30th Nov 2009 07:00
Monday 30 November 2009
Pursuit Dynamics plc
("Pursuit Dynamics" or "PDX" or "the Company")
Preliminary Results for the Year to 30 September 2009
Pursuit Dynamics plc (AIM: PDX), the developer and exploiter of PDX®, the process improvement platform technology, is pleased to announce today its financial results for the year ended 30 September 2009.
Business highlights
Financial highlights
Excluding discontinued operations, was £6.5 million (2008: £6.9 million).
Including discontinued operations, was £7.1 million (2008: £7.5 million).
Forward strategy
Commenting on the results, Roel Pieper, Chief Executive Officer of Pursuit Dynamics Plc, said:
"The PDX technology represents an exciting platform for delivering returns to our shareholders. Having now spent three months in the business and with the benefit of the successful fund-raising, I believe the challenge and opportunity lies in driving financial returns out of the inherent innovation within the Company.
"With the new strategy being implemented, we expect to demonstrate commercial success with a number of our existing and new business activities. Given our lean cost structure we are cautiously optimistic that we may be able to achieve positive cash flow towards the end of the 2009/2010 financial year. In addition, we will continue to explore new business activities to ensure a full pipeline of value creation opportunities for the future."
For Further Information, please contact:
Pursuit Dynamics
Roel Pieper, Chief Executive Officer Tel: +44 (0)1480 422 050
Donald Bell, Chief Financial Officer
FD
Ben Foster/Marc Cohen Tel: +44 (0)20 7831 3113
Cenkos Securities plc
Ian Soanes/Max Hartley Tel: +44 (0)20 7397 8924
Mirabaud Securities LLP Tel: +44 (0)20 7878 3360
Rory Scott
Notes to Editors
- Pursuit Dynamics PLC (AIM: PDX) owns and commercialises the PDX fluid processing reactor the benefits of which include significant reductions in energy usage, process acceleration and the process enhancement for industries such as Bioethanol production, Food & Drink, Brewing, Fire Suppression and Decontamination.
- Pursuit Dynamics is headquartered in Huntingdon, UK and has offices in Norwalk, Connecticut, and Fallbrook, California, USA.
- Further information is available at the Company's website: www.pursuitdynamics.com
- Publication quality photographs are available from FD.
LETTER FROM THE CHAIRMAN
The past year started with great promise, although there were signs that several of the industries we were intent upon supplying were already experiencing increasing levels of stress due to the worsening credit crisis. Nevertheless, we had already taken some cost out of the business and were optimistic that the benefits that could be provided by our suite of technologies, whether reactor-based or atomisation-based, would result in success, despite the financial meltdown that was underway. The results of the cost cutting are clear from the results where cash operating costs of £6.9 million in 2008 were reduced to £5.8 million in 2009. This saving of £1.1 million of cash expenses was achieved despite the closure of Pursuit Processing Equipment only occurring in early July 2009 and the restructuring of our Huntingdon head office occurring early January 2009. The new monthly overhead cash burn for the Company is £0.4 million.
The financial results for the full year are well below what we had anticipated going into the year, with turnover for the year to 30 September, excluding discontinued operations, falling virtually to nil from £0.5 million in 2008. The operating loss before non cash expenses decreased to £5.8 million (2008: £6.5 million). The loss from discontinued business amounted to £0.6 million (2008: £0.6 million) after sales of £1.1 million (2008: £2.8 million).
When non cash expenses, financing activities, tax credits and losses from discontinued operations are recognised, the loss for the year is £7.1 million (2008: £7.5 million).
The Board is not recommending a dividend at this stage in the Company's development.
Placing
At 30 September 2009, funds (cash and cash equivalents) stood at £5.7 million (2008: £8.2 million). We raised £4.0 million before expenses in September 2009 via the issue of 3,636,364 new ordinary shares at 110p. We expect that this fundraising will enable us to continue to roll out our new business plan and meet our objectives for 2010. Shareholders' funds at the year end that reflect the fundraising, offset by the increased loss for the year, were £7.0 million (2008: £9.9 million).
The Board
During the year, John Heathcote informed the Board of his intention to retire from the Company on September 1, 2009. John founded Pursuit Dynamics in 2000 with his partner Henry Clarke and took the Company public on AIM in 2001. John has led the Company with great enthusiasm and entrepreneurial skill, developing a diverse range of unique applications in wholly-new areas, protected by an extensive patent suite. He built the organisation and led it in all of its current commercial relationships and leaves a strong platform poised to enter its second major phase of development and commercial success. On behalf of the Board of Directors, staff and shareholders, I would like to thank him and wish him well in his future endeavours.
