![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Feedback Plc | LSE:FDBK | London | Ordinary Share | GB00BJN59X09 | ORD 50P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 62.50 | 60.00 | 65.00 | 62.50 | 62.50 | 62.50 | 168 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Electronic Computers | 1.03M | -2.92M | -0.2188 | -2.86 | 8.33M |
TIDMFDBK
RNS Number : 4899Q
Feedback PLC
07 November 2012
7 November 2012
Feedback plc
("Feedback" or "the Company")
Final Results for the year ended 31 May 2012
Chairman's Statement
2012 was a difficult year for everyone at Feedback plc as tough market conditions further exposed the Group's long-term weaknesses.
The structure and costs of Feedback were those of a larger Group. Without sustained growth reversing the more than 40% decline in revenues over the past few years, the business was not sustainable.
The Group's strategy, since my appointment, had been for a sales led turnaround whilst investing in new products and pushing through measures to improve operational effectiveness, all the time working within the harsh constraints of the Group's working capital requirements.
Results
The financial year started well. Half-year results showed what looked like clear indications of a recovery. Turnover to November 2011 was up 13% with the Group running at breakeven on a like-for-like basis. The multi-year implementation of an expensive new ERP system was finally completed and immediately delivered on its long-anticipated promise of enabling faster order-to-ship times and real-time management of inventory. Two loss-making product ranges were eliminated, the operational structure was simplified somewhat to reduce cost, and we started Feedback Black Box (Black Box) as a new product incubator with a promising first customer.
The cost of restructuring the Group, of following through on a number of long-term investment decisions, the impact of margins being squeezed from customers and suppliers, and the simple demands of growth, all created an increased need for working capital that was forecast to be on-going. Funds were raised from new and existing shareholders, including every member of the Board, in October 2011.
Despite the encouraging start, results for the full year, including for Feedback Instruments Limited and Feedback Inc (Feedback Instruments) up to its disposal on 23 May 2012 and allowing for the effects of its sale, are extremely disappointing.
Turnover of GBP7.0 million was up 11.7% from GBP6.3 million in the previous year. Reported loss on all activities was GBP1.8 million (2011: loss of GBP831,000) reflecting operating losses of GBP414,000 (2011: loss of GBP831,000), loss of GBP802,000 (2011: nil) on the sale of Feedback Instruments, GBP293,000 (2011: nil) write-off of intercompany debt, and an impairment of GBP274,000 (2011: nil) relating to property. The loss after taxation was GBP1.82 million (2011: GBP862,000).
Revenue for Feedback Instruments up to the date of its disposal grew 8% to GBP4.9 million, up from GBP4.5 million in 2011, despite extremely low order volumes for most of the second half of the year. This growth was well below management's expectations with export sales particularly disappointing. Feedback Instruments had an operating profit of GBP311,000 (2011: GBP466,000 loss) due in part to the write-back of GBP260,000 (2011: nil) legacy stock provisions.
The financial challenge facing Feedback Instruments that led to its disposal was funding the working capital demands of the long lead-time between receipt of order and receipt of payment and the overhead needed to maintain the minimum level workforce during the months of lean trading.
For Feedback Data, revenues of GBP1.9 million represent a 12% growth on the GBP1.7 million performance in 2011. However, losses worsened to GBP294,000 (2011: GBP23,000) largely due to the cost of restructuring the sales team and the increased investment necessary to finish two product development projects started in prior years.
The increases in revenue in both operating companies occurred in the first half of the year.
As we moved into the second half of the year, all parts of the Group suffered poor levels of sales. Feedback Instruments in particular experienced several consecutive months of extremely weak order intake that fell well below management's even short-term forecasts.
The engine of the Group had long been Feedback Instruments' export sales. When these dried to a trickle, predominantly due to the lack of product investment in prior years, the prospect of a sales led recovery evaporated and the Board then determined that to turnaround the entire Group would be impossible.
After a thorough review in early 2012 the Board concluded that given its cash burn, its weakness in terms of the age of its existing products, and the length of time needed for any new products to be developed and marketed effectively in the education sector, returning Feedback Instruments to positive cash flow and profitability would take more time and cash resources than the Group possessed or had access to.
