not been audited. Accordingly the comparative information for the yearended 31 December 2005 is unaudited. The interim financial statement has been prepared on a basis consistent with theaccounting policies disclosed in the Annual Report and Accounts for the yearended 31 December 2005 and also the new accounting policy applicable in thisperiod as described below. Share based payments The share option programme allows employees to acquire shares of the Company.The fair value of options granted after 7 November 2002 and those not yet vestedas at the company's effective date of FRS 20 (which is 1 January 2006) isrecognised as an employee expense with a corresponding increase in equity. Thefair value is measured at grant date and spread over the period during which theemployees become unconditionally entitled to the options. The fair value of theoptions granted is measured using an option pricing model, taking into accountthe terms and conditions upon which the options were granted. The amountrecognised as an expense is adjusted to reflect the actual number of shareoptions that vest The prior year figures in the profit and loss accounts for the 6 month period to30 June 2005 and for the year to 31 December 2005 have been restated for theimpact of FRS 20. In the 6 month period to 30 June 2005 a charge in relation toshare based payments of £46,007 has been made; in the year to 31 December 2005 acharge in relation to share based payments of £101,199 has been made. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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