Interim Results

 

TIDMINN 
 
RNS Number : 0195E 
Innovision Research&Technology PLC 
14 December 2009 
 
? 
ANNOUNCEMENT 
 
 
INNOVISION RESEARCH & TECHNOLOGY PLC 
 
 
Results for six months ending 30 September 2009. 
 
 
Innovision Research & Technology plc today announces its interim results for the 
six months ending 30 September 2009. 
 
 
Highlights: 
 
 
-    Progress made on new development programmes with Tier 1 suppliers into the 
mobile telecoms 
 

     industry - implementation remains the focus over the 
coming months; 
-    Delivered technology to first Chinese customer - early test results 
encouraging; 
-    Completed successful share placing raising GBP5.2m; 
-    Additional time and resource invested in Innovision's 1.8volt generation 
NFC IP* - remain on 
 

     track to deliver to customer volume production 
requirements and timescales. 
-    Progress in shipping Jewel  into transport ticketing applications. 
 
 
 
 
Commenting on the results, David Wollen, Chief Executive said: 
 
 
"The Company recently engaged with semiconductor industry leaders creating 
analogue and RF designs on state of the art processes. We continue to develop 
well in this environment meeting the challenges that present themselves in order 
to deliver to time and specification. The main focus of our activity is NFC and 
whilst the exact timing of volume deployment remains difficult to predict, we do 
expect shipments of combo devices with NFC to start in late 2011 or 2012". 
 
 
Enquiries: 
 
 
Innovision Research & Technology plc    Tel: [phone] 
David Wollen, Chief Executive Officer 
Brian McKenzie, Finance Director 
 
 
* Near Field Communication Intellectual Property 
  See www.nfc-forum.org 
 
 
 
The Chairman's and Chief Executive's Statement 
 
 
This six-month period has been focused on the first phase of implementation of 
several major contracts with Tier 1 suppliers into the mobile telecoms industry. 
These contracts are for integration of Innovision's Near Field Communication 
(NFC) intellectual property (IP) into chips which combine several wireless 
functions onto one chip ("combo" chips). Completion of the 1.8volt generation of 
our NFC IP from the previous 3.3volt version has been more involved and taken 
longer than planned. Due to the timing of customer requirements to deliver 
initial test devices the intensity on their programmes has been raised, However, 
the Company remains on track to generate significant royalties arising from 
mobile handset shipments starting in 2011/12. 
 
 
In China, we have delivered our technology to our first customer, and this has 
been incorporated into an initial chip. Early results from the initial testing 
and evaluation of samples have been encouraging. Once qualified, we expect 
royalties from product sales to begin in the second half of 2010. 
 
 
In July, we completed a successful placing of 30 million shares raising GBP5.2m 
net of expenses. This funding is designated to support development of the NFC IP 
business until royalty flow, and, the development of the NFC product/tag 
business. On the back of the contracts won, we increased the engineering team 
headcount by 40% with a combination of shorter-term contract staff and planned 
permanent employees in order to fulfil the customer commitments and maintain the 
investment in our market leading NFC IP. 
 
 
Results for the six months (unaudited) 
 
 
The Company is still in the pre-royalty phase and therefore the majority of 
revenue again relates only to development services. Overall revenue was GBP1.0m 
(2008: GBP0.8m). Of the total revenue, 84% (2008: 98%) relates to design 
services provided to major semiconductor customers in order to customise our 
background IP for inclusion into their products. 
 
 
As expected, gross profit on engineering has been impacted by the reduction in 
development funding available from customers. There has also been incremental 
engineering resource required to address the technical and customer-specific 
challenges earlier than planned, which has come at a higher effective man-day 
rate as we are using contractors to maintain flexibility through peak periods. 
These factors have contributed to the increase in direct costs to GBP1.1m (2008 
GBP0.5m). 
 
 
At 30 September 2009, we had cash deposits of GBP7.1m (2008: GBP4.3m) and 
additional net current assets of GBP0.4m (2008: GBP1.9m). Net cash outflow was 
GBP1.6m excluding the GBP5.2m net proceeds from the share placing (2008: 
GBP1.3m) and is in line with the loss for the period. The reduction in other net 
current assets reflects the timing of milestone payments on the major contracts. 
 
