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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Virotec Intl | LSE:VTI | London | Ordinary Share | GB00B15PVR02 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:6242S Virotec International PLC 18 April 2008 VIROTEC INTERNATIONAL PLC ("Virotec" or the "Group") PRELIMINARY RESULTS ANNOUNCEMENT 18 April 2008 CHAIRMAN'S STATEMENT Dear Shareholders I am pleased to present the Group's financial report for the year ended 31 December 2007. The Group achieved revenue for the year ended 31 December 2007 of AUD$3.52 million compared with AUD$1.57 million for six months ended 31 December 2006. The loss for the year was AUD$13.4m, compared to a loss of AUD$7.6m for the six months ended 31 December 2006. The comparative information provided is only for the six month period to 31 December 2006 due to the change in the financial reporting period from the end of June to the end of December as a consequence of the change of domicile of the Group to the United Kingdom ("UK"). The Group's balance sheet for the year remains strong with net assets of AUD$17.4m, limited borrowings and significant investments in two listed companies (Hydrodec Group plc and The Greenhouse Fund Limited). These are recorded at their book value in the balance sheet of AUD$9.7m whilst their current market value is in excess of AUD$60m. The cash balance at the year end was AUD$0.4m. This does not include approximately AUD$2m relating to the sale of Hydrodec Group plc shares in December 2007, which was accounted for as a receivable at year end and subsequently received in January 2008. The Group continued to provide environmental remediation and waste treatment services through the application of Group patented technologies in the following areas: Environmental Remediation * ViroMineTM Technology - applications developed for the mining industry. * ViroSoilTM Technology - applications developed for the agricultural, fertiliser and aquaculture industries. Drinking Water, Wastewater and Solid Waste Treatment * ViroFlowTM Technology - applications developed for the treatment of drinking water and wastewater and solid waste from industrial sites. * ViroSewageTM Technology (referred to as ViroFilterTM Technology in the UK) - applications developed for the sewage industry. The Group's operations are conducted in three geographic areas: Australia and Asia, Europe and the United States of America ("USA"). Australia and Asia In Australia and Asia, the Group's environmental remediation operations continued to grow, with a record year in terms of revenue. The revenue for the region for the year ended 31 December 2007 year was AUD$2.16m, compared with AUD$0.89m for six months ended 31 December 2006. The Group has operated for the longest period in the Australian market which has been the proving ground for its core technologies. The various environmental remediation and waste treatment applications have been commercially developed in Australia which has proven the viability of the aforementioned technologies. The Group now has significant market presence and forward orders in this region and will continue to increase both its revenue and profitability in the coming year. In March 2008, Virotec announced a significant new contract to supply solid waste treatment services to Nyrstar Hobart Pty Ltd (formerly part of Zinifex Ltd) using its ViroFlowTM Technology. The contract is to treat mercurous filter cake and is expected to generate up to AUD$3.5m in revenue in 2008. Work on the contract has commenced and is expected to be completed by the end of the third quarter of 2008. Europe In Europe, the primary focus to date has been within the UK. The revenue for the year ended 31 December 2007 was AUD$0.56m compared to AUD$0.55m in the six months ended 31 December 2006. Initially, the Group targeted water companies with its ViroFilterTM Technology for phosphate removal from municipal wastewater. This technology had been successfully trialled by an independent body, the Water Research Council, and has now been verified by one of the UK's largest water companies. Due to customer budgetary cycles, this part of the market has taken longer than expected to penetrate. During the year, a new general manager for the UK operations was appointed and the business is now expanding into other areas of waste treatment, including hazardous solid waste management, that have been successfully realised in Australia and which are expected to generate more immediate sales in the UK. The operations in Italy have been scaled back, with a view of finding a licencee to look after the sales and marketing effort in the region. All production assets from Italy have been transferred to the USA where production for all geographical regions will be now based. United States of America The revenue in the USA for the year ended 31 December 2007 was AUD$0.8m compared to AUD$0.13m for the six months ended 31 December 2006. The USA is considered to be our largest target market and three key industries have been identified for near-term focus by the Group. 1.Drinking Water from Wells - The Group has spent a significant amount of time addressing the regulatory issues associated with drinking water, particularly where contaminants include radium, uranium, gross alpha and/or arsenic. The Group has two ViroFlowTM Technology filter systems installed at the date of this report. 