Accordingly, and with a heavy heart given its position as the foundation stone of the Group in 1958 and the presence still on the Board of one of the founders, the decision was taken to dispose of Feedback's education business. In a difficult and, due to the lack of viable offers received, in the end distressed transaction, Feedback Instruments was sold to a subsidiary of LD Didactic GmbH for a nominal consideration in respect of the shares and a repayment of GBP260,000 of the Group's indebtedness.
Losses in Feedback Data (Data) also increased in the year under review; the result of its own ageing product range, postponed projects, and further restructuring costs.
The Group undertook a series of actions to preserve and maximise value for shareholders. Data was restructured to reduce headcount; hardware development, production and certain customer support functions were outsourced. The Board has determined that the Group's headquarters in Crowborough, which long-standing shareholders will remember was sold in 2007 and bought back in 2008, is now surplus to requirements and is in the process of being sold.
Notwithstanding the challenges of the current economic environment, shareholders should be aware that the single factor most responsible for the decline in the Group's long-term performance is the lack of priority given, over many years, to new product development.
In the education sector, product development is generally accepted to be a long-term strategy. The Group's education customers are reluctant to consider new products until they are available on the market, and the sales cycle is upwards of two years due to the necessary time required to incorporate new equipment into curricular activities. However, even in this context, Feedback Instruments generating approximately 90% of revenues from products developed more than 10 years ago shows a clear picture of a company resting too long on past glories.
The pace of product development in the Group has been, in the eyes of our customers and when compared with our competitors, extremely disappointing. Feedback's development teams, working with the evolving demands of the market place and rapidly changing technologies, were left behind by the quicker cycle times of larger and faster manufacturers who have bigger development budgets.
None of this is to say that Feedback products are not excellent pieces of engineering. They are. Indeed, the Company has built a strong reputation for designing and building robust products that continue to provide value even after many years in the field.
Developing new products is always a risk-based activity. However, for too many years the operating companies failed to make enough wise choices - leaving decisions in the hands of engineers, and not listening to end users or feeling the pulse of the market - which left customers looking elsewhere for the innovation that would drive their own growth.
Given the time needed to develop new products for our established markets, Feedback Black Box Company (Black Box) was an attempt to leverage Feedback's engineering reputation and inject urgency and revenue into the Group with a completely outsourced business model. But with start-up revenues of only GBP186,000 (2011: nil) and losses of GBP128,000 (2011: nil), despite much promise, Black Box was closed as part of the cost cutting programme immediately after the sale of Feedback Instruments.
People
In October 2011, David Marks left the Company after giving over 30 years' service in all parts of the business. He joined the main Board in 2009 after spending time as Managing Director of Feedback Instruments Limited, and more latterly held the role of Group Operations Director.
We have recently also seen the departure, on health grounds, of David Barton. David worked tirelessly for the Company from his appointment as a non-executive director in 2007 until his withdrawal in October 2012.
I would like to thank the two Davids and all my other colleagues across the Group's operations for their commitment and hard work during what continues to be an extremely difficult year.
Outlook
After 54 years in operation, 2012 has been Feedback's annus horribilis and this has forced a complete re-evaluation of the business.
With the distressed sale of Feedback Instruments, Feedback is left with annual revenues of approximately GBP2 million. These revenues are predominantly derived from low-growth products which are sold into a competitive market. The cost base of the remaining business is difficult to bare and the potential for organic growth is limited. The Group's continued poor performance has resulted in it relying on its banking and other loan facilities and has meant a significant amount of management time has been focused on cash management.
In such a challenging environment the Board continue to consider all viable strategic opportunities to maximise value for shareholders, including the potential disposal of the remaining operating businesses.
In the meantime, the Group is seeking to minimise its cash burn from on-going operations.
