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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Robotic Tech | LSE:RTS | London | Ordinary Share | GB0007614935 | 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% | 3.25 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMRTS
RNS Number : 3826J
Robotic Technology Systems PLC
30 March 2010
Robotic Technology Systems PLC
Preliminary results for the year ended 31 December 2009
RTS is a high technology business supplying products and integrated systems to
automate scientific and industrial processes. RTS today announces its
preliminary results for the year ended 31 December 2009.
+------------------+----------+----------+----------+----------+
| | 2009 | 2009 | 2009 | 2008 |
| | H1 | H2 | TOTAL | TOTAL |
| | GBPM | GBPM | GBPM | GBPM |
+------------------+----------+----------+----------+----------+
| | | | | |
+------------------+----------+----------+----------+----------+
| Revenue | 5.5 | 6.3 | 11.8 | 10.5 |
| | | | | |
+------------------+----------+----------+----------+----------+
| | | | | |
+------------------+----------+----------+----------+----------+
| Operating | (0.2) | 0.0 | (0.2)* | (0.7) |
| (loss)/profit | | | | |
| before | | | | |
| 'exceptional' | | | | |
| items | | | | |
| | | | | |
+------------------+----------+----------+----------+----------+
| | | | | |
+------------------+----------+----------+----------+----------+
| 'Exceptional' | (0.1) | (0.5) | | (5.6) |
| costs | | | (0.6)** | |
+------------------+----------+----------+----------+----------+
| Net finance | 0.2 | 0.3 | 0.5* | 1.6 |
| income | | | | |
+------------------+----------+----------+----------+----------+
| Loss before | (0.1) | (0.3) | (0.4) | (4.8) |
| taxation | | | | |
+------------------+----------+----------+----------+----------+
| Profit/(loss) | 0.0 | 0.0 | 0.0 | (4.5) |
| after taxation | | | | |
| | | | | |
+------------------+----------+----------+----------+----------+
| Profit/(Loss) | 0.0p | 0.0p | 0.0p | (7.2)p |
| per share | | | | |
+------------------+----------+----------+----------+----------+
| Net cash | 3.0 | 2.1 | 2.1 | 2.8 |
+------------------+----------+----------+----------+----------+
* see notes 3 & 5 for the exchange movement effect
** See note 4 to the financial statements
KEY POINTS
· The Group's operational improvement continued, led by the Life
Science business, resulting in a return to profitability in the second half
· US acquisition of Hatch Science LLC ("Hatch Science" or "Hatch")
in February 2010 strengthens Life Science's presence in its key market
· The closing cash position of GBP2.1m (2008: GBP2.8m) does not
contain GBP0.3m of restricted cash included in other receivables and is after
the payment of an interim dividend of GBP0.6m in October 2009
· Gary Walsh is appointed to Chief Executive, with Chris Brown
reverting to his former role as Non-Executive Chairman
· The operational performance is anticipated to continue to improve
in 2010 although, due to project timing, this will be weighted towards the
second half
Chris Brown, Non-Executive Chairman of RTS, said:
"We have continued to focus on cost reductions and developing our capabilities
to fit the various niche markets we serve. This, in conjunction with the
competitive sterling exchange rate, means our business is well positioned to
continue operational improvement in 2010.
During the year we acquired the US company, Hatch Science, whose complementary
products and skills will help us accelerate our expansion in this key market.
The Company has invested significantly in new products over the last few years
and with its superior after-sales service is continuing to win business in a
difficult market."
30 March 2010
Enquiries:
+----------------------------------+-----------------------------+
| Robotic Technology Systems PLC | Tel: 0161 777 2000 |
+----------------------------------+-----------------------------+
| Chris Brown, Non-Executive | |
| Chairman | |
+----------------------------------+-----------------------------+
| Jon Sharrock, Finance Director | |
+----------------------------------+-----------------------------+
| | |
+----------------------------------+-----------------------------+
| College Hill | Tel: 020 7457 2020 |
+----------------------------------+-----------------------------+
| Jamie Ramsay | |
+----------------------------------+-----------------------------+
| | |
+----------------------------------+-----------------------------+
| Collins Stewart Europe Limited | Tel: 020 7523 8350 |
+----------------------------------+-----------------------------+
| Stewart Wallace | |
+----------------------------------+-----------------------------+
| | |
+----------------------------------+-----------------------------+
| | |
+----------------------------------+-----------------------------+
Chairman's statement
Business Results
Overall Group turnover increased by 13% to GBP11.8m (2008: GBP10.5m), with the
growth attributable to RTS Life Science, which more than made up for the decline
in the Flexible Systems business.
The underlying Group operating performance (before "exceptional" items) returned
to profitability in the second half of the year, reducing the pre-exceptional
operating loss for the year to GBP0.2m (2008: loss of GBP0.7m).
The Group generated a small profit after tax in the year (2008: loss GBP4.5m),
and a resulting earnings per share of 0.02 pence (2008: loss per share of 7.20
pence). The significant turnaround was attributable to a reduction in
"exceptional" costs (noted below) and an improvement in operational performance.
Life Science
Life Science continued to see strong sales in the second half of the year,
resulting in the full year sales increasing by 35% to GBP9.3m (2008: GBP6.9m).
The higher sales led to an improved operating profit before "exceptional" items
of GBP0.5m (2008: loss of GBP0.2m).
The business benefited significantly in 2009 from a major store order booked in
2008 that contributed GBP2.4m to revenues in the year. In 2009 we have taken
positive steps to address this reliance on large projects by increasing the
competitiveness of our smaller storage product and expanding our product
offerings. We believe we have accelerated this process with the acquisition in
February 2010 of Hatch Science LLC, a Boston-based company with complementary
products and skills.
Therefore, despite a reduction in the year end order book to GBP4.6m (2008:
GBP5.9m), we enter the year with a more diversified prospect list, and are
anticipating an increasing order book through 2010.
Flexible Systems
In a difficult market, Flexible Systems sales fell to GBP2.5m (2008: GBP3.5m).
This reduced volume, together with further cost overruns to complete a major
project, led to a pre-exceptional operating loss of GBP0.3m (2008: loss of
GBP0.7m)
Following the departure of the division's Managing Director in October 2009, we
have simplified the operating structure and the strategy of the business while
at the same time reducing its cost base and realigning its focus.
Despite a lower opening order book of GBP0.3m (2008: GBP0.6m), we are
anticipating that these changes will help to return the business to
profitability in 2010, based on a similar level of sales.
"Exceptional" Items
The Group recorded "exceptional" operating costs in the year of GBP0.6m, based
on certain restructuring and legal costs and goodwill impairment charges as
further explained in note 4 to the financial statements.
Cash management and the realisation of non-operating assets
Further progress in the realisation of the Doerfer Industries Inc ("Doerfer")
loan notes in the period led to a cash inflow of $745k (GBP480k) from capital
and interest payments. The contractual value of the notes at the end of the
year was $7.2m (GBP4.5m), but consistent with prior periods we have maintained a
full provision against these loan notes.
The overall net cash balance reduced to GBP2.1m (2008: GBP2.8m). This does not
include GBP0.3m included in other receivables in note 9 that is used to 'cash
cover' two bank guarantees due to expire in the first half of 2010. The
reduction in cash balances is largely accounted for by the payment of the
special interim dividend of GBP0.6m in October 2009
Board changes
In September 2009, John Mowinckel resigned as non-executive Director, Chris
Heminway was appointed to replace him on the Board.
In October 2009 David Bradford, the Managing Director of RTS Flexible Systems
and an executive member of the Board resigned to pursue other interests. The
management of both businesses has been consolidated under the leadership of Gary
Walsh.
In March 2010, the Board appointed Gary into the position of Chief Executive and
I have reverted to my former role as non-executive Chairman.
Outlook
We have continued to focus on cost reductions and developing our capabilities to
fit the various niche markets we serve. This, in conjunction with the
competitive sterling exchange rate, means our business is well positioned to
continue operational improvement in 2010.
The Company has invested significantly in new products over the last few years
and with its superior after sales service is continuing to win business in a
difficult market.
It remains the Board's strategy to return surplus funds to shareholders, whilst
retaining sufficient cash to support the operating businesses. The interim
dividend paid in the year takes the total cash returned to shareholders to
eleven pence per share since November 2005.
Chris Brown
Non-executive Chairman
30 March 2010
Life Science
Performance in 2009
We entered the year with a strong opening order book and this provided a
platform to increase turnover to GBP9.3m (2008: GBP6.9m). The higher volumes
and improved operational performance resulted in an operating profit before
"exceptional" items of GBP0.5m (2008: loss of GBP0.2m).
Our realignment strategy, initiated during 2008, placed emphasis on our core
competence in sample management with selective diversification into niche
adjacent markets. This strategy has allowed us to widen our customer base and
reduce our reliance on large one-off projects.
We continue to invest in product development and successfully secured early
adopter customer orders for our new Tube Auditor product launched in the year.
These sales will serve as a foundation and reference points for sales growth in
2010.
Our return to profitability has been achieved by the dedication and commitment
of our highly skilled and loyal staff who have delivered on their objectives and
created an excellent basis from which to build.
Markets and technologies
We continue to see a shift in our customer base with an increasing proportion of
our new sales being generated from academia and publicly funded research
institutes. This has helped to offset a reduction in opportunities from large
pharmaceutical companies, where consolidation and reduced research and
development budgets have depressed demand for new capital equipment. Our large
pharmaceutical customer base remains the foundation of our business and our
after-sales team work in partnership with our customers to upgrade and support
existing capital equipment ensuring that they maximise the value from their
original investment.
We have been reviewing our options to serve the US market more effectively for
some time, and at the beginning of 2009 we entered into a relationship with
Hatch Science LLC, at both a sales and operating level. This arrangement has
served both organisations well, and has culminated in RTS acquiring a 65%
controlling interest in Hatch during February 2010. Hatch is a leading edge
developer and manufacturer of scientific instruments for the pharmaceutical and
medical industries and is located close to Boston, Massachusetts. This
acquisition provides complementary products and skills to RTS and simultaneously
increases our presence in the important US market.
We continue to strengthen our position in the premium sample storage market.
With improvements in our offering and a more competitive position from the
strength of the dollar, we have regained market share against US competitors.
Further sales of the entry level SmaRTStore and recently updated Sample-Store
provide evidence that our customers are starting to appreciate the benefits of
the additional levels of service we bring in our offering.
New business in sample processing and storage of biological specimens is
encouraging. In the biobanking market we secured several new customers for our
ABF500 blood fractionation instrument and other related products. Although this
emerging market suffers from lengthy sales cycles and the rigours of public
procurement procedure we are optimistic that our investment in this sector will
continue to deliver results.
In the drug delivery automation business, we successfully generated repeat sales
of the "Walkaway Specialist" inhaler testing system range. This product is based
on a standard platform that requires minimal modification and configuration for
new devices and is now successfully serving an expanding customer base.
Outlook
Sample management, sample preparation and pharmaceutical testing applications in
the Life Science sector remain our focus. With dedicated teams serving several
related business lines and with an increasing range of products we expect to
deliver improved operational performance. We anticipate that our investment in
additional sales personnel, combined with our increased presence in the US
through the acquisition of Hatch will lead to a growing order book in 2010.
Flexible Systems
Performance in 2009
Flexible Systems continued to operate in difficult market conditions with
turnover reducing to GBP2.5m (2008: GBP3.5m) and an operating loss before
"exceptional" items of GBP340k (2008: loss of GBP760k).
