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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Flight Safety Technologies, | AMEX:FLT | AMEX | Ordinary Share |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
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RNS Number:2804S
Flintstone Technologies PLC
20 November 2003
Embargoed 07:00hrs 20/11/03
FLINTSTONE TECHNOLOGIES PLC
("Flintstone")
Interim Report for the six months Ended 30th September 2003
CHAIRMAN'S STATEMENT
It is with pleasure that I present you with the Interim Report for the first six
months of our year to 30 September 2003. During the period we have seen progress
both in our portfolio of technology investments and within the group itself.
As you will see in the Chief Executive's report, there has been a number of
positive developments and progress made in most of the technologies and in
particular I am pleased to report on the significant achievements made by
Hardide Limited, which is already beginning to present real value to the group.
Cash balances at 30 September 2003 were #963,000 and debtors amounted to
#612,000. These balances should adequately cover the working capital
requirements of the group to March 2006 assuming there are no further
investments into the technology companies. The group's central costs have been
substantially reduced to a gross figure of #279,000 for the first six months of
the year which is further reduced by income to a net central cost of #139,000.
Within the last twelve months we have taken on board one new technology - Ultra
Motor Company Limited - and the power and efficiency capabilities of the
company's versatile electric motor have prompted considerable commercial
interest from manufacturers in the Indian sub-continent. Our strategy is to
develop this technology commercially with one of these corporations.
We continue to use our contacts and partners in Russia to look for further
technologies and we remain confident of securing at least one new technology for
the Flintstone portfolio.
I remain confident that the progress we have seen in the first six months of the
financial year will continue and that the intrinsic asset values of our
investments will continue to grow.
I should like to take this opportunity to thank the employees, advisers and
shareholders for their support during the past six months.
Glyn Hirsch 20 November 2003
Chairman
Business Review
The accounts for the first six months of this financial year reflect the savings
made following the restructuring of our head office and the resulting reduction
in the group's central costs. To demonstrate the significance of these cost
savings I draw your attention to the comparative 'administration expenses'
figure for the six month period ending 30 September 2002. The figure for that
period was #735,000 and did not include any consolidated expenses relating to
the activities of our subsidiary companies. The expenses figure for the first
six months of the current year is #763,000 but #484,000 of that sum represents
consolidated expenses in connection with our subsidiary companies, Firestop
Chemicals Limited and Ultra Motor Company Limited. As a result, the group's true
central costs for the period amount to just #279,000 which is further reduced by
the interest credited and advisory fees charged to our investee companies.
The major increase in our investments during the six month period has been our
further investment in Hardide Limited. At 31 March 2003 we held 45% of Hardide
but following a fundraising round of #1.98m and the acquisition of shares from
third parties, we now hold 45.62% of Hardide's enlarged share capital. We have
been extremely encouraged by the successful fundraising and the progress made by
the company, both in terms of improvements to Hardide's physical infrastructure
and the advancement of its commercial relations. Under the leadership of the
Chief Executive, Jim Murray-Smith, the company has positioned itself to be a
major supplier of metal coatings for customers from a wide range of business
sectors including oil and gas exploration and industrial machinery and we expect
positive results from its recent endeavours.
Firestop Chemicals has made enormous strides in the last nine months to secure
an industrial manufacturing partner in Russia. The consequence of the hard work
at Firestop Chemicals is expected to result in commercial quantities of Noflan
being available in the market place from 1 January 2004. The investors who
subscribed for the preference shares in Firestop Chemicals in 2002 are
considering a follow-on-investment which will require Flintstone to provide a
further #250,000. In view of the recent achievements made by Firestop Chemicals,
we will continue our support for this investment.
Additionally, Flintstone have been supporting Ultra Motor Company beyond its
initial working capital loan and will be seeking to bring in third party
investors between now and the end of the financial year.
There has been a considerable reduction in debtors mainly as a result of the
conversion of loans into equity in Hardide. At 30 September 2003 the group's
fixed assets including investments stood at #4.64m and the net current assets at
#1.45m. The group's cash and debtors balances of #963,000 and #612,000
respectively are sufficient to fund the business for at least the next
two-and-a-half years assuming, in line with the Board's strategy, there will be
no further investments in the technology companies.
Technology Companies
Since I last reported to you on the activities of our investee companies in June
2003, there has been a number of advances both technically and commercially
within the various technologies in the portfolio. In particular, I am pleased to
present to you the progress achieved by Hardide, Firestop and Ultra Motor.
