RNS Number : 2571E
Celoxica Holdings PLC
25 September 2008
CELOXICA HOLDINGS PLC
("Celoxica", the "Company" or the "Group")
Interim Results for the six months ended 30 June 2008
Celoxica Holdings plc (AIM: CXA) - September 25, 2008, a leading provider of low latency trading solutions for the financial services
sector, today announces its unaudited consolidated results for the six month period ended 30 June 2008.
OPERATIONAL HIGHLIGHTS
* Low latency trading solutions
* New strategy launched following sale of Electronic System Level (ESL) products in January 2008
* Restructuring of organisation in line with new business focus
* New products for market data acceleration launched
* Early adopter program completed
* 5 new customers for Celoxica's new products :
* NYSE Euronext
* 3 major US sell- side institutions
* 1 major independent proprietary trading organisation
* New COO appointed April 2008
FINANCIAL HIGHLIGHTS
* Turnover for continuing activities �0.3m (30 June 2007: �0.2m; 31 December 2007 �0.4m)
* Administrative expenses for continuing activities �0.8m (30 June 2007: �1.1m; 31 December 2007 �2.3m)
* Loss before tax on continuing activities �0.5m (30 June 2007: �1.0m; 31 December 2007 �2.2m)
* Loss per share from continuing operations 0.4p (30 June 2007: 1.4p; 31 December 2007: 2.9p)
* Profit on disposal �1.076m in January 2008 from the sale of the ESL business, with �0.327m restructuring costs
* Funding of �2.0m (net) raised in May 2008
Jean-Marc Bouhelier, Chairman, Celoxica, commented,
'Following the sale of the Electronic System Level (ESL) and associated products at the start of 2008, the company has re-launched with
a focus on providing accelerated computing solutions into the financial services sector.
New products were released early in the year and, by working closely with our early adopter clients, we have refined our roadmap and
confirmed the acute need for ultra low latency market data solutions in response to the increased volatility of market data volumes. We also
completed a successful funding of �2m of shares at 1p in May 2008.
The financial result for the first half of the year is encouraging. We are strongly committed to reducing our overhead costs inherited
from the previous structure, and have gained good market traction with five new client engagements. We have built a healthy pipeline of
qualified opportunities covering exchanges, market data service providers, buy and sell side institutions.'
ENQUIRIES
Celoxica Holdings plc (www.celoxica.com) Tel. +44 (0)1235 863656
Lee Staines, CEO
Antoine Rescourio, COO
Arbuthnot Tel. +44 (0) 20 7012 2000
Tom Griffiths
Alasdair Younie
ICIS Tel. +44 (0) 20 7651 8688
Tom Moriarty
Caroline Evans-Jones
CELOXICA HOLDINGS PLC
("CELOXICA" OR "THE COMPANY")
Interim Results for the six months ended 30 June 2008
Chairman's Statement
Overview
The first half of 2008 has seen significant change to both the Celoxica business strategy and to the structure of the company.
At the start of the year Celoxica successfully completed the sale of its Electronic System Level (ESL) business. This allowed the
company to fully focus on its re launch in providing accelerated computing solutions to the financial services sector
Three initial products were released in the first quarter of the year with five new clients committing to the new Celoxica product
range. This early progress in product delivery and early adopter client commitment, helped support the business in successfully completing a
fund raising in April of �2m.
Financial Results
The interim results are presented under International Financial Reporting Standards (IFRS). The revenue of �0.3m from continuing
operations for the six months ended 30 June 2008 was in line with revenue targets with the Group signing new clients resulting in a 43%
increase compared to the six months to 30 June 2007.
Following the sale of the ESL business, coupled with the change in strategic direction detailed below, administrative overheads in the
continuing business have reduced from �1.1m in the first half of 2007 to �0.8m in the first half of 2008. The net effect of this to reduce
the loss per share to 0.4p (1.4p 30 June 2007)
In addition, the Company have raised �2m through the issue of 200,000,000 new ordinary shares of 1p each at 1p per share. As a result,
the Group had cash of �1.9m at 30 June 2008.
For the first half of the year, we have signed five new clients enabling us to achieve our half year forecast. Following the
restructuring, the board anticipates growing the business whilst continuing to carefully monitor costs in a challenging market.