At the end of October David Bradford left the Company to pursue other interests.
Following this the business and its prospects were reviewed within the multiple
markets that it serves. In the final quarter of 2009 we realigned Flexible
Systems' strategy and forged closer links with the Life Science division, which
has allowed us to remove cost and provide improved focus.
Markets and Technologies
Flexible Systems continues to serve the UK automation market with high
technology solutions requiring a multi-disciplinary approach. Its core
competences are in robotics, vision and high integrity software development.
The defence sector continues to play an important role in the future of Flexible
Systems with strategically important orders being won from a major new customer
in 2009.
In 2010 we intend to use our unique skill sets to provide more consultancy and
development services, an approach which will allow our customers to regulate
their budgets and minimise risk within a collaborative relationship.
The after-sales business continues to perform well. We provide support, service
and spare parts to our installed base and have added control system upgrades to
this unit. We have good relationships with the large control equipment OEMs who
use third parties for integration services.
Outlook
With a realigned strategy, a lower cost base and a clearer definition of our
targeted markets, we anticipate an improvement in operating performance from a
similar level of sales. We will continue to assess opportunities for efficiency
gains within the RTS Group by exploiting synergies between Flexible Systems and
Life Science.
Gary Walsh
Chief Executive
30 March 2010
Consolidated statement of comprehensive income
for the year ended 31 December
2009
+----------------------------------------+-------+----------+----------+
| | | 2009 | 2008 |
+----------------------------------------+-------+----------+----------+
| | Notes | GBP'000 | GBP'000 |
+----------------------------------------+-------+----------+----------+
| Revenue | 3 | 11,812 | 10,475 |
+----------------------------------------+-------+----------+----------+
| Cost of sales | | (7,933) | (7,919) |
+----------------------------------------+-------+----------+----------+
| Gross profit | | 3,879 | 2,556 |
+----------------------------------------+-------+----------+----------+
| Distribution costs | | (1,163) | (1,256) |
+----------------------------------------+-------+----------+----------+
| Administrative expenses | | (3,692) | (7,725) |
+----------------------------------------+-------+----------+----------+
| Other operating income | | 134 | 102 |
+----------------------------------------+-------+----------+----------+
| Operating loss | | (842) | (6,323) |
+----------------------------------------+-------+----------+----------+
| Operating loss before exceptional | | (216) | (743) |
| items | | | |
+----------------------------------------+-------+----------+----------+
| Exceptional items included in | 4 | (626) | (5,580) |
| administrative expenses above | | | |
+----------------------------------------+-------+----------+----------+
| Operating loss | | (842) | (6,323) |
+----------------------------------------+-------+----------+----------+
| Finance income | 5 | 481 | 1,620 |
+----------------------------------------+-------+----------+----------+
| Finance expense | 6 | (8) | (74) |
+----------------------------------------+-------+----------+----------+
| Net finance income | | 473 | 1,546 |
+----------------------------------------+-------+----------+----------+
| Loss before taxation | | (369) | (4,777) |
+----------------------------------------+-------+----------+----------+
| Taxation | | 379 | 286 |
+----------------------------------------+-------+----------+----------+
| Profit/(loss) for the year, | | 10 | (4,491) |
| attributable to equity shareholders of | | | |
| the parent | | | |
+----------------------------------------+-------+----------+----------+
| | | | |
+----------------------------------------+-------+----------+----------+
| Other comprehensive income | | | |
+----------------------------------------+-------+----------+----------+
| Other comprehensive income for the | | - | - |
| year | | | |
+----------------------------------------+-------+----------+----------+
| Total comprehensive income/(loss) for | | 10 | (4,491) |
| the year, all attributable to equity | | | |
| shareholders of the parent | | | |
+----------------------------------------+-------+----------+----------+
| | | | |
+----------------------------------------+-------+----------+----------+
| Earnings/(loss) per share | | | |
+----------------------------------------+-------+----------+----------+
| Total basic and diluted | 7 | 0.02p | (7.20)p |
| earnings/(loss) per share attributable | | | |
| to equity shareholders of the parent | | | |
+----------------------------------------+-------+----------+----------+
Statement of changes in equity
for the year ended 31 December 2009
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | | | Currency | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | Share | Share | translation | Retained | Minority | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | capital | premium | reserve | earnings | interest | Total |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Group 2009 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Balance at 1 January | 623 | 680 | (126) | 2,634 | 15 | 3,826 |
| 2009 | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Share options | - | - | - | 27 | - | 27 |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Dividend paid | - | - | - | (623) | - | (623) |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Transactions with owners | - | - | - | (596) | - | (596) |
| recognised directly in | | | | | | |
| equity | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Profit for the year | - | - | - | 10 | - | 10 |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | - | - | - | (586) | - | (586) |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Balance at 31 December | 623 | 680 | (126) | 2,048 | 15 | 3,240 |
| 2009 | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | | | | | | |
| | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Group 2008 | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Balance at 1 January | 623 | 680 | (126) | 8,320 | 15 | 9,512 |
| 2008 | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Share options | - | - | - | 52 | - | 52 |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Dividend paid | - | - | - | (1,247) | - | (1,247) |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Transactions with owners | - | - | - | (1,195) | - | (1,195) |
| recognised directly in | | | | | | |
| equity | | | | | | |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Loss for the year | - | - | - | (4,491) | - | (4,491) |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| | - | - | - | (5,686) | - | (5,686) |
+--------------------------+---------+---------+-------------+----------+----------+---------+
| Balance 31 December 2008 | 623 | 680 | (126) | 2,634 | 15 | 3,826 |
+--------------------------+---------+---------+-------------+----------+----------+---------+
Consolidated statement of financial position
at 31 December 2009
+-----------------------------------------+-------+---------+----------+
| | | 2009 | 2008 |
+-----------------------------------------+-------+---------+----------+
| | Notes | GBP'000 | GBP'000 |
+-----------------------------------------+-------+---------+----------+
| Non-current assets | | | |
+-----------------------------------------+-------+---------+----------+
| Property, plant and equipment | | 640 | 680 |
+-----------------------------------------+-------+---------+----------+
| Intangible assets | 8 | 1,019 | 1,284 |
+-----------------------------------------+-------+---------+----------+
| Deferred tax asset | | 543 | 371 |
+-----------------------------------------+-------+---------+----------+
| Total non-current assets | | 2,202 | 2,335 |
+-----------------------------------------+-------+---------+----------+
| Current assets | | | |
+-----------------------------------------+-------+---------+----------+
| Inventories | | 111 | 179 |
+-----------------------------------------+-------+---------+----------+
| Current tax receivable | | - | 283 |
+-----------------------------------------+-------+---------+----------+
| Trade and other receivables | 9 | 4,864 | 5,718 |
+-----------------------------------------+-------+---------+----------+
| Cash and cash equivalents | | 2,092 | 2,824 |
+-----------------------------------------+-------+---------+----------+
| Total current assets | | 7,067 | 9,004 |
+-----------------------------------------+-------+---------+----------+
| Total assets | | 9,269 | 11,339 |
+-----------------------------------------+-------+---------+----------+
| Current liabilities | | | |
+-----------------------------------------+-------+---------+----------+
| Trade and other payables | | (5,169) | (6,291) |
+-----------------------------------------+-------+---------+----------+
| Total current liabilities | | (5,169) | (6,291) |
+-----------------------------------------+-------+---------+----------+
| Non-current liabilities | | | |
+-----------------------------------------+-------+---------+----------+
| Other liabilities | | (494) | (750) |
+-----------------------------------------+-------+---------+----------+
| Provisions | | (366) | (472) |
+-----------------------------------------+-------+---------+----------+
| Total non-current liabilities | | (860) | (1,222) |
+-----------------------------------------+-------+---------+----------+
| Total liabilities | | (6,029) | (7,513) |
+-----------------------------------------+-------+---------+----------+
| Net assets | | 3,240 | 3,826 |
+-----------------------------------------+-------+---------+----------+
| Equity | | | |
+-----------------------------------------+-------+---------+----------+
| Share capital | | 623 | 623 |
+-----------------------------------------+-------+---------+----------+
| Share premium | | 680 | 680 |
+-----------------------------------------+-------+---------+----------+
| Currency translation reserve | | (126) | (126) |
+-----------------------------------------+-------+---------+----------+
| Retained earnings | | 2,048 | 2,634 |
+-----------------------------------------+-------+---------+----------+
| Total equity attributable to equity | | 3,225 | 3,811 |
| shareholders | | | |
+-----------------------------------------+-------+---------+----------+
| Equity minority interest | | 15 | 15 |
+-----------------------------------------+-------+---------+----------+
| Total equity attributable to equity | | 3,240 | 3,826 |
| shareholders of the Group | | | |
+-----------------------------------------+-------+---------+----------+
Consolidated cash flow statement
for the year ended 31 December 2009
+----------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+----------+----------+
| Profit/(loss) for the year | 10 | (4,491) |
+----------------------------------------------+----------+----------+
| Adjusted for: | | |
+----------------------------------------------+----------+----------+
| Taxation | (379) | (286) |
+----------------------------------------------+----------+----------+
| Depreciation charge | 182 | 158 |
+----------------------------------------------+----------+----------+
| Amortisation | 79 | 78 |
+----------------------------------------------+----------+----------+
| Loss on sale of non-current assets | - | 23 |
+----------------------------------------------+----------+----------+
| Impairment of intangible assets | 189 | - |
+----------------------------------------------+----------+----------+
| Provision against loan notes | - | 3,418 |
+----------------------------------------------+----------+----------+
| Foreign exchange losses/(gains) | 34 | (601) |
+----------------------------------------------+----------+----------+
| Equity-settled share-based payment charges | 27 | 52 |
+----------------------------------------------+----------+----------+
| Finance income | (481) | (1,620) |
+----------------------------------------------+----------+----------+
| Finance expense | 8 | 74 |
+----------------------------------------------+----------+----------+
| | (331) | (3,195) |
+----------------------------------------------+----------+----------+
| Changes in working capital | | |
+----------------------------------------------+----------+----------+
| Decrease/(increase) in inventories | 68 | (13) |
+----------------------------------------------+----------+----------+
| Decrease/(increase) in receivables | 854 | (1,022) |
+----------------------------------------------+----------+----------+
| (Decrease)/increase in payables | (1,387) | 2,453 |
+----------------------------------------------+----------+----------+
| (Decrease)/increase in provisions | (102) | 69 |
+----------------------------------------------+----------+----------+
| Cash used in operating activities | (898) | (1,708) |
+----------------------------------------------+----------+----------+
| Finance expense paid | - | (74) |
+----------------------------------------------+----------+----------+
| Finance income received | 434 | 982 |
+----------------------------------------------+----------+----------+
| Taxation received | 489 | 24 |
+----------------------------------------------+----------+----------+
| Net cash generated from/(used in) operating | 25 | (776) |
| activities | | |
+----------------------------------------------+----------+----------+
| Cash flows from investing activities | | |
+----------------------------------------------+----------+----------+
| Payments to acquire property, plant and | (142) | (45) |
| equipment | | |
+----------------------------------------------+----------+----------+
| Payments to acquire intangible non-current | (3) | (3) |
| assets | | |
+----------------------------------------------+----------+----------+
| Receipt from sale of land | - | 448 |
+----------------------------------------------+----------+----------+
| Receipt in respect of loan notes | 47 | 297 |
+----------------------------------------------+----------+----------+
| Net cash (used in)/generated from investing | (98) | 697 |
| activities | | |
+----------------------------------------------+----------+----------+
| Cash flows from financing activities | | |
+----------------------------------------------+----------+----------+
| Dividend paid | (623) | (1,247) |
+----------------------------------------------+----------+----------+
| Net cash used in financing activities | (623) | (1,247) |
+----------------------------------------------+----------+----------+
| Net decrease in cash and cash equivalents | (696) | (1,326) |
+----------------------------------------------+----------+----------+
| Cash and cash equivalents at beginning of | 2,824 | 3,708 |
| year | | |
+----------------------------------------------+----------+----------+
| Exchange (losses)/gains on cash and cash | (36) | 442 |
| equivalents | | |
+----------------------------------------------+----------+----------+
| Cash and cash equivalents at end of year | 2,092 | 2,824 |
+----------------------------------------------+----------+----------+
1. Basis of preparation
The Group financial statements are authorised for issue by the Board of
Directors on 30 March 2010. European Union law (EULAW) (IAS Regulation EC
1606/2002) requires that the financial statements of the Group are prepared in
accordance with International Financial Reporting Standards as adopted by the EU
(EU-IFRS). The financial statements have been prepared on the basis of the
recognition and measurement requirements of EU-IFRS that are endorsed by the EU
and effective at 31 December 2009.