On September 1, following an extensive search, we announced the appointment of Roel Pieper as Chief Executive Officer. Roel comes to Pursuit Dynamics with extensive experience in successfully developing and commercialising new technologies at some of the world's leading companies and we are confident that he will be a huge asset for the Company. Since joining us he has already had a very significant impact, leading a strategic re-think about our organisation and our whole approach to the way we do business. This is exactly what we anticipated when we made our decision to appoint Roel and we are very excited about the future prospects for the Company. He has been charged with verifying our current range of opportunities and examining new possibilities in areas such as Algae, Water Treatment, Turbine Cleaning and revisiting Brewing.
LETTER FROM THE CHIEF EXECUTIVE OFFICER
In September 2009 I started as Chief Executive Officer of Pursuit Dynamics, a Company that I discovered was an exceptional European technology foundation platform. Since then, a review has been under way to ascertain the best way to take the business forward and to achieve optimal returns for our shareholders. The focus has been on re-organising the business so as to maximize the commercialisation of PDX's applications, both current and future. The strategy section below sets out the direction that PDX is going to take in the coming years to ensure optimal commercial deployment of its products and solutions in a global market.
Our review of the current business activities combined with the various new opportunities that have been selected by the new management team, shows that PDX has strong potential. It is our goal to conclude the verification process as soon as possible and to determine the specific time frame of the new businesses in a relatively short period of time. In short, PDX is moving rapidly towards a commercial business creation platform enabling its products and technologies to expand and grow into independent opportunities.
Main Strategy
The PDX Business Creation and Launch Platform
For years PDX has been known for its innovations, technology and patents. The Company has demonstrated insightful innovations in a wide variety of relevant industrial and commercial applications. However, PDX has not yet demonstrated its commercial relevance and value. This is now the main task at hand.
Over the past three months, PDX has re-enforced to its shareholders, stakeholders, customers, partners and employees its commitment to transition its technology foundation to a variety of key commercially relevant business opportunities.
To that end, the Company has re-organised into a straightforward line-of-business model. This means that each of PDX's core applications will now operate as separate and distinct businesses, enabling the product and technology architecture to be both focused and exploited fully on the one hand, while at the same time ensuring that the commercial success of each line of business is the highest priority.
PDX will be responsible for the application required to make an innovation become valuable and useful in the eyes of the partners and end-market users, and PDX will transition to this fundamental product and market positioning as fast as possible. Each line of business will have its commercial viability as one of its main management objectives.
Naturally PDX will continue to invest in its technology and patent portfolio, but more than before PDX will also provide ideas to commercialise these innovations leveraging our understanding of both the market and our technology.
As each application and innovation develops, the next step will be to ascertain which individual businesses will benefit more from being retained within PDX or possibly operated more independently. It may therefore be that PDX will not be the optimal home platform to all its business opportunities. Some of the businesses will grow into full blown independent operations, some will lead to global joint-ventures with other industry leaders and some may be discontinued. PDX will act and behave more and more as a business creation and launch platform, establishing valuable innovations and validating these through market driven lines of business.
This structure will ultimately deliver more value to our investors and stakeholders thereby ensuring that optimal investment returns for these businesses are achieved.
Outlook
With the new strategy being implemented, we expect to demonstrate commercial success with a number of our existing business activities and the new ones. Given our lean cost structure we are cautiously optimistic that we may be able to achieve positive cash flow towards the end of the 2009/2010 financial year. In addition, we will continue to explore new business activities to ensure a full pipeline of value creation opportunities for the future.
OPERATIONAL REVIEW
Bioethanol
The year saw a considerable investment of time and resources in the bioethanol industry, mainly in the USA but also in Europe. The outlook for the industry is continuing to improve with an increasing ethanol price, reduced corn costs and continued government support in the USA to reduce dependence on imported liquid fuels. Because of these positive factors the industry revenues and profitability continue to improve from the hard times of last year and so present an even more attractive opportunity for the PDX Ethanol Reactor Tower ("ERT").
Whilst we are confident of the performance capabilities of the ERT, we continue to gather sustainable commercial data. Robust research into optimum operating points along with plant process design modifications are under way to ensure best fit within operational plants. To overcome the operational challenges, the Company is undertaking a set of trials with ICM at its facility in Witchita, Kansas. Around 70% of the ethanol plants in the USA are built by ICM. These trials should simulate a real life plant environment and the results of these tests should be available early next year.