Nick Shepheard
Chairman
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2012
Notes 2012 2012 2012 2011 GBP000 GBP000 GBP000 GBP000 Continuing Discontinued Total REVENUE 3 2,111 4,935 7,046 6,308 Cost of sales (1,290) (3,308) (4,598) (3,969) ----------- ------------- -------- -------- GROSS PROFIT 821 1,627 2,448 2,339 Other operating expenses 4 (1,522) (1,340) (2,862) (3,170) ----------- ------------- -------- -------- OPERATING LOSS (701) 287 (414) (831) Losses on disposal of discontinued operations - (1,369) (1,369) - Net finance expense (13) - (13) (9) ----------- ------------- -------- -------- Loss on ordinary activities before taxation (714) (1,082) (1,796) (840) Tax charge (29) 6 (23) (22) ----------- ------------- -------- -------- Loss for the year attributable to the equity shareholders of the Company (743) (1,076) (1,819) (862) ----------- ------------- -------- Other comprehensive income/(expense) Translation differences on overseas operations 10 (36) ----------- ------------- -------- -------- Total comprehensive expense for the year (1,809) (898) =========== ============= ======== ======== LOSS PER SHARE (pence) Basic and diluted 5 (0.60) (0.87) (1.47) (0.79) =========== ============= ======== ========
Consolidated Statement of Changes in Equity
for the year ended 31 May 2012
Share Share Capital Retained Translation Capital Premium Reserve Earnings Reserve Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 1 June 2010 273 633 300 2,519 (178) 3,547 Total comprehensive expense for the year - - - (862) (36) (898) -------- -------- -------- --------- ------------ -------- At 31 May 2011 273 633 300 1,657 (214) 2,649 New shares issued 54 218 - - - 272 Total comprehensive expense for the year - - - (1,819) 10 (1,809) -------- -------- -------- --------- ------------ -------- At 31 May 2012 327 851 300 (162) (204) 1,112 ======== ======== ======== ========= ============ ========
Consolidated Balance Sheet
at 31 May 2012
2012 2011 Notes GBP000 GBP000 GBP000 GBP000 ASSETS Non-current assets Held for sale 1,050 - Property, plant and equipment 6 73 1,505 Intangible assets 7 330 732 Deferred tax asset - 134 ------- ------- ------- ------- 1,453 2,371 Current assets Inventories 8 316 1,030 Trade receivables 343 930 Other receivables 160 233 Cash and cash equivalents - 9 ------- ------- ------- ------- 819 2,202 ------- ------- ------- ------- Total assets 2,272 4,573 ------- ------- ------- ------- LIABILITIES Non-current liabilities Deferred tax liabilities 86 198 Current liabilities Trade payables 228 909 Other payables 9 688 817 Bank borrowings 158 - ------- ------- ------- ------- 1,074 1,726 ------- ------- ------- ------- Total liabilities 1,160 1,924 ------- ------- ------- ------- TOTAL NET ASSETS 1,112 2,649 ======= ======= ======= ======= EQUITY Capital and reserves attributable to the Company's equity shareholders Called up share capital 327 273 Share premium account 851 633 Capital reserve 300 300 Retained earnings (366) 1,443 ------- ------- ------- ------- TOTAL EQUITY 1,112 2,649 ======= ======= ======= =======
Consolidated Cash Flow Statement
for the year ended 31 May 2012
2012 2011 GBP000 GBP000 GBP000 GBP000 Cash flows from operating activities Loss before tax (1,796) (818) Adjustments for: Loss on disposal of subsidiary 802 - Impairment provision against property 274 - Net finance expenditure 13 - Depreciation and amortisation 508 565 Foreign exchange difference (10) (36) Decrease in inventories (310) 270 Decrease in trade receivables 212 956 Decrease/(increase) in other receivables 42 (8) Decrease in trade payables (286) (357) Decrease in other payables 434 (111) ------- -------- ------- ------- 1,679 1,279 ------- -------- ------- ------- Net cash generated in operating activities (117) 461 Cash flows from investing activities Purchase of tangible fixed assets (51) (98) Purchase of intangible assets (258) (370) ------- -------- ------- ------- Net cash used in investing activities (309) (468) Cash flows from financing activities Interest paid (13) (9) Proceeds of share issue 272 - ------- -------- ------- ------- Net cash used from financing activities 259 (9) ------- -------- ------- ------- Net decrease in cash and cash equivalents (167) (16) Cash and cash equivalents at beginning of year 9 25 ------- -------- ------- ------- Cash and cash equivalents at end of year (158) 9 ======= ======== ======= ======= 1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (October 2012). The accounting policies have been consistently applied to all the years presented.
