Flomerics Group PLC
31 July 2000
FLOMERICS
'Excellent Interim Results'
For the 6 months ended 30 June 2000
Flomerics Group PLC, supplier of analysis software to the
telecommunications, semiconductor, and computer
industries, and other sectors of the electronics
industries, announces its results for the six months to
30 June 2000.
Key Points
* Profit Before Tax of £40,000 after amortisation of
goodwill (1999: loss of £150,000) full year profit in
1999 of £807,000.
* Turnover increased 42% to £4.89m (1999: £3.44m)
* Well established thermal products, FLOTHERM and
FLOVENT, accounted for 90% of turnover.
* The Company is building the necessary infrastructure
to support the new electromagnetic products business
arising from the acquisition of KCC.
* Development of the new FLO/EMC product is on track
and will address the important electromagnetic markets of
the electronics industry.
Commenting on the results, David Mann, the Chairman,
said:
"Flomerics is clearly well placed for the second half of
the year. However, as in previous years, the results for
the year as a whole will depend significantly on the
level of licence renewals for thermal products near to
the year end. Moreover, the second half will be a further
period of investment in establishing the infrastructure
for the electromagnetic market. The directors' view of
the prospects for the year as a whole therefore remains
positive and in line with current market expectations."
For further information please contact:
Flomerics:
David Mann, Chairman 020 8941 8810
David Tatchell, Chief Executive
Chris Ogle, Finance Director
Teather & Greenwood:
Richard Thompson 020 7426 9073
Alex Davies (analyst) 020 7426 9540
Buchanan Communications:
Tim Thompson / Nicola Cronk 020 7466 5000
Chairman's Statement
Results
Flomerics has achieved excellent results for the six
months ended 30 June 2000. I am particularly pleased to
report that, for the first time as a quoted company, it
has made a profit in the first half of the year.
Traditionally, because of the pattern of renewals of
licences for its software, the company receives a
disproportionate part of its income in the second half of
the year and has made a loss in the first half. This year
the profit before tax for the six months ended 30 June
was £40,000, after the amortisation of intangible assets
arising from the acquisition of KCC in July 1999. In the
same period last year there was a loss of £150,000.
Turnover for six months ended 30 June 2000, including
that from KCC, was £4,890,000, a 42% increase on the
same period last year. The growth was enhanced by the
weakening of Sterling but, at constant exchange rates and
excluding the contribution from KCC, turnover grew by
33%.
Sales in North America increased by 29% and accounted for
53% of turnover. In Europe the growth was 41%. There was
also an impressive increase in sales in the Far East,
with significant contributions from Korea and Japan, and
the first sale from representation in China.
Flotherm and Flovent
Flomerics' well established thermal products, FLOTHERM
and FLOVENT, accounted for 90% of turnover. Towards the
end of last year there was a major new release of
FLOTHERM, which has generated growth of 37% in sales of
this product over the same period last year. A major
upgrade of FLOVENT was released at the same time and has
received a positive response in the market. At this stage
the rate of growth of sales is only 10% compared to the
same period last year, but we continue to believe that
there is good potential for growth for this product.
Electromagnetics
As highlighted in the last Annual Report, the acquisition
of KCC has enabled the company to address very important
electromagnetic markets. New arrangements have now been
made for the distribution of KCC's established product,
Microstripes, outside the UK; these have included the
relocation of Dr David Johns, the Managing Director of
KCC, to be based at our US headquarters in Massachusetts
from August. Development of the new FLO/EMC product
specifically for the electronics industry is on track;
Version 1 is planned for release this August and some
licences have already been sold to some leading
organisations. Considerable efforts are being made to
build the necessary infrastructure to support these
products.
Share Placing
With the strong growth of the group, there is naturally a
requirement for increased working capital. On 4 July
137,400 shares were therefore placed at a premium to the
then mid-market price, realising approximately £1.2
million for the Company. This placing was well received
by the market and helped broaden the Company's
institutional shareholder base further.
Prospects
Flomerics is clearly well placed for the second half of
the year. However, as in previous years, the results for
the year as a whole will depend significantly on the
level of licence renewals for thermal products near to
the year end. Moreover, the second half will be a further
period of investment in establishing the infrastructure
for the electromagnetic market. The directors' view of
the prospects for the year as a whole therefore remains
positive and in line with current market expectations.
Looking to 2001 and beyond, the directors remain
confident that the electromagnetic market offers
significant opportunities for broadening the company's
range and level of activity. Furthermore the synergy
between the new FLO/EMC product and the existing FLOTHERM
product should support the continuing strong growth in
the core thermal market.