2.Phosphate Removal from Concentrated Animal Feeding Operation (CAFO) Lagoons - In June 2007, the Group was contracted to treat 13 lagoons for the largest hog farmer in the world. The treatments have been completed and it is expected that further contracts to treat additional lagoons will follow. These results will allow part of our ongoing sales efforts to target other CAFOs. 3.Wastewater Treatment Plants - To date a number of wastewater treatment plants have been contracted to use ViroFlowTM Technology to treat their waste lagoons for phosphate and odour reduction. These treatments have been successful and the Group now has important reference sites to demonstrate the effectiveness of the technology to other companies in the region. In 2007 the sales effort in the USA was based in Colorado and also South Carolina, where the Group operated through its 66% owned joint venture, Virotec Aquasolve. Due to the disappointing result in 2007 an extensive review of the operations was conducted by the Group. Following this review the Board dismissed existing management of Virotec Aquasolve and commenced proceedings against them to recover assets which they consider to be misapplied. The majority of fixed assets have been secured and the remaining assets for which recovery is sought are not material in the context of the Group as a whole. Nevertheless, this has delayed the benefits of our sales efforts by several months. Following the restructuring, all USA operations are now being managed directly by CEO, Dr Lee Fergusson on a headcount of five employees, and they are now both financially and operationally structured to more closely resemble Virotec's Australian operations, which are trading profitably. Investment in Associate Virotec holds 54,500,000 ordinary shares in Hydrodec Group plc ("Hydrodec") representing 28.1 per cent. of its issued share capital. In addition, under a royalty agreement, Virotec is entitled to receive five per cent. of revenues generated by the Hydrodec technology. At present, production of Hydrodec's SuperfineTM transformer oil at its Australian facility is at near full capacity and demand continues to be strong, driven primarily by an export order from a Turkish distributor which was announced on 8 November 2007. On 29 January 2008, Hydrodec announced it had made progress in the USA with the construction of its first production plant in Ohio. A decision was also made to accelerate the planning and construction of a second plant in Mississippi, which is expected to be fully operational by the third quarter of 2009. In a trading update announced on 28 February 2008, Hydrodec stated that it had reached a price agreement with, and secured a conditional commitment from a transformer oil buyer in the US to purchase more than 50 per cent. of the maximum production capacity of the Ohio plant, plus a firm expression of interest in increasing purchase quantities upon the commissioning of the Mississippi plant. On 11 March 2008, Hydrodec announced its preliminary results for the year to 31 December 2007 which showed a pre-tax loss of £2.3m (2006: £2.8m) and a decrease in net operating cash outflow to £0.6m (2006: £2.1m). Investment Virotec holds 30,000,000 ordinary shares in The Greenhouse Fund Limited ("Greenhouse") representing approximately 20 per cent. of its issued share capital. Greenhouse is a Jersey domiciled, closed-ended investment company established to invest principally in sustainable environmental technologies to create a portfolio of investment holdings in the Environmental Sector. Since inception Greenhouse has invested in the Environmental Sector acquiring five BauxsolTM Technology sub-licences from Virotec and now owns approximately 57 per cent. in Molectra Australia Pty Ltd, which is licensed to commercialise an advanced technology based on a sustainable process that re-cycles used vehicle tyres and recovers materials from them, including crumb rubber, oil and carbon. As a result of a conservative accounting treatment this investment has been written down to market value at 31 December 2007 resulting in an impairment loss of AUD$3.5m being recorded in the current year. Dividend The Directors do not propose the payment of a dividend as they believe their resources will provide a greater return by being re-invested in its business operations. Bid Approach As advised to the market on 30 January 2008, Virotec was approached in relation to proposals that might result in an offer being made for the Company. On 4 April 2008, Virotec confirmed that discussions were on-going with one party, and that Hydrodec had informed Virotec that it had purchased 7.75m shares (2.93 per cent. of the issued share capital) and noted its intention to make an offer at around 12p for the Company and that it had support of shareholders holding just below 30 per cent. of the issued share capital. Hydrodec announced that it had increased its holding to just over 3 per cent. and that its all share offer would be on the basis of 1 Hydrodec share for every 3.75 Virotec shares. Further it stated that it was seeking the recommendation of the Virotec Board. Virotec is progressing these discussions at a good pace and the Board of Virotec hopes