Strategic Direction
Celoxica is gaining momentum as a result of its new business strategy and commitment to providing leading edge accelerated computing
solutions to trading organisations and exchanges. The sale of the ESL business coupled with the realignment of our business focus and
restructuring of the Company, should ensure Celoxica is well placed to help financial organisations adapt their trading strategies to handle
the challenges of increased competition, changing regulation and the ever rising volume of market data. Furthermore, with the continuing
volatility in the worlds financial markets, Celoxica's solutions and services ensure users can trade consistently through volume spikes at
the same ultra low latency levels in turn providing true competitive edge.
It is Celoxica's intention to extend the exchange and market data feeds it supports to cover those exchanges most impacted by the
changing market landscape and then to look at broadening these low latency solutions to address accelerated market distribution and trade
execution requirements in the future.
Summary
Progress has been encouraging to date with new products released, new clients gained and half year revenue targets met. Furthermore we
now have a clear product roadmap and a strong pipeline of new opportunities with discussions continuing with major organisations in the
financial services market. This gives me confidence in the long term growth potential for the future and continued successful development of
the 'new' Celoxica business model.
Jean-Marc Bouhelier
Chairman
Celoxica Holdings plc
Unaudited Condensed Consolidated Income Statement for the period ended 30 June 2008
Six months ended Year ended
30 June 2008 30 June 2007 31 December 2007
Note �'000 �'000 �'000
Continuing operations
Revenue 300 210 354
Cost of sales (81) (142) (240)
Gross profit 219 68 114
Administrative expenses (769) (1,084) (2,278)
Operating loss (550) (1,016) (2,164)
Finance income 11 33 22
Finance costs (2) (33) (26)
Loss on ordinary activities before taxation (541) (1,016) (2,168)
Tax on loss on ordinary activities 2 15 63 86
Loss for the period for continuing operations (526) (953) (2,082)
Discontinued operations
Profit/(loss) for the period from discontinued operations 3 749 (978) (1,648)
Profit/ (loss) for the period 223 (1,931) (3,730)
Earnings/(loss) per share (pence)
From continuing operations:
- Basic and diluted 4 (0.4p) (1.4p) (2.9p)
From continuing and discontinued operations:
- Basic and diluted 4 0.2p (2.9p) (5.2p)
Unaudited Consolidated Statement of Recognised Income & Expense
For the period ended 30 June 2008
Six months ended Year ended
30 June 2008 30 June 2007 31 December 2007
�'000 �'000 �'000
Exchange differences on (3) (1) (2)
translation of foreign
operations
Net expense recognised (3) (1) (2)
directly in equity
Profit/(Loss) for the period 223 (1,931) (3,730)
Total recognised income and 220 (1,932) (3,732)
expense for the period
Unaudited Condensed Consolidated Balance Sheet
At 30 June 2008
30 June 2008 30 June 2007 31 December 2007
Note �'000 �'000 �'000
Non-current assets
Property, plant & equipment 5 27 116 27
Current assets
Inventories 124 62 28
Trade and other receivables 649 1,034 561
Cash 1,915 703 22
2,688 1,799 611
Non-current asset classified - - 142
as held for sale
Total assets 2,715 1,915 780
Current liabilities
Trade and other payables (636) (1,013) (641)
Bank overdrafts 6 - - (172)
Provisions 10 (86) - (85)
(722) (1,013) (898)
Liabilities directly - - (125)
associated with non-current
assets classified as held for
sale
Net current 1,966 786 (412)
assets/(liabilities)
Total liabilities (722) (1,013) (1,023)
Net assets/(liabilities) 1,993 902 (243)
Equity
Share capital 7 15,227 13,075 13,215
Share premium 8 4,469 4,025 4,500
Merger reserve 8 23,730 23,730 23,730
Share option reserve 8 335 260 300
Translation reserve 8 (11) (7) (8)
Retained earnings 8 (41,757) (40,181) (41,980)
Total equity 1,993 902 (243)
Unaudited Condensed Consolidated Cash Flow Statement
For the period ended 30 June 2008
Six months ended Year ended
30 June 2008 30 June 2007 31 December 2007
Note �'000 �'000 �'000
Cash flows from operating
activities
Loss before taxation (868) (2,035) (3,883)
Income tax received 19 244 234
Net interest received 5 (31) (4)
Other operating cash flows 27 (206) 403
(net)
Net cash outflow from (817) (2,028) (3,250)
operating activities
Cash flows from investing
activities
Purchases of property, plant 5 - (12) (12)
and equipment
Proceeds on disposal of 5 - 1 1
property, plant and equipment
Disposal of business 3 896 - -
Net cash from/(used in) 896 (11) (11)
investing activities
Cash flows from financing
activities
Repayments of borrowings 6 - (278) (525)
Other financing cash flows 1,987 2,863 3,478
(net)
Net cash from financing 1,987 2,585 2,953
activities
Net increase/(decrease) in 2,066 546 (308)
cash and cash equivalents
Cash and cash equivalents at (151) 157 157
beginning of the period
Cash and cash equivalents at 1,915 703 (151)
end of the period
Notes to the Accounts
1. Basis of preparation
The interim results for the period ended 30 June 2008 have been prepared using the recognition and measurement principles of IFRS
including IAS 34 'Interim Financial Reporting' as adopted by the European Union and are unaudited and have not been reviewed by the
company's auditors. The accounting policies adopted are consistent with those in the financial statements for the year ended 31 December
2007, as described in those financial statements. The condensed half-yearly financial statements should be read in conjunction with those
annual financial statements. The condensed half-yearly financial statements do not comprise full financial statements within the meaning of
the Companies Act 1985.
