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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Ddd Group | LSE:DDD | London | Ordinary Share | GB0031129355 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.30 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:1176M DDD Group PLC 10 June 2003 DDD GROUP PLC 10 June 2003 PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 DDD Group plc ("DDD"), the developer and publisher of content enabling technologies and applications for the 3D displays market, is pleased to announce its preliminary results for the twelve months ending December 31st 2002. * Turnover increased 6% to #182,000 (2001: #172,000) * Loss before tax of #2.629 million (2001: #3.419 million) * Cash reserves at #3.8 million * Level of sales enquiries increasing in all three market segments * Overheads reduced and expenditure contained Commenting on the results, Paul Kristensen, Chairman said: "2002 was planned to be a year of growth for the company, both in terms of human resource, customer base and revenues following the company's successful fund raising in January 2002. However, during the early months of the year specific commercial opportunities being pursued did not reach sign-off stage. Consequently the Board decided to reduce expenditure and overhead while maintaining its technological and business development progress without compromise. DDD continues to believe in the long-term growth potential of the three core markets for 3D displays and applications. The overall plan for the year ahead is of a careful balance between maintaining short-term revenue growth and gross margin, investing in response to market growth, and effective application of cash reserves." CHAIRMAN AND CHIEF EXECUTIVE'S JOINT STATEMENT FINANCIAL RESULTS During the year turnover increased by 6% to #182,000 (2001: #172,000) while pre-tax losses for the year narrowed to #2.629 million (2001: #3.419 million). Turnover comprised sales of 3D displays and software of #98,917 and sales of 3D Conversion services of #46,946, primarily to purchasers and owners of 3D displays. Sales of hardware video processors declined to #14,135 with no further sales in the medical imaging sector. Revenues from consultancy and custom development totaled #21,583. Geographically, customers based in North America accounted for 85% of total revenues. The cash balance at the year-end amounted to #3.8 million (2001: #0.5 million). MANAGEMENT & VARIABLE COSTS Faced with the disappointing levels of revenue the company took action to reduce costs and refocus resources without significantly impairing its ability to continue business development once market conditions improve. From May 2002, all expenditure budgeted for the remainder of the year was reviewed and either eliminated or reduced. BOARD CHANGES In March 2002, Brett Cohen joined the board as a non-executive Director. Brett is a Portfolio Manager with Elliott Associates, L.P (affiliated with Liverpool Limited Partnership and Westgate International LP), who have been investors in the company since 1997. In May 2002, Paul Kristensen succeeded Neil Speakman as non-executive Chairman and Neil stepped down from the board in June of 2002. In February 2003, Mark Schwartz resigned his position as Chief Financial Officer and will be leaving the company at the end of July 2003. STAFF REDUCTIONS As a consequence of the reduction in costs, a number of positions in the company became redundant. The total number of DDD employees fell from 41 in December 2001 to 30 by December 2002, resulting in a reduction in payroll-related costs of 22% to #1.37m (2001: #1.76m). BUSINESS REVIEW DDD presently pursues sales opportunities in two key segments, reflecting current patterns of revenue, technology and market activity. The major division, Public Space Entertainment, builds upon the use of 3D displays, software and 3D conversion for retail advertising, promotions and trade shows. The second, Consumer, recognizes the emergence of a consumer market for 3D display products and the relevance of the company's products, services and intellectual property to provide solutions to several key requirements that accompany mass markets for 3D. Finally, in the fourth quarter, based upon the substantially improved image quality being made possible by the latest 3D displays, the company identified a third segment, Professional, where a number of opportunities exist for software development, licensing and systems integration. PUBLIC SPACE ENTERTAINMENT (PSE) Demand for 3D Display systems, software and content conversion grew steadily as the year progressed, accounting for approximately 70% of 2002 revenues. Display sales and hardware accounted for 65% of PSE revenues, 3D conversion represented 27% and software license accounted for the remaining 8%. Our progress in the PSE market was helped by the launch of the SynthaGramTM 3D display by StereoGraphics Corporation. This provided a brighter, clearer 3D image for the viewer and generated a competitive market for 3D displays resulting in lower costs and choice of display sizes for our prospective customers. During the year