16th Dec 2005 15:54
Accsys Technologies PLC16 December 2005 INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2005 ACCSYS TECHNOLOGIES PLC ("Accsys" or "the Company") CHAIRMAN'S STATEMENT Introduction Following our successful admission to AIM on 26 October 2005, I am pleased toreport the Group's first set of financial results as a public company. Construction of wood acetylation plant The past six months have seen considerable progress on the engineering andconstruction of the two major process facilities, with the acetyls processingunit substantially built for initial testing to commence in Q1 2006 and thelongest lead-time equipment items ordered for the wood processing unit.Mechanical completion of the total facility is presently scheduled for Q3 2006,with commercial start-up shortly thereafter. Strong interest from both customers and prospective licensees (see below) led toa decision to relocate part of production to an adjacent area in order to (a)allow easier future expansion and (b) release an existing building unit for thedevelopment of another production line. Two suitable areas have been identifiedand negotiations are in progress to secure an optimal arrangement. Although notyet completed, the planned move is not expected to affect the completion andstart-up schedule. Product and customer development The transition from process development to product enhancement continued duringthe period, with pilot plant production for customer trials increasing toreflect high levels of interest from both end-users and potential licensees.Titan Wood responded to this interest by building its production team andincreasing production of sample materials, accompanied by an investmentprogramme to enhance the development and testing facility. Basic technicalresearch was completed in all areas of product performance, with veryencouraging results. Strong customer interest has led to a re-evaluation offuture production volumes at the site and arrangements for future expansion arenow being incorporated into the design and layout of the first generationfull-sized plant. Licensing The primary goal of the business is to maximise returns through licensing theGroup's production technology. The company wishes to exploit its "first mover"advantage and has been implementing an ambitious programme of internationallicensing for its wood acetylation technology. The past six months sawconsiderable success, with eight licensee testing programmes now underway withpartners in four continents. Following the sale of an option on a licence inthe previous financial period, negotiations for licences have progressed withseveral parties. Dividends The directors do not intend to pay a dividend until the Company has establishedstrong cash flow and reported satisfactory profitability. The corporate restructure undertaken prior to the admission to AIM was intendedto facilitate the future payment of dividends by removing the accumulateddeficit on the profit and loss account of the parent company. This has beenpartly achieved through the creation of the new holding company. Theconsolidated deficit of €80m at 30 September 2005 relates almost wholly tosubsidiary companies. The Company is now in the process of completing therestructure by taking direct ownership of the subsidiaries likely to generatefuture licence income and the former intermediate holding company will beliquidated. Willy Paterson-BrownExecutive Chairman FINANCIAL INFORMATION Basis of Preparation Accsys Technologies PLC was incorporated on 11 August 2005 and as at 30September 2005, its balance sheet was represented by €0.02 in cash and €0.02 ofshare capital. The company had not earned any income or incurred any expensesto that date nor had it any other recognised gain or loss. The acquisition of Accsys Chemicals PLC by the Company took effect after 30September 2005, with Accsys Chemicals PLC becoming wholly owned on 22 November2005 following a share for share exchange. Although this group reconstructiontook place after 30 September 2005, the directors decided to present interimfinancial information based on the results of Accsys Chemicals PLC as theybelieved that this would give much more meaningful and useful information. Accordingly, the consolidated results for the six months to 30 September 2005,six months to 30 September 2004 and the year to 31 March 2005 and the balancesheets as at those dates are those of Accsys Chemicals PLC. The comparativefigures for the six months to 30 September 2004 and the balance sheet at thatdate were converted to euros at the period end rate. After that date thecompany reported in euros. These proforma interim financial statements for Accsys Technologies PLC havetherefore been prepared on a basis consistent with the accounting policies setout in the Accsys Chemicals PLC annual report and accounts for the year ended 31March 2005 and in the AIM Admission document published on 20 October 2005. The independent auditors' report on the 2005 Accsys Chemicals PLC accounts wasunqualified and did not contain any statement under section 237(2) or (3) of theCompanies Act 1985. The financial information in this document does notconstitute statutory financial statements within the meaning of section 240 ofthe Companies Act 1985. INTERIM FINANCIAL STATEMENTS TO 30 SEPTEMBER 2005 Consolidated profit and loss account Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 Administrative expenses General administrative expenses (2,327) (1,478) (2,965) Impairment of intangiblefixed assets - - (24,514) _________ _________ _________ Administrative expensesand operating loss (2,327) (1,478) (27,479) Interest receivable and similarincome 111 2 18 _________ _________ _________ Loss on ordinary activitiesbefore and after taxation (2,216) (1,476) (27,461) Minority interest - 527 841 _________ _________ _________ Retained loss for theperiod/year (2,216) (949) (26,620) _________ _________ _________ Basic and diluted loss per share •(0.02) •(0.02) •(0.43) All amounts relate to continuing activities Consolidated statement of total recognised gains and losses Loss for the period/year (2,216) (2,216) (26,620)Exchange translation differences on (2,216)consolidation and conversion to - (776) (1,095)euro _________ _________ _________ Total recognised gains andlosses for the period/year (2,216) (1,725) (27,715) _________ _________ _________ The notes set out on pages 7 to 11 form part of these interim financialstatements Consolidated Balance Sheet Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 Notes Fixed assetsIntangible assets 14,246 35,272 14,246Tangible assets 4,655 1,665 2,842 _________ _________ _________ 18,901 36,937 17,088 _________ _________ _________ Current assetsDebtors 562 332 608Deposits 8,726 - 5,616Cash at bank 921 1,355 4,564 _________ _________ _________ 10,209 1,687 10,788Creditors: amounts falling duewithin one year (1,178) (4,825) (1,922) _________ _________ _________ Net current assets/(liabilities) 9,031 (3,138) 8,866 _________ _________ _________ Net assets 27,932 33,799 25,954 _________ _________ _________ Capital and reservesCalled up share capital 1 49,575 35,888 47,295Share premium account 18,203 6,963 16,288Merger reserve 40,132 40,957 40,132Profit and loss account (79,978) (53,457) (77,761) _________ _________ _________ Shareholders' funds 2 27,932 30,351 25,954 Minority interests - equity - 3,448 - _________ _________ _________ 27,932 33,799 25,954 _________ _________ _________ Included within shareholders' funds is an amount of €23,209,000 (30 September2004 •nil; 31 March 2005 €23,209,000) in respect of non-equity interests. The notes set out on pages 7 to 11 form part of these interim financialstatements Consolidated cash flow statement Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 Notes Net cash outflow fromoperating activities 3 (1,802) (1,161) (2,513) Returns on investments andservicing of financeInterest received 111 2 18 Capital expenditure andfinancial investmentPurchase of tangible fixedassets (1,842) (525) (2,210) _________ _________ _________ Cash outflow before use ofliquid resources and financing (3,533) (1,647) (4,705) Management of liquidResourcesIncrease in short term deposits (3,110) - (5,616) FinancingIncrease in loans - 796 1,434Issue of share capita 3,000 - 11,773Expenses of issue of sharecapital - - (565)Shares issued by subsidiary toMinority - 800 800 _________ _________ _________ Decrease)/increase in cash (3,643) (88) 3,121 _________ _________ _________ The notes set out on pages 7 to 11 form part of these interim financialstatements Notes forming part of the interim financial statements for the period ended 30September 2005 1. Share capital of Accsys Chemicals PLC 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 AuthorisedEquity share capital493,700,000 ordinary shares of€0.25c each 123,425 - 123,425200,000,000 ordinary shares of50p each - 150,000 -Non-equity share capital48,700,000 deferred shares of33p each 23,464 - 23,464 _________ _________ _________ 146,889 150,000 146,889 _________ _________ _________ Issued and fully paidEquity share capitalOrdinary shares of €0.25c each:At 30 September 2005: 105,463,447 26,366 - -At 31 March 2005: 96,344,308 - - 24,086Ordinary shares of 50p eachAt 30 September 2004: 48,171,536 - 35,888 -Non-equity share capitalDeferred shares of 33p each, 48,171,536 23,209 - 23,209 _________ _________ _________ 49,575 35,888 47,295 _________ _________ _________ Notes forming part of the interim financial statements for the period ended 30September 2005 2. Reconciliation of movements in shareholders' funds 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 Loss for the period/year (2,216) (949) (26,620)Other recognised gains/ (losses)relating to the period - (776) 1,155Exchange difference onconversion to euro - - (2,250)Shares issued in the period/year 4,194 - 21,593 _________ _________ _________ Net increase/(decrease) inshareholders' funds 1,978 (1,725) (6,122)Opening shareholders' funds 25,954 32,076 32,076 _________ _________ _________ Closing shareholders' funds 27,932 30,351 25,954 _________ _________ _________ 3. Reconciliation of operating loss to net cash outflow from operating activities 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 Operating loss (2,327) (1,478) (27,479)Depreciation of tangible fixedassets 29 374 838Impairment of intangible fixedAssets - - 24,514Decrease/(increase) in debtors 46 (151) (476)Increase in creditors 450 94 90 _________ _________ _________Net cash flow from operatingactivities (1,802) (1,161) (2,513) _________ _________ _________ Notes forming part of the interim financial statements for the period ended 30September 2005 4. Reconciliation of net cash flow to movement in net funds/(debt) 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 •'000 •'000 •'000 (Decrease)/increase in cash inthe period/year (3,643) (88) 3,121Cash flow from increase in debt - (796) (1,434) _________ _________ _________ Change in net debt resultingfrom cash flows (3,643) (884) 1,687Shares issued in settlement of debt 1,195 - 3,000Other non-cash movements - - 150Exchange differences - 21 115 _________ _________ _________ Movement in net debt in theperiod/year (2,448) (863) 4,952Opening net funds/(debt) 3,369 (1,583) (1,583) _________ _________ _________ Closing net funds/(debt) 921 (2,446) 3,369 _________ _________ _________ Notes forming part of the interim financial statements for the period ended 30September 2005 5. Analysis of net debt Other Opening Cash non-cash Closing balance flow changes balance •'000 •'000 •'000 •'000 Period ended 30 September 2005Cash in hand and at bank 4,564 (3,643) - 921Debt due within one year (1,195) - 1,195 - _______ _______ _______ _______ Total 3,369 (3,643) 1,195 921 _______ _______ _______ _______ Period ended 30 September 2004Cash in hand and at bank 1,443 (88) - 1,355Debt due within one year (3,026) (796) 21 (3,801) _______ _______ _______ _______ Total (1,583) (884) 21 (2,446) _______ _______ _______ _______ Year ended 31 March 2005Cash in hand and at bank 1,443 3,121 - 4,564Debt due within one year (3,026) (1,434) 3,265 (1,195) _______ _______ _______ _______ Total (1,583) 1,687 3,265 3,369 _______ _______ _______ _______ Notes forming part of the interim financial statements for the period ended 30September 2005 6. Loss per Accsys Chemicals PLC share The loss per share is shown below is calculated based upon the weighted averagenumber of Accsys Chemicals PLC Ordinary shares in issue. 6 months ended 6 months ended Year ended 30 September 2005 30 September 2004 31 March 2005 Weighted average number ofOrdinary shares in issue 105,260,799 48,171,536 61,596,033 Loss for the period/year •'000 (1,716) (949) (26,620) Loss per share •(0.02) •(0.02) •(0.43) Since none of the Accsys Chemicals PLC's Ordinary shares are dilutive, there isno difference between basic and diluted loss per share. 7. Post balance sheet events On 26 October 2005, the Company completed the placing of 27,000,000 new Ordinaryshares at a price of €1.00 each raising approximately €25,850,000 after expensesand its Ordinary shares were admitted to AIM. On 22 November 2005, the Company completed its acquisition of the Ordinary andDeferred shares of Accsys Chemicals PLC, which became wholly owned, and alsocompleted the offer in respect of options over Ordinary shares in AccsysChemicals PLC. As a result of the offers the total number of AccsysTechnologies PLC shares in issue and options granted over shares at the date ofthis report is: Issued and fully paid Ordinary shares of €1.00 each 132,463,447Options granted over Ordinary shares of €1.00 each 5,788,000Issued and fully paid Deferred shares of 10p each 100,000 Independent review report to ACCSYS TECHNOLOGIES plc Introduction We have been instructed by the company to review the financial information setout on pages 3 to 11 for the six months ended 30 September 2005 which has beenprepared on the basis set out in "Basis of Preparation". We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. Our report has been prepared in accordance with the terms of our engagement toassist the company in meeting the requirements of the rules of the London StockExchange for companies trading securities on the Alternative Investment Marketand for no other purpose. No person is entitled to rely on this report unlesssuch a person is a person entitled to rely upon this report by virtue of and forthe purpose of our terms of engagement or has been expressly authorised to do soby our prior written consent. Save as above, we do not accept responsibilityfor this report to any other person or for any other purpose and we herebyexpressly disclaim any and all such liability. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the rules of theLondon Stock Exchange for companies trading securities on the AlternativeInvestment Market which require that the half-yearly report be presented andprepared in a form consistent with that which will be adopted in the company'sannual accounts having regard to the accounting standards applicable to suchannual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom by auditorsof fully listed companies. A review consists principally of making enquiries ofgroup management and applying analytical procedures to the financial informationand underlying financial data and based thereon, assessing whether theaccounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with UnitedKingdom Auditing Standards and therefore provides a lower level of assurancethan an audit. Accordingly we do not express an audit opinion on the financialinformation. 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 30 September 2005. BDO STOY HAYWARD LLP Chartered Accountants London Date: This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Accsys Tech