The financial information does not constitute the Company's statutory accounts
for the years ended 31 December 2009 or 2008 (but is derived from those
accounts). Statutory accounts for 2008 have been delivered to the registrar of
companies, and those for 2009 will be delivered in due course. The auditors
have reported on those accounts; their reports were (i) unqualified, (ii) did
not include references to any matters to which the auditors drew attention by
way of emphasis without qualifying their reports and (iii) did not contain
statements under section 498 (2) and (3) of the Companies Act of 2006.
2. Exceptional items
Income or costs which are material and non-recurring, whose significance is
sufficient to warrant separate disclosure in the financial statements, are
referred to as exceptional items. These items are included and separately
identified within their relevant income statement category.
3. Operating segments
Information about reportable segments
The Group has two operating segments as detailed below, which are the Group's
strategic business units. The strategic business units offer different products
and services, and are managed separately. The Group's Board reviews internal
management reports on a monthly basis. The following summary describes the
operations of each of the Group's operating business segments:
· RTS Life Science. A major supplier of automated products and solutions for
drug discovery, delivery and quality control applications with pharmaceutical,
biotech, biobanking and academic institutes.
· RTS Flexible Systems. A provider of automation systems in-depth consultancy,
service and support to a wide range of industries from consumer goods,
packaging, food manufacture and bakery to nuclear and defence.
'All other segments' includes non-trading subsidiaries, holding companies and
the parent Company. These are not reported separately to the Board.
Information regarding the results of each operating segment is included below.
Performance is measured based on segment profit before tax, as included in the
internal management reports that are reviewed by the Board. Segment profit is
used to measure performance as management believes that such information is the
most relevant in evaluating segment results.
Information about reportable segments
Statement of comprehensive income
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Flexible | Life | Total | All | Total as |
| | Systems | Science | reportable | other | per |
| | | | segments | segments | consolidated |
| | | | | | accounts |
+-------------------+-------------------+-------------------+-------------------+-------------------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Revenue | 2,444 | 3,506 | 9,291 | 6,908 | 11,735 | 10,414 | 77 | 61 | 11,812 | 10,475 |
| (external) | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Revenue | 64 | - | - | - | 64 | - | (64) | - | - | - |
| (inter-segmental) | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Depreciation | (13) | (10) | (87) | (69) | (100) | (79) | (82) | (79) | (182) | (158) |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Amortisation | (40) | (39) | (37) | (36) | (77) | (75) | (2) | (3) | (79) | (78) |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Grant income | - | - | - | - | - | - | 40 | 40 | 40 | 40 |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Inter-segment | (57) | (83) | 33 | 40 | (24) | (43) | 24 | 43 | - | - |
| transactions | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Operating | (337) | (699) | 491 | (220) | 154 | (919) | (336) | (425) | (182) | (1,344) |
| (loss)/profit | | | | | | | | | | |
| before | | | | | | | | | | |
| exceptional | | | | | | | | | | |
| items and | | | | | | | | | | |
| exchange | | | | | | | | | | |
| (losses)/gains | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Exchange | (2) | (1) | (2) | 439 | (4) | 438 | (30) | 163 | (34) | 601 |
| (losses)/gains | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Exceptional | (398) | (1,207) | - | (1,155) | (398) | (2,362) | (228) | (3,218) | (626) | (5,580) |
| items | | | | | | | | | | |
| included in | | | | | | | | | | |
| administrative | | | | | | | | | | |
| expenses | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| (Loss)/profit | (737) | (1,907) | 489 | (936) | (248) | (2,843) | (594) | (3,480) | (842) | (6,323) |
| before | | | | | | | | | | |
| interest and | | | | | | | | | | |
| taxation | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Finance | 2 | - | - | 56 | 2 | 56 | 479 | 632 | 481 | 688 |
| income | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Foreign | - | - | 272 | (649) | 272 | (649) | (280) | 1,581 | (8) | 932 |
| exchange | | | | | | | | | | |
| gains/(losses) | | | | | | | | | | |
| included in | | | | | | | | | | |
| finance | | | | | | | | | | |
| income/(expenses) | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Finance | - | - | - | (21) | - | (21) | - | (53) | - | (74) |
| expenses | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Total finance | 2 | - | 272 | (614) | 274 | (614) | 199 | 2,160 | 473 | 1,546 |
| income/(expense) | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Segment | (735) | (1,907) | 761 | (1,550) | 26 | (3,457) | (395) | (1,320) | (369) | (4,777) |
| result: | | | | | | | | | | |
| (loss)/profit | | | | | | | | | | |
| before | | | | | | | | | | |
| taxation | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Taxation | | | | | | | | | 379 | 286 |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) | | | | | | | | | 10 | (4,491) |
| for period | | | | | | | | | | |
| attributable | | | | | | | | | | |
| to equity | | | | | | | | | | |
| shareholders | | | | | | | | | | |
| of the parent | | | | | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
Statement of financial position
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Flexible | Life | Total | All | Total |
| | | Science | reportable | other | as per |
| | Systems | | segments | segments | consolidated |
| | | | | | accounts |
+----------------------+-------------------+-------------------+-------------------+-------------------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Segment | 1,417 | 2,025 | 4,373 | 4,910 | 5,790 | 6,935 | 1,387 | 1,580 | 7,177 | 8,515 |
| assets | | | | | | | | | | |
| excluding | | | | | | | | | | |
| inter-company | | | | | | | | | | |
| balances | | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Cash/(overdraft) | (3,769) | (2,480) | (596) | 1,790 | (4,365) | (690) | 6,457 | 3,514 | 2,092 | 2,824 |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Segment | (588) | (958) | (4,115) | (5,260) | (4,703) | (6,218) | (1,326) | (1,295) | (6,029) | (7,513) |
| liabilities | | | | | | | | | | |
| excluding | | | | | | | | | | |
| inter-company | | | | | | | | | | |
| balances | | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Net segment | (2,940) | (1,413) | (338) | 1,440 | (3,278) | 27 | 6,518 | 3,799 | 3,240 | 3,826 |
| assets/(liabilities) | | | | | | | | | | |
+----------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
Inter-company assets and liabilities have been removed from each segment.