These consolidated financial statements have been prepared under the historical cost convention.
During the period the Group disposed of its Feedback Instruments Limited and Feedback Inc subsidiaries and is in negotiations to dispose of its property (held by Brickshield Limited). For these reasons the results of these subsidiaries have been disclosed as discontinued.
The financial information set out above does not comprise the Company's statutory accounts for the periods ended 31 May 2012 or 31 May 2011. Statutory accounts for 31 May 2011 have been delivered to the Registrar of Companies and those for 31 May 2012 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2012 or for 2011.
2. GOING CONCERN
As highlighted in the Chairman's statement, the cost base of the Group's remaining business is difficult to bare and the potential for organic growth is limited. The Group is reliant on its banking and other loan facilities and a significant amount of management time is focused on cash management. The Board continue to consider all viable strategic opportunities to maximise value for shareholders including the disposal of the remaining operating businesses. In the meantime, the Group is seeking to minimise its cash burn from on-going operations.
The current situation and outlook cast significant doubt on the Group's ability to continue as a going concern. Based on current plans however, the Directors consider that the Group is a going concern and have prepared the Group financial statements on a going concern basis. The financial statements therefore do not include any adjustments that would result if the Group was unable to continue as a going concern. In the event the Group ceased to be a going concern, the adjustments would include writing down the carrying value of assets, including intangible assets and inventories, to their recoverable amount and providing for any further liabilities that might arise.
3. SEGMENTAL REPORTING
The directors have determined the operating segments based on the management reports that are used to make strategic decisions. The Group's business is analysed below between the Feedback Instruments segment and the Data segment. The Feedback Instruments segment primarily relates to the former subsidiary companies Feedback Instruments Limited and Feedback Incorporated which were disposed of in the year. The Data segment relates to the subsidiary company Feedback Data Limited. Details of these companies are included in the Directors' Report.
On 23 May 2012 the Group disposed of its Feedback Instruments business. For this reason the results shown below disclose the results of the Feedback Instruments business for the period to 23 May 2012.
Year ended 31 May 2012 Feedback Feedback Other Total Instruments Data GBP000 GBP000 GBP000 GBP000 Revenue External 4,935 1,925 186 7,046 ------------- --------- -------- -------- Finance expense - - (13) (13) ------------- --------- -------- -------- Loss before tax 311 (286) (1,821) (1,796) ============= ========= ======== ======== Balance sheet Assets - 781 2,524 3,305 Liabilities - (602) (2,138) (2,740) ------------- --------- -------- -------- - 179 386 565 ============= ========= ======== ======== Capital expenditure - 6 33 39 ============= ========= ======== ======== Year ended 31 May 2011 Feedback Feedback Other Total Instruments Data GBP000 GBP000 GBP000 GBP000 Revenue External 4,558 1,750 - 6,308 ------------- --------- -------- -------- Finance expense - - 9 9 ------------- --------- -------- -------- Loss before tax (466) (23) (351) (840) ============= ========= ======== ======== Balance sheet Assets 1,359 975 3,329 5,663 Liabilities (1,096) (985) (1,635) (3,716) ------------- --------- -------- -------- 263 (10) 1,694 1,947 ============= ========= ======== ======== Capital expenditure 6 37 53 96 ============= ========= ======== ========
Reported segments' assets are reconciled to total assets as follows:
2012 2011 GBP000 GBP000 Segment assets for reportable segments 3,305 5,663 Unallocated: Inter-company receivables adjustment (1,223) (1,541) Intangible assets 330 732 Investments (140) (281) -------- -------- Total assets per the balance sheet 2,272 4,573 ======== ========
Reported segments' assets are reconciled to total assets as follows:
2012 2011 GBP000 GBP000 Segment liabilities for reportable segments 2,740 3,716 Inter-company payables adjustment (1,666) (1,990) Deferred tax 86 198 -------- -------- Total liabilities per the balance sheet 1,160 1,924 ======== ======== External revenue Total assets Capital expenditure by location of by location of by location of customer assets assets 2012 2011 2012 2011 2012 2011 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 United Kingdom 3,070 2,820 2,258 4,312 51 95 Rest of Europe 644 879 14 14 - - United States of America 445 734 - 247 - 1 Other Americas 498 148 - - - - Asia 1,040 792 - - - - Africa 384 192 - - - - Middle East 965 743 - - - - --------- -------- -------- -------- ---------- ---------- Total 7,046 6,308 2,272 4,573 51 96 ========= ======== ======== ======== ========== ========== 4. OTHER OPERATING EXPENSES 2012 2011 GBP000 GBP000 Distribution costs 1,821 1,352 Administrative costs: Research and development 619 526 Other 422 1,292 ------- ------- 2,862 3,170 ======= ======= 5. LOSS PER SHARE
Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of GBP1,819,000 (2011: GBP862,000) and on the weighted average of 123,679,889 (2011: 109,146,746) shares in issue.
