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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Innovision Res. | LSE:INN | London | Ordinary Share | GB0030308448 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 34.75 | 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:6684Y Innovision Research&Technology PLC 19 June 2007 Innovision Research & Technology plc ("Innovision" or the "Company") Preliminary results for the year ended 31 March 2007 HIGHLIGHTS *The Company has made good progress in the last 12 months with further investment in the business and its Intellectual Property (IP) and the winning of significant new contracts for the Near Field Communications (NFC) market. *The financial results show that 2006/07 was the highest ever revenue for the Company. The revenue for the year has more than doubled to #3.5 million (2006: #1.7 million). *The loss halved in the year to #1.5 million (2006: #3.0 million). This translates to a loss per share of approximately 3.1 pence (2005/06: 6.4 pence). *Three existing projects progressed to prototype design, one uniquely integrating NFC with Bluetooth and two others offering advanced multi-frequency RFID solutions. *Engineering capability was enhanced through hiring of additional designers and further investment in industry-standard design tools. *The Company will announce today a placing of approximately 14.45 million new ordinary shares of 1 pence each raising approximately #6.5 million before expenses (approximately #6.2 million net of expenses). David Wollen, Chief Executive Officer said: " We are very pleased with the progress the Company has made during the last year, especially in securing new contracts with major customers for the NFC market and with our in-house development of key NFC Intellectual Property. Our increasingly high quality prospect list gives us confidence as we move into the new year." Enquiries: Innovision Research & Technology plc Tel: 01285 888 200 David Wollen, Chief Executive Officer Brian McKenzie, Finance Director KBC Peel Hunt Ltd Tel: 020 7418 8900 Oliver Scott David Anderson STATEMENT FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE Summary Over the past year the Company has made good progress winning and extending contracts and, in particular, won a major new contract during the year and another since the year end. There has also been significant recruitment of new staff, improvements to the engineering tools, investment in developing our Intellectual Property (IP) base and improvement in the financial performance. The Company is in a good position to exploit the market opportunities in the near and medium term. Financial Results The financial results also show a marked improvement from 2005/06. With the benefit of high royalty and licence revenues, turnover has more than doubled to #3.5 million (2006: #1.7 million). The loss has halved to #1.5 million (2006: #3.0 million). The investment in research and development increased to #1.7 million (2006: #0.6 million) of which #1.4 million related to the development of IP aimed primarily at the Near Field Communications (NFC) market, though with general relevance to a number of complementary RFID areas. This is a significant investment, but it has already been endorsed with the signing of a recent three year framework agreement and it puts us in a strong position going forward to capitalise on NFC market growth through licence income and development revenue relating to the customisation for specific customers. We intend to continue to invest in this area to keep ourselves at the leading edge of designs and design techniques. Development funding from customers was relatively unchanged at #1.2 million (2006: #1.3 million) while there was a notable increase in royalty and licence revenue to #1.8 million (2006: #0.3 million). The Company also generated #0.4 million income (2006: nil) from product sales related to wafer shipments. Cash reserves at year end stood at #1.8 million (2006: #4.1 million). The net cash movement for the year has been negatively impacted by the timing of some significant payments (approximately #1.1 million) on long term contracts which are anticipated to reverse in the first half of 2007/08. However we believe we need to invest ahead of the predicted revenues and will require additional cash resources. The Company will therefore announce today a placing of 14.45m new ordinary shares of 1 pence each raising approximately #6.5 million before expenses (#6.2 million net of expenses). Contracts We have moved forward on the RFID contracts in progress at the beginning of the year. Three designs progressed to initial prototype design and chips were delivered into a novel toy application for a large US company. There has also been significant progress within the contactless ticketing activity for mass transport with the first order of a new multi-million unit design win received in May 2007. During the year, the Company secured a major new contract in the Near Field Communications (NFC) area and since the