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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
3DM Worldwide | LSE:TDM | London | Ordinary Share | GB0030949472 | ORD 2.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.19 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:2866Y 3DM Worldwide PLC 14 June 2007 3DM Worldwide plc (the "Company" or "3DM") Preliminary unaudited results for the year ended 31 December 2006 CHIEF EXECUTIVE OFFICER'S STATEMENT 2006 has been a busy year for the Company culminating in the restructuring of the business. COMMERCIAL ACTIVITIES The development of the Eco Sheet product in conjunction with Bovis Lend Lease Ltd provided the springboard for commercial discussions. The product is positioned as a replacement for plywood in temporary works within the construction industry. Following trials of the board as site safety fencing and use as concrete forms (moulds), Eco Sheet won the Chartered Institute of Building Award for Innovation. Eco Sheet has generated commercial interest within the construction industry where the focus on recycling is gaining momentum. This has led to advanced licence negotiations with Express Recycling and Plastics Ltd (Express) for the Eco-Sheet manufacturing rights in the UK. Express plans to set up a fully operational production plant in South East England during the second half of 2008. In South Africa, where 3DM Worldwide plc (3DM) has appointed a marketing agent, negotiations on Eco Sheet production are underway with a consortium of recycling and manufacturing companies. Further interest in taking the Eco Sheet product to market in Europe has also been expressed. While the prospect of the European Union funded project in Tanzania remains positive, there has been a delay in obtaining the appropriate permissions from the Tanzanian Government where there is a considerable backlog in processing project applications. The application for European funding for a plastic recycling project in Kenya has recently been submitted. Again representations to the Kenyan Finance Minister have been well received and we expect to be able to report on progress later in the current financial year. 3DM is in the process of forming a joint venture with a local recycling company to establish a plastic recycling and a Powder Impression Moulding (PIM) manufacturing plant in East Hungary. The joint venture has made representations to the Hungarian Finance and Environment Minister for support in funding the project, which has been positively received. Formal submission of the project will be made in July 2007. RJ Plastics Ltd and 2k Manufacturing Ltd, who took up licences earlier this year, are both in the process of product development and evaluation of their respective manufacturing strategies. Environmental Polymer Technologies Ltd (EPT) has successfully developed prototype surf boards with samples being produced on the Beta line in Bedwas House. EPT continues to develop pallet applications including a one trip pallet with sample products being produced at their new Semley facility. Panel products incorporating recycled tyre rubber have also successfully been produced. Licence opportunities in the Middle East are under discussion with a number of parties. The Board has concluded that while opportunities will continue to be explored, it is vital that the right partners be found to take the PIM technology forward in China and the Far East. In the USA product development work utilising the PIM process is successfully underway through Global Tech. Inc. (GTI), an existing licence holder. Moulds have been manufactured for James Marine Inc. for the development, and ultimately production, of river barge covers. These moulds measure 10m long and represent the largest moulds manufactured for the PIM process to date. The development work with Kelly Space Technology Inc. for various parts encapsulating anti-ballistic material for military vehicles continues to progress satisfactorily. GTI also continues to work on a range of encapsulated automotive components with ASIMCO Technologies and USCAR, the United States Council for Automotive Research, an umbrella organisation for collaborative research between, Daimler Chrysler Corporation, Ford Motor Company and General Motors Corporation. RESTRUCTURING The work completed on Eco Sheet has proven the commercial viability of the PIM process. This in turn allowed the business to be restructured with the sale on 30 November 2006 of 3DM Europe Ltd and its subsidiary 3DM Group Ltd, including the Bedwas House facility to EPT. 3DM Worldwide plc will receive 