RNS Number:8955U
Farsight PLC
30 November 2005
FARSIGHT PLC
PRELIMINARY RESULTS FOR THE YEAR TO 31 MAY 2005
Chief Executive Report
Introduction
I am pleased to report that during the year ended 31st May 2005 Farsight's
business has continued to expand with sales revenues meeting plan. Operating
costs are lower than last year and this, together with increased sales growth
has resulted in an improved financial result.
The Board has undertaken a strategic review of the business to accelerate it
towards profitablity.In this regard the board divested itself of its continuing
investment in the e-surveillance suite of software and has focused the business
upon delivering a high quality, managed monitoring service, utilising the
e-surveillance platform. With government regulations today increasingly
affecting the UK security industry and the increasing demand for remote
monitoring services, the Board believes that Farsight is well placed to take
advantage of this changing operating environment.
Results for the year
Turnover increased by approximately 50% to #1,172,000 (2004: #777,000).
The operating loss on all operations was reduced to #639,000 (2004: #1,375,000).
This loss is stated after charging #265,000 in respect of the impairment of
all fixed assets (2004: impairment of goodwill #596,000).
No dividend is recommended
Funding
The directors' have reviewed the funding requirements and have taken the
following measures:
The financial statements include details of financial support agreed with a
concert party of investors. Prior to the 2005 financial year end Farsight Plc
had drawn down the whole of its facility of #750,000 agreed with the "concert
party" investors on conditional secured convertible loans.
The "concert party" investors entered into a Deed of Variation with the company
on 28th November 2005 to extend the Conditional Secured Convertible Loan
Agreement for an additional period of two years to 28th November 2007.The
conversion rights into ordinary shares shall, if exercised, be subject to the "
concert party" complying with the rules of the City Code on Takeovers and
Mergers, which, because the extension to the conversion rights has not been
subject to a Rule 9 whitewash waiver, may mean that upon exercise the concert
party is required to make a mandatory offer for the Company.
The directors are satisfied that with the financial support provided sufficient
funds are available to the Group in order that a return to a net cash generating
position can be achieved.
Trading Review
Developing our corporate customer base is a sales priority and the BuildSecure
product introduced last year has been well received by a number of well known
national house builders to whom we are increasing sales month on month. A
number of national motor dealerships are using IP based monitoring services
which is helping them to reduce loss through petty crime.
Our operation has achieved the new BS8418 accreditation, the first in the UK.
We have also signed up to the Security Industry Association, a new government
backed organisation designed to improve standards in the industry. Our
operating staff are in the process of being trained to achieve the new licensing
arrangements which must be in place by April 2006. We have applied for approved
contractor status with the SIA and should obtain this early in 2006.
These new regulatory requirements will have an impact on the security industry
and are likely to be problematic to smaller or less well developed operators.
Analysts suggest that some consolidation in the industry is inevitable leaving
Farsight well placed to make some acquisitions to complement continued organic
growth.
Subsequent to the financial year end Intellectual Property Rights relating to
e-Surveillance technologies were disposed of by the Group. An amount of #50,000
was received by the Group as consideration for the disposal. Further details are
given in the Financial Statements.
Board of Directors
On the 8th June 2005 Alan Wix stepped down as Chairman of Farsight Plc. On
behalf of all shareholders and the board of Farsight Plc I would like to thank
him for his commitment and services made to the Company.
On the 8th 2005 June Thomas Charles Blanchard, operations director, was
appointed to the main board. Farsight intends to seek and appoint a new Chairman
in the current financial year.
Conclusion
The difficult decisions made in recent years to cut costs, restructure and
re-focus the business is allowing us to ensure that sales growth is effectively
supported by efficient ongoing operations.
Maintaining a fruitful long term relationship with our clients is based on the
provision of a quality service delivered by well trained staff, therefore we
continue to invest in training and development.
Our focus is the achievement of sales growth and cost containment. Our
immediate priority is to return the company to profitability. The current year
trading position has continued to show positive movement towards its objective
of profitability.
Chris Thomas, Chief Executive
30 November 2005
Enquiries: Chris Thomas, Chief Executive 07812 145350
Consolidated Profit and Loss Account
for the year ended 31 May 2005
2005
2004
#'000
#'000
Turnover 1,172
777
Cost of sales (968)
(628)
Gross profit 204
149
Net operating expenses (578)
(928)
Exceptional net operating expenses (265)
(596)
Total net operating expenses (843)
(1,524)
Operating loss (639)
(1,375)
Interest payable and similar charges (16)
(53)
Loss on ordinary activities before taxation (655)
(1,428)
Taxation -
2
Retained loss for the year (655)
(1,426)
Loss per ordinary share (0.214)p
(0.469)p
Fully diluted loss per ordinary share (0.179)p
(0.437)p
The group's turnover and operating loss as included in the above profit and loss
account are classed as continuing operations of the group following the
requirements of FRS 3 "Reporting Financial Performance".
The group has no gains or losses other than the results for the year, and so no
statement of recognised gains or losses has been presented.
There is no difference between the loss on ordinary activities before taxation
and the retained loss for the year stated above and their historical cost
equivalents.
Consolidated Balance Sheet
for the year ended 31 May 2005
2005 2004
#'000 #'000
Fixed assets
Intangible assets
- -
Tangible assets
- 325
- 325
Current assets
Debtors: amounts falling due within one year
340 231
Cash at bank and in hand
- -
340 231
Creditors: amounts falling due within one year
(913) (963)
Net current liabilities
(573) (732)
Total assets less current liabilities
(573) (407)
Creditors: amounts falling due after one year
Secured convertible loans
(750) (450)
Other creditors falling due after one year
(189) -
Provisions for liabilities and charges
- -
Net (liabilities)
(1,512) (857)
Capital and reserves
Called up share capital
7,484 7,484
Share premium account
4,493 4,493
Capital redemption reserve
20 20
Profit and loss account
(13,509) (12,854)
Equity shareholders' (deficit)
(1,512) (857)
Consolidated Cash Flow Statement
for the year ended 31 May 2005
2005 2004
#'000 #'000
Net cash outflow from operating activities
(304) (262)
Returns on investments and servicing of finance
Interest element of finance lease payments
- (41)
Interest paid
(11) (12)
(11) (53)
Taxation
United Kingdom corporation tax paid
- -
Capital expenditure and financial investment
Purchase of tangible fixed assets
(10) (50)
Proceeds from sale of tangible fixed assets
13 17
3 (33)
Net cash outflow before financing
(312) (348)
Financing
Issue of new share capital
- 32
Issue of convertible loans
300 450
Capital element of finance lease payments
(15) (119)
Net cash inflow from financing
285 363
(Decrease)/increase in cash in the year
(27) 15
Reconciliation of movements in equity shareholders' deficit
at 31 May 2005
Group
Company
2005 2004
2005 2004
#'000 #'000
#'000 #'000
Loss for the financial year (655) (1,426)
(315) (4,258)
Proceeds of share capital issues (see below) - 32
- 32
Net increase in shareholders' deficit (655) (1,394)
(315) (4,226)
Opening shareholders' funds (857) 537
(652) 3,574
Closing shareholders' (deficit) (1,512) (857)
(967) (652)
During the previous financial year, 3,250,000 ordinary shares of 1p each were
issued for a subscription price of 1p per share. The total consideration
received was #32,500 before expenses.
Reconciliation of operating loss to net cash flow from operating activities
2005 2004
#'000 #'000
Operating loss
(639) (1,375)
Depreciation of tangible fixed assets
70 133
Impairment of tangible fixed assets
265 -
Profit on disposal of tangible fixed assets
(13) (17)
Amortisation of intangible fixed assets
- 289
Impairment of intangible fixed assets
- 596
(Increase)/decrease in debtors
(109) 17
Increase in creditors
122 95
Net cash flow from operating activities
(304) (262)
Notes to the Preliminary Results for the year ended 31 May 2005
1. Loss per ordinary share
Basic loss per share (LPS) is calculated by dividing the loss attributable to
ordinary shareholders, namely a loss of #655,000 (2004: #1,426,000), by
305,727,072 ordinary shares.
Fully diluted loss per share (LPS) is calculated by dividing the loss
attributable to ordinary shareholders, namely a loss of #655,000 (2004:
#1,426,000), by 365,727,072 potential ordinary shares. This includes a weighted
average of 60,000,000 potential ordinary shares which would be issued under the
convertible loan agreement.
2005 2004 Weighted
Weighted average number
average of shares
number of
shares '000
Earnings/ '000 Per share Earnings/
Per share
amount (pence)
amount (pence)
(loss) (loss)
#'000 #'000
Basic LPS (655) 305,727 (0.214) (1,426) 304,102
(0.469)
Fully diluted LPS (655) 365,727 (0.179) (1,426) 326,602
(0.437)
2. Reconciliation of net cash flow to movement in net debt
2005 2004
#'000 #'000
Movement in cash in year
(27) 15
Cash (inflow) from change in debt
(285) (331)
Change in net debt resulting from cash flows
(312) (316)
Net (debt) at 1 June 2004
(502) (186)
Net (debt) at 31 May 2005
(814) (502)
3. Analysis of net debt
At 1 June
Cash At 31 May
2004
Flow 2005
#'000
#'000 #'000
Overdrafts (37)
(27) (64)
Secured convertible loans (450)
(300) (750)
Finance leases (15)
15 -
Total (502)
(312) (814)
4. Statutory Accounts
The financial information contained in this announcement does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The figures for the year ended 31 May 2004 have been extracted from the
statutory accounts which have been filed with the Register of Companies and
which are available on request from the Company Secretary. The auditor's report
on those accounts was unqualified and did not contain any statement under
section 237(2) or section 237(3) of the Companies Act 1985. The statutory
accounts for the financial year ended 31 May 2005 have been approved by the
Directors and are available for collection at the Company's registered office or
in electronic form on the company's website, www.farsight.co.uk. The auditors'
report on these accounts was unqualified and did not contain any statement under
section 237(2) or section 237(3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
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