TIDMZYT
RNS Number : 5615M
Zytronic PLC
12 May 2020
12 May 2020
Zytronic plc
("Zytronic" or the "Company" and, together
with its subsidiaries, the "Group")
Interim Results for the six months ended 31 March 2020
(unaudited)
Zytronic plc, a leading specialist manufacturer of touch
sensors, announces its consolidated interim results for the six
months ended 31 March 2020. Comparative data is given for the six
months ended 31 March 2019, except where indicated.
Overview
-- Group revenue of GBP7.4m (2019: GBP9.5m), impacted by
decreases in Gaming, Financial and Vending revenues
-- Profit before tax of GBP0.5m (2019: GBP1.4m)
-- No interim dividend due to COVID-19 (2019: 7.6p)
-- Basic earnings per share ("EPS") of 2.5p (2019: 7.4p)
-- Positive operating cashflow of GBP2.0m (2019: GBP0.2m)
-- Net cash of GBP12.4m (30 September 2019: GBP13.1m),
reflecting payment of final dividend of GBP2.4m in respect of the
prior financial year
Commenting on the results, Tudor Davies, Chairman said:
"We shall keep shareholders informed of any material
developments, but in common with all businesses we are facing
difficult and unprecedented circumstances with anything except very
short term forecasts challenging. Management will continue to
respond accordingly to ensure operations are maintained in a safe
manner and will utilise any Government assistance to safeguard the
employment of our workforce."
Enquiries:
Zytronic plc
Mark Cambridge, Chief Executive
Claire Smith, Group Finance Director 0191 414 5511
N+1 Singer (Nominated Adviser and
Broker)
Aubrey Powell, Alex Bond (Corporate
Finance)
Rachel Hayes (Corporate Broking) 020 7496 3000
Notes to Editors
Zytronic is the developer and manufacturer of a unique range of
internationally award-winning and patented touch sensor products,
operating from three modern factories totaling 80,000ft(2) near
Newcastle-upon-Tyne in the United Kingdom.
Zytronic touch products employ an embedded sensing solution and
are readily configurable to enable multi-user and multi-touch touch
sensing sizes from five inches to ultra-large 85", making them an
ideal solution for system designers' specific requirements,
offering significant durability, environmental stability and
optical enhancement benefits to touch interactivity for industrial,
self-service and public access equipment.
Chairman's statement
Introduction
As we indicated in December 2019 and at the AGM in February, the
first half results are, as management expected, lower than the
previous year as a result of a low conversion of opportunities into
orders and sales. However, we were expecting an upturn as the year
progressed, and in February and March the order book and sales
improved considerably and until the impact of COVID-19, we were
well on track for a second half at significantly improved
levels.
Trading
Revenues for the half year ended 31 March 2020 were GBP7.4m
(2019: GBP9.5m), EBITDA was GBP1.0m (2019: GBP1.9m) and profits for
the half year before tax were GBP0.5m (2019: GBP1.4m).
The decline in revenues principally arose from a low level of
order intake in the latter part of 2019 which, as expected,
recovered significantly thereafter. In January, February and March
2020 order intake was 15% higher than the same period in 2019,
resulting in an order book of GBP2.7m at 31 March 2020 (2019:
GBP2.0m).
In normal circumstances this improved order position would have
formed the basis for a good performance in the second half and a
much better result for the year as a whole. However, in recent
weeks the effect of the COVID-19 pandemic has begun to affect
supplies, deliveries and a deferral in orders. In common with most
other businesses it is far too early for us to be able to assess
how long this situation will last for. On a more positive note, our
growth markets within the APAC countries where the pandemic has had
the earliest effects will hopefully return to normality quicker
than others.
Subsequently, our operations have continued, at reduced levels
of activity, without needing to shut the factory following
appropriate adjustments to working practices and the cost base.
Since 31 March we have in stages reduced factory hourly labour from
101 to 32 persons and staff from 63 to 35, principally through
utilisation of the Government Job Retention Scheme (Furlough), and
reduced other expenditure accordingly, with everything under
constant review.