The recent investment in Hardide Limited has enabled the company to move to new
larger premises and complete the installation and commissioning of a new
generation, industrial size, CVD coating machine. The Board of Hardide
anticipates placing an order for a further machine and the financial prospects
and potential for Hardide are more of a reality than at any stage in the
company's development.
The manufacturing agreement due to be signed with a Russian-based chemical
company should ensure that Firestop Chemicals Limited achieves cash breakeven
and profit on a monthly basis within the next twelve months.
There has been further investment in Ultra Motor Company Limited and exhaustive
testing has been carried out at Southampton University. This technology is now
being actively marketed to Indian manufacturers of both bikes and small engines.
To date, there has been considerable interest generated in the technology.
In addition to the other investments, there has been a further equity investment
in Biocote Limited, valuing the company at #2.65m. The company continues to sign
up new licences as it moves towards cash breakeven and profit in early 2005.
The small team at Intellikraft Limited, having moved from their factory in
Cowley and relocated to a smaller unit at Culham, are continuing with the
developmental research and testing on various battery units. The company has
also continued the development of a power piezo application which is currently
being trialled with a multi-national company.
Keronite Limited, the most mature of all our technologies, continues to sell
licences while developing a new generation of high frequency machines using
newly manufactured plant to enable the company to coat larger parts. This will
be of particular interest to the motor industry where, due to its lightweight
properties, magnesium is becoming an increasingly popular material, despite its
susceptibility to galvanic corrosion which can be eliminated by the Keronite
coating process.
New Technologies
As part of the continuing expansion of the investment portfolio held by
Flintstone, we are constantly looking for new technologies to commercialise and
are presently in the final assessment stage with four interesting technologies -
one of which we hope to be able to secure and take forward as a Flintstone
commercialisation project during 2004.
While seeking new technologies we are always alert to the possibilities of
realising an investment in one of our current technologies and we meet regularly
with the Executive Management in those companies to ensure that if there is an
opportunity for a beneficial exit, we are in a position to take it.
David Chestnutt 20 November 2003
Chief Executive
Table of Investment Values (unaudited)
Investee Company Last third party Valuation of Flintstone equity Value of Flintstone
investment in investee shareholding (%) shareholding (#000)
investee company company(1) (preference
shareholding (%))
Biocote Limited May 2003 #2.652m 31.50 812
Firestop Chemicals Limited September 2002 #3.38m 63.46/(31.25) 1,625
Hardide Limited September 2003 #6m 45.62 2,760
Intellikraft Limited(2) November 2001 #24.6m 9.94 600
Keronite Limited February 2003 #10m 16.09 1,650
Ultra Motor Company March 2003 #50,000 80.00 40
Limited(3)
Total(4) 7,487
(1) Valuation based on last price paid for equity, in line with BVCA valuation
methodology.
(2) Since the November 2001 investment, the company has so far failed to deliver
its technology and the value of Intellikraft Limited has been written down
by quoted Venture Capital Trusts to approximately #6m.
(3) The valuation of Ultra Motor Company Limited is recorded at cost.
(4) Fixed assets including intangible assets and investments per the group
balance sheet at cost are #4,647,000
INDEPENDENT REVIEW REPORT TO FLINTSTONE TECHNOLOGIES PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2003 which comprises the group profit and loss
account, group balance sheet, group cash flow statement and the related notes.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information. The other information comprises
only the Chairman's statement and the Proforma group profit and loss account.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.
Liverpool, UK
Registered Auditors
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
Unaudited Unaudited Audited
6 months to 30 6 months to 12 months to 31
September 2003 30 September March 2003
2002
Notes #'000 #'000 #'000
Turnover 74 66 127
Administrative
expenses (763) (735) (1,607)
Operating loss (689) (669) (1,480)
Loss on sale of fixed
asset investments - - (9)
Income from other fixed
assets investments 6 - -
(Loss)/profit on
ordinary activities
before investment
income, interest and
taxation (683) (669) (1,489)
Other interest
receivable 60 29 90
(Loss)/profit on
ordinary activities
before taxation (623) (640) (1,399)
Taxation on loss on
ordinary activities - - -
(Loss)/profit on
ordinary activities
after taxation (623) (640) (1,399)
Minority interest:
equity 148 - 126
(Loss)/profit for the
financial year
attributable to members
of the parent company (475) (640) (1,273)
(Loss)/profit per
share: basic and
diluted (pence per
share) 2 (1.0) (1.9) (3.1)
There are no recognised gains or losses other than the loss for the period.