we continued to improve productivity in our 3D conversion process allowing us to reduce our list price while maintaining strong margins. We were successful in securing reference sites with the debut of 3D displays at the Farnborough Airshow in July, exhibited by The Boeing Company on their tradeshow stand. We were also selected to supply the 3D displays and content for the Christmas window at Harvey Nichols in Knightsbridge, London underscoring the value of 3D promotions in retail locations. We anticipate that these early sales will lead to repeat orders for displays, software and services as well as building reference users from which other prospective customers may measure the benefits of working with the company. CONSUMER Building upon the business development initiatives that had commenced in the third quarter of 2001, we continued the process of establishing relationships with consumer electronics companies who are at various stages in the delivery of 3D displays. We have identified a number of North American, Japanese and Korean display manufacturers who are pursuing the delivery of 3D flat panel LCD and plasma displays and we have visited several of them to meet their research and development teams to establish their requirements for their intended markets. We anticipate the availability of the first mass market 3D displays from brand name manufacturers to become available towards the end of 2003. In the fourth quarter of 2002, Sharp and Sanyo demonstrated their prototype 3D LCD and plasma displays and this was followed shortly afterwards by the launch of a mobile telephone by DoCoMo in Japan featuring a Sharp 3D LCD display module. Another important step towards the creation of a mass market for 3D has been the formation of the "3D Consortium" which DDD has invited at the invitation of two of the five founding member companies. Our goal is to license our software products to mass-market display manufacturers to provide effective 3D content creation and presentation tools for their end users. In addition we are seeking to establish our patented 2D Compatible 3DTM format as a standard for media encoding and delivery. PROFESSIONAL In the third quarter of 2002, StereoGraphics introduced the SynthaGram SG202, the first high-resolution 3D LCD display. The improvement in image quality and price performance yielded a product that for the first time offered an image quality and 3D effect that met the requirements of the professional user for 3D displays. A growing number of companies who have traditionally used 3D glasses to visualize computer graphics models in markets as diverse as molecular modeling and architectural design have approached the company seeking solutions for 3D displays to complement or replace their 3D glasses. In the third quarter 2002, the company began to evaluate the technical feasibility of enabling these professional visualization software applications to be integrated with the latest high-resolution 3D displays. The challenge is to achieve the 3D display integration without requiring changes to the software code of the visualization application. In the current economic climate and with the relatively small installed base of 3D displays, software developers are reticent to commit their time and resources to a relatively small market opportunity. Our Research group has demonstrated that it is possible to deliver such a solution and we are now developing the TriDefTM Visualizer software solution for licensing to business users with professional and scientific visualization applications. ANALYSIS AND OUTLOOK 2002 was planned to be a year of growth for the company, both in terms of human resource, customer base and revenues following the company's fund raising in January 2002. Despite the reductions in expenditure and overhead, the company has been able to maintain its technological and business development progress without compromise. Through continued investment in our core image science capabilities, we are anticipating that we can continue to offer competitively priced content conversion and creation services while sustaining our gross margin ratios. As the customer base in the PSE market grows, we are expecting that the ratio of content business with new customers compared to existing customers will shift in favor of repeat customers, with a resultant impact on the costs associated with creating the sales opportunity. With the recent improvements in image quality and the competitive nature of the 3D displays market, the next major milestone will be the delivery of 3D displays by major consumer electronics manufacturers. It is hoped that this will further reduce the price differential between a 3D display and its 2D equivalent to a level more acceptable to wider adoption by business users in our target PSE segment. The mass-market availability of 3D displays, including lower unit pricing and the ability to switch between conventional 2D and 3D viewing modes from the same display, is likely to prove very attractive to a number of prospective users who are now becoming aware of the ability to view in 3D without glasses. Unlike a standard 2D display, a 3D display requires a 3D enabled application in order for the customer to make their purchase decision. We are seeking to leverage our expertise in the integration and enabling of a variety of professional and consumer applications by assisting mass-market manufacturers in building and maintaining market share with their target end user. By partnering with leading display manufacturers, we expect to reach large audiences of prospective customers without the need to create substantial sales and marketing infrastructure to reach these customers directly. As the market for consumer 3D displays emerges, which we expect to occur in early 2004, we are hopeful that our patented 2D Compatible 3DTM encoding format will form the basis for the standard for the publishing and playback of 3D video media. This is also the focus of our participation in the 3D Consortium. We expect to address a wider base of business users through the capabilities of our interactive TriDefTM Visualizer software, extending our reach from still images and video to interactive computer graphics in the scientific visualization market. Here too we are targeting market leaders in high performance graphics applications and platforms, allowing us to reach large installed bases of customers through our partners without the need to incur substantial sales and marketing expense. DDD continues to believe in the long-term growth potential of the three core markets for 3D displays and applications. The overall plan for the year ahead is of a careful balance between maintaining short-term revenue growth and gross margin, investing in response to market growth, and effective application of cash reserves. DIVIDEND POLICY As indicated in the flotation Prospectus, the directors are not declaring a dividend in relation to these results and the Board will keep the dividend policy under review. SHAREHOLDER AND EMPLOYEE SUPPORT We would like to thank all employees and shareholders for their continuing support and hope that they will enjoy a long association with the company. FURTHER INFORMATION Further information on DDD Group plc, its markets and products is available from the company's Web site at www.DDD.com. Paul Kristensen, Chairman Christopher Yewdall, Chief Executive 10 June 2003 10 June 2003 DDD GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended Year ended 31 December 31 December 2002 2001 Notes #'000 #'000 Turnover 182 172 Administrative expenses (2,971) (3,609) -------------- ------------- Operating loss (2,789) (3,437) Net interest 160 18 -------------- ------------- Loss on ordinary activities before taxation (2,629) (3,419) Tax on loss on ordinary activities 3 - - -------------- ------------- Retained loss for the financial year (2,629) (3,419) ============== ============= Basic loss per share 4 (7.5p) (14.6p) -------------- ------------- DDD GROUP PLC CONSOLIDATED BALANCE SHEET As at As at 31 31 December December 2002 2001 Notes #'000 #'000 Fixed assets Intangible assets 90 63 Tangible assets 427 1,226 -------------- ------------- 517 1,289 Current assets Debtors: due within one year 138 1,759 Debtors: due after more than one year 131 184 Investment in money market deposit 1,750 - Cash at bank and in hand 2,048 460 -------------- ------------- 4,067 2,403 Creditors: amounts falling due within one year (279) (2,012) -------------- ------------- Net current assets 3,788 391 -------------- ------------- Total assets less current liabilities 4,305 1,680 Creditors: amounts falling due after more than one year - (5) -------------- ------------- Net assets 4,305 1,675 ============== ============= Capital and reserves Called up share capital 3,516 50 Share premium account 4,416 15,702 Merger reserve 13,279 - Other reserves 894 942 Exchange equalisation reserve (300) (83) Profit and loss account (17,500) (14,936) -------------- ------------- Shareholders' funds - equity 5 4,305 1,675 ============== ============= DDD GROUP PLC Company BALANCE SHEET As at As at 31 31 December December 2002 2001 Notes #'000 #'000 Fixed assets Investments 6,295 - Current assets Debtors 60 50 Investment in money market deposit 1,750 - Cash at bank and in hand 40 - -------------- ------------- 1,850 50 Creditors: amounts falling due within one year (19) - -------------- ------------- Net current assets 1,831 50 -------------- ------------- Net assets 8,126 50 ============== ============= Capital and reserves Called up share capital 3,516 50 Share premium account 4,416 - Other reserves 17 - Exchange equalisation reserve 233 - Profit and loss account (56) - -------------- ------------- Shareholders' funds - equity 8,126 50 ============== ============= DDD GROUP PLC CONSOLIDATED CASH FLOW STATEMENT Year ended Year ended 31 31 December December 2002 2001 Notes #'000 #'000 Net cash outflow from operating activities 6 (2,394) (2,878) Returns on investments and servicing of finance Interest received 102 38 Interest paid (4) (14) Finance lease interest paid (2) (6) -------------- ------------- Net cash inflow from returns on investments and servicing of finance 96 18 -------------- ------------- Capital expenditure Purchase of tangible fixed assets (78) (93) Purchase of intangible fixed assets (63) (26) Sale of tangible fixed assets 460 23 -------------- ------------- Net cash inflow/(outflow) from capital expenditure 319 (96) -------------- ------------- Management of liquid resources Investment in money market deposit (1,750) - Sale of short term bank deposits 53 33 -------------- ------------- Net cash (outflow)/inflow from management of liquid resources (1,697) 33 -------------- ------------- Financing Issue of shares 7,105 2,315 Expenses paid in connection with issue of shares (1,559) - Redemption of shares (50) - Repayment of borrowings (193) (14) Capital element of hire purchase (39) (36) leases ------------- ------------- Net cash inflow from financing 5,264 2,265 -------------- ------------- Increase/(decrease) in cash 1,588 (658) ============== ============= DDD GROUP PLC consolidated statement of total recognised gains and losses Year ended Year ended 31 December 31 December 2002 2001 #'000 #'000 Loss for the financial year (2,629) (3,419) Currency differences on foreign currency net (217) (83) investments -------------- ------------- Total recognised losses for the financial year (2,846) (3,502) ============== ============= DDD GROUP PLC NOTES TO THE PREMILINARY ANNOUNCEMENT 1 BASIS OF PREPARATION The preliminary announcement has been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards. The principal accounting policies of the Group are set out in the group's 2002 financial statements and have been consistently applied in all material respects. 2 BASIS OF CONSOLIDATION The Group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December 2002. 3 TAX ON LOSS ON ORDINARY ACTIVITIES The tax charge represents: Year ended Year ended 31 December 31 December 2002 2001 #'000 #'000 Tax loss on ordinary activities - - ============== ============= The current tax charge can be explained as follows: Year ended Year ended 31 December 31 December 2002 2001 #'000 #'000 Loss on ordinary activities before tax (2,629) (3,419) ============== ============= Loss on ordinary activities multiplied by the large companies rate of 30% (2001: 30%) (789) (1,026) Effect of: Expenses not deductible for tax purposes 19 - Tax loss carried forward 770 1,026 -------------- ------------- Current Tax - - ============== ============= The unrelieved tax losses, which arise in the USA, Canada and Australia, may be limited in their ability to offset future taxable trading profits. Accordingly, a full valuation allowance has been provided against this resulting deferred tax asset. DDD GROUP PLC NOTES TO THE PREMILINARY ANNOUNCEMENT 4 LOSS PER SHARE 2002 2001 Weighted Loss per Weighted Loss per average share average share Loss number amount Loss number amount #'000 of shares pence #'000 of shares pence Basic loss per share: Loss attributable to ordinary shareholders (2,629) 34,917,158 (7.5) (3,419) 23,369,394 (14.6) ======= ======== ====== ======= ======== ======== Share options outstanding at the year end were anti-dilutive. 5 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Year ended Year ended 31 December 31 December 2002 2001 #'000 #'000 Loss for the financial year (2,629) (3,419) Exchange differences (217) (83) Issue of stock options 17 198 Redemption of preference shares (50) - Issue of shares 5,509 2,352 -------------- ------------- Net increase/(decrease) in shareholders' funds 2,630 (952) -------------- ------------- Shareholders' funds at 1 January 2002 1,675 2,627 ============== ============= Shareholders' funds at 31 December 2002 4,305 1,675 ============== ============= 6 NET CASH OUTFLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2002 2001 #'000 #'000 Operating loss (2,789) (3,437) Amortisation 35 20 Depreciation 360 418 Issue of stock options 17 198 Loss on sale of tangible fixed assets 27 89 Loss on sale of intangible fixed assets 1 50 Decrease/(increase) in debtors 1,648 (1,654) (Decrease)/increase in creditors (1,506) 1,509 Foreign exchange differences (187) (71) -------------- ------------- Net cash outflow from operating activities (2,394) (2,878) ============== ============= DDD GROUP PLC NOTES TO THE PREMILINARY ANNOUNCEMENT 7 PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The consolidated balance sheet and company balance sheet at 31 December 2002 and the consolidated profit and loss account, consolidated cash flow statement and consolidated statement of total recognised gains and losses for the year then ended have been extracted from the Group's 2002 statutory financial statements upon which the auditors opinion is unqualified and does not include any statement under Section 237 of the Companies Act 1985. 8 PUBLICATION OF NON-STATUTORY ACCOUNTS The Report and Accounts will be posted to shareholders on or about 20 June 2003 and, from the date of posting, will be available from Arbuthnot Securities, 2 Lambeth Hill, London EC4V 4GG, United Kingdom and on the Company's website: www.DDD.com. This information is provided by RNS The company news service from the London Stock Exchange END FR BIGDLRSGGGXC
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