Cash and dividend
We continue to be in a strong financial position with cash
balances of GBP12.4m (30 September 2019 GBP13.1m), although as we
explained in December 2019, with the recent downturn in results we
were uncomfortable continuing to pay an uncovered dividend, which
we had done for the prior two years. In considering an interim
dividend we are cognisant of the relatively low profits for the
year to date and the extremely uncertain prospects for the
remainder of the year as a whole and have decided that in these
circumstances we should not pay an interim dividend and returns to
shareholders should be deferred until there is a return towards
normality.
Outlook
We shall keep shareholders informed of any material
developments, but in common with all businesses we are facing
difficult and unprecedented circumstances with anything except very
short term forecasts challenging, and as each month progresses
without a real change of circumstances, the opportunity to benefit
from what was an improving and promising situation to produce a
positive return during this financial year is remote.
Tudor Davies
Chairman
12 May 2020
Consolidated statement of comprehensive income
Unaudited results for the six months to 31 March 2020
Six months Six months Year to
to to
31 March 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
------------------------- ------ ----------- ----------- -------------
Group revenue 7,378 9,463 20,104
Cost of sales (5,146) (6,178) (13,311)
------------------------- ------ ----------- ----------- -------------
Gross profit 2,232 3,285 6,793
Distribution costs (135) (182) (350)
Administration expenses (1,679) (1,755) (3,462)
------------------------- ------ ----------- ----------- -------------
Group trading profit 418 1,348 2,981
Finance revenue 40 35 76
------------------------- ------ ----------- ----------- -------------
Profit before tax 458 1,383 3,057
Tax expense 3 (64) (193) (366)
------------------------- ------ ----------- ----------- -------------
Profit for the period 394 1,190 2,691
------------------------- ------ ----------- ----------- -------------
Earnings per share
Basic 4 2.5p 7.4p 16.8p
Diluted 4 2.5p 7.4p 16.8p
------------------------- ------ ----------- ----------- -------------
All activities are from continuing operations.
Consolidated statement of changes in equity
Unaudited results for the six months to 31 March 2020
Called
up
share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- --------- --------
At 1 October 2019 160 8,994 16,644 25,798
Profit for the period - - 394 394
Dividends - - (2,439) (2,439)
------------------------------ -------- -------- --------- --------
At 31 March 2020 (unaudited) 160 8,994 14,599 23,753
------------------------------ -------- -------- --------- --------
Consolidated statement of financial position
Unaudited results at 31 March 2020
At At At
31 March 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- -------------
Assets
Non-current assets
Intangible assets 1,208 1,460 1,299
Property, plant and equipment 6,126 6,566 6,385
----------------------------------- ---------- ---------- -------------
7,334 8,026 7,684
---------------------------------- ---------- ---------- -------------
Current assets
Inventories 2,713 3,948 3,034
Trade and other receivables 3,357 3,856 4,127
Cash and short term deposits 12,369 12,060 13,143
----------------------------------- ---------- ---------- -------------
18,439 19,864 20,304
---------------------------------- ---------- ---------- -------------
Total assets 25,773 27,890 27,988
----------------------------------- ---------- ---------- -------------
Equity and liabilities
Current liabilities
Trade and other payables 650 978 962
Derivative financial liabilities 93 3 21
Accruals 636 591 499
Tax liabilities 125 227 192
----------------------------------- ---------- ---------- -------------
1,504 1,799 1,674
---------------------------------- ---------- ---------- -------------
Non-current liabilities
Government grants - 13 -
Deferred tax liabilities (net) 516 562 516
----------------------------------- ---------- ---------- -------------
516 575 516
---------------------------------- ---------- ---------- -------------
Total liabilities 2,020 2,374 2,190
----------------------------------- ---------- ---------- -------------
Net assets 23,753 25,516 25,798
----------------------------------- ---------- ---------- -------------
Capital and reserves
Equity share capital 160 160 160
Share premium 8,994 8,994 8,994
Retained earnings 14,599 16,362 16,644
----------------------------------- ---------- ---------- -------------
Total equity 23,753 25,516 25,798
----------------------------------- ---------- ---------- -------------
Consolidated cashflow statement
Unaudited results for the six months to 31 March 2020
Six months Six months Year to
to to
31 March 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ------ ----------- ----------- -------------
Operating activities
Profit before tax 458 1,383 3,057
Net finance income (40) (35) (76)
Depreciation and impairment of property,
plant and
equipment 365 361 726
Amortisation, impairment and write-off
of intangible assets 213 205 430
Amortisation of government grant (3) (15)
Fair value movement on foreign exchange