year-end we have signed a significant three year framework agreement for a series of Integrated Circuit (IC) designs for NFC. Both contracts are with major semiconductor companies selling into the mobile handset market, which endorses the IP, skills and knowledge we have built up in NFC. Strategy The Company's strategy remains the development and licensing of IC designs and IP for the near-field data communications market and recent contract wins and current opportunities support our belief that we have a strong and unique offering in this sector. Our current focus is on NFC and our presence as a key player on the NFC Forum, our custom IC design capability and our investment in growing the IP portfolio provide a solid base on which to grow as the NFC market develops. We will continue to look for additional opportunities to apply our design skills and IP within other near-field data communications and RFID markets both in engineering, licensing and product development at chip level (such as Jewel(R) and Topaz(R)) and at systems level. We are seeking to develop partnerships with leading companies whose market, geographic reach and capabilities complement our own. Through these partnerships we will continue to offer standards-based products and capabilities specifically tailored to the market they serve. Markets We are seeing increasing prominence given to Near Field Communications (NFC), with the mobile operators in the GSM Association promoting NFC through white papers, statements from certain operators that NFC is part of their future requirements, mobile handset manufacturers identifying NFC on their product roadmaps and numerous successful trials underway, including use of NFC for contactless payments and ticketing, both of which are applications targeted by the Company. The indications are that mass market devices will start to be shipped during 2008/09 with growth predicted over the following years. Our expertise in value-added RFID tags has enabled us to tape-out two designs in this area which we believe are market leading technology. We are targeting further RFID designs and expect royalties from these products to begin towards the end of the 2007/08 and to be material in 2008/09. Mass Transit remains a potentially large market for our contactless ticketing chip, Jewel. Overall uptake of contactless ticketing by mass transit organisations is slower than anticipated and Jewel's market share is lower than we would have liked. However, we have recently shipped an initial batch to a large transport customer and have received a first order of a new multi-million unit design win. We continue to promote Jewel and whilst we have scaled back our expectations we are confident this can be a solid revenue stream in the future. We are constantly looking to find additional markets to which our core skills can add value. We believe that a standards-based approach can be successful in a number of markets, both geographic and technology specific. Our strategy to enter new markets is to work with credible partners who have the appropriate knowledge, contacts and existing market presence to exploit the opportunities presented. We have identified potential partners in a number of key markets and will continue these discussions over the coming months. Operations The last financial year saw a significant expansion of our IC design team and other functions in Cirencester, with more than twenty new hires. We invested heavily in new Electronic Design Automation (EDA) design tools from Cadence and Mentor Graphics, which enable us to more easily interface with our sophisticated global semiconductor customers in a world-class design environment. The Company plays a strong role in the NFC standards body (see www.nfc-forum.org ), where we continue to chair a key technical committee and now a key marketing committee. The Company is recognised as a leader in custom IC design for this market place and our profile within the NFC Forum and the global NFC community in general, combined with the IP base and design capability, puts us in a strong position to exploit the new opportunities as they arise. Our experience in custom tag and reader IC design combined with strong systems design skills enabled us to deliver approximately 8 million tag chips in the first half of the year. Furthermore we have invested in our chip testing facility and in production planning in anticipation of mass-market chips and tags demand over the next few years. Outlook The Company is confident of building on the achievements of the past year with good prospects of further contract wins. As ever, the exact timing and nature of contracts is difficult to predict, although there has been a steady increase in the interest in and demand for our capabilities and business offering from a steadily growing prospect list. This is made up primarily of top global semiconductor corporations who see our IP and custom development capabilities as a way to add considerable value to their own products whilst reducing their risk, time