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER 2003
Unaudited Unaudited Audited
30 September 30 September 31 March
2003 2002 2003
Notes #'000 #'000 #'000
Fixed assets
Intangible assets 1,221 - 1,252
Tangible assets 82 22 16
Investments 3 3,344 1,355 2,441
4,647 1,377 3,709
Current assets
Debtors 612 1,296 1,410
Cash at bank and in hand 963 2,495 1,688
1,575 3,791 3,098
Creditors: amounts falling due
within one year (125) (190) (87)
Net current assets 1,450 3,601 3,011
Net assets 6,097 4,978 6,720
Capital and reserves
Called up share capital 2,378 2,093 2,378
Share premium reserve 6,518 5,007 6,518
Merger reserve 147 147 147
Profit and loss account (3,377) (2,269) (2,902)
Total shareholders' funds 4 5,666 4,978 6,141
Equity minority interest (669) - (521)
Non equity minority interests 1,100 - 1,100
6,097 4,978 6,720
The interim financial report was approved by the board of directors on 19
November 2003 and was signed on their behalf by:
D M A Chestnutt
Director
GROUP CASH FLOW STATEMENT
AT 30 SEPTEMBER 2003
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002
Notes #'000 #'000 2003
mot #'000
Cash outflow from
operating activities 5 (712) (964) (3,051)
Returns on investment and
servicing of finance
Interest received 60 29 143
60 29 143
Capital expenditure and
financial investment
Payments to acquire
tangible fixed assets (73) - (10)
Payments to acquire
investments - (770) (719)
(73) (770) (729)
Acquisitions and
disposals
Net cash acquired with
subsidiary undertakings - - 511
Payments to acquire
subsidiary undertakings - - (25)
- - 486
Net cash outflow before
financing (725) (1,705) (3,151)
Financing
Issue of shares - 4,547 5,186
Capital element of finance
lease rental payments
Repayment of loans - (5) (5)
- (421) (421)
- 4,121 4,760
(Decrease)/increase in cash (725) 2,416 1,609
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
1. ACCOUNTING POLICIES
(i) Basis of preparation
The interim report for the six months ended 30 September 2003 and 2002 is
unaudited and does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985. It has been prepared under the historical
cost convention and on a basis consistent with the accounting policies for the
year ended 31 March 2003. The results for the year ended 31 March 2003 and the
balance sheet of that date are an extract from the statutory financial
statements for that year, which have been filed with the Registrar of Companies
and on which the company's auditors gave an unqualified report and did not
contain a statement under Section 237 (2) or (3) of that Act.
(ii) Basis of consolidation
The group financial statements consolidate the financial information of the
company and of its subsidiaries. The financial information for each company in
the group has been prepared to 30 September 2003.
(iii) Investments
Certain investments within the group's investment fund fall within the
definition of associated undertakings, as contained in the Companies Act 1985.
As these investments are held as part of an investment portfolio, in accordance
with FRS9 "Associates and Joint Ventures", they are treated consistently with
other investments in the fund, and consequently are not equity accounted for.
2. EARNINGS PER SHARE
The calculation of basic and diluted loss per share is based on loss of #475,000
for the 6 months ended 30 September 2003 (31 March 2003: loss of #1,273,000, 30
September 2002: loss of #640,000), and on the weighted average number of
ordinary shares in the period of 47,554,000 (31 March 2003: 40,681,671, 30
September 2002: 32,852,544).