Commercially the Company is in discussions with the management of Pacific Ethanol's Boardman plant in Oregon to return to the facility for more trials early next year. The Company also remains in discussions with IBEC and expects to continue the trial in 2010. In the meantime we are exploring other routes for the commercialisation of the ERT in the bioethanol industry.
Decontamination and Disinfection
PDX has continued to assist its licensee, EADS, in developing commercial interest in its decontamination technology. Because of the wide interest in the technology flowing from the demonstrations of the mobile decontamination units for both military, health and other commercial applications we have entered into discussions with EADS on how best to partner them to exploit all the opportunities that are available. In addition, PDX will verify what size of business opportunities decontamination offers. We expect that by early 2010 a separate Line of Business for decontamination will be started.
Fire
Following initial sales of the AQUASONIC, PDX's water atomising fire suppression system, 260 cubic metre model, PDX licensee ANSUL, a subsidiary of Tyco Fire and Building Products, has received additional Factory Mutual ("FM") approvals. The upgraded 260 cubic metre model has already been launched through approximately 30 approved North American distributors. In Hamburg in January 2010 the model will be launched for the EMEA market.
Despite the global economic slump in demand for capital equipment ANSUL continues to pursue OEM agreements for the AQUASONIC as the interest referred to in the June 2009 interim report remains intact.
FM approvals of the next generation larger scale AQUASONIC 520 and 1040 cubic metre models are imminent. These approvals will allow the launch of the new models in January 2010 in the USA and the EMEA markets. These milestones will give the global distribution network the complete AQUASONIC product range.
We expect that 2010 will in fact be the first full calendar year of commercial activity from ANSUL in all global markets. PDX anticipates that a full product line will be made available by ANSUL in 2010.
Food
As has been announced previously, the food division, which has sold the PDX Sonic into major blue chip food manufacturers via a direct sales model and in house fabrication at Pursuit Processing Equipment in Weybridge, was restructured during the period, moving to a licensing model. A license was granted to Zeal Process Technologies Limited, part of the Zeal group of companies, at the end of the financial period to sell the PDX Sonic in the UK, Europe and Japan. Royalty revenues are anticipated in the first quarter of 2010.
Brewing
Based on a new business assessment of the brewing market opportunities, PDX decided to revisit the brewing market opportunity. As a result, work commenced on installing a pilot plant at the premises of a major European brewer at the close of the financial year. The installation and commissioning was successfully completed by the end of October and indications of performance should be available early 2010. The accessible market opportunity within this brewer is significant for the Wort heater.
Shepherd Neame have successfully installed their second PDX Wort Heater, which has shown reduced energy use by 47% on the ale copper and 57% on the lager copper.
Research and Development
Predominantly the R&D team have invested most effort in the renewable fuels programmes, conducting a number of (in line) processing tests in Generation 1 bio-ethanol. A number of feasibility tests have been conducted to see how the PDX Reactor best impacts algae to facilitate production of biodiesel.
In atomisation, the R&D team supported EADS in developing production prototype mobile decontamination systems, designated MPB-A (Man Portable Basilisk) and assisted them in presenting the technology to customers.
Different decontaminant chemicals to be used in conjunction with PDX atomising technology were tested to see that the efficacy of the chemicals was not affected by the atomising technology. These tests were verified by a third party organisation.
At the close of the financial year construction commenced on a wind tunnel to assess the performance of PDX atomising technology in an accelerated airstream. This research is funded by a partner active in the power generation industry. Results should be available early in 2010.