6. PROPERTY, PLANT AND EQUIPMENT Land and Plant and Motor buildings equipment vehicles Total GBP000 GBP000 GBP000 GBP000 Cost of valuation At 31 May 2010 1,441 757 19 2,217 Additions - 96 - 96 Exchange adjustments - 2 - 2 ---------- ---------- --------- -------- At 31 May 2011 1,441 855 19 2,315 Additions - 51 - 51 Disposal (504) (5) (509) Reclassification (1,441) - - (1,441) ---------- ---------- --------- -------- At 31 May 2012 - 402 14 416 ---------- ---------- --------- -------- Depreciation At 31 May 2010 71 528 15 614 Charge for the year 23 170 1 194 Exchange adjustments - 2 - 2 ---------- ---------- --------- -------- At 31 May 2011 94 700 16 810 Charge for the year 24 121 1 146 Disposal - (492) (3) (495) Reclassification (118) - - (118) ---------- ---------- --------- -------- At 31 May 2012 - 329 14 343 ---------- ---------- --------- -------- Net book value At 31 May 2012 - 73 - 73 ========== ========== ========= ======== At 31 May 2011 1,347 155 3 1,505 ========== ========== ========= ======== 7. INTANGIBLE ASSETS Development expenditure GBP000 Cost At 31 May 2010 3,725 Additions 370 ------------- At 31 May 2011 4,095 Additions 258 Disposed on sale of subsidiary (2,236) ------------- At 31 May 2012 2,117 ------------- Amortisation At 31 May 2010 2,992 Charge for the year 371 ------------- At 31 May 2011 3,363 Charge for the year 362 Disposed on sale of subsidiary (1,938) ------------- At 31 May 2012 1,787 ------------- Net book value At 31 May 2012 330 ============= At 31 May 2011 732 ============= 8. INVENTORIES 2012 2011 GBP000 GBP000 Raw materials and consumables 308 432 Work in progress 8 11 Finished goods - 587 ------- ------- 316 1,030 ======= ======= 9. OTHER PAYABLES 2012 2011 GBP000 GBP000 Amounts falling due within one year Other payables 124 260 Other taxes and social security 44 102 Accruals and deferred income 520 455 ------- ------- 688 817 ======= ======= 10. PUBLICATION OF ANNOUNCEMENT AND REPORT AND ACCOUNTS
A copy of this announcement will be available at the Company's registered office (Park Road, Crowborough, East Sussex TN6 2QR) and on its website - www.fbk.com.
This announcement is not being sent to shareholders. The Annual Report will be posted to shareholders shortly and will be made available on the website.
For further information contact:
Feedback plc Tel: 0845 3379 155 Nick Shepheard Merchant Securities Limited Simon Clements/Lindsay Mair Tel: 020 7628 2200
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DQLFBLFFXFBE
1 Year Feedback Chart |
1 Month Feedback Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions