Interim Management Statement (4720W)

TIDMNTX

RNS Number : 4720W

NXT PLC

19 November 2010

19 November 2010

NXT plc

Interim Management Statement

NXT plc ("NXT" or the "Company"), developer of products utilising its bending wave technology, is today issuing its Interim Management Statement for the period 1 July 2010 to 18 November 2010 in accordance with the requirements of the Disclosure and Transparency Rules of the UK Listing Authority.

July to October 2010

The period was dominated by the restructuring of the organisation, with the introduction of a new business model and a significant fundraising, following the previous year's poor financial performance.

The fundraising comprised a GBP5.5 million placing and firm placing with institutions, and a GBP2.5 million open offer to existing shareholders which was significantly over-subscribed. The aggregate proceeds of the fundraising were approximately GBP7.2million after expenses. The directors would like to express their thanks to all investors who participated in this round.

The restructuring is now largely complete, and the employee headcount has been reduced to 24 people. New employees are now being recruited to fill key roles that will enable the Company to execute its new business model, commencing with the recent appointment of a new Financial Controller.

The change in business model will see the Company transitioning to sales of components that exploit its IP and know-how rather than only licensing IP to third parties who may choose when and how to exploit it. Under the latter model financial planning is precarious, whereas the new business model of component sales generating revenues with gross profit margins enables far greater clarity and control.

The directors are confident that the Company's new business model is already enabling it to engage strongly with potential customers in the audio sector who recognise the benefits that the combination of its Audium amplifier and its BMR speaker technologies can deliver. Access to the burgeoning haptics market has been strengthened with the development of the haptics control module that greatly simplifies the design challenges faced by our prospective customers.

November 2010

In the month since the AGM the Company has quickly settled into the new structure with the team focused and committed to the business plan.

The Audio business unit has received the first two purchase orders for Dyad platforms (two BMR drivers plus one Audium chip). The components are expected to be shipped in December 2010 and be incorporated into end products to be on shelves in the New Year.

The complexity of chip manufacturing as well as BMR assembly means that forward planning is key as lead times are lengthy. The significant forward commitment from Trilinq announced in October enables NXT to work closely with its supply chain, and the strengthening partnership is enabling shorter lead times and implementation of cost reductions.

The Haptic business unit has been focusing on the route to commercialisation for bending wave haptics. Initial feedback from customers on the recently announced haptic module is positive, and evaluation kits are enabling our engineers to fully evaluate and optimise performance.

A new website that will target the Company's technology and products firmly at engineers and decision makers in prospective customers will be launched before the end of December.

The Board composition is being addressed, with the need for two non-executive directors and the announcement by Ian Buckley, Chairman that he will be stepping down from his position when a suitable new Chairman has been appointed. First-round interviews have taken place and the search is well advanced for the first appointment.

Cash at bank at 15 November was approximately GBP6 million. The utilisation of funds received from the fundraising was as previously indicated.

The cash generated by the recent funding round has put the Company into a position of security from which it can execute its plan for growth.

Revenue for the period was in line with expectations, being lower than the same period in 2009 due to the continued decline from licensing and royalties. Royalties from the legacy business for automotive exciters and BMRs in TVs, however, are continuing to make a useful contribution to income. Component sales are doing well, and revenues from the first Audio platform sales are ahead of schedule and will feature in the results for current period.

For further information please contact:

NXT plc:

 
 James Lewis, CEO   Tel: [phone] 
 

Singer Capital Markets Ltd

 
 Claes Spang   Tel: [phone] 
 

Media enquiries:

Allerton Communications

 
 Peter Curtain   Tel: [phone] 
 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS:

This announcement contains certain forward-looking statements which may include reference to one or more of the following: the Company's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters. Statements in this announcement that are not historical facts are hereby identified as "forward-looking statements". Such forward-looking statements, including without limitation, those relating to future business prospects, revenue liquidity, capital needs, interest costs and income, in each case relating to NXT, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of NXT and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, the terms and conditions of NXT's financing arrangements, foreign currency rate fluctuations, competition in NXT's principal markets, acquisitions or disposals of businesses or assets and trends in NXT's principal industries.

These forward-looking statements speak only as at the date of this announcement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, NXT does not have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, NXT expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in NXT's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur.

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