30% of the revenues generated by EPT through the use of the PIM process. The disposal has allowed the business to focus on the commercial exploitation of the PIM process while still having access to the Alpha line and Bedwas House facility for client demonstrations and conferences. The close working arrangement with EPT, an existing licence holder, also ensures 3DM can continue to develop products on behalf of clients. As part of the sale, existing contracts with 3DM Group transferred to EPT. The acquisition of 3DM Europe Ltd and its subsidiary 3DM Group Ltd by EPT provided significant synergies avoiding duplication of effort in process and material research and development. EPT has undertaken the development of production systems for large-scale three dimensional products including large diameter pipes and marine products such as work boats. This sale has significantly reduced the ongoing overheads of the business. In line with our stated strategy to simplify the group structure, 3DM has disposed of the share holding in Longborough Capital plc for a consideration of #100,000. 3DM has also divested its interest in Highseas Technologies Ltd. INTELLECTUAL PROPERTY The intellectual property bank has increased with the following patents being granted since the beginning of 2006: PIM process in China (patent no.ZL028045750) PIM process in New Zealand (patent no. 527461) PIM Light duty truck dumping mechanism in the United States (patent no.7032977 B2) The European blow moulding technology patent oral examination was won in 2007 and will proceed to grant later this year. This brings the total number of patents granted to 10 with another 14 in progress. 3DM has acquired the full licensing rights to processes for recycling agricultural film, x-ray plates and medical waste into a feedstock for the PIM process. These licenses form a key part of the funding applications for the Hungarian and Kenyan projects. 3DM has also taken the lead role in forming a consortium comprising Tesco, Bovis Lend Lease Ltd, Severnside Recycling, Phillip Tyler Polymers, Brunel University and Pera for a 2 year project to develop sustainable products made from recycled plastic using the PIM process. The consortium has recently won a Department of Trade & Industry grant for #600,000 funding as part of the #1.2 million project. This is a commercially focused project aimed at developing products for sale into the retail and construction industry. DEVELOPMENT ACTIVITIES To assist in providing clients with turnkey manufacturing solutions for the PIM process, 3DM has entered into a collaboration agreement with Arup, a global design and business consulting firm. Arup has a range of skills including acoustics, construction, material development, sustainable product development, vehicle design and project management as well as an enviable track record in delivering major projects. Arup will provide the technical expertise and global reach to assist 3DM in delivering projects on behalf of our clients. Initial analysis has shown that the PIM process compares favourably to other plastics processes in terms of carbon footprint. Compared to other plastics processes using virgin polymers, preliminary research shows that the PIM process generates only one quarter of the carbon dioxide when using recycled waste plastics. This significantly adds to the environmental credentials of the PIM process. CHANGES TO THE BOARD OF DIRECTORS During the year there have been a number of changes to the Board. Having previously announced his intention to step down as a director, the Board and key shareholders persuaded Ken Brooks to remain as Non Executive Chairman. Ken has been instrumental in effecting the restructuring of the business. To build on the growing opportunity in recycling of waste plastics, Roger Baynham was appointed Executive Deputy Chairman. Peter Oldham stood down from the Board as Operational Director and his position has not been replaced. The Board would like to thank Peter for his contribution to the development of the Company. OUTLOOK While sales revenue was disappointing in 2006 the focus on cost control remained strong throughout the year. This focus will continue with overheads being kept to a minimum. The company will draw in external expertise on a project by project basis to deliver turnkey manufacturing solutions to clients. Moving forward, considerable groundwork has been completed in 2006 to restructure the business and establish commercially viable projects. While maintaining the focus on current projects, 3DM will build on the environmental credentials of the PIM process focusing on recycling the vast amounts of mixed plastic wastes currently being sent to incineration or landfill. The increasing public awareness of environmental issues and climate change, particularly in Europe, presents significant opportunities for the Company. 3DM is uniquely positioned to take advantage of these opportunities and this will be at the centre of our marketing campaign. 3DM has never been in as strong a position to exploit the commercial opportunities presented by the PIM process and deliver value for shareholders. NIALL MACKAY Chief Executive Officer FINANCIAL REVIEW RESULTS Turnover in 2006 was #0.36 million compared to #0.40 million in 2005. The consolidated net operating loss was #5.7 million, up from #4.7 million in 2005. Consolidated losses before tax were #7.3 million compared to losses of #4.7 million in 2005. DIVIDENDS AND LOSS PER SHARE No dividend payment is proposed. There remained 20.5 million warrants and 4.5 million shares under option at the year end which produced no effect on the earnings per share. The loss per share was (9.41) pence compared to (6.94) pence in 2005. TRADING Turnover included revenue generated from production work, accrued royalties from Silkwood and a proportion of licence income which is taken to income over the expected life of the licence of three years. Cost of sales covers material purchases for the Alpha and Beta lines used in the production of samples and a small amount of finished product. Administration expenses in the year totalled #6.0 million compared to #5.2 million in 2005. Included in administration expenses are all research and development costs, all operating costs associated with the running of the Alpha and Beta lines at Bedwas House up to 30 November 2006 (the date of the disposal), corporate expenses, the legal costs associated with securing the ongoing intellectual property assets and a number of specific provisions. Administration costs also include an increase in depreciation on plant and machinery, a charge in relation to the write off of investments and provisions against the investments and associated debts which your board considered prudent. DISPOSAL OF NON-CORE ASSETS/INVESTMENTS In line with our stated strategy to simplify the group structure and increase transparency, the Company's investment in Highseas Technologies Ltd was disposed of during the year resulting in a charge of #28,750. A provision of #225,000 was made against the investment in Medical Waste Solutions Limited due to restructuring of their company. A provision of #391,850 has been made against the debt due from Silkwood Financial Corporation Inc. where legal action is now being pursued to recover the outstanding balance due. A provision of #620,380 was made against balances owed by Value Plastic Technologies LLC. These have both been treated as exceptional administration expenses. A profit of #88,000 was made on the disposal of shares in Longborough Capital plc during the year. DISPOSAL OF SUBSIDIARIES 3DM Europe Ltd and its subsidiary 3DM Group Ltd were disposed of as at 30 November 2006 to EPT an existing licence holder for the PIM process. As part of the deal 30% of the revenue generated by the use of the PIM process by EPT will be paid to 3DM Worldwide plc. The assets disposed of included the facility at Bedwas House, the Alpha and Beta lines, the associated staff, overheads and machinery finance. The outstanding inter company debt between 3DM Worldwide plc and 3DM Group Ltd was restructured (effectively writing off the bulk of the inter company loans that financed 3DM Group Ltd) leaving an outstanding inter company debt of #598,583 owed by 3DM Group Ltd to 3DM Worldwide plc. This debt is to be repaid no later than the 31 December 2008. The net asset value of 3DM Europe Ltd after this adjustment was #598,583. In consideration of EPT taking over the lease, staff and other liabilities, a payment of #200,000 was made satisfied by the issue of 3,076,923 ordinary shares in 3DM. The negative consideration of #0.8m was made up of #4.3m assets less #3.7m liabilities, together with the #0.2m payable in shares. An additional provision has been made for #0.2 million to cover the potential loss arising from contractual obligations currently under dispute, which primarily relates to the transfer of the lease on the Bedwas House facility. The operating losses before taxation attributable to the 3DM Europe Ltd for the eleven months to 30 November 2006 were #3.1 million representing 54% of total operating losses incurred. Historically, most of the trading had been