23rd Sep 2005 06:00
Timestrip Plc INTERIM RESULTS FOR THE 6 MONTHS ENDED 30TH JUNE 2005 Timestrip Plc is pleased to announce its unaudited interim results for the 6months to 30 June 2005.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. * Maiden interims following reverse takeover of Timestrip UK Limited in March 2005 * A full-scale commercial trial with Nestle FoodServices UK recently announced (16th September 2005) * Joint Development project agreed with Pfizer for pharmaceutical application * Significant progress made across core targeted international markets Highlights include: * In preparation for the new EU Food Hygiene Directive, distribution secured in Germany and Benelux through a 3-year exclusive supply contract with Label Lord, part of the NSD Labelling Group. Good progress in North America with new orders from Taylor Precision Products, the leading manufacturer of measurement related products in North America, and Daymark Food Safety Systems. * For the food retailing sector, The Lifetime Cap¢â€ž¢ project with Crown Zeller (announced in April 2005) is progressing well with further product development underway. * New EU labelling regulations driving demand in cosmetic and beauty care sector. * Additional production machinery on line to fulfill future demand * Commercialisation strategy moving towards revenue generation * Directors confident of continued progress Paul Freedman, Timestrip's joint CEO commented:-"Timestrip has made significant progress to date in the marketing of our smartlabel technology in key sectors. Timestrips are now perceived to be a highlydesirable packaging innovation for companies wishing either to differentiatetheir products in competitive markets or improve their compliance with newlabelling regulations. We are confident of reporting further progress in duecourse and delivering significant value to our shareholders."For further information:Paul Freedman, Joint CEO and founding Director, Timestrip 01462 440700Shane Dolan, Biddicks 020 7448 1000John Frederick, Athanor Capital 020 7430 1991Roland Cornish, Beaumont Cornish 020 7638 3396Chairman's StatementThe past six months have seen some exciting changes for the Company as it madethe transition from Internet Music & Media Plc, a shell company, into TimestripPlc, a smart label technology business, through the reverse takeover ofTimestrip UK Limited in March. At this time, the Company raised just over ‚£2million by way of an equity placing, most of which was allocated as workingcapital.We are making significant progress in commercialising this exciting technologythrough commercial trials and development projects with a wide range ofinternational customers and are confident that this can be developed intosignificant future revenue streams.The addition of key personnel to our Research and Development and BusinessDevelopment team has enabled us to introduce more customers to the technologyand respond to their individual development requirements more effectively thanin the past. The Company is operating well within its internal budget forecastsand retains a very disciplined approach to controlling costs.We expect the current momentum to continue to accelerate over the year ahead aswe look to our goal of establishing Timestrip as the new international standardin product labelling.Stephen OakesChairman23rd September 2005Joint Chief Executives' StatementTimestrip has developed a patented smart label, the `Timestrip', which enablesusers of perishable food and other products to monitor for how long an item hasbeen open or in use. The Timestrip is a disposable multi-layer laminated labelwhich contains a timing device consisting of a specialised porous material anda non-toxic liquid. Upon squeezing the label to activate, the liquid starts tomove through the porous material by micro-capillary action. A printedcalibration on the top layer of the label allows the user to tell at any pointin time how long the label has been active. The label is currently manufacturedwith adhesive backing enabling it to be attached to perishable goods as areminder to use or replace the product. The label is designed to be easilycustomised and is capable of being embedded into the product packaging or theproduct itself. It can be activated automatically either upon first opening thepackage or upon first use of the product.The solution provided by Timestrip relates to the difficulty in monitoringrelative expiry dates, such as "Use within two weeks of opening". The Timestripaddresses this problem by reliably monitoring the lapse of time, providing avisual indication that the relative expiry date is approaching, thereby givingthe user the opportunity to manage perishable items in a way that waspreviously problematic.Current Tradingand Future ProspectsWe are pleased to report significant progress in the five international massmarkets in which relative expiry dates are predominately found, as well as anew market - cosmetics and beauty care: * Catering and Food Services * + Our exclusive distributor in this category for North America, Daymark Food Safety Systems, have now sold packs of Food Service Timestrips to approximately 1000 restaurants in the US. We are delighted with the investment in marketing from Daymark, who are proving to be a dynamic and committed partner. + We have also increased our market presence in North America by securing an order from Taylor Precision Products, the leading manufacturer of measurement related products, who will launch the "Taylor Timestrip" at the NAFEM Show in California this month. + For Europe, the adoption of new EU Food Hygiene Legislation in January 2006 represents a significant opportunity for us, as caterers look to improve compliance with the new labelling regulations. Existing distribution in the UK and Ireland has been augmented by a 3-year exclusive distribution agreement covering Germany and Benelux, with LabelLord, part of the NSD Group, leader in Food Safety labels. We expect to open new channels to market across Southern Europe in the coming months. + Recent efforts to develop the technology for custom applications