The comparative figures for the year ended 31 December 2007 are derived from the Company's statutory accounts for that financial period.
The accounts have been reported upon by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
The board of directors approved the above results on 24 September 2008.
These interim financial statements are presented in pounds sterling because that is the currency of the primary economic environment in
which the group operates. Foreign operations are included in accordance with the policies set out in the group's financial statements for
the year ended 31 December 2007.
2. Tax
The Group has tax losses of �42.4 million (30 June 2007: �42.7 million) and therefore does not incur a tax charge for the period. It
also takes advantage of the Research and Development tax credit available for Small and Medium Enterprises.
3. Discontinued operations
On 4 January 2008 the Group completed the sale of its Electronic System Level (ESL) business to Catalytic Inc. The assets disposed of
and consideration payable by the acquirer were as follows:
�'000
Property, plant and equipment 60
Inventories 32
Trade and other receivables 37
Trade and other payables (125)
Net assets disposed 4
Total purchase consideration net of costs (1,080)
Profit on disposal of business (1,076)
The net purchase consideration comprised the following:
�'000
Cash payment 1,297
Associated costs (401)
Net cash received in the period 896
Deferred contingent consideration 184
Total purchase consideration net of costs 1,080
The deferred contingent consideration will be paid on 4 January 2009 subject to no non-IP claims arising in respect of the business.
The results of the ESL business which have been included in the consolidated income statement were as follows:
Period ended Period ended Year ended
30 June 2008 30 June 2007 31
December
2007
�'000 �'000 �'000
Revenue - 801 1,349
Expenses (327) (1,819) (3,063)
Operating loss (327) (1,018) (1,714)
Net finance costs - (1) (2)
Loss before tax (327) (1,019) (1,716)
Attributable tax income - 41 68
Profit on disposal of 1,076 - -
discontinued operations
Attributable tax charge - - -
Net profit/(loss) attributable to 749 (978) (1,648)
discontinued operations
4. Loss per share
From continuing and discontinued operations
The calculation of the basic and diluted loss per share is based on the following data:
Losses Six months ended Year ended
30 June 2008 30 June 2007 31 December 2007
�'000 �'000 �'000
Loss for the purposes of basic and diluted loss per share 223 (1,931) (3,730)
Number of Shares 30 June 2008 30 June 2007 31 December 2007
Number Number Number
Weighted average number of ordinary shares for the 126,936,005 67,077,191 71,846,612
purposes of basic and diluted loss per share
The issue of additional shares on the exercise of options would decrease the basic loss per share and there is, therefore, no dilutive
effect of share options.
From continuing operations Six months ended Year ended
30 June 2008 30 June 2007 31 December 2007
�'000 �'000 �'000
Net profit/(loss) attributable to equity holders of 223 (1,931) (3,730)
the parent
Adjustment to exclude loss for (749) 978 1,648
the period from discontinued
operations
Losses from continuing (526) (953) (2,082)
operations for the purpose of
basic and diluted earnings per
share excluding discontinued
operations
The denominators used are the same as those detailed above for both basic and diluted earnings per share from
continuing and discontinued operations.
5. Property, plant and equipment
There have been no material additions or disposals in the period (6 months to 30 June 2007: none).
6. Borrowings
No new loans or borrowings have been taken out in the period.