to market, cost and deployment of precious design resources to add unique NFC capability. Malcolm Baggott David Wollen Chairman Chief Executive Officer June 2007 June 2007 PROFIT AND LOSS ACCOUNT Notes 2007 2006 #'000 #'000 as restated Turnover 2 3,485 1,650 Cost of sales (295) (101) -------- -------- Gross profit 3,190 1,549 Administrative expenses Operating costs (4,940) (4,347) Exceptional items - (556) -------- -------- Operating loss (1,750) (3,354) Interest receivable 143 252 -------- -------- Loss on ordinary activities before taxation 3 (1,607) (3,102) Taxation 4 136 80 -------- -------- Loss for the year (1,471) (3,022) ======== ======== Earnings per share Pence per share Pence per share Basic and diluted 5 (3.12) (6.42) The operating loss for the year arises from the Company's continuing operations. BALANCE SHEET Notes 2007 2006 #'000 #'000 as restated Fixed assets Tangible assets 309 283 -------- -------- 309 283 -------- -------- Current assets Stocks 15 16 Debtors 2,149 1,370 Cash at bank and in hand 6 1,836 4,075 -------- -------- 4,000 5,461 Creditors: Amounts falling due within one year (759) (742) Net current assets 3,241 4,719 -------- -------- Total assets less current liabilities 3,550 5,002 Provisions for liabilities and charges (89) (190) -------- -------- Net assets 3,461 4,812 ======== ======== Capital and reserves Called up share capital 7 471 470 Share premium 15,652 15,641 Profit and loss account 8 (12,662) (11,299) -------- -------- Equity shareholders' funds 9 3,461 4,812 -------- -------- CASH FLOW STATEMENT Notes 2007 2006 #'000 #'000 Net cash outflow from operating activities 10 (2,273) (3,282) -------- -------- Returns on investments and servicing of finance Interest received 145 256 -------- -------- Taxation 85 100 -------- -------- Capital expenditure and financial investment Purchase of tangible fixed assets (208) (165) Sale of tangible fixed assets - 1 -------- -------- Net cash flow for capital expenditure and financial investment (208) (164) -------- -------- Cash outflow before use of liquid resources and (2,251) (3,090) financing Management of liquid resources Decrease in treasury deposit account 2,310 2,432 Financing Net proceeds from share issue 12 428 -------- -------- Increase / (Decrease) in cash in year 71 (230) ======== ======== Reconciliation of net cash flow to movement in net funds Increase / (Decrease) in cash in year 71 (230) Cash outflow in liquid resources (2,310) (2,432) -------- -------- Change in net funds resulting from cash flow (2,239) (2,662) Opening net funds 4,075 6,737 -------- -------- Closing net funds 11 1,836 4,075 ======== ======== NOTES TO THE ACCOUNTS (EXTRACTED) 1 Accounting Policies Basis of Preparation The financial statements have been prepared under the historical cost convention and in accordance with United Kingdom accounting standards. The accounting policies used are consistent with those contained in the Group's last annual report and accounts for the year ended 31 March 2006, with the exception that following the implementation of FRS 20 - Share Based Payment, the fair value of share options granted is recognised as a cost on the face of the profit and loss account (see note 8). Share-based payment The financial statements reflect the initial adoption of FRS 20, 'Share-based payment'. In accordance with the transitional provisions, FRS 20 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as at 1 January 2006. Equity-settled share based payments are measured at fair value (including the effect of non market-based vesting conditions) at the date of grant. The fair value is recognised on a straight line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions. Fair value is measured by use of the Black-Scholes pricing model. The adoption of this standard represents a change in accounting policy and the comparative figures have been restarted accordingly. Details of the prior year adjustment are given in notes 8 and 9. 2 Turnover The Company's turnover was all derived from its principal activities and was made to the following geographical markets: 2007 2006 #'000 #'000 United Kingdom 1,952 22 Rest of Europe 147 571 United States of America 620 765 Rest of the World 766 292 ------- ------- 3,485 1,650 ======= ======= Sales by business activity were as follows: Development engineering 1,240 1,325 Licence fees and Royalties 1,807 325 Product Sales 438 - ------- ------- 3,485 1,650 ======= ======= 3 Loss on ordinary activities before taxation has been 2007 2006 stated after charging / (crediting): #'000 #'000 Amounts payable to Baker Tilly UK Audit LLP (2006 Baker Tilly) in respect of both audit and non-audit services Audit services: Statutory audit 19 21 Audit related regulatory reporting 5 8 Tax services: Compliance services 3 3 Advisory services - 3 Government grants receivable (57) (51) Depreciation of tangible fixed assets 182 161 Loss on disposal of fixed assets - 3 Exchange rate loss 43 6 Research & development costs 1,737 629 Operating lease rentals: Land and buildings 262 