in this market have yielded a new order from Daymark for a 7-day FoodService Timestrip that will be launched in North America in October. We expect the range of products to expand further in response to customer feedback and market trends. * Food Retailing * + We are now working in partnership with plastic closure, carton and tray manufacturers as well as labelling companies, in order to develop systems for integrating the Timestrip into the packaging of food products. The Lifetime Cap¢â€ž¢ project with Crown Zeller (announced in April 2005) is progressing well with further product development underway. Encouraging feedback has been received from a number of international brand owners in the food and beverage sector. + Ocado (one of the UK's leading online grocers) has reported positively on early sales of Timestrip multipacks since their introduction in May 2005. Demonstrable retail success is creating a platform to take the proposition of a stand alone retail pack to other retailers both in the UK and abroad. We are also pursuing options for co-branding the retail pack with established brand names, as an alternative route to retail shelves. * Non-Food/Consumables * + In the last three months we have experienced a significant increase in interest from a wide range of non-food companies that wish to communicate the useful life of their products more effectively to consumers. + Joint Development projects have produced customised Timestrips that are now undergoing performance testing with a number of companies. We will report progress on these projects as soon as confidentiality restrictions are lifted and supply contracts are secured. + In the Admission Document of 2nd February reference was made to an order for tooling that had been received from a customer. This project has now yielded working prototypes of a household product with near-universal usage that contain fully integrated Timestrips. Consumer testing and focus groups will commence in the coming weeks. * Pharmaceuticals * + A Joint Development project was recently started with Pfizer who are interested in using the Timestrip technology to more effectively communicate the lifetime of products once they have been opened. + We maintain an excellent relationship with Bayer who are currently testing a new batch of Timestrips that have been developed to meet their specific requirements. * Medical Devices * + We have recently entered into a confidential Joint Development project to integrate the Timestrip technology into a medical device used in hospitals, and hope to report progress in the near future. * Cosmetics/Personal Care Products * + This is a very exciting new category with the recent introduction of EU labelling regulations which require the addition of a "Period After Opening" instruction on all cosmetic products which have a shelf-life of over 3 years. For example, mascara now carries an instruction to use within six months of opening. + We have already been approached by two leading cosmetic/personal care brands interested in the potential use of Timestrips and look forward to reporting progress in this sector in the future. FinancialThe interim results include the results of Timestrip UK Limited from the dateof acquisition on 25 February 2005. Turnover in the period since theacquisition amounted to ‚£50,283 (2004 : ‚£nil). Pre-tax loss including researchand development and re-listing costs amounted to ‚£378,786 (2004 : profit - ‚£2,940). Costs attributable to the re-listing of Timestrip plc amounted to ‚£27,004. Research and development ("R&D") costs including subcontracted R&Dcosts in the period since acquisition amounted to ‚£100,338. Loss per share0.02p (2004 : profit per share - 0.009p).StaffIn line with strategy, we have strengthened our R&D team with the appointmentof a chemical and a mechanical engineer. These appointments will play a keyrole in strengthening our current production systems as well as developing ourfuture capabilities as we make rapid progress in commercialising ourtechnology. In addition, we have recruited a Business Development Director toconsolidate and build upon our strategic partnerships with packaging companiesas well as introduce new customers to the technology. We now have in place adedicated team of professionals who are committed to driving forward theTimestrip business.StrategyOur manufacturing process and prevailing market dynamics lend themselves to astrategy under which Timestrip will license the rights to manufacture anddistribute in local markets to customers, joint venture partners anddistributors. The implementation of this strategy requires a level of in-houseproduction in order to seed markets in the early stages and new productionmachinery has recently increased our production capacity to levels that willenable us to satisfy initial contracts. Royalty revenues will be enhancedthrough the supply of key raw materials and technical support to licensees.We stipulate the use of our registered trademark on all Timestrip products, andthere has been, to date, no objection to this policy from even the largest ofinternational brand owners. It is our belief that the exposure to be gained byTimestrip within the marketing campaigns of leading brands will lead to thecreation, over time, of an internationally recognised brand of significantvalue.CompetitionIt is anticipated that the commercialisation of Timestrip will stimulatecompetition at some point in the future, but we are not aware at this time ofany direct competition to our technology. Our first patent has now been grantedin Europe and South Africa and is pending review in all other territories. Itis our intention to continue building an Intellectual Property portfolio toprotect the technology as it evolves.OutlookWe are making very good progress in all relevant market sectors, which webelieve will translate into significant revenue generation in the future,building substantial value for our shareholders. Timestrip smart labels are nowperceived to be a highly desirable packaging innovation for companies wishingeither to differentiate their products in