carried out through 3DM Group Ltd and financed by 3DM Worldwide plc through the inter company account. The net effect of writing down the inter company debt and the charge to 3DM's profit and loss account for the total cost of disposal was #0.9 million. A further loss on disposal of #0.18 million has been provided for arising from outstanding finance obligations on fixed assets sold to Medical Waste Solutions Ltd bringing the total losses on disposal to #1.1 million. These disposals have enabled the company to return to its original licensing and royalty model significantly reducing operating overheads and cash outflow. FINANCING In late 2005, the Company entered into a convertible loan note with Cornell Capital Partners, L.P. (Cornell) and Montgomery Equity Partners L.P. (Montgomery) to provide a #4.75 million draw down facility. As reported in the Interim Statement, Cornell Capital Partners L.P. ("Cornell") made a further advance of #1.5m on 29 June 2006 increasing its debenture loan to #6.25 million including arrangement fees. Since 1 January 2006 to date, Cornell has converted #3.4 million at an average price of 6.64p per share. Cornell is entitled to convert up to a maximum of #300,000 per week in to shares in the company at a price which is the lower of 90% of the volume weighted average price during either the 10 days prior to the closing date of the deals or the 10 days prior to the conversion date. 3DM has the right to repay all or part of the combined debenture in cash. The company also has a Standby Equity Distribution Agreement (SEDA) with Cornell to the value of #5 million which is due to expire in September 2008. No draw down has been made against this facility. With this facility and the reduced overhead base, the company has access to sufficient funds to operate going forward and to fund the commercialisation of the PIM process. DAVID SHEPLEY-CUTHBERT Finance Director UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 31 DECEMBER 2006 Notes Continuing Discontinued Total Year Total Operations Operations Ended 31 Year 2006 2006 December Ended 31 2006 December 2006 #'000 #'000 #'000 #'000 Turnover Continuing operations 319 40 359 404 --------- --------- --------- --------- 319 40 359 404 Cost of sales - (177) (177) (113) --------- --------- --------- --------- Gross profit 319 (137) 182 291 Administrative expenses - exceptional 7 (1,012) - (1,012) - - other (2,070) (2,976) (5,046) (5,188) --------- --------- --------- --------- (3,082) (2,976) (6,058) (5,188) Other operating income 144 - 144 236 --------- --------- --------- --------- Operating Loss (2,619) (3,113) (5,732) (4,661) Loss on disposal of subsidiary - (1,121) (1,121) - --------- --------- --------- --------- (2,619) (4,234) (6,853) (4,661) Foreign currency gains on investments - 247 Interest receivable 5 - Interest payable (478) (297) --------- --------- Loss on ordinary activities before (7,326) (4,711) taxation Tax on loss on ordinary activities - 75 --------- --------- Loss on ordinary activities after (7,326) (4,636) taxation --------- --------- Loss per share Basic and diluted loss per ordinary share (9.41)p (6.94)p --------- --------- Loss per share excluding loss on disposal (7.97)p (6.94)p of subsidiary --------- --------- UNAUDITED CONSOLIDATED BALANCE SHEET 31 DECEMBER 2006 Notes 31 31 December December 2006 2005 #'000 #'000 As restated Fixed Assets Intangible assets 12,473 11,996 Tangible assets 544 5,158 Investments 97 65 --------- ------------ 13,114 17,219 --------- ------------ Current Assets Debtors 6 974 2,330 Cash at bank 55 4,507 --------- ------------ 1,029 6,837 Creditors: amounts falling due within one year (4,867) (7,245) --------- ------------ Net current liabilities (3,838) (408) --------- ------------ Total assets less current liabilities 9,276 16,811 Creditors: amounts falling due after more than one year (1,708) (5,329) --------- ------------ Net Assets 7,568 11,482 --------- ------------ Capital and reserves Called-up equity share capital 2,656 1,670 Share premium account 32,213 29,992 Warrant reserve 468 265 Profit and loss account (27,769) (20,445) --------- ------------ Shareholders' funds 7,568 11,482 --------- ------------ UNAUDITED CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 DECEMBER 2006 31 December 2006 31 December 2005 #'000 #'000 Net cash outflow from operating (1,857) (3,133) activities Returns on investments and servicing of finance Interest received 5 - Interest paid (369) (270) ----------------- ----------------- Net cash outflow from returns on (364) (270) investments and servicing of finance