7. Share capital
Ordinary 1p shares 24p Deferred
Number Ordinary Shares
Number
Authorised
As at 1 January 2008 and 30 June 2008 560,000,000 60,000,000
Ordinary 1p shares 24p Deferred
�'000 Ordinary Shares
�'000
As at 1 January 2008 and 30 June 2008 5,600 14,400
Ordinary 1p shares 24p Deferred Ordinary Shares
Number Number
Issued and Fully Paid
As at 1 January 2008 84,307,434 51,551,184
Share issue 201,150,000 -
As at 30 June 2008 285,457,434 51,551,184
Ordinary 1p shares 24p Deferred Ordinary Shares
�'000 �'000
Issued and Fully Paid
As at 1 January 2008 843 12,372
Share issue 2,012 -
As at 30 June 2008 2,855 12,372
The Company issued 201,150,000 ordinary shares of 1p each in May and June 2008 for aggregate consideration of �2,011,500. Expenses
associated with the issue, which have been deducted from the Company's share premium account, were �31,000.
The Deferred Shares have:
a. no right to receive notice of, or to attend or vote at, any general meeting of the Company; and
b. no right to participate in the profits of the Company whether by way of dividend, distribution, return of capital (whether or not
upon a winding-up) or otherwise, save that upon a return of capital upon a winding-up, the holders of Deferred Shares shall be entitled to
the return of the nominal value of each Deferred Share held after �10,000,000 has been returned on each Ordinary Share;
Following the authority given by the passing of the resolution at the General Meeting held on February 1st 2007, the Company has
irrevocable authority to execute a transfer of the Deferred Ordinary Shares to a custodian and to retain the certificate(s) for those
Shares.
The rights attached to the Deferred Shares shall not be deemed to be varied or abrogated by the creation or issue of any new shares
ranking in priority to or pari passu with or subsequent to the Deferred Shares.
8. Reserves
Share Premium reserve Merger reserve Share Option reserve Translation reserve Retained losses
�'000 �'000 �'000 �'000 �'000
Balance at 1 January 2007 1,349 23,730 255 (6) (38,250)
Premium on issue of Ordinary 2,676 - - - -
shares net of expenses
Exchange differences on - - - (1) -
translation of foreign
operations
Share options expensed - - 5 - -
Net loss for the period - - - - (1,931)
Balance at 30 June 2007 4,025 23,730 260 (7) (40,181)
Balance at 1 January 2008 4,500 23,730 300 (8) (41,980)
Exchange differences on translation of foreign - - - (3) -
operations
Share issue costs (31) - - - -
Share options expensed - - 35 - -
Net profit for the period - - - - 223
Balance at 30 June 2008 4,469 23,730 335 (11) (41,757)
The merger reserve was created on the acquisition of Celoxica Limited by Celoxica Holdings plc in 2001, representing the balance on the
share premium account of Celoxica Limited at that time.
9. Segment information
The primary format used for segmental reporting is geographical.
Segment results, assets and liabilities include items directly attributable to a segment as well as other shared
items allocated on a reasonable basis.
Unallocated expenses comprise cash, borrowings, tax assets and liabilities and retirement benefit obligation.
Inter-group trading is determined on an arm's length basis.
The Group comprises the following segments:
Europe, Middle East, Africa and India (EMEAI)
Asia Pacific (APAC)
The Americas (USA)
The Group was also previously involved in the electronic system level design (ESL) market. That operation was
discontinued with effect from 4 January 2008 (see note 3). Revenues and costs directly attributable to that business
and not ongoing are disclosed within discontinued operations. Costs incurred with that business but not directly
attributable or ongoing are not.
Segment information about these geographic areas is presented below:
EMEAI APAC USA Discontinued Consolidated
operations
30 June 2007 �'000 �'000 �'000 �'000 �'000
Revenue from external customers 14 - 286 - 300
Segment result 10 - 209 749 968
Unallocated corporate expenses (769)
Operating loss 199
Net finance costs 9
Profit before tax 208
Tax 15
Net profit for the year 223
No net finance income was attributable to discontinued operators and no taxation charge was attributable to discontinued operations.
Accordingly, the segment result for discontinued operations reconciles directly to the total profit for the year attributable to
discontinued operations.
10. Provisions and contingencies
30 June 2008 30 June 2007 31 December 2007
�'000 �'000 �'000
Onerous contracts 86 - 85
The onerous contract provision relates to the rent, rates and service charge attributable to unutilised office space at the Group's UK
office. All amounts are due within twelve months. The movement on the provision during the period was as follows:
�'000
At 1 January 2008 85
Additional provision in the period 43
Utilisation of provision (42)
At 30 June 2008 86
Utilisation of the provision has occurred in line with expected expenditure at 31 December 2007 but management have altered their
assessment as to the period until the onerous contract can be surrendered.
At 30 June 2008 and 30 June 2007, the Group had no contingent liabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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