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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Disperse Tech | LSE:DPT | London | Ordinary Share | GB0001786069 | 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% | 0.00 | - |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:9490E Disperse Technologies Group PLC 08 November 2004 Disperse Technologies Group plc Preliminary Announcement for the year ended 31 August 2004 Highlights: 2004 2003 ------ ------ #'000 #'000 Turnover 2,811 1,029 Profit/(Loss) pre Exceptional & R&D Costs 292 (231) Operating Loss (923) (1,575) Loss per Share (2.62)p (5.43)p * Successful equity fund raisings in excess of #5 million * Acquisition of Elizabeth French Plc * Move from OFEX to AIM * Reorganisation of business into three main activity areas * Strengthening of management team CHAIRMAN'S REPORT I am pleased to report on the results for the enlarged Group for the year ended 31 August 2004, which show an increase in turnover from #1.03m to #2.81m and a significant reduction in operating losses before exceptional and non-recurring reorganisation costs , down from #1.41m to #0.53m . These results include our continuing investment in R&D of #0.82m (2003: #1.18m). The results for Elizabeth French are incorporated from the date of acquisition (29 July 2004). With a turnover of #1.77m since acquisition, Elizabeth French has produced results that are very much in line with expectations. However, due to the short time period reported and the seasonality of its activities, this should not be taken as an indicator of Elizabeth French's likely contribution to annual revenue. We have taken significant action to reduce the Group's cost base where appropriate. Excluding the newly acquired Elizabeth French operations, the operating costs (excluding R&D expenditure) of the historical Disperse business in the second half amounted to #0.28m, a reduction of 42% (Six months to 29 February 2004: #0.49m). We have since taken further steps to reduce the cost base of the historical Disperse operations (excluding Elizabeth French), so that we estimate that in the current year it should amount to around #1.4m, including approximately #0.4m of central costs. These savings from the Group's cost base should ensure that the effect of improvement in our trading performance is maximised. During the year, we successfully raised over #5.14m in equity funding and have further expanded our shareholder base. #3.28m of these funds were used as the initial cash element in the acquisition of Elizabeth French, including acquisition costs. As part of this process, the Company has moved its share listing from OFEX to AIM. There have been a number of changes in the management structure of the Group. Tony Williams has been appointed Group Finance Director. David Gerrard retains his role as Managing Director of Elizabeth French and Guy Hawking heads up the Disperse Cosmetics and Personal Care division, including responsibility for the USA. Derek Wheeler retains his role as overall Technical Director, but takes specific responsibility for Disperse pharmaceutical work. We are in the process of appointing a Marketing Director with extensive experience of brand building and trade marketing within the cosmetic and personal care arena and we hope to make an announcement shortly. Looking forward the Group is now organised into three main activity areas - design, importation and distribution of branded cosmetics (Elizabeth French); provision of proprietary technology and design and supply of cosmetic and personal care products to major third party brands, such as Estee Lauder and Bath and Body Works (Disperse - Cosmetics and Personal Care); and the development and refining of the technology so that it can be used as a drug delivery mechanism for oral, topical and parenteral applications (Disperse - Healthcare). It is our intention to integrate the Elizabeth French and Disperse - Cosmetic and Personal Care operations and to expand Disperse pharmaceutical activities into the more general healthcare area by the acquisition of suitable brands or companies. In respect of Elizabeth French, sales of "VIVO" since the launch in June of this year have exceeded #0.8m, with a strong forward order book and rapidly expanding number of retail outlets both in the UK and overseas. We have strengthened the management team by the appointment of Tony Williams, who will be based at Elizabeth French, and are sharpening the marketing focus by the introduction of the proposed new Marketing Director. We are already taking steps to improve gross margin and working capital management. The further development of existing brands has already commenced and new products are being designed for inclusion within the "Lizzie" and "Katie and Friends" ranges. We have agreed, in principle, to