 
We continued to invest in our background NFC IP and the new Emerald tag 
platform, spending GBP0.8m (2008: GBP1.0m) for the six months under review. This 
investment in background IP has been an important element in securing the NFC 
business and the major engineering focus over the last year. In the second half 
the focus will switch to the customisation of this IP directly for customers. 
Administrative overheads were in line with the same period last year at GBP1.7m 
(2008: GBP1.7m). 
 
 
With the reduced gross margin and lower investment income as interest rates have 
fallen, the loss after tax for the 6 months to 30 September 2009 was GBP1.6m 
(2008: GBP1.1m). 
 
 
Operations Review 
 
 
Over the period, we have strengthened our IC design capability and maintained 
our position as a leading company in our field. This has included investment in 
transferring our IP to state of the art manufacturing processes. 
 
 
The primary focus for our design team is the work on existing development 
programmes for our major customers and the continued development of our 
background IP to meet the market demands for existing and prospective customers. 
Good progress has been made in all areas though at the cost of additional 
resources. As a result, it is unlikely that we will take on major new in-house 
development programmes until next year. We are focussing on new projects that 
require less customisation by our engineering teams and, in due course, we 
expect this IP transfer model to become more prevalent. 
 
 
In the tag area, we have made good progress both on technology development and 
production costs. We expect to start production for a specific large customer in 
the second half of 2010. The volume of NFC-related tag sales is starting to 
increase and we are investing now to take advantage of what we believe will be a 
very attractive market in the medium term. 
 
 
We have completed the relocation of the system design facility in Wokingham and 
are actively reviewing cost effective options to move our Cirencester 
headquarters to more appropriate premises from which to manage the next stages 
of the company's development. 
 
 
Current trading and outlook 
 
 
Consumer handsets with NFC based on stand-alone controllers will be available 
from 2010/11 with fully integrated NFC handsets based on our IP following from 
2011/12. We expect volumes to grow through 2012 to 2015. Once the "combo" chips 
are designed into devices, the company will generate revenue from licence fees, 
royalties based on the shipments of the combination chips and the sales of tags 
for use with these devices. The market for tags may ultimately be greater than 
the royalty stream from the devices themselves. 
 
 
Our focus for the remainder of this financial year is moving forward with the 
implementation phases of our current development programmes and securing 
additional IP and product-based contracts for next year. We are entering a 
number of months of concentrated development effort to achieve our customers' 
aggressive goals. This additional effort and cost will continue to impact us for 
the rest of this year but it is encouraging that there is growing visibility of 
NFC in future mobile handsets and this gives us confidence in achieving our 
long-term goals. 
 
 
 
 
 
 
Malcolm Baggott       David Wollen 
Chairman 
Chief Executive 
11 December 2009   11 December 2009 
 
 
 
INTERIM STATEMENT OF COMPREHENSIVE INCOME 
30 September 2009 (unaudited) 
 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           | Notes |  6 months |   6 months |  12 months | 
|                                           |       |  ended 30 |   ended 30 |   ended 31 | 
|                                           |       | September |  September |      March | 
|                                           |       |      2009 |       2008 |       2009 | 
|                                           |       |   GBP'000 |    GBP'000 |    GBP'000 | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Revenue                                   |     2 |     1,042 |        830 |      1,192 | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Cost of sales                             |       |   (1,105) |      (492) |      (600) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Gross profit                              |       |      (63) |        338 |        592 | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Administrative expenses                   |       |   (1,737) |    (1,675) |    (3,731) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| OPERATING LOSS                            |       |   (1,800) |    (1,337) |    (3,139) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Investment Income                         |       |        45 |        142 |        216 | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| LOSS BEFORE TAXATION                      |       |   (1,755) |    (1,195) |    (2,923) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Tax                                       |     3 |       126 |        100 |        334 | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| LOSS FOR THE PERIOD                       |       |   (1,629) |    (1,095) |    (2,589) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Other comprehensive income for the period |       |         - |          - |          - | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |       |   (1,629) |    (1,095) |    (2,589) | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| LOSS PER SHARE                            |       |     Pence |  Pence per |  Pence per | 
|                                           |       |       per |      share |      share | 
|                                           |       |     share |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
|                                           |       |           |            |            | 
+-------------------------------------------+-------+-----------+------------+------------+ 
| Basic and diluted                         |     4 |    (2.26) |     (1.78) | (4.20)     | 
+-------------------------------------------+-------+-----------+------------+------------+ 
 