forward contracts 72 (4) 14
Working capital adjustments
Decrease/(increase) in inventories 321 (927) (13)
Decrease/(increase) in trade and other
receivables 770 (118) (389)
Decrease in trade and other payables and
provisions (170) (648) (742)
-------------------------------------------- ------ ----------- ----------- -------------
Cash generated from operations 1,989 214 2,992
Tax (paid)/received (127) 25 (238)
-------------------------------------------- ------ ----------- ----------- -------------
Net cashflow from operating activities 1,862 239 2,754
-------------------------------------------- ------ ----------- ----------- -------------
Investing activities
Interest received 31 30 71
Payments to acquire property, plant and
equipment (106) (322) (506)
Payments to acquire intangible assets (122) (74) (144)
-------------------------------------------- ------ ----------- ----------- -------------
Net cashflow used in investing activities (197) (366) (579)
-------------------------------------------- ------ ----------- ----------- -------------
Financing activities
Dividends paid to equity shareholders
of the Parent (2,439) (2,439) (3,658)
Net cashflow used in financing activities (2,439) (2,439) (3,658)
-------------------------------------------- ------ ----------- ----------- -------------
Decrease in cash and cash equivalents (774) (2,566) (1,483)
-------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the beginning
of the period 13,143 14,626 14,626
-------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the end of
the period 6 12,369 12,060 13,143
-------------------------------------------- ------ ----------- ----------- -------------
Notes to the interim report
Unaudited results for the six months to 31 March 2020
1. Basis of preparation
The financial information in these interim statements is
prepared under the historical cost convention and in accordance
with international accounting standards. It does not constitute
statutory accounts as defined in Section 435 of the Companies Act
2006 and does not reflect all the information contained in the
Group's annual report and financial statements.
The tax charge is calculated by applying the Directors' best
estimate of the annual tax rate to the profit for the period. Other
expenses are accrued in accordance with the same principles used in
the preparation of the annual report and financial statements.
The interim results for the six months to 31 March 2020 are not
reviewed by Ernst & Young LLP and accordingly no opinion has
been given.
The interim financial statements have been prepared using the
same accounting policies and methods of computation used to prepare
the 2019 annual report and financial statements.
The financial information for the six months to 31 March 2020
and the comparative financial information for the six months to 31
March 2019 have not been audited. The comparative financial
information for the year ended 30 September 2019 has been extracted
from the 2019 annual report and financial statements.
The annual report and financial statements for the year ended 30
September 2019, which were approved by the Board of Directors on 9
December 2019, received an unqualified audit report, did not
contain a statement under Sections 498(2) or (3) of the Companies
Act 2006 and have been filed with the Registrar of Companies.
The Group has one reportable business segment comprising the
development and manufacture of customised optical products to
enhance electronic display performance. Products in this reportable
business segment include touch sensors, filters and other laminated
products. All revenue, profits or losses before tax and net assets
are attributable to this reportable business segment.
2. Basis of consolidation
The Group results consolidate the accounts of Zytronic plc and
all its subsidiary undertakings drawn up to 31 March 2020.
3. Tax charge on profit on ordinary activities
The estimated tax rate for the year of 14% has been applied to
the half year's profit before tax, in accordance with the Auditing
Standard Board's statement on interim reports.
4. Earnings per share
Basic EPS is calculated by dividing the profit attributable to
ordinary equity holders of the Company by the weighted average
number of ordinary shares in issue during the period. All
activities are continuing operations and therefore there is no
difference between EPS arising from total operations and EPS
arising from continuing operations.
For the six months to 31 March 2020 and 2019
Weighted Weighted
average average
number number
Earnings of shares EPS Earnings of shares EPS
31 March 31 March 31 March 31 March 31 March 31 March
2020 2020 2020 2019 2019 2019
GBP'000 Thousands Pence GBP'000 Thousands Pence
------------------------------- --------- ---------- --------- --------- ---------- ---------
Profit on ordinary activities
after tax 394 16,044 2.5 1,190 16,044 7.4
------------------------------- --------- ---------- --------- --------- ---------- ---------
Basic EPS 394 16,044 2.5 1,190 16,044 7.4
------------------------------- --------- ---------- --------- --------- ---------- ---------
The weighted average number of shares for diluted EPS is
calculated by including the weighted average number of shares under
option.