to be in a position to enable proposals to be put before shareholders as soon as due diligence and the legal requirements have been completed. Yours sincerely Brian Sheeran Executive Chairman VIROTEC INTERNATIONAL PLC Consolidated Balance Sheet (Unaudited) As at 31 December 2007 31 December 2007 31 December 2006 AUD$'000 AUD$'000 Assets Property, plant and equipment 5,366 6,019 Investments in equity accounted 2,916 5,396 investees Investments 6,800 9,680 Trade and other receivables 450 521 ---------- ---------- Total non-current assets 15,532 21,616 ---------- ---------- Inventories 1,031 1,475 Trade and other receivables 3,522 1,955 Cash and cash equivalents 391 3,283 ---------- ---------- Total current assets 4,944 6,713 ---------- ---------- Total assets 20,476 28,329 ---------- ---------- Equity Share capital 6,535 5,959 Share premium reserve 8,140 - Other reserves 101,441 105,944 Deficit (98,732) (86,890) ---------- ---------- Total equity 17,384 25,013 ---------- ---------- Liabilities Interest-bearing loans and borrowings 290 551 Provisions 731 690 ---------- ---------- Total non-current liabilities 1,021 1,241 ---------- ---------- Interest-bearing loans and borrowings 392 139 Trade and other payables 1,556 1,705 Employee benefits 98 206 Provisions 25 25 ---------- ---------- Total current liabilities 2,071 2,075 ---------- ---------- Total liabilities 3,092 3,316 ---------- ---------- Total equity and liabilities 20,476 28,329 ---------- ---------- VIROTEC INTERNATIONAL PLC Consolidated Income Statement (Unaudited) For the year ended 31 December 2007 Year ended Six months ended 31 December 2007 31 December 2006 AUD$'000 AUD$'000 Revenue 3,522 1,570 Cost of sales (1,924) (1,053) ----------- ---------- Gross profit 1,598 517 Gain on disposal of shares 2,262 - Other income 101 33 Impairment loss on investments (3,543) - Sales and marketing expenses (5,509) (2,681) Administrative expenses (6,660) (4,195) ----------- ---------- Loss from operating activities (11,751) (6,326) ----------- ---------- Financial income 158 204 Financial expenses (77) (31) ----------- ---------- Net financing income 81 173 ----------- ---------- Share of loss of associate (1,699) (1,412) ----------- ---------- Loss before tax (13,369) (7,565) Taxation - - ----------- ---------- Loss after tax (13,369) (7,565) ----------- ---------- Attributable to: Equity holders of the parent (13,369) (7,565) Minority - - ----------- ---------- Loss for the year (13,369) (7,565) ----------- ---------- Earnings per ordinary share: Basic earnings per share (AUD $) (0.052) (0.032) ----------- ---------- VIROTEC INTERNATIONAL PLC Consolidated Statement of Recognised Income and Expense (Unaudited) For the year ended 31 December 2007 Year ended Six months ended 31 December 2007 31 December 2006 AUD$'000 AUD$'000 Foreign currency translation (2,105) (420) differences for foreign operations Net change in fair value of 1,298 (1,298) available-for-sale financial assets ---------- ----------- Income and expense recognised (807) (1,718) directly in equity Loss for the year (13,369) (7,565) ---------- ----------- Total recognised income and expense (14,176) (9,283) for the year ---------- ----------- Attributable to: Equity holders of the Company (14,176) (9,283) Minority interest - - ---------- ----------- Total recognised income and expense (14,176) (9,283) for the year ---------- ----------- VIROTEC INTERNATIONAL PLC Consolidated Statement of Cash Flows (Unaudited) For the year ended 31 December 2007 Year ended Six months ended 31 December 2007 31 December 2006 AUD$'000 AUD$'000 Cash flows from operating activities Cash receipts in the course of operations 2,080 1,035 Cash payments in the course of operations (9,100) (7,049) ----------- ---------- Cash absorbed by operations (7,020) (6,014) Interest received 158 205 Interest paid (77) (11) ----------- ---------- Net cash flows from operating activities (6,939) (5,820) ----------- ---------- Cash flows from investing activities Proceeds from sale of property, plant and 21 20 equipment Acquisition of property, plant and equipment (557) (2,395) ----------- ---------- Net cash flows from investing activities (536) (2,375) ----------- ---------- Cash flows from financing activities Proceeds from the issue of share capital 4,984 - Share issue costs (216) - Repayment of borrowings (185) - Increase in borrowings - 666 ----------- ---------- Net cash flows from financing activities 4,583 666 ----------- ---------- Net decrease in cash and cash equivalents (2,892) (7,529) Cash and cash equivalents at 1 January 3,283 10,812 ----------- ---------- Cash and cash equivalents at 31 December 391 3,283 ----------- ---------- VIROTEC INTERNATIONAL PLC Notes to the Consolidated Financial Statements 1. BASIS OF PREPARATION The preliminary result statement has been prepared on the basis of the same accounting policies as those set out in the financial statements for the year ended 31 December 2006. These summarised consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU under the historical cost convention. They are presented in Australian dollars, which is the functional currency of the group because the significant events of the current and prior period occurred in Australian dollars. The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 2. SEGMENT REPORTING Business segments The Group has operated within one business segment in all financial periods being environmental services - the provision of solutions to industry for the treatment of contaminated water and soil. The Group also retains mining tenements, however as they represent less than 10% of the Group's assets, are not considered significant, and are therefore not reported separately. Geographical segments The environmental services segment is managed on a worldwide basis, and has operated in three principal geographical areas: * Australia and Asia; * Europe; and * United States of America. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets. Australia and Asia USA Europe Consolidated 31 December 2007 AUD$'000 AUD$'000 AUD$'000 AUD$'000 Revenue 2,164 800 558 3,522 --------- --------- --------- --------- Segment assets 7,324 5,441 7,711 20,476 --------- --------- --------- --------- Capital expenditure 151 411 40 602 --------- --------- --------- --------- 31 December 2006 Revenue 890 127 553 1,570 --------- --------- --------- --------- Segment assets 19,913 6,418 1,998 28,329 --------- --------- --------- --------- Capital expenditure 76 2,283 36 2,395 --------- --------- --------- --------- 3. SHARE CAPITAL AND RESERVES Number of Nominal Value Share Premium Merger Reserve Ordinary Shares Reserve Issues AUD$'000 AUD$'000 AUD$'000 Issued on incorporation 2 - - - Shares issued to 240,162,440 5,959 - 96,417 acquire Virotec International Ltd --------- ------- -------- ------- Balance at 31 240,162,442 5,959 - 96,417 December 2006 --------- ------- -------- ------- Balance at 1 240,162,442 5,959 - 96,417 January 2007 17,350,000 17,350,000 415 4,569 - ordinary shares of 1p issued for cash at a price of 12p per share 6,655,789 6,655,789 161 3,798 - ordinary shares of 1p issued under executive share plans at a price of AUD$0.60 per share Capital raising costs - - (227) - --------- ------- -------- ------- Balance at 31 264,168,231 6,535 8,140 96,417 December 2007 --------- ------- -------- ------- Authorised issued and fully paid share capital 2007 2006 AUD$'000 AUD$'000 Authorised share capital 900,000,000 ordinary shares of 1p each 22,332 22,332 --------- ---------- Called up, allotted and fully paid 264,168,231 6,535 5,959 ordinary shares of 1p each --------- ---------- As at 31 December 2007 the Company has also granted a total of 10,860,000 options (2006: 11,310,000 options). Share Share Merger Trans- Fair Share Retained Total Min- Total capital premium reservelation value based earnings ority Equity reserve reserve res. payments interest reserve AUD AUD AUD AUD AUD AUD AUD AUD AUD AUD $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000$'000 $'000 Effect of - -102,376 155 - 9,771 (79,325)32,977 47 33,024 reverse acquisition Total - - - (420)(1,298) - (7,565)(9,283)(47)(9,330) recognised income and expense Equity settled - - - - - 1,319 - 1,319 - 1,319 transactions Share issues 5,959 -(5,959) - - - - - - - --------------------------------------------------------------- Balance at 31 5,959 - 96,417 (265)(1,298) 11,090 (86,890) 25,013 - 25,013 December 2006 --------------------------------------------------------------- Balance at 1 5,959 - 96,417 (265)(1,298) 11,090 (86,890) 25,013 - 25,013 January 2007 Total - - - (2,105)1,298 - (13,369)(14,176)-(14,176) recognised income and expense Equity settled - - - - - 434 1,357 1,791 - 1,791 transactions Share issues 576 8,140 - - - (4,130) 170 4,756 - 4,756 -------------------------------------------------------------- Balance at 31 6,535 8,140 96,417 (2,370) - 7,394 (98,732) 17,384 - 17,384 December 2007 -------------------------------------------------------------- 4. EARNINGS PER SHARE The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Year ended Six months ended 31 December 2007 31 December 2006 Weighted average number of ordinary shares used in the calculation 257,983,256 240,162,442 of basic earnings per share --------------------------------------- The options outlined in Note 3 are potential ordinary shares which were not considered dilutive at 31 December 2007 or 31 December 2006. 5. ANNUAL REPORT Copies of the annual report and accounts will be sent to shareholders in the near future and will be obtainable from the Company's head office and from its website at www.virotec.com. 6. STATUS OF THIS REPORT The preliminary results for the year ended 31 December 2007 are unaudited. The financial information included in this statement does not constitute the Group's statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2007 will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and will be delivered to the Registrar of Companies in due course. The information given as the comparative figures for the six months ended 31 December 2006 do not constitute the Group's statutory accounts for this financial period. Statutory accounts for the six months ended 31 December 2006, prepared in accordance with International Financial Reporting Standards as adopted by the European Union have been reported on the by the Group's auditors. The report of the auditors was unqualified and did not contain a statement under Section 237 (2) and (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange END FR IPMRTMMTBMTP
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