 
The results were all derived from continuing operations. 
 
 
The total comprehensive income for the period is wholly attributable to the 
equity shareholders of Innovision Research & Technology plc. 
 
 
 
 
INTERIM STATEMENT OF FINANCIAL POSITION 
30 September 2009 (unaudited) 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |  As at 30 |   As at 30 |      As at | 
|                                       |      | September |  September |   31 March | 
|                                       |      |      2009 |       2008 |       2009 | 
|                                       |      |   GBP'000 |    GBP'000 |    GBP'000 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Non-Current Assets                    |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Property, plant & equipment           |      |       241 |        159 |        217 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Intangible assets                     |      |     1,063 |        412 |        646 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Other receivables                     |      |         2 |          3 |          2 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |     1,306 |        574 |        865 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Current Assets                        |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Inventories                           |      |        81 |         40 |         80 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Trade and other receivables           |      |       692 |      2,343 |      1,125 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Current tax asset                     |      |       125 |         75 |        310 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Cash and cash equivalents             |      |     7,100 |      4,274 |      3,585 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |     7,998 |      6,732 |      5,100 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| TOTAL ASSETS                          |      |     9,304 |      7,306 |      5,965 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Current Liabilities                   |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Trade and other payables              |      |       495 |        531 |        607 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Provisions                            |      |         - |         37 |         99 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| TOTAL LIABILITIES                     |      |       495 |        568 |        706 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| NET ASSETS                            |      |     8,809 |      6,738 |      5,259 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Equity                                |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| Share Capital                         |      |       915 |        615 |        615 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Share Premium Account                 |      |    26,596 |     21,735 |     21,735 | 
+---------------------------------------+------+-----------+------------+------------+ 
| Retained Earnings                     |      |  (18,702) |   (15,612) |   (17,091) | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| TOTAL EQUITY ATTRIBUTABLE TO EQUITY   |      |           |            |            | 
| SHAREHOLDERS                          |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
| OF THE COMPANY                        |      |     8,809 |      6,738 |      5,259 | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
|                                       |      |           |            |            | 
+---------------------------------------+------+-----------+------------+------------+ 
 
INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 
for the six months ended 30 September 2009 (unaudited) 
+---------------------------------------+----------+----------+------------+------------+ 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
|                                       |    Share |    Share |   Retained |      Total | 
|                                       |  Capital |  Premium |   Earnings |            | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |  GBP'000 |  GBP'000 |    GBP'000 |    GBP'000 | 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| At 1 April 2008                       |      615 |   21,735 |   (14,531) |      7,819 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Total comprehensive income for the    |        - |        - |    (1,095) |    (1,095) | 
| period                                |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Share based payments                  |        - |        - |         14 |         14 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| At 30 September 2008                  |      615 |   21,735 |   (15,612) |      6,738 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Total comprehensive income for the    |        - |        - |    (1,494) |    (1,494) | 
| period                                |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Share based payments                  |        - |        - |         15 |         15 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| At 31 March 2009                      |      615 |   21,735 |   (17,091) |      5,259 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Total comprehensive income for the    |        - |        - |    (1,629) |    (1,629) | 
| period                                |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| Share based payments                  |        - |        - |         18 |         18 | 
+---------------------------------------+----------+----------+------------+------------+ 
| Issue of share capital                |      300 |    5,100 |          - |      5,400 | 
+---------------------------------------+----------+----------+------------+------------+ 
| Share issue costs                     |        - |    (239) |          - |      (239) | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
| At 30 September 2009                  |      915 |   26,596 |   (18,702) |      8,809 | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
|                                       |          |          |            |            | 
+---------------------------------------+----------+----------+------------+------------+ 
 
INTERIM STATEMENT OF CASH FLOWS 
for the six months ended 30 September 2009 (unaudited) 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          | Note  |  6 months |   6 months |       12 | 
|                                          |       |  ended 30 |   ended 30 |   months | 
|                                          |       | September |  September | ended 31 | 
|                                          |       |     2009  |      2008  |    March | 
|                                          |       |  GBP'000  |   GBP'000  |     2009 | 
|                                          |       |           |            |  GBP'000 | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Cash utilised in operations              |  5    |   (1,195) |    (1,047) |    (895) | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Tax credit received                      |       |       311 |        160 |      160 | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Net cash outflow from operating          |       |     (884) |      (887) |    (735) | 
| activities                               |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Investing activities                     |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Interest received                        |       |       117 |        112 |      209 | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Purchases of property, plant & equipment |       |      (94) |       (25) |    (143) | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Investment in intangible assets          |       |     (785) |      (514) |  (1,334) | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Net cash outflow from investing          |       |     (762) |      (427) |  (1,268) | 
| activities                               |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Financing activities                     |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Proceeds on issue of shares              |       |     5,400 |          - |        - | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Share capital issue costs                |       |     (239) |          - |        - | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Net cash from financing activities       |       |     5,161 |          - |        - | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Net increase / (decrease) in cash & cash |       |     3,515 |    (1,314) |  (2,003) | 
| equivalents                              |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Cash & cash equivalents at the beginning |       |     3,585 |      5,588 |    5,588 | 
| of the period                            |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
| Cash & cash equivalents at the end of    |       |     7,100 |      4,274 |    3,585 | 
| the period                               |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
|                                          |       |           |            |          | 
+------------------------------------------+-------+-----------+------------+----------+ 
 
 
 
NOTES TO THE INTERIM FINANCIAL STATEMENTS 
for the six months ended 30 September 2009 (unaudited) 
 
 
1    BASIS OF PREPARATION 
 
 
Innovision Research & Technology plc is a public limited company incorporated in 
the United Kingdom under the Companies Act 1985. The Company is domiciled in the 
United Kingdom and its ordinary shares are traded on the Alterative Investment 
Market (AIM). 
 
The annual financial statements of Innovision Research & Technology plc are 
prepared in accordance IFRS as adopted by the European Union. These interim 
financial statements do not constitute statutory accounts within the meaning of 
section 434 Companies Act 2006. Statutory accounts for the year ended 31 March 
2009 were approved by the Board of Directors on 10 June 2009 and delivered to 
the Registrar of Companies. The report of the auditor on those accounts was 
unqualified and did not contain a statement under section 237(2) or (3) 
Companies Act 1985. 
 
 
The interim results, which have been reviewed but not audited, have been 
prepared using accounting policies consistent with those used in the preparation 
of the annual report and accounts for the year ended 31 March 2009. 
 
 
In these interim financial statements the Company has implemented the revised 
IAS 1 "Presentation of Financial Statements" (2007), which became effective for 
accounting periods beginning on or after 1 January 2009. As a result the income 
statement, balance sheet and cash flow statement have been renamed as the 
statement of comprehensive income, statement of financial position and statement 
of cash flows. Comparative information has been re-presented on a consistent 
basis. 
 
 
As permitted this interim report has been prepared in accordance with UK AIM 
listing rules and not in accordance with IAS 34 "Interim Financial Reporting" 
therefore it is not fully in compliance with IFRS. 
 
 
The interim financial statements are presented in sterling and all values are 
rounded to the nearest thousand pounds (GBP'000) except when otherwise 
indicated. 
 
 
2      REVENUE 
 
 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     |                                          |  6 months |  6 months |       12 | 
|     |                                          |  ended 30 |  ended 30 |   months | 
|     |                                          | September | September | ended 31 | 
|     |                                          |     2009  |     2008  |    March | 
|     |                                          |  GBP'000  |  GBP'000  |     2009 | 
|     |                                          |           |           |  GBP'000 | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     | By Type:                                 |           |           |          | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     | Development Engineering                  |       873 |       810 |      906 | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     | Licence fees & Royalties                 |       122 |         - |      195 | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     | Product Sales                            |        47 |        20 |       91 | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     |                                          |           |           |          | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     |                                          |     1,042 |       830 |    1,192 | 
+-----+------------------------------------------+-----------+-----------+----------+ 
|     |                                          |           |           |          | 
+-----+------------------------------------------+-----------+-----------+----------+ 
 
 
The Company has not implemented IFRS 8 "Operating Segments" in these interim 
financial statements and consequently Note 2 is not in accordance with this 
standard. IFRS 8 will be implemented in full in the financial statements for the 
year ended 31 March 2010. 
 
 
3      TAXATION 
 
 
Taxation for the six months to 30 September 2009 is based on the estimated tax 
credits for Research and Development. 
 
 
4    LOSS PER SHARE 
Basic loss per share has been calculated by dividing the loss for the period 
attributable to ordinary shareholders by the weighted average number of shares 
in issue during the period. 
 
 
For diluted earnings per share, the weighted average number of ordinary shares 
in issue is adjusted to assume conversion of all dilutive potential ordinary 
shares. Dilutive potential ordinary shares arise from employee share options. At 
30 September 2009 the average market price of the company's ordinary shares was 
more than the exercise price of the options and consequently the shares in 
question are excluded from the diluted EPS calculation. There is therefore no 
dilution as a result of outstanding options. 
 
 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      |                                         |       6 months |       6 months |      12 months | 
|      |                                         |       ended 30 |       ended 30 |       ended 31 | 
|      |                                         |      September |      September |          March | 
|      |                                         |           2009 |           2008 |           2009 | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      |                                         |                |                |                | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      | Loss for the period                     | (GBP1,629,000) | (GBP1,095,000) | (GBP2,589,000) | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      |                                         |                |                |                | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      | Weighted average number of shares       | 72,070,415     | 61,556,121     | 61,556,121     | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      |                                         |                |                |                | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
|      | Loss per share (basic & diluted) -      | (2.26)         | (1.78)         | (4.20)         | 
|      | pence per share                         |                |                |                | 
+------+-----------------------------------------+----------------+----------------+----------------+ 
 
 
 
5    RECONCILIATION OF LOSS BEFORE TAX TO CASH UTILISED BY OPERATIONS 
 
 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |   6 months |   6 months |  12 months | 
|     |                                          |   ended 30 |   ended 30 |   ended 31 | 
|     |                                          |  September |  September |      March | 
|     |                                          |      2009  |      2008  |       2009 | 
|     |                                          |   GBP'000  |   GBP'000  |   GBP'000  | 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Loss before tax                          |    (1,755) |    (1,195) |    (2,923) | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Adjustments for:                         |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Depreciation of property, plant &        |         70 |         70 |        130 | 
|     | equipment                                |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Loss on disposal of property, plant &    |          - |          2 |          2 | 
|     | equipment                                |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Amortisation of intangible fixed assets  |        368 |        304 |        890 | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Share based payments                     |         18 |         14 |         29 | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Decrease / (increase) in provisions      |       (99) |       (17) |         45 | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Investment income                        |       (45) |      (142) |      (216) | 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Operating cash flows before movements in |    (1,443) |      (964) |    (2,043) | 
|     | working capital                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Increase in inventories                  |        (1) |       (34) |       (74) | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Decrease in receivables                  |        361 |         37 |      1,232 | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Decrease in payables                     |      (112) |       (86) |       (10) | 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     | Cash utilised by operations              |    (1,195) |    (1,047) |      (895) | 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
|     |                                          |            |            |            | 
+-----+------------------------------------------+------------+------------+------------+ 
6    APPROVAL OF THE INTERIM FINANCIAL STATEMENTS 
The interim financial statements set out above were approved and authorised for 
issue by the directors on 11 December 2009. 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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