Cash Flow
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Flexible | Life | Total | All | Total |
| | | Science | reportable | other | as per |
| | Systems | | segments | segments | consolidated |
| | | | | | accounts |
+------------------+-------------------+-------------------+-------------------+-------------------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Cash (used | (1,353) | (2,127) | (2,665) | 948 | (4,018) | (1,179) | 3,120 | (529) | (898) | (1,708) |
| in)/generated | | | | | | | | | | |
| from operating | | | | | | | | | | |
| activities | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Add back | 880 | 75 | 2,595 | (116) | 3,475 | (41) | (3,475) | 41 | - | - |
| inter-company | | | | | | | | | | |
| movements | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Net finance | 2 | - | - | 35 | 2 | 35 | 432 | 873 | 434 | 908 |
| income | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Taxation | 79 | - | 391 | 28 | 470 | 28 | 19 | (4) | 489 | 24 |
| received/(paid) | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Net cash (used | (392) | (2,052) | 321 | 895 | (71) | (1,157) | 96 | 381 | 25 | (776) |
| in)/generated | | | | | | | | | | |
| from operating | | | | | | | | | | |
| activities | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Payments to | (13) | (6) | (111) | (13) | (124) | (19) | (18) | (26) | (142) | (45) |
| acquire | | | | | | | | | | |
| property, | | | | | | | | | | |
| plant and | | | | | | | | | | |
| equipment | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Payments to | (1) | (3) | (2) | - | (3) | (3) | - | - | (3) | (3) |
| acquire | | | | | | | | | | |
| intangible | | | | | | | | | | |
| non-current | | | | | | | | | | |
| assets | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Cash flows | - | - | - | - | - | - | 47 | 745 | 47 | 745 |
| from other | | | | | | | | | | |
| investing | | | | | | | | | | |
| activities | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Cash flows | - | - | - | - | - | - | (623) | (1,247) | (623) | (1,247) |
| from financing | | | | | | | | | | |
| activities | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Less | (880) | (75) | (2,595) | 116 | (3,475) | 41 | 3,475 | (41) | - | - |
| inter-company | | | | | | | | | | |
| movements | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Net cash | (1,286) | (2,136) | (2,387) | 998 | (3,673) | (1,138) | 2,977 | (188) | (696) | (1,326) |
| (outflow)/inflow | | | | | | | | | | |
+------------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
4. Exceptional administrative expenses
+-----------------------------------------+-------------+------------+
| | Year ended | Year ended |
+-----------------------------------------+-------------+------------+
| | 31 December | 31 |
| | | December |
+-----------------------------------------+-------------+------------+
| | 2009 | 2008 |
+-----------------------------------------+-------------+------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------+-------------+------------+
| Impairment of intangible non-current | 189 | - |
| assets | | |
+-----------------------------------------+-------------+------------+
| Restructuring costs | 236 | 93 |
+-----------------------------------------+-------------+------------+
| Legal costs | 201 | 950 |
+-----------------------------------------+-------------+------------+
| Provision against loan notes | - | 3,418 |
+-----------------------------------------+-------------+------------+
| One-off project completion costs | - | 1,119 |
+-----------------------------------------+-------------+------------+
| | 626 | 5,580 |
+-----------------------------------------+-------------+------------+
The exceptional administrative expenses consist of the following:
· restructuring costs of GBP236,000 consist of GBP88,000 in RTS PLC and
GBP148,000 in Flexible Systems (2008: GBP93,000 consisted of GBP37,000 in Life
Science and GBP56,000 in Flexible Systems);
· the exceptional legal expense of GBP0.2m (2008: GBP1.0m) relates to a
dispute with a former customer in our Flexible Systems business. The Company has
reserved its right to not disclose further information required by IAS 37 on the
grounds that it may prejudice the outcome of the claim;
· the impairment of intangible assets of GBP189,000 consists of two items,
GBP49,000 relating to a write down in the carrying value of capitalised research
and development costs in the Flexible Systems business. The remaining impairment
of GBP140,000 represents the write down of goodwill relating to Flexible
Systems;
· the provision against loan notes of GBP3.4m in 2008 is a provision against
US loan notes receivable from the purchaser of the trade and certain assets and
liabilities of RTS Wright Industries, LLC following its sale in 2004. The
unprovided amount at 31 December 2009 is GBPnil (2008: GBPnil); and
· the one-off project completion costs in 2008 of GBP1.1m are costs
associated with concluding a project in the Life Science business. This contract
is now completed and the Company has no further liabilities.