- Ends -
|
CONSOLIDATED INCOME STATEMENT |
||
|
for the year ended 30 September 2009 |
||
|
Year ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
|
|
£ |
£ |
|
|
|
Unaudited |
Restated |
|
Continuing operations: |
||
|
Revenue |
45,225 |
455,493 |
|
Operating expenses |
(5,845,014) |
(6,907,267) |
|
Operating loss before non-cash expenses |
(5,799,789) |
(6,451,774) |
|
Operating expenses, non-cash expenses |
||
|
Depreciation of tangible fixed assets |
(291,534) |
(188,216) |
|
Amortisation of intangible fixed assets |
(591,266) |
(577,215) |
|
Share option compensation charge |
(323,223) |
(239,444) |
|
Total non-cash operating expenses |
(1,206,023) |
(1,004,875) |
|
Total operating expenses |
(7,051,037) |
(7,912,142) |
|
Operating loss |
(7,005,812) |
(7,456,649) |
|
Finance income |
83,166 |
398,585 |
|
Finance costs |
(2,407) |
(8,959) |
|
Loss before taxation |
(6,925,053) |
(7,067,023) |
|
Income tax credit |
400,685 |
171,196 |
|
Loss from continuing operations |
(6,524,368) |
(6,895,827) |
|
Discontinued operations: |
||
|
Loss from discontinued operations |
(550,138) |
(563,725) |
|
Loss for the year |
(7,074,506) |
(7,459,552) |
|
Loss per share for loss attributable to the equity holders of the company during the year: |
||
|
Loss per 1p share - basic and fully diluted |
||
|
- From continuing operations |
10.61 |
11.53 |
|
- From discontinued operations |
0.89 |
0.94 |
|
|
11.50 |
12.47 |
|
Discontinued operations: |
||
|
Revenue |
1,094,809 |
2,814,378 |
|
Operating expenses |
(1,554,286) |
(3,378,103) |
|
Finance income |
1,352 |
|
|
Loss recognised on remeasurement of assets |
(92,013) |
- |
|
Loss from discontinued operations |
(550,138) |
(563,725) |
|
CONSOLIDATED BALANCE SHEET |
||
|
as at 30 September 2009 |
||
|
2009 |
2008 |
|
|
£ |
£ |
|
|
Unaudited |
||
|
Non-current assets |
|
|
|
Property, plant and equipment |
283,750 |
591,257 |
|
Intangible fixed assets |
804,370 |
1,448,951 |
|
|
1,088,120 |
2,040,208 |
|
Current assets |
||
|
Inventories |
71,787 |
103,609 |
|
Trade and other receivables |
421,557 |
1,453,542 |
|
Corporation tax receivable |
522,975 |
259,426 |
|
Cash and cash equivalents |
5,666,496 |
8,202,128 |
|
|
6,682,815 |
10,018,705 |
|
Current liabilities |
(780,572) |
(2,160,956) |
|
Net current assets |
5,902,243 |
7,857,749 |
|
Net assets |
6,990,363 |
9,897,957 |
|
|
|
|
|
Capital and reserves attributable to equity holders of the company |
||
|
Called up share capital |
650,581 |
613,398 |
|
Share premium account |
35,256,853 |
31,342,483 |
|
Merger reserve |
4,061,185 |
4,061,185 |
|
Foreign exchange reserve |
(66,241) |
(50,452) |
|
Profit and loss account |
(32,912,015) |
(26,068,657) |
|
Total equity |
6,990,363 |
9,897,957 |
|
CONSOLIDATED CASH FLOW STATEMENT |
||
|
for the year ended 30 September 2009 |
||
|
Year ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
|
|
Unaudited |
Restated |
|
|
£ |
£ |
|
|
Cash flows from operating activities (see note 24) |
||
|
Cash used in operations |
(6,300,003) |
(6,342,195) |
|
Interest element of finance lease payments |
(2,407) |
(8,959) |
|
Taxation Received |
137,801 |
115,796 |
|
Cash used in discontinued operations |
(308,321) |
(213,076) |
|
Net cash used in operating activities |
(6,472,930) |
(6,448,434) |
|
Cash flows from investing activities |
||
|
Purchase of plant and machinery |
(38,248) |
(113,923) |
|
Purchase of intangible assets |
(1,200) |
(45,060) |
|
Proceeds from sale of fixed assets |
7,500 |
- |
|
Acquisition of minority interest |
- |
(20) |
|
(Increase)/decrease in short term deposits with banks |
- |
5,000,000 |
|
Finance income |
82,501 |
398,585 |
|
Cash used in investing activities on discontinued operations |
(5,027) |
35,332 |
|
Net cash inflow from investing activities |
45,526 |
5,274,914 |
|
Cash flows from financing activities |
|
|
|
Proceeds of ordinary share issue |
4,000,000 |
6,501,000 |
|
Issuance cost of shares |
(120,000) |
(325,050) |
|
Proceeds of options exercised |
43,520 |
772,285 |
|
Capital element of finance lease payments |
(31,748) |
(35,532) |
|
Repayment of loan |
- |
(55,983) |
|
Net cash inflow from financing activities |
3,891,772 |
6,856,720 |
|
Net increase/(decrease) in cash and cash equivalents |
(2,535,632) |
5,683,200 |
|
Cash and cash equivalents at beginning of period |
8,202,128 |
2,518,928 |
|
Cash and cash equivalents at end of year |
5,666,496 |
8,202,128 |
Related Shares:
Gaming Realms