David Mann
Chairman
£
FLOMERICS GROUP PLC
Interim Results for the six
months to 30 June 2000
Group Profit and Loss Account
6 Months 6 Months 12 months
ended 30 ended 30 ended 31
June 2000 June 1999 December 1999
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Turnover 4,890 3,443 8,713
Cost of Sales (246) (216) (525)
------- ------ ------
Gross profit 4,644 3,227 8,188
Administrative Expenses (4,549) (3,378) (7,328)
------- ------- -------
Operating profit before
amortisation of goodwill 95 (151) 860
Amortisation of goodwill (41) - (34)
------- ------- -------
Operating Profit 54 (151) 826
Other interest receivable
and other income 7 23 30
Interest payable and
similar charges (20) (21) (49)
------- ------- -------
Profit on ordinary
activities before taxation 41 (149) 807
Tax on profit on ordinary
activities (16) - (313)
------- ------- -------
Profit on ordinary
activities after taxation 25 (149) 494
------- ------- -------
Dividends - - (110)
------- ------- -------
Transferred to reserves 25 (149) 384
------- -------- -------
Earnings per share 1.4p (5.8p) 18.7p
Diluted earnings per share 1.4p (5.8p) 18.6p
STATEMENT OF TOTAL REALISED GAINS AND LOSSES
The profit and loss account reserve includes a movement of
£57,000 relating to unrealised gains on translation of foreign
currency investments.
Group Balance Sheet
30 30 31
June June December
2000 1999 1999
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Fixed assets
Intangible assets 745 - 786
Tangible assets 1,076 755 815
Investments 19 - 19
------ ------- ----
1,840 755 1,620
Current assets
Debtors 3,285 2,893 3,860
Cash at bank and in hand 537 420 506
------ ------- -----
3,822 3,313 4,366
Creditors: amounts falling
due within one year (2,083) (1,557) (2,497)
------ ------- -------
Net current assets 1,739 1,756 1,869
------ ------- -------
Total assets less current
liabilities 3,579 2,511 3,489
Creditors: amounts falling
due after one year (155) (120) (109)
Deferred income (898) (964) (992)
------- ------- -------
Net Assets 2,526 1,427 2,388
------- ------- -------
Capital and reserves
Called up share capital 28 26 27
Share premium account 579 49 524
Other reserves 759 759 759
Profit and loss account 1,160 593 1,078
------- ------- -------
Equity shareholders'
funds 2,526 1,427 2,388
------- ------- -------
Group Cashflow Statement
6 Months 6 Months 12 months
ended 30 ended 30 ended 31
June 2000 June 1999 December
1999
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating activities
Operating profit 54 (151) 826
Depreciation and
amortisation charges 262 199 457
(Increase)/decrease in
debtors 633 365 (452)
Increase/ (decrease) in
creditors (200) (46) (79)
------- ------- --------
Net cash inflow from
operating activities 749 367 752
Net cashflow from returns
on investments and
servicing of finance (13) 2 (18)
Taxation (63) - (121)
Net cashflow from capital
expenditure and financial
investment (482) (232) (280)
Net cashflow from
acquisitions - - (164)
Equity Dividend paid (110) (85) (85)
------- ------- -------
Net cashflow before
financing 81 52 84
Net cashflow from financing 46 49 (234)
Increase/ (Decrease) in
cash in the period 127 101 (150)
NOTES
1. ACCOUNTING POLICIES
The financial information contained in this interim
report does not constitute statutory accounts. The
interim results, which have not been 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 December 1999. Those accounts have
been filed with the Registrar of Companies and received
an unqualified audit report.
2. TAXATION
Taxation to the six months to 30 June 2000 is based on
the effective rate of taxation which is estimated to
apply to the year ending 31 December 2000.
3. EARNINGS PER SHARE
Basic earnings per share have been calculated by dividing
the profit on ordinary activities after taxation in the
period by the weighted average number of shares in issue
in the period 2,770,616 (six months to June 1999
2,560,676). The diluted earnings per share calculation
has been based on a fair value of 726p per share (30 June
1999 212p). The weighted average number of dilutive
shares is 2,788,358 (30 June 1999 2,581,513).
4. SEGMENTAL INFORMATION
The group's turnover for each geographic area of
operation is:
30 June 00 30 June 99 31 Dec 99
£'000 £'000 £'000
United States of America 2,601 2,010 4,690
Europe 2,289 1,433 4,023
----- ------ ------
4,890 3,443 8,713
The sales for the Far East are invoiced from the UK and
are included in the totals for Europe.
|