3. INVESTMENTS
(a) Subsidiary Undertakings
Company No. of Type of Share Nominal Nature of
Shares Shares Capital Value business
#
Firestop 3,401,456 Ordinary 63% 34,015 Fire retardant
Chemicals chemicals
Ltd
500,000 Preference 31% 500,000
Ultra Motor 40,000 Ordinary 80% 40,000 Electric Motor
Company Ltd Wheel
Technology
Ceraheat Ltd 1 Ordinary 100% 1 Dormant
NOTES TO THE INTERIM REPORT (continued)
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
3. INVESTMENTS (continued)
(b) Other Investments
30 September 31 March
2003 2003
#'000 #'000
Shares
Brought forward 2,019 585
Additions 903 1,443
Amounts written off - (9)
Carried forward 2,922 2,019
Loans
Brought forward 422 422
Carried forward 422 422
Total investments 3,344 2,441
Company No. of Type of Holding Nominal Nature of
Shares Shares % Value business
#
Biocote 696,693 Ordinary 31.50% 697 Powder coating
Limited
Hardide 682,300 Ordinary 45.62% 56,823 Surface
Limited engineering
(heavy metals)
Intellikraft 12,061,124 Ordinary 9.94% 12,061 Piezo-ceramics
Limited based electronic
systems
Keronite 38,731 Ordinary 16.09% 38,731 Surface
Limited engineering
Loan notes 422,462 (light alloys)
NOTES TO THE INTERIM REPORT (continued)
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
3. INVESTMENTS (continued)
Analyses of the aggregate share of the results of all investments falling
within the definition of associates are as follows:
6 months to 6 months to 12 months
30 September 30 September to 31 March
2003 2002 2003
#000 #000 #000
Share of associate profit and loss
account
Turnover 60,130 12,069 50,394
Operating loss (269,680) (209,198)* (465,321)*
Retained loss (269,680) (209,198)* (465,321)*
Share of associate balance sheets
Fixed assets 197,541 251,778 153,928
Current assets 567,825 178,814 107,521
Current liabilities (289,875) (338,744) (456,471)
Net assets/(liabilities) 475,491 91,848 (195,022)
* The comparative figures include the group's share of the retained loss in
Firestop Chemicals Limited for the 6 months ended 30 September 2002 of #
(109,517). This company was an associate investment until the group increased
its shareholding to 63% on 1 October 2002. From this date the company has been
accounted for in the consolidation as a subsidiary undertaking.
As explained in note 1 (iii), as these investments are held as part of an
investment portfolio, they are not equity accounted for.
4. RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Group
(Loss)/profit for the year (475) (640) (1,273)
On issue of shares - 4,547 4,815
On share for share exchange - - 1,528
(Reduction)/increase in (475) 3,907 5,070
shareholders' funds
Opening shareholders' funds 6,141 1,071 1,071
Closing shareholders' funds 5,666 4,978 6,141
NOTES TO THE INTERIM REPORT (continued)
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
Unaudited Unaudited Audited
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Operating loss (683) (669) (1,480)
Depreciation of tangible fixed assets 7 7 16
Increase in operating debtors and
prepayments (105) (228) (1,099)
Increase/(decrease) in operating
creditors and accruals 38 (74) (520)
Amortisation of goodwill 31 - 32
Cash outflow from operating
activities (712) (964) (3,051)
PROFORMA GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
A proforma group profit and loss account has been prepared to illustrate the
results for the period excluding Firestop Chemicals Limited and Ultra Motor
Company Limited. These investee companies are included in the consolidated
results on pages 4 and 5 but are not viewed as part of the trading activities of
the parent company.
Unaudited - 6 months to 30 September
2003
Parent Subsidiary Group
company undertakings P&L
(note 1) (note 2) account
#'000 #'000 #'000
Turnover 74 - 74
Administrative expenses (279) (484) (763)
Operating loss (205) (484) (689)
Income from other fixed assets
investments 6 - 6
(Loss)/profit on ordinary activities
before investment income, interest and
taxation (199) (484) (683)
Other interest receivable 60 - 60
(Loss)/profit on ordinary activities
before taxation (139) (484) (623)
Taxation on loss on ordinary activities - - -
(Loss)/profit on ordinary activities
after taxation (139) (484) (623)
Minority interest: equity - 148 148
(Loss)/profit for the financial year (139) (336) (475)
Note 1 - this column includes the results of Flintstone Management Services
Limited and CFB (Isle of Man) Limited, subsidiaries of Flintstone Technologies
plc.
Note 2 - this column represents the results for the period of Firestop Chemicals
Limited and Ultra Motor Company Limited; investee companies not viewed as part
of the trading activities of the parent subgroup.
This page does not form part of the financial information on which the auditors'
review opinion is expressed.
For further information please contact:
David Chestnutt 0151 706 0626
Flintstone Technologies plc www.flintstoneplc.com/
Andrew Tan Tel: 020 7245 1100
Hansard Communications
This information is provided by RNS
The company news service from the London Stock Exchange
END
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