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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| TruSpine Technologies Plc | AQSE:TSP | Aquis Stock Exchange | Ordinary Share | GB00BMZCKL55 | Ordinary shares |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.625 | 0.40 | 1.90 | 1.15 | 0.575 | 0.625 | 0.00 | 16:29:56 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Telspec PLC
12 March 2003
12 March 2002
Telspec plc - final results
Preliminary announcement for the year ended 31 December 2002
Telspec plc, the telecommunication equipment company, announces preliminary
results for the year ended 31 December 2002.
(#'000) 2002 2001 change
Turnover 40,426 41,482 -2.5%
Operating profit/(loss) before
exceptional items 1,095 -902 221%
Stock provisions - -1,230
Release of sales provision - 478
Operating profit/(loss) 1,095 -1,654
Net interest payable -49 -267
Profit/(loss) before tax 1,046 -1,921 154%
Basic earnings/(loss) per share (p) 2.55 -4.81 153%
Diluted earnings/(loss) per share (p) 2.53 -4.81 153%
Net funds/(debt) 1,302 -1,192
Summary
* A PBT of #1.0m (2001:loss of #1.9m) in line with market expectations.
* Net debt eliminated to give a net cash surplus of #1.3m.
* International Access sales up 26%.
* Gross margin up 2.5%.
* EBITDA of #2.6m (2001:loss of #0.3m)
* Operating costs decreased by #1.5m.
* Stocks reduced by a further 30% during the year.
Commenting on the results, Magnus Braxell, Chief Executive said:
" The return to profitability in 2002 was mainly due to the success of TelMax
and the focus on cost efficiency in the Group. With the continued turmoil in the
market, Telspec will continue to balance the Group cost base with the level of
available business and the need to continue product development to ensure the
long term success of the Group."
Enquiries:
Magnus Braxell Telspec Seb Hoyle Citigate Dewe Rogerson
CEO Toby Mountford Citigate Dewe Rogerson
Tel: +44 (0) 1634 687133 Tel: +44 (0) 207 638 9571
Martin Parmenter Telspec
CFO Simon Bennett Credit Lyonnais Securities
Tel: +44 (0) 1634 687133 Tel: +44 (0) 207 588 4000
Chairman's statement
The profit before taxation for the year ended 31 December 2002 was #1.0m,
compared with a loss of #1.9m for the previous year. Sales were down to #40.4m
in 2002 (2001: #41.5m), the fall coming principally from lower volumes of our
switching product.
Basic earnings per share were 2.55p, compared with a loss of 4.81p in the
previous year.
The balance sheet has strengthened with net current assets of #5.0m at 31
December 2002 up from #3.2m at 31 December 2001, and net funds of #1.3m at the
year end compared to net indebtedness of #1.2m at the end of 2001.
TelMax, our international pair gain product range, is now firmly established and
producing significant orders from a number of markets. The OEM relationship with
Siemens also generated its first significant deliveries during the year.
The sales, via Myacom, of the ISDN NTU to BT (known as Highway) continued
strongly during the year following the introduction of a new generation of
product in October 2001.
Last year we expected volume deliveries under the contract with BT for the new
generation SDSL access platform eNode to begin in the summer of 2002. At the
time of our interim report we expected deliveries of a revised product to begin
in the summer of 2003. We announced, however, on 5 February 2003 that BT has
now decided not to introduce this product. In accordance with our normal
accounting policies, all development costs related to this project were written
off as incurred.
The 40-node BT RIDE platform, which delivers televoting and mass calling
applications, based upon the Group's IPS switching solution, advanced service
provisioning and a management system, was successfully commissioned during the
year. We continue to work on enhancements.
With no improvement in market conditions generally, prospects for traditional
switching products have continued at a low level. We do, however, continue to
promote these and our DISP products to potential customers around the world.
Further work has continued during the year on improving our manufacturing cost
effectiveness and keeping our cost base in line with the current business.
Dividends
No dividend is proposed in respect of 2002 (2001: #nil).
Cash flow and Capital employed
We continued to maintain our focus on capital employed and cash management
during the year such that we eliminated net debt by midyear. The Group moved to
a net funds balance of #1.3m (2001: #1.2m net debt) at year-end. It is our
intention to maintain this emphasis.
Board
In June 2002 Martin Parmenter was appointed Group Finance Director. Richard
Bingham, who had been Interim Group Finance Director and Chief Operating
Officer, became a non-executive director while the handover was completed.
