TIDMDSN
RNS Number : 7092C
Densitron Technologies PLC
04 May 2012
DENSITRON TECHNOLOGIES PLC
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER
2011
Densitron Technologies plc ("Densitron" or the "Company" or the "Group"),
the designer, developer and distributor of electronic displays is pleased
to announce its preliminary unaudited results for the year ended 31
December 2011.
A further year of substantial growth has enabled the Group to move
forward with its growth plans.
0 Revenue increased by 11% to GBP23.1 million (2010: GBP20.8 million).
0 Profit from continuing operations (excluding loss on disposal of
available-for-sale asset in 2010) increased to GBP1.1 million (2010:
GBP0.7 million).
0 2011 profit from operations reduced by GBP0.1 million due to exceptional
legal costs. Excluding these costs the profit from operations would
be GBP1.2 million (2010: GBP0.7 million).
0 Capital reduction and special dividend totaling 5p per share paid
to Shareholders.
0 Dividends for the year totaling 0.6p per share (2010: 0.3p per share)
an increase of 100%.
0 Earnings per share (excluding disposal of available-for-sale asset
in 2010) increased to 1.18p (2010: 0.72p).
0 Increase in gross margin from 28.1% to 29.6% reflecting an increase
in the Group's range of quality products.
0 Growth of the new branch office in Italy.
0 Introduction of internally developed products providing intellectual
property for the Group.
0 Promotion of new products and growth in the range of existing products.
2011 2010
GBP million GBP million
Revenue 23.1 20.8
Profit from operations * 1.1 0.7
Basic earnings per share * 1.18p 0.72p
Orders booked 21.2 21.8
Order Book 8.9 10.1
* Excludes loss on the sale of available-for-sale asset in 2010
Jan G Holmstrom, Chairman of Densitron, commented:
"I am delighted with the progress that the business has
continued to make during the year. The foundations that were laid
several years ago have enabled the business to develop and grow
despite difficult economic conditions."
Enquiries:
Densitron Westhouse Securities
Grahame Falconer / Tim Pearson Tom Price / Martin Davison
Tel: 0207 648 4200 Tel: 020 7601 6100
Chairman's Statement
Introduction
I am pleased to report on the results for the year ended 31
December 2011 which show a continuation of the positive progress
made by the Group over the last few years. Despite the year being
shrouded by continual negative economic news the Group has managed
to grow its business further and increase the return generated by
its business units.
Densitron Displays
The challenge for the Displays business in the year was to
continue the progress that had been made during the previous year
when a solid foundation had been laid. The business largely rose to
the challenge by increasing both revenues and operating profit
significantly during the year.
Inevitably there were obstacles that needed to be negotiated and
difficulties that needed to be managed during the year, none more
so than the Tsunami that hit Japan in March 2011. I am pleased to
be able to report that our office in Japan along with our customers
and suppliers were largely unaffected by the Tsunami apart from a
shortage of power. It did, however, create a temporary delay in the
delivery of certain component parts that are supplied by Japanese
manufacturers to display manufacturers in China and Taiwan which
resulted in manufacturing lead times being extended. That has now
returned to normal.
The challenge for the coming year will be to ensure that those
parts of the business that performed well during 2011 and met or
exceeded our expectations continue to progress during 2012. Those
parts of the business that did not perform to expectations during
2011 have identified and addressed the issues that that caused them
not to meet expectations and remedial measures have been
adopted.
Land at Blackheath
Blackheath is the 1.25 acre piece of land that the Group owns in
Blackheath, South East London.
I reported in my statement last year that our planning
application for the land had been rejected by the Local Council.
Following the rejection we reviewed the options we had with the
land and consulted leading Counsel. We consequently took the
decision not to appeal against the ruling of the local Council and
to pursue alternative options. We are now working on the
reclassification of the site through the Local Development
Framework and exploring existing use rights on the site. We will
keep shareholders informed when there is further information.
In 2010, we engaged a firm of surveyors to carry out a
professional valuation of the land and they confirmed a valuation
of GBP500,000 which was recognised in the 2010 accounts. We have
not undertaken a formal revaluation of the land in 2011 but the
Board considers the value to be at least at this level.
Shareholders
The directors remain committed to delivering a return to the
Company's Shareholders by way of both capital growth and
distribution.
Capital Growth - In order to grow the value of the Company it is
vital that investors are informed about the Company's businesses.
To that end, the Company's Nomad has provided research on the Group
during the year and the Executive Directors have held numerous
meetings with current and potential investors explaining the
results of the Group and its future strategy. The share price at
the beginning of 2011 was 14.75p and during the year the Company
returned cash to its Shareholders by way of capital reduction and
dividends totalling 5.4p per share. At the close of the year the
share price was 11.00p. Taking into account the return of cash and
dividends, the overall return from a holding in the shares during
the year has been 1.65p per share or 11.19%.
Capital reduction - During the year the Company returned 4p per
share to its Shareholders by way of a capital reduction and a
further 1p per share by way of dividend. This followed the sale of
the Group's investment in Evervision Electronics Co. Ltd during
2010. The Board considered that this was the most appropriate use
of the disposal proceeds as they were not required within the
business to fund the Group's primary strategy of organic
growth.
Dividends - The Board is committed to providing Shareholders
with dividends but will do so whilst being mindful of the
requirements within the Group for funds to continue to grow. An
interim dividend of 0.2p per share was paid to Shareholders in
September. I am pleased to propose a final dividend for the year of
0.4p per share (2010: 0.2p per share) resulting in a total dividend
payment for the year of 0.6p per share (2010: 0.3p per share)
representing a return of in excess of 50% of profit for the year
and an increase of 100% over 2010.