185 Exceptional items: relocation and restructuring costs - 556 ======= ======= 4 Employees 2007 2006 No. No. Marketing and administration 19 21 Research and engineering 31 28 ------- ------- 50 49 ------- ------- 2007 2006 #'000 #'000 Staff costs for the above persons: Wages and salaries 2,570 2,307 Social security costs 298 262 Pension contributions 89 88 Cost of employee share schemes 108 101 ------- ------- 3,065 2,758 ------- ------- Directors' emoluments 2007 Basic Benefits Total Pension Share Total Salary #'000 Excl. option 2007 #'000 Pension #'000 gains #'000 #'000 #'000 Malcolm Baggott 40 - 40 - - 40 David Wollen 175 28 203 9 - 212 Marc Borrett 102 12 114 9 - 123 Heikki Huomo 90 12 102 9 - 111 Dr Ian Buckley-Golder 20 - 20 - - 20 Brian McKenzie (appointed 01/07/06) 40 - 40 4 - 44 Michael Wroe (resigned 01/07/06) 27 4 31 3 - 34 Paul Trevor Crotch-Harvey (resigned 11/07/06) 77 4 81 8 - 89 571 60 631 42 - 673 5 Earnings per share Basic earnings per share has been calculated by dividing the loss for the year of #1,468,000 (2006: #3,022,000) by the weighted average number of shares in issue during the year of 47,088,391 (2006: 47,038,890). For diluted earnings per share, the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares. Dilutive potential ordinary shares arise from employee share options. At 31 March 2007 the average market price of the Company's ordinary shares was less than the exercise price of the vast majority of share options (namely 14,750 share options) and consequently the shares in question are excluded from the diluted earnings per share calculation. There is therefore no dilution in the earnings per share as a result of outstanding options. 6 Financial instruments The Company's financial instruments comprise cash balances as follows: 2007 2006 #'000 #'000 Sterling bank deposits 1,534 3,844 Current accounts - Sterling 180 122 Current accounts - Euro 23 77 Current accounts - Dollar 99 32 ------- ------- 1,836 4,075 ------- ------- 7 Share capital 2007 2006 #'000 #'000 Authorised: 60,000,000 ordinary shares of 1p each 600 600 ======= ======= Allotted, issued and fully paid: 47,097,268 (2006: 47,057,268) ordinary shares of 1p each 471 470 ======= ======= 8 Profit and loss account 2007 2006 #'000 #'000 1 April (11,299) (8,378) Loss for the financial year as previously reported (1,471) (2,921) Prior year adjustment relating to the implementation - (101) of FRS 20, 'Share-based payment' -------- -------- Loss for the financial year (1,471) (3,022) Adjustment in respect of employee share schemes 108 101 -------- -------- 31 March (12,662) (11,299) -------- -------- 9 Reconciliation of movement in shareholders' funds 2007 2006 #'000 #'000 Loss for the financial year as previously reported (1,471) (2,921) Prior year adjustment relating to the implementation of - (101) FRS 20, 'Share-based payment' Loss for the financial year (1,471) (3,022) -------- -------- Proceeds from share issue 6 428 Refund re share issue costs 6 - Adjustment in respect of employee share schemes 108 101 -------- -------- Net addition to shareholders' funds (1,351) (2,493) Opening shareholders' funds 4,812 7,305 -------- -------- Closing shareholders' funds 3,461 4,812 -------- -------- 10 Reconciliation of operating loss 2007 2006 to net cash outflow from operating activities #'000 #'000 as restated Operating loss (1,750) (3,354) Depreciation 182 161 Loss on sale of fixed assets - 3 Decrease/ (increase) in stocks 1 (16) Increase in debtors (730) (476) Increase in creditors 17 109 (Decrease)/ increase in (101) 190 provisions for liabilities and charges Other non Cash changes 108 101 -------- -------- Net cash outflow from operating activities (2,273) (3,282) ======== ======== 11 Analysis of changes in net funds At 1 April Cash At 31 2006 flows March 2007 #'000 #'000 #'000 Other cash at bank and in hand 231 71 302 Short term bank deposits 3,844 (2,310) 1,534 ------- ------- ------- 4,075 (2,239) 1,836 ------- ------- ------- Copies of the Final Report Copies of the final report will be dispatched to shareholders and will be available to the public at the Registered Office, 33, Sheep Street, Cirencester, Gloucestershire, GL7 1RQ. Financial Information The financial information set out above does not constitute the statutory accounts of Innovision Research & Technology plc for the year ended 31 March 2007 and the year ended 31 March 2006. For the year ended 31 March 2007 the financial information is derived from the statutory accounts of the Company. For the year ended 31 March 2006 the financial information is derived from the statutory accounts delivered to the Registrar of Companies. The statutory accounts for the year ended 31 March 2007, which were approved by the Directors and authorised for issue on 19 June 2007, will be delivered following the Company's Annual General Meeting. The auditors have reported on the accounts for both periods; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange END FR OKCKPDBKBOAD
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