license a new heavily promoted brand name aimed at the younger market. A new national accounts manager with a depth of experience in trade marketing and account development will join us in November. Certain price increases scheduled for early 2005 have already been identified and should help improve gross margins. The focus in the Disperse - Cosmetic and Personal Care division is on providing support and designing new products for major customers in the cosmetics and personal care arena. On the technical front, our Paramus laboratory has developed sun care products that offer both UV protection and can be used as beachwear/daywear moisturisers as well as a range of anti-wrinkle and skin smoothing concepts. During 2004, we received our first design and supply order for two new products for a prestige UK brand for delivery early 2005. We are currently negotiating with other companies both in the UK and the USA to develop this particular aspect of our business as an alternative to our traditional royalty remuneration. We also believe that new products using our technology will be launched in the coming 12 months by both Estee Lauder and Bath and Body Works. In our Disperse - Healthcare division, there is considerable technological overlap between our work in cosmetics and personal care and topical drug delivery and thus our work in this area is carried on in-house in Guildford, where substantial progress has been made on our anti-acne compounds and range of sanitisers ("Biocleanse"). For oral and parenteral drug delivery, we work in partnership with Monash University, one of the world's leading drug delivery academic institutions, where further research work is being undertaken, following positive initial results in bio-availability studies against bench mark drugs. We continue to seek partners in this area to jointly develop drug delivery opportunities. In conclusion, I believe that we have successfully started the process of integrating, developing and taking forward the new enlarged Group. Over the coming months, where the opportunity arises to capitalise on the investment already made, we shall be looking at acquiring further brands or companies both in the Cosmetic and Personal Care and Healthcare markets. Colston Herbert 5 November 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 August 2004 Notes 2004 2003 #'000 #'000 TURNOVER 3 2,811 1,029 Cost of sales 3 (1,179) (72) ________ ________ Gross profit 1,632 957 Administration expenses 3 (1,340) (1,188) ________ ________ Profit before exceptional and research & development 292 (231) costs Exceptional and non-recurring reorganisation costs 4 (394) (167) Research & development costs 3 (821) (1,177) ________ ________ OPERATING LOSS (923) (1,575) Interest Receivable 23 31 ________ ________ (900) (1,544) Interest payable and exchange loss on foreign (59) (18) currency ________ ________ (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION (959) (1,562) Taxation credit 197 360 ________ ________ (LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION (762) (1,202) RETAINED Balance on Profit & Loss Account b/fwd (2,036) (834) ________ ________ Balance on Profit & Loss Account c/fwd (2,798) (2,036) ======== ======== EARNINGS PER SHARE Basic and fully diluted 2 (2.62)p (5.43)p ======= ======= The operating loss for the year arises from the group's continuing operations. CONSOLIDATED BALANCE SHEET for the year ended 31 August 2004 Notes 2004 2003 #'000 #'000 FIXED ASSETS Intangible assets - goodwill 5 6,926 - Investments 118 118 Tangible assets 1,666 400 ________ ________ 8,710 518 ________ ________ CURRENT ASSETS Stock & Materials 3,734 5 Debtors due within one year 3,526 351 Debtors due after more than one year 6 812 892 Cash at bank and in hand 3,646 261 ________ ________ 11,718 1,509 CREDITORS: Amounts falling due within one year (3,346) (317) Bank Overdrafts & short term loans (4,120) (121) ________ ________ NET CURRENT ASSETS 4,252 1,071 ________ ________ TOTAL ASSETS LESS CURRENT LIABILITIES 12,962 1,589 CREDITORS: Amounts falling due after more than one year 7 (5,492) - ________ ________ 7,470 1,589 ===== ===== CAPITAL AND RESERVES Called up share capital 609 222 Share premium 9,809 3,553 Profit and loss account (2,798) (2,036) Merger reserve (150) (150) ________ ________ EQUITY SHAREHOLDERS' FUNDS 8 7,470 1,589 ===== ===== CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 August 2004 Notes 2004 2003 #'000 #'000 Cash flow from operating activities (1,728) (1,051) Returns on investments and servicing of finance (24) 31 Taxation 112 - Capital expenditure and financial investment (71) (168) Net cost of acquisition 5 (9,284) - ________ ________ CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (10,995) (1,188) Non Equity Financing 7 4,719 - Equity Financing 8 6,643 125 ________ ________ INCREASE/(DECREASE) IN CASH IN THE YEAR 367 (1,063) ========== ========== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) Increase/(decrease) in cash in the year 367 (1,063) Borrowings acquired with subsidiary (981) ________ ________ MOVEMENT IN NET FUNDS IN THE YEAR (614) (1,063) NET FUNDS AT 1 SEPTEMBER 2003 140 1,203 ________ ________ NET FUNDS AT 31 AUGUST 2004 (474) 140 ========== ========== NOTES TO THE PRELIMINARY ANNOUNCEMENT for the year ended 31 August 2004 1. PREPARATION OF THE PRELIMINARY ANNOUNCEMENT The preliminary announcement is for the year ended 31 August 2004 and includes the results of Disperse Technologies Group plc and its subsidiary undertakings Elizabeth French plc, Disperse Limited, Emulsion Systems Limited and Disperse Technologies Inc. The preliminary announcement was approved by the Board on 5 November 2004. The results of Elizabeth French plc have been included since that company's acquisition on 29 July 2004. The results of Disperse Limited have been incorporated in accordance with the principles of merger accounting as if the group had always owned it. 2 EARNINGS PER ORDINARY SHARE Earnings per share has been calculated using the weighted average number of shares in issue during the relevant financial year. The weighted average number of shares in issue for the year ended 31 August 2004 was 29,124,216 (2003: 22,122,600). The loss for the year after taxation was #762,000 (2002: Loss #1,202,000). The effect of the share options in issue at the year-end is anti-dilutive and there is therefore no adjustment to the earnings per share for the year ended 31 August 2004 or 2003. 3. TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION The group's turnover and profit before taxation were all derived from its principal activities. The profit and loss account disclosure of other operating costs has been expanded to reflect the nature of the business of the company. Disperse Elizabeth 2004 2003 French # '000 # '000 United Kingdom 222 1,473 1,695 109 Europe - 298 298 - United States 818 - 818 920 ________ ________ ________ ________ 1,040 1,771 2,811 1,029 Cost of Sales (1,179) (72) ________ ________ Gross Profit 1,632 957 Administration costs (1,340) (1,188) ________ ________ Profit before exceptional and 292 (231) research & development costs Exceptional and non-recurring (394) (167) reorganisation costs Research & development costs (821) (1,177) ________ ________ Operating Profit/(Loss) (923) (1,575) ======== ======== 4 EXCEPTIONAL AND NON-RECURRING REORGANISATION COSTS 2004 2003 # '000 # '000 Diminution of assets 36 106 Other restructuring and non-recurring costs 358 61 ________ ________ 394 167 ======== ======== 5 GOODWILL 2004 2003 #'000 #'000 Fixed Assets 1,391 - Stock 3,023 - Debtors 1,421 - Creditors (1,737) (5) Borrowings over 12 months (759) - Bank Overdrafts and discount financing (981) 3 ________ ________ Net Assets Acquired 2,358 (2) ________ ________ Shares allocated to vendors 1,500 - Deferred loan 4,500 - Cash 3,000 8 Expenses 284 - Cash outflow in respect of acquisition 9,284 8 ________ ________ Goodwill on acquisition 6,926 10 Goodwill written off - (10) ________ ________ 6,926 - In the light of the revised International Accounting Standard (IAS)coming into force in 2005, no amortisation of goodwill has be made. 6 DEBTORS OVER 12 MONTHS 2004 2003 #'000 #'000 Deferred tax asset 749 816 Other debtors 63 76 ________ ________ 812 892 ======== ======== 7 CREDITORS OVER 12 MONTHS 2004 2003 #'000 #'000 6% Unsecured Convertible Loan Stock 219 - 2006-2007 issued at 80p per #1 Deferred consideration for acquisition 4,500 - of Elizabeth French Non Equity financing in Year 4,719 - Amortisation 6% Unsecured Convertible 8 - Loan Stock 2006-2007 Deferred tax liability 149 - Bank loans and HP 616 - ________ ________ 5,492 - ======== ======== 8 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS'FUNDS Shares 2004 2004 2003 ------------- #'000 #'000 As at 1st September 22,453,703 3,775 3,650 Equity finance net of costs: September 2003 placing at 25p 4,295,388 1,004 - July 2004 placing & offer at 18p 26,081,839 4,139 - Issued as part of acquisition at 18p 8,333,333 1,500 - ________ _______ Equity financing in Year 6,643 125 _________ ________ _______ As at 31 August 60,864,263 10,418 3,775 ========== Profit and Loss Account (2,798) (2,036) Merger Reserve (150) (150) ________ ________ Total Shareholder's Funds 7,470 1,589 ======= ====== Copies of this statement are available from the Company at its offices at 40 Alan Turing Road, Guildford, Surrey GU2 7YJ or by downloading from the Company's web site @ www.disperseplc.com 8 November 2004 This information is provided by RNS The company news service from the London Stock Exchange END FR EANFSEEALFFE
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