competitive markets or improve theircompliance with new labelling regulations. There is clear evidence that thecommunication to consumers of a product's life has become a high priority witha wide range of brands. The widespread adoption of the Timestrip technologywill not happen overnight but we expect momentum to build in the coming monthsin relation to this exciting and innovative technology.Paul Freedman Reuben IsbitskyJoint Chief Executive Officer Joint Chief Executive Officer23rd September 2005 23rd September 2005TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005Profit and Loss Account 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 Unaudited Unaudited Audited GBP GBP GBP `000s `000s `000s Turnover 50 - - Cost of sales (26) - - Gross Profit 24 - - - Administration costs (419) (13) (34) Amounts written off investments - 16 - Interest payable - - - Other operating income 16 - - Profit/(Loss) on Ordinary Activities (379) 3 (34)before Taxation Taxation - - - Profit/(Loss) on Ordinary Activities (379) 3 (34)After Taxation - Retained profit/(loss) (379) 3 (34) Basic and diluted earnings per (0.02)p 0.009p (0.12)pordinary share TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005Summary Balance Sheet 30 June 30 June 31 December 2005 2004 2004 Unaudited Unaudited Audited GBP GBP GBP `000s `000s `000s Fixed assets Investments - - - Intangible assets 6,490 Tangible assets 312 - - 6,802 - - Current assets Stock 74 - - Debtors 64 10 3 Cash 1,206 - - 1,344 10 3 Creditors: amounts falling due (122) (2,222) (15)within one year Net current liabilities 1,222 (2,212) (12) Creditors: amounts falling due (138) - -over one year Total assets less current 7,886 (2,212) (12)liabilities Capital and reserves Called-up share capital 3,593 3,545 3,551 Share premium account 24,103 13,638 15,869 Reserves (19,810) (19,395) (19,432) 7,886 (2,212) (12) Shareholders' Funds Equity 4,342 (5,418) (3,556) Non-equity 3,544 3,206 3,544 7,886 (2,212) (12)TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005Summary Cash Flow Statement 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 Unaudited Unaudited Audited GBP GBP GBP `000s `000s `000s Net cash outflow from operating (545) - (2,222)activities Returns on investment and servicing of finance Interest received 16 - - Net cash outflow from returns on (529) - (2,222)investments and servicing of finance Capital expenditure and financial investment Capital contributions to - - -subsidiaries Payments to acquire fixed assets (108) - & intangible assets Net cash outflow for capital (637) - -expenditure and financial investment Acquisitions and disposals Net cash acquired from subsidiary 43 - -undertakings Net cash outflow before financing (594) - - Financing Issue and purchase of ordinary 2,023 - 2,222shares Share issue expenses (273) - - New short term loan 50 - - Net cash inflow from financing 1,800 - 2,222 Increase in cash in the period 1,206 - -TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005Notes to the Cash Flow Statement 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 Unaudited Unaudited Audited Consolidated GBP GBP GBP `000 `000 `000 Net cash outflow from operating activities Operating profit/(loss) (395) 3 (34) Depreciation 129 - - Increase in stocks (16) - - Decrease in debtors 69 - 7 Decrease in creditors (332) (3) (2,195) (545) - (2,222) Reconciliation of net cash flow to movement in net debt Increase in cash 1,206 - - Cash inflow from new loans (50) - - Loans acquired with subsidiary (88) Movement in net funds 1,068 - - Opening funds - - - Closing funds 1,068 - - TIMESTRIP PLCINTERIM STATEMENTRESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2005Notes To The Interim Results:-1. Basis of preparationThe results for the six months ended 30 June 2005 are unaudited. They have beenprepared on accounting bases and policies that are consistent with those usedin the preparation of the financial statements of the company for the periodended 31 December 2004. The financial statements contained in this report do not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Full accounts for the period ended 31 December 2004, upon which the auditorsissued an unqualified opinion, have been delivered to the Registrar ofCompanies.2. Basis of consolidationThe consolidated profit and loss account and balance sheet include thefinancial statements of the company and its subsidiary undertakings made up to30 June 2005. The results of Timestrip UK Limited have been included from thedate of acquisition on 25 February 2005.3. Goodwill, patents and trademarksGoodwill is the difference between the amount paid on the acquisition ofTimestrip UK Limited and the aggregate fair value of its separable net assets.Goodwill, patents and trademarks are capitalised and classified as anintangible asset on the balance sheet. The directors have concluded thatgoodwill arising on the acquisition of Timestrip UK Limited should be amortisedover its useful economic life of 20 years. Patents and trademarks are alsoamortised over their useful economic life which is estimated to be 20 years.4. Share capitalOn 25 February 2005, the company acquired the entire issued share capital ofTimestrip UK Limited for a consideration of ‚£6.4 million. The purchase pricewas satisfied by the issue of 160,000,000 new Ordinary Shares of 0.02p each at4p per share to the vendors on the sale of their Timestrip UK Limited shares.Furthermore on 25 February 2005, 50,581,250 new Ordinary Shares of 0.02p wereissued pursuant to a placing to raise a total of ‚£2,023,250 before expenses.5. DividendsNo dividend is proposed for the period ended 30 June 2005.6. TaxationNo taxation is expected to arise on the results for the period.7. Loss per ShareThe loss per share for the six months ended 30 June 2005 has been calculated onthe basis of the loss after taxation for the period of (‚£378,786) (June 2004:profit - ‚£2,940 and December 2004: ‚£(33,942)) and the weighted average numberof shares in issue during the period of 194,262,829 (2004: 28,484,103).ENDTIMESTRIP PLCRelated Shares:
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