Capital expenditure and financial investment Purchase of tangible fixed (220) (3,312) assets Sale of investments 100 - ----------------- ----------------- Net cash outflow from capital expenditure (120) (3,312) and financial investment ----------------- ----------------- Net cash outflow before financing (2,341) (6,715) ----------------- ----------------- Financing Issue of equity share capital 314 36 (Repayment)/Inception of finance leases (164) 3,320 (Repayment)/Inception of loans (2,031) 7,560 ----------------- ----------------- Net cash flow from financing (1,881) 10,916 ----------------- ----------------- (Decrease)/Increase in cash (4,222) 4,201 ----------------- ----------------- UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES YEAR ENDED 31 DECEMBER 2006 Year Ended Year Ended 31 December 31 December 2006 2005 #'000 #'000 As restated Loss for the financial year (7,326) (4,636) Currency translation differences on foreign - (247) currency ------------- -------------- Total recognised gains and losses relating (7,326) (4,883) to the year -------------- Prior period adjustment (254) ------------- Total recognised gains and losses since the (7,580) last financial statements ------------- NOTES TO THE ACCOUNTS UNAUDITED RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Year Ended Year Ended 31 December 2006 31 December 2005 As restated #'000 #'000 #'000 #'000 Loss for the financial year (7,326) (4,636) New equity share capital 986 2 Premium on new equity share 2,221 34 capital Movement in warrant reserve 203 98 Movement due to share options 2 - ------- ------- 3,412 134 -------- -------- Net reduction to funds (3,914) (4,502) Movement in reserves due to - (247) foreign exchange differences Opening shareholders' funds 11,482 16,231 -------- -------- Closing Shareholders' funds 7,568 11,482 -------- -------- 1. The calculation of loss per share is based on the loss of #7,326,065 (2005: #4,635,992) and on 77,862,312 Ordinary shares (2005: 66,802,356) in issue. 2. The financial statements have been prepared on the basis of the accounting policies set out in the Group's statutory accounts for 2006. 3. The financial information set out above does not constitute the company's statutory accounts within the meaning of section 240 of the Companies Act 1985. The 2006 figures are based on unaudited accounts for the year ended 31 December 2006. The auditors do not expect to issue a qualified report on the statutory accounts which will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and which will be delivered to the Registrar of Companies following the company's annual general meeting. 4. The 2005 comparatives are derived from the statutory accounts for 2005, except for the prior year adjustments, which have been delivered to the Registrar of Companies and received an unqualified audit report and did not contain a statement under the Companies Act 1985, s237(2) or (3). 5. This statement will be made available online at www.3dmworldwide.com and copies will be made available at the Company's registered office, Regent House, 316 Beulah Hill, London, SE19 3HF. 6. Included in Debtors is an amount due of #598,583 by 3DM Group Limited. This amount is not due to be repaid until 31 December 2008. 7. The exceptional item of #1,012,230 is a write off of loans and trade debts which were owed by Silkwood Financial Corporation Inc. and Value Plastics Technologies LLC. 8. The Group has adopted FRS 20, 'Share Based Payment' for the first time. FRS 20 'Share Based Payment' requires the recognition of share based payments at fair value at the date of grant. Prior to the adoption of FRS 20, the Group recognised the financial effect of the share based payment in the following way: when shares and share options were awarded to employees, a charge was made to the profit and loss account based on the difference between the market value of the company's shares at the date of grant and the option exercise price in accordance with UITF Abstract 17 (Revised 2003) 'Employee Share Schemes'. The credit entry for this charge under both FRS 20 and UITF 17 was taken to the share option reserve. In accordance with the transitional provisions of FRS 20 and the latest interpretations thereof, the standard will be applied in the 2006 annual accounts from the relevant effective date, being 1 January 2006. This is different to the manner in which FRS 20 was dealt with in the 2006 interim accounts. This information is provided by RNS The company news service from the London Stock Exchange END FR BDGDLRDBGGRX
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