Weighted Weighted
average average
number number
Earnings of shares EPS Earnings of shares EPS
31 March 31 March 31 March 31 March 31 March 31 March
2020 2020 2020 2019 2019 2019
GBP'000 Thousands Pence GBP'000 Thousands Pence
------------------------------- --------- ---------- --------- --------- ---------- ---------
Profit on ordinary activities
after tax 394 16,044 2.5 1,190 16,044 7.4
Weighted average number - - - - - -
of shares under option
------------------------------- --------- ---------- --------- --------- ---------- ---------
Diluted EPS 394 16,044 2.5 1,190 16,044 7.4
------------------------------- --------- ---------- --------- --------- ---------- ---------
For the year to 30 September 2019
Weighted
average
number
Earnings of shares EPS
30 September 30 September 30 September
2019 2019 2019
GBP'000 Thousands Pence
----------------------------------------- ------------- ------------- -------------
Profit on ordinary activities after tax 2,691 16,044 16.8
----------------------------------------- ------------- ------------- -------------
Basic EPS 2,691 16,044 16.8
----------------------------------------- ------------- ------------- -------------
The weighted average number of shares for diluted EPS is
calculated by including the weighted average number of shares under
option.
Weighted
average
number
Earnings of shares EPS
30 September 30 September 30 September
2019 2019 2019
GBP'000 Thousands Pence
------------------------------------------------ ------------- ------------- -------------
Profit on ordinary activities after tax 2,691 16,044 16.8
Weighted average number of shares under option - - -
------------------------------------------------ ------------- ------------- -------------
Diluted EPS 2,691 16,044 16.8
------------------------------------------------ ------------- ------------- -------------
5. Dividends
As explained above, and under the present circumstances, the
Directors consider that it is appropriate to defer returns to
shareholders until there is clear evidence of a return towards
normality. Accordingly, no interim dividend is proposed for the
period (2019: 7.6p per share). The table below reflects historic
dividend payments.
Six months Six months Year to
to 31 March to 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------------- ------------- ------------- --------------
Ordinary dividends on equity shares
Final dividend of 15.2p per ordinary share
paid on
22 February 2019 - 2,439 2,439
Interim dividend of 7.6p per ordinary share
paid on
19 July 2019 - - 1,219
Final dividend of 15.2p per ordinary share
paid on
7 February 2020 2,439 - -
--------------------------------------------- ------------- ------------- --------------
2,439 2,439 3,658
--------------------------------------------- ------------- ------------- --------------
6. Cash and cash equivalents
Six months Six months Year to
to 31 March to 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- --------------
Cash at bank and in hand 12,369 12,060 13,143
-------------------------- ------------- ------------- --------------
For the purpose of the consolidated cashflow statement, cash and
cash equivalents comprise the following:
Six months Six months Year
to 31 March to 31 March to 30
September
2020 2019 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- -------------- -------------- ------------
Cash at bank and in hand 9,839 5,991 7,351
Short term deposits 2,530 6,069 5,792
12,369 12,060 13,143
-------------------------- -------------- -------------- ------------
Cash at bank earns interest at floating rates based on daily
bank deposit rates. Short term deposits are made for variable
lengths, being overnight, three months or one year (with break
conditions), depending on the immediate cash requirements of the
Group, and earn interest at variable rates.
At 31 March 2020 the Group had available a net GBP1.0m (cash
less overdrawn accounts) overdraft facility from Barclays Bank plc,
which will fall for review in July 2020.
The fair value of cash and cash equivalents is GBP12.4m (2019:
GBP12.1m).
7. Availability of the interim report
A copy of the interim report and interim results presentation is
available on the Company's corporate website, www.zytronicplc.com.
Copies can be requested from the Company's registered office:
Whiteley Road, Blaydon-on-Tyne, Tyne and Wear NE21 5NJ.
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END
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