Richard resigned from the Board in December and the Board expresses its thanks
for his significant contribution.
Martin has twenty years' experience in senior financial positions in the
professional electronics industry and this experience is already bearing fruits
across the business.
In May 2002 Shiv Rakkar retired from an executive role and became a
non-executive Director. Having returned to live in Australia, Shiv is to retire
at the conclusion of the forthcoming Annual General Meeting and the Board is
very appreciative of his contribution over recent years.
Staff
As ever we appreciate the loyalty and dedication of our staff, who form a key
element in the design, selling and delivery of our solutions to our customers.
Outlook and prospects
BT's decision not to introduce the eNode product has reduced our expectations
for sales of access products during the current period and in current market
conditions, it will be difficult to fill the gap entirely with extra sales of
our TelMax product. Prospects for our switching business depend on our ability
to win new business, in what remains challenging market conditions. The Group's
return to profitability has been a significant achievement and our focus will
remain unchanged given the current economic and political uncertainties.
Peter Espenhahn
Non-executive Chairman
11 March 2003
Chief Executive's Review
Introduction
Telspec's offerings to the market include Access Solutions and Switching
Solutions. Principal customers are BT in the UK and PTTs throughout the world.
Increased sales of new products and our continuing focus on cost control have
been a major factor in the Group reporting profit before taxation of #1.0m for
2002 (2001:loss of #1.9m).
These new products were our pair gain product, Telmax, which strengthened its
position in international markets, and the new version of the Network
Termination Unit (NTU) which is sold via Myacom to BT. There were, however, no
sales of our eNode product, developed for BT and which BT has now decided not to
deploy. Sales of our Switching products were reduced as the RIDE contract for BT
was substantially completed, resulting in a fall in Group turnover to #40.4m
(2001: #41.5m). Other Switching sales consisted mainly of additional sales to
existing customers.
Telspec's strategy continues to be the development of new products at the
forefront of technology in order to maintain our competitive advantage, and to
market these via our established sales network throughout the world.
Product Portfolio
Telspec works in close co-operation with its customers and partners to offer
competitive solutions. The group has offerings in copper access solutions,
Switching, Intelligent Networks and VoIP.
The portfolio is being extended to increase its attractiveness to customers,
Telspec is giving high priority to the establishment of new solutions built on
advanced, state of the art technology. Whilst maintaining our established
research and development spend, we also source certain third party products as
and when such products will enable a more complete solution to be provided to
customers.
Broadly in line with the level of spending in recent years, Telspec spent #5.3m
in the year on research and development amounting to 13% of turnover, split
approximately evenly between Access and Switching. A substantial part of the
spending is customer funded software development for Switching applications.
Sales
Group sales were down by 3 per cent at #40.4 m (2001: #41.5m) principally due to
RIDE moving into the commissioning phase and the lead time to the next major
DISP contract.
Access Solutions
Sales revenue in the Access business increased 23% in 2002 to #36.0m (2001:
#29.2m) and accounted for 89% (2001: 70%) of Group revenues.
The increase in Access revenues reflects portfolio changes and the success of
TelMax and NTU products. The sales of DACS fell as a result of reduced demand
from BT.
TelMax
The TelMax digital pair gain solutions promote the efficient use of existing
copper infrastructure. They electronically boost the communication capacity so
that a single copper subscriber line can carry up to 12 separate telephone
channels. This allows extra subscribers to be added to the telephone network
without requiring the installation of new copper for each new subscriber. The
product range has achieved considerable success in a very competitive market.
Our competitiveness is being further enhanced by adding new products into the
range, such as the TelMax IP version and the latest addition, TelMax-X, a
flexible E1 extender, based on standard G.shdsl technology. Both should assist
us in developing business with existing and new markets.
Some notable successes are described below.
Egypt
During 2002 we won further orders for 200,000 lines of Telmax product, on top of
the first 100,000 lines awarded in 2001. This is one of the fastest
installation plans of any market in the world for pair gain equipment. With
additional orders already secured for 2003, this is the single largest market
for our Access products and we are well placed to develop it further throughout
the year.
Costa Rica
The contract with ICETEL, the telecoms operator in Costa Rica, was important for
the business. In recent years 60,000 lines of product have been delivered to the
market.
Iran
Iran was the first success in our co-operation with Siemens and took our
products into another Middle East market. As part of a long-term contract, we
delivered 71,000 lines of TelMax equipment in the year, which has proved to be a
very reliable and popular solution for reducing the long waiting list of
subscribers. Further prospects are being developed in what is a very large, if
competitive, market.
Kazakhstan
With the support of an ECGD funded finance package we were successful in winning
another contract with Kazak Telecom to supply over 30,000 lines of TelMax during
the year. This builds on the success of an earlier contract won in 2001 and
positions us as the leading pair gain supplier to the country.
These and many other market achievements reinforced our position as a leading
supplier of pair gain technology.
eNode
Telspec has worked with BT over a number of years on a technology enhanced and
cost reduced replacement for DACS. It is disappointing to report that, due to a
change in BT strategy announced in February 2003, eNode will not now be adopted
by BT.
TelNode
Development of TelNode, Telspec's multi-service Access platform continues.
TelNode is designed as a very flexible product offering ADSL and G.shdsl line
interfaces, ATM and IP back haul, and can evolve to provide VoDSL solutions.
TelNode addresses the market for the smaller low cost DSLAM to deliver rural
ADSL broadband solutions and will provide a low cost of entry solution for
network operators. TelNode's evolution path to IP networks and VoIP telephony
will place us in a good position when the next generation of telephone networks
arrive.
Network Terminating Units (NTU)
The enhanced Highway product, offering USB connection to the home computer, was
successfully introduced to BT in October 2001. Further development and delivery
of the product is the responsibility of Myacom Limited in which Telspec holds a
19.9% stake and Myacom is expected to release a further enhanced version during
2003.
Switching Solutions
Our Switching solutions business is focused on serving specific market segments
for network and service providers. Sales revenue in the Switching business fell
in 2002 to #4.4m (2001: #12.3m) and accounted for 11% of Group revenue (2001:
30%).
The portfolio has been broadened with new solutions based on in house design and
sourced products to create a complete offering including: TDM transit nodes, the
DISP Intelligence Platform, Softswitches and Media Gateways to integrate into
the IP standards.
DISP provides premium rate services in the public telephone network and is
particularly suitable for Mass Calling applications such as televoting.
Televoting is now well accepted in the UK, but is still developing in many other
countries.
A wide range of enhanced services can be implemented on the DISP platform, from
high-volume number translations (e.g. freephone) to complex interactive services
requiring extensive voice processing, giving Telspec possibilities for ongoing
revenue streams for sales of new functionality beyond initial DISP installation.
The success of our RIDE solution with BT has opened up continuing enhancement
and support business and provides us with an excellent reference to pursue
international markets. Our marketing campaigns have identified a number of
opportunities.
The depressed telecoms market has continued to impact our core switch business,
the IPS transit switch, with only a small number of contracts being won during
the year, reflecting the low level of investment by new operators.
Prospects
We remain convinced that our strategy, which focuses on intelligent access and
Switching solutions, will continue to open up new business opportunities with
existing and new customers. With the new products introduced recently, Telspec
is addressing additional market segments.
The return to profitability in 2002 was mainly due to the success of TelMax and
the focus on cost efficiency in the Group. With the continued turmoil in the
market, Telspec will continue to balance the Group's cost base with the level of
available business and the need for product development to ensure the long term
success of the Group.
Magnus Braxell
Chief Executive Officer
11 March 2003
Consolidated profit and loss account
Year ended 31 December 2002
Note
2002 2001
#'000 #'000
Turnover (including exceptional provision release in 2001 of #478,000) 40,426 41,482
Cost of sales (including exceptional loss on stock write-down in 2001
amounting to #1,230,000) (27,977) (29,754)
Gross profit 12,449 11,728
Distribution costs (2,473) (3,079)
Administrative expenses (9,006) (10,476)
Other income 125 173
Operating profit/(loss) 1,095 (1,654)
Net interest payable (49) (267)
Profit/(loss) on ordinary activities before taxation 1,046 (1,921)
Tax charge on profit/(loss) on ordinary activities (12) (26)
Profit/(loss) retained and taken to reserves 1,034 (1,947)
Basic earnings/(loss) per ordinary share 2 2.55p (4.81p)
Diluted earnings/(loss) per ordinary share 2.53p (4.81p)
No material difference exists between the results calculated on a historical
cost basis and the results shown above.
The turnover and operating profits of the Group are derived wholly from
continuing operations.
Consolidated balance sheet
31 December 2002
2002 2001
#'000 #'000
Fixed assets
Tangible assets 4,494 5,464
Investments 17 17
4,511 5,481
Current assets
Stocks 2,889 4,163
Debtors 6,423 7,638
Cash at bank and in hand 1,662 530
10,974 12,331
Creditors- amounts falling due within one year (5,898) (9,077)
Net current assets 5,076 3,254
Total assets less current liabilities 9,587 8,735
Creditors - amounts falling
due after more than one year - (30)
Provisions for liabilities and charges (1,070) (1,262)
Net assets 8,517 7,443
Capital and reserves
Called up share capital 10,125 10,124
Share premium account 10,419 10,419
Revaluation reserve 687 702
Surplus of nominal value of shares issued over nominal value of
shares acquired (6,930) (6,930)
Other reserves 18 36
Capital redemption reserve 295 297
Profit and loss account - deficit (6,097) (7,205)
Equity shareholders' funds 8,517 7,443
Consolidated cash flow statement
Year ended 31 December 2002
2002 2001
#'000 #'000
Net cash inflow from operating activities 3,190 3,350
Returns on investments and servicing of finance (49) (267)
Taxation - (47)
Capital expenditure and financial investment (562) (469)
Net cash inflow before financing 2,579 2,567
Financing
- issue of ordinary shares 1 -
- net decrease in debt and net lease financing (83) (638)
Net cash outflow from financing (82) (638)
Increase in cash in the year 2,497 1,929
Reconciliation of net cash flow to movement in net debt
Increase in cash in the year 2,497 1,929
Cash outflow from decrease in debt and net lease financing 83 638
Decrease in net debt resulting from cash flows 2,580 2,567
Translation difference (86) (63)
Decrease in net debt in the year 2,494 2,504
Net debt at beginning of year (1,192) (3,696)
Net funds/(debt) at end of year 1,302 (1,192)
NOTES
1. Dividends
No final dividend is to be paid (2001: #nil).
2. Earnings/(loss) per ordinary share
The calculation of earnings/(loss) per ordinary share is based on the result on
ordinary activities after taxation but before ordinary dividends and on the
weighted average number of shares in issue and may be summarised as follows:
2002 2001
Profit/(loss) on ordinary activities after
taxation #1,034,000 (#1,947,000)
Weighted average number of shares in issue 40,500,063 40,495,815
Diluted average number of shares in issue 40,907,027 40,495,815
Basic earnings/(loss) per ordinary share 2.55p (4.81p)
Diluted earnings/(loss) per ordinary share 2.53p (4.81p)
3. Abridged Accounts
The 2002 financial information is an abridged version of the Group's statutory
accounts, which have been prepared under accounting policies consistent with
those applied in the 2001 Group statutory accounts, except for the change in
accounting policy required by FRS 19 'Deferred Taxation' which has not had a
material impact, and which have not yet been filed with the Registrar of
Companies but which have been reported on by the Group's auditors. The 2001
figures are an extract from the Group's statutory accounts for the year ended 31
December 2001 which have been filed with the Registrar of Companies. The
auditors' report for both years was unqualified and did not contain a statement
under Section 237 (2) or (3) of the Companies Act 1985.
4. Copies of this statement are available from the Company's registered
office at 1-5 Lancaster Parker Road, Rochester Airport, Rochester, Kent ME1 3QU.
The annual report and accounts will be sent to shareholders shortly.
Glossary
"ADSL" Asynchronous Digital Subscriber Line. ADSL is the transmission protocol used for
Broadband connection to the internet, particularly for the home user.
"ATM" Asynchronous Transfer Mode. The method by which data is transmitted over cell based data
networks, often used by major network operators.
"Broadband" System with a capacity of at least 2 Mbps.
"DACS" Digital Access Carrier System. A 2 channel pair gain access system sold to BT.
"DISP" Telspec's Distributed Intelligence Service Platform. A system of distributed intelligent
service nodes providing mass calling and other value-added telephony applications.
"DSL" Digital Subscriber Line. A term used to describe the transmission of digital data over a
copper pair from the exchange to the subscriber.
"DSLAM" Digital Subscriber line Access Multiplexer. A DSLAM is the unit that is located in the
telephone exchange that allows broadband ADSL service to be provided.
"eNode" BT's name for the new SDSL pair gain access system capable of 4 channels with full V90
modem performance.
"E1-Extender" A pair of units that enables a 2Mbps PSTN (EI) signal to be transmitted over one or more
copper pairs. Often used by Network Operators to connect a company's PABX to an exchange,
or for connection of a mobile phone base station to a network.
"G.shdsl" An ITU standardised version of SDSL allowing transmission speed of up to 2.3 Mbps on a
single copper pair.
"Highway" BT's name for their service, which provides customers with an ISDN connection and two
standard phone connections over a single phone line.
"Intelligent A layer of intelligence attached to the PSTN to enable advanced telephone calls such as
Networks" portability of telephone members, freephone and other services.
"International A switch operating at the transition point between one national PSTN network and another.
Transit Nodes"
"IPS" Telspec's Intelligent Programmable Switch. A narrowband circuit switch used for
switching voice calls in the Public Switched Telecommunications Network. The
architecture of the IPS allows it to be used as a transit switch, international gateway
or as a service node.
"IP" Internet Protocol. The method by which data is transmitted over packet based data
networks such as the Internet.
"ISDN" Integrated Subscriber Digital Network. Offers a range of new and sophisticated telephony
and data services to the customer provided by today's digital network.
"Media Gateway" An interface unit that provides the conversion between circuit switch networks (i.e. the
current generation of telephone network) and VoIP based packet networks (i.e. the next
generation of telephone network).
"NTU" Network Terminating Unit. The unit which provides the interface point between the
Customer and the Network. In the case of the Highway service for example, this is
mounted in the customer's premises and provides the ISDN and telephone connection points
for the customer.
"PABX" Private Automatic Branch Exchange. A PABX is used by businesses to connect their
telephones internally and to the PSTN network.
"Pair Gain" Enables a subscriber pair to carry two or more independent telecommunications
transmissions simultaneously.
"POTS" Plain Ordinary Telephone Service. The traditional telephony service as offered by an
ordinary analogue telephone unit.
"PSTN" Public Switched Telephone Network. The traditional telephone network carrying call
traffic for telephone operators such as BT.
"RIDE" Recorded Information Distribution Equipment. BT's name for their Mass Calling Platform
used in Televoting applications.
"SDSL" Symmetric Digital Subscriber Line. A transmission technology which gives the same
transmission speed in either direction, as compared with ADSL (Asymmetric Digital
Subscriber Line) which favours the rate from the exchange towards the customer.
"Service Node" A multi-service platform that allows for the rapid development and deployment of advanced
network services.
"SME" Small to Medium Enterprises. A distinct market sector requiring more services than the
SOHO market but less than larger sized business units.
\"Softswitch" A switch where the intelligence layer is separate from the physical switching elements.
This architecture is used for switches operating in VoIP packet networks.
"SOHO" Small Office Home Office. The small office and home office are now generally recognised as
a distinct market sector requiring more services than a residential home, but fewer than a
larger sized business unit.
"TDM" Time Division Multiplex. A method whereby several voice or data signals are digitised and
put into a time sequence for transmission. This is a fundamental technical attribute of a
digital circuit switched telephone network.
"TelMax" Telspec's latest generation pair-gain product that delivers multiple POTS traffic (up to 12
subscribers) and ISDN (Voice and Data) over a single copper pair.
"TelMax-IP" A version of TelMax delivering multiple POTS and IP data over a single copper pair.
"TelMax-X" Telspec's name for its E1 Extender product.
.
"TelNode" Telspec's latest generation DSLAM (Digital Subscriber Line Access Multiplexer) delivering
traditional voice telephony and broadband data (2Mbps) to the residential, SOHO and SME
markets, capable of ADSL and G.shdsl delivery, with an evolution path to delivering
everything over IP.
"Transit Switch" A switch in a PSTN network that does not have directly connected subscribers.
"USB Connection" Universal Serial Bus. A standard for connectivity of peripheral devices to PCs.
"VoIP" Voice over IP. A method to transmit voice across an IP network.
"VoDSL" Voice over DSL. The transmission of voice over Digital Subscriber Line service such as ADSL
or SDSL, usually then for onward transmission over a ATM or IP data network.
"V90" V90 modems are used to connect a home PC to the internet over the PSTN network. They are
capable of a maximum transmission bit rate of 56kbs. "V90 modem performance" means the
transmission through Access equipment at a rate comparable to the copper network alone.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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