5. Finance income
+------------------------------------------+------------+------------+
| | Year ended | Year ended |
| | | |
+------------------------------------------+------------+------------+
| | 31 | 31 |
| | December | December |
+------------------------------------------+------------+------------+
| | 2009 | 2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| Bank interest | 3 | 48 |
+------------------------------------------+------------+------------+
| Loan note interest | 476 | 609 |
+------------------------------------------+------------+------------+
| Other interest | 2 | 31 |
+------------------------------------------+------------+------------+
| Net currency movements on foreign | - | 932 |
| currency denominated assets and | | |
| liabilities | | |
+------------------------------------------+------------+------------+
| | | |
| | 481 | 1,620 |
+------------------------------------------+------------+------------+
6. Finance expenses
+------------------------------------------+------------+------------+
| | Year ended | Year ended |
| | | |
+------------------------------------------+------------+------------+
| | 31 | 31 |
| | December | December |
+------------------------------------------+------------+------------+
| | 2009 | 2008 |
+------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+------------+------------+
| Bank loans and overdrafts | - | 4 |
+------------------------------------------+------------+------------+
| Other interest | - | 70 |
+------------------------------------------+------------+------------+
| Net currency movements on foreign | 8 | - |
| currency denominated assets and | | |
| liabilities | | |
+------------------------------------------+------------+------------+
| | 8 | 74 |
+------------------------------------------+------------+------------+
7. Earnings/(loss)per share
Earnings/(loss) per ordinary share has been calculated using the weighted
average number of shares in issue during the relevant financial years. The
calculations of both basic and diluted earnings/(loss) per share for the year
are based upon a profit after tax and minority interests of GBP10,000 (2008:
loss of GBP4,491,000). The weighted average number of equity shares used in the
basic calculation is 62,335,374 (2008: 62,335,374).
The calculation for diluted earnings/loss per ordinary share is identical to
that used for the basic earnings/(loss) per share. This is because there were no
share options outstanding with an exercise price lower than the average share
price for the year and for the year ending 31 December 2008 the exercise of
share options would have had the effect of reducing the loss per ordinary share
and is therefore not dilutive under the terms of IAS 33 "Earnings per Share".
+--------------------------------------------+------------+------------+
| | Year | Year |
| | ended | ended |
+--------------------------------------------+------------+------------+
| | 31 | 31 |
| | December | December |
+--------------------------------------------+------------+------------+
| | 2009 | 2008 |
+--------------------------------------------+------------+------------+
| Profit/(loss)for the year (GBP'000) | 10 | (4,491) |
+--------------------------------------------+------------+------------+
| Exceptional items in administrative | 626 | 5,580 |
| expenses (GBP'000) | | |
+--------------------------------------------+------------+------------+
| Profit after taxation before "exceptional" | 636 | 1,089 |
| items (GBP'000) | | |
+--------------------------------------------+------------+------------+
| Weighted average ordinary shares in issue | 62,335,374 | 62,335,374 |
+--------------------------------------------+------------+------------+
+--------------------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+--------------------------------------------+-----------+-----------+
| | 31 | 31 |
| | December | December |
+--------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+--------------------------------------------+-----------+-----------+
| | Pence | Pence |
+--------------------------------------------+-----------+-----------+
| Basic/diluted earning/(loss) per share | 0.02 | (7.20) |
+--------------------------------------------+-----------+-----------+
| Earnings per share before "exceptional" | 1.02 | 1.75 |
| items | | |
+--------------------------------------------+-----------+-----------+
8. Intangible assets
+---------------------------------+-------------+-------------+-----------+
| | | Software | |
| | | and | |
+---------------------------------+-------------+-------------+-----------+
| | Acquisition | development | |
| | | | |
+---------------------------------+-------------+-------------+-----------+
| | goodwill | costs | Total |
+---------------------------------+-------------+-------------+-----------+
| Group | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+-----------+
| Cost | | | |
+---------------------------------+-------------+-------------+-----------+
| At 1 January 2008 | 2,735 | 4,203 | 6,938 |
+---------------------------------+-------------+-------------+-----------+
| Additions | - | 3 | 3 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2008 and 1 | 2,735 | 4,206 | 6,941 |
| January 2009 | | | |
+---------------------------------+-------------+-------------+-----------+
| Additions | - | 3 | 3 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2009 | 2,735 | 4,209 | 6,944 |
+---------------------------------+-------------+-------------+-----------+
| Amortisation and impairment | | | |
| losses | | | |
+---------------------------------+-------------+-------------+-----------+
| At 1 January 2008 | 1,621 | 3,958 | 5,579 |
+---------------------------------+-------------+-------------+-----------+
| Charge for the year | - | 78 | 78 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2008 and 1 | 1,621 | 4,036 | 5,657 |
| January 2009 | | | |
+---------------------------------+-------------+-------------+-----------+
| Charge for the year | - | 79 | 79 |
+---------------------------------+-------------+-------------+-----------+
| Impairment | 140 | 49 | 189 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2009 | 1,761 | 4,164 | 5,925 |
+---------------------------------+-------------+-------------+-----------+
| Net book value | | | |
+---------------------------------+-------------+-------------+-----------+
| At 1 January 2008 | 1,114 | 245 | 1,359 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2008 | 1,114 | 170 | 1,284 |
+---------------------------------+-------------+-------------+-----------+
| At 31 December 2009 | 974 | 45 | 1,019 |
+---------------------------------+-------------+-------------+-----------+
Goodwill, intangible assets and impairment
For the purposes of impairment testing goodwill, goodwill is allocated to the
Group's operating divisions which represent the lowest level within the Group at
which goodwill is monitored for internal management purposes.
The aggregate carrying amounts of intangible assets allocated to each unit are
as follows:
+----------------------+----------+-----------+----------+----------+
| | RTS Life | RTS | | |
| | | Flexible | | |
+----------------------+----------+-----------+----------+----------+
| | Science | Systems | Others | Total |
+----------------------+----------+-----------+----------+----------+
| 2009 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+----------+-----------+----------+----------+
| Acquisition goodwill | 974 | - | - | 974 |
+----------------------+----------+-----------+----------+----------+
| Software and | 38 | - | 7 | 45 |
| development costs | | | | |
+----------------------+----------+-----------+----------+----------+
| | 1,012 | - | 7 | 1,019 |
+----------------------+----------+-----------+----------+----------+
+----------------------+----------+-----------+----------+----------+
| | RTS Life | RTS | | |
| | | Flexible | | |
+----------------------+----------+-----------+----------+----------+
| | Science | Systems | Others | Total |
+----------------------+----------+-----------+----------+----------+
| 2008 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+----------+-----------+----------+----------+
| Acquisition goodwill | 974 | 140 | - | 1,114 |
+----------------------+----------+-----------+----------+----------+
| Software and | 74 | 91 | 5 | 170 |
| development costs | | | | |
+----------------------+----------+-----------+----------+----------+
| | 1,048 | 231 | 5 | 1,284 |
+----------------------+----------+-----------+----------+----------+
RTS Life Science
The RTS Life Science unit's impairment test was based on value in use. Value in
use is the present value of the cash flows expected to be generated by the
business unit over a projection period of ten years. Management believes that
this forecast period is justified due to the nature of the business. Recoverable
amounts are based on value in use projections of the RTS Life Science unit's
performance reflecting the Directors' best estimates of cash flows.
The recoverable amount of GBP2,112,000 was determined by discounting the future
cash flows expected to be generated from the RTS Life Science business. The key
assumptions in these forecasts were in respect of revenue growth (based on
detailed forecasts in year one and then 3% inflationary increase), future
margins (based on a detailed forecast in year one and then constant) and cost
management (based on a detailed forecast in year one and then 3% inflationary
increase year on year). Detailed 2010 budgets were used to forecast cash flows
applying a 3% annual inflationary increase. A risk adjusted pre-tax discount
rate of 13.73% (2008: 13.72%) was applied to the projections.
The recoverable amount in respect of the RTS Life Science unit, assessed by the
Directors using the above assumptions, is GBP2,112,000 which is GBP1,100,000
greater than the carrying amount of intangible assets and therefore no
impairment charge has been booked in 2009. Management considers that it is not
reasonably possible for the assumptions to change so significantly as to
eliminate this excess.
RTS Flexible Systems
Flexible System unit's impairment test was based on value in use. Value in use
is the present value of the cash flows expected to be generated by the business
unit over a projection period of fifteen years. Management believes that this
forecast period is justified due to the nature of the business. Recoverable
amounts are based on value in use projections of the RTS Flexible Systems unit's
performance reflecting the Directors' best estimates of cash flows. Business
forecasts have been used for 2010 projections and an inflationary increase of 3%
has been used for subsequent periods. A risk adjusted pre-tax discount rate of
13.73% (2008: 13.72%) has been applied to the projections.
The impairment test determined that the carrying value of this goodwill and
intangible assets was not supportable and therefore an impairment charge of
GBP189,000 has been made in the year.
9. Trade and other receivables
+-----------------------+----------+----------+----------+----------+
| | Year ended | Year ended |
| | 31 December 2009 | 31 December 2008 |
+-----------------------+ + +
| | | |
+-----------------------+---------------------+---------------------+
| | Group | Company | Group | Company |
+-----------------------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+----------+----------+----------+----------+
| Trade receivables | 2,286 | 24 | 3,735 | - |
+-----------------------+----------+----------+----------+----------+
| Amounts receivable on | 1,709 | - | 1,434 | - |
| long-term contracts | | | | |
+-----------------------+----------+----------+----------+----------+
| Other receivables | 537 | - | 273 | 7 |
+-----------------------+----------+----------+----------+----------+
| Amounts falling due | - | 38 | - | 6,586 |
| from Group | | | | |
| undertakings | | | | |
+-----------------------+----------+----------+----------+----------+
| Prepayments and | 332 | 16 | 276 | 16 |
| accrued income | | | | |
+-----------------------+----------+----------+----------+----------+
| | 4,864 | 78 | 5,718 | 6,609 |
+-----------------------+----------+----------+----------+----------+
At 31 December 2009 the Group and the Company had two bank guarantees in place
for the value of GBP323,000 (2008: GBPnil). Cash covering the value of the
guarantees is held by the Group bankers and included in other receivables.
10. Contingent liabilities
RTS Flexible Systems is engaged in an ongoing dispute with a former customer.
This fact has been disclosed in these financial statements since 2006. The
information usually required by IAS 37 is not disclosed on the grounds that it
can be expected to seriously prejudice the outcome of the dispute. The Directors
are of the opinion that the claim can be successfully resisted by the Company.
11. Subsequent events
On 10 February 2010 the Group acquired a 65% controlling interest in Hatch
Science LLC. Hatch Science LLC is a US based leading developer and manufacturer
of scientific instruments for the pharmaceutical and medical industries. An
initial consideration of $325,000 was paid in cash from Group resources with an
additional earn out based on a payment of 32.5% of the profits after tax
generated from Hatch for each of the first three years. The remaining
shareholding is held by the existing management who have the option to sell
their 35% holding to the Group at the end of three, four or five years based on
the greater of $175,000 or the aggregate net profits generated from Hatch
Science LLC in the preceding two to three years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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