Claim against the Company
Shareholders were advised in February 2012 that the Group had
received a writ in respect of unpaid rents on a property occupied
by a former group company, Densitron Ferrograph Limited, whose
shares were disposed of in 2006. The Board confirmed in the
announcement that it intends to defend the Group's position
vigorously in this matter.
Outlook and strategy
The Board of directors review the medium and long term strategy
of the business on a regular basis and has concluded that the main
driver of the business will remain organic growth. However, in the
near term, opportunities to grow the business will diminish unless
action is taken to develop it further. To this end, the following
four specific business objectives have been identified and have
been incorporated into the current business plan:
-- Increase in market share from the existing business;
-- Geographical expansion of the business;
-- Introduction of new products to the current product offerings; and
-- Creation of more value by development of the Group's own
products and intellectual property.
The first three objectives reflect how the Group has been
growing the business over the last few years. They are still valid
strategies and will continue to be followed. The main change in the
strategy is the intention to develop more intellectual property
within the Group which will enable the Group to differentiate
itself from a number of its competitors throughout the world by
having its own unique range of products. It will also result in the
Group being able to derive better returns on its revenues and will
enable it to retain customers as the products that they are buying
increasingly become unique to Densitron. The Group currently has
several exciting development projects in the pipeline and the
product offerings that are being developed will be available later
this year.
I am pleased to be able to report that the level of orders
booked in the first quarter of 2012 has been in excess of 28%
higher than for the same period in 2011. This clearly demonstrates
the continuing strength of demand for the types of products that
the Group sells.
I would like to thank the directors and staff throughout the
Group for their continued dedication during the year. They have
ensured that the progress that was made during 2010 has been
continued in 2011 and have assisted in significantly strengthening
the business with new products and also an expanded market
penetration.
Finally, I would like to thank the Company's shareholders for
your continuing support.
Jan G Holmstrom
Chairman
Densitron Technologies plc
Consolidated income statement
For the year ended 31 December 2011
2011 2010
GBP000 GBP000
Continuing operations
Revenue 23,130 20,770
Cost of sales (16,274) (14,928)
--------- ---------
Gross profit 6,856 5,842
Other operating income 78 174
Distribution costs (72) (62)
Administrative expenses (5,769) (5,276)
Loss on disposal of available-for-sale
asset - (1,174)
--------- ---------
Profit/(loss) from operations 1,093 (496)
Financial income 1 6
Financial expenses (33) (79)
--------- ---------
Profit/(loss) before tax 1,061 (569)
Income tax expenses (245) (109)
--------- ---------
Profit/(loss) for the year 816 (678)
--------- ---------
Attributable to:
Equity holders of the parent 818 (674)
Non-controlling interests (2) (4)
--------- ---------
816 (678)
--------- ---------
Basic and diluted earnings /(loss) per share 1.18p (0.97)p
--------- ---------
Basic and diluted earnings per share on continuing
operations (excluding loss on disposal of available
for sale asset) 1.18p 0.72p
--------- ---------
Densitron Technologies plc
Consolidated statement of comprehensive income
For the year ended 31 December 2011
2011 2010
GBP000 GBP000
Profit/(loss) for the year 816 (678)
------- -------
Other comprehensive income
Exchange gains on translation of foreign
operations 50 137
Total other comprehensive income 50 137
------- -------
Total comprehensive profit/(loss)
for the year 866 (541)
------- -------
Total comprehensive profit/(loss)
attributable to:
Owners of the parent 870 (535)
Non-controlling interests (4) (6)
------- -------
866 (541)
------- -------
Densitron Technologies plc
Consolidated Statement of Financial Position
At 31 December 2011
2011 2010
GBP000 GBP000
Non current assets
Property, plant and equipment 806 757
Goodwill 143 143
Other intangible assets 174 87
Deferred tax assets 48 41
-------- --------
1,171 1,028
-------- --------
Current assets
Inventories 1,311 1,348
Trade and other receivables 4,673 4,916
Financial assets 74 165
Income tax recoverable 130 123
Cash and cash equivalents 1,809 6,002
-------- --------
7,997 12,554
-------- --------
Total assets 9,168 13,582
-------- --------
Current liabilities
Short term borrowings and overdrafts 1,694 2,246
Trade and other payables 2,503 3,499
Current tax payable 232 179
Provisions 134 34
-------- --------
4,563 5,958
-------- --------
Non current liabilities
Borrowings 25 24
Provisions 117 117
Deferred tax liabilities 44 141
-------- --------
186 282
-------- --------
Total liabilities 4,749 6,240
-------- --------
4,419 7,342
-------- --------
Equity
Share Capital 697 3,483
Retained earnings 2,907 3,082
Special reserve 107 117
Revaluation reserve 450 450
Translation reserve 223 171
-------- --------
Equity attributable to shareholders
of Densitron 4,384 7,303
Non-controlling interests 35 39
Total equity 4,419 7,342
-------- --------
Densitron Technologies plc
Consolidated Cash Flow Statement
For the year ended 31 December 2011
2011 2010
GBP000 GBP000
Cash flows from operating activities
Profit/(loss) before taxation 1,061 (569)
Adjustments for:
Depreciation 61 48
Loss on the sale of available-for-sale
asset - 1,174
Net finance expense 32 85
1,154 738
Change in financial assets (74) (165)
Change in inventories 23 (665)
Change in trade and other receivables 243 (1,220)
Change in trade and other payables (929) 1,191
Change in provisions 100 (60)
-------- --------
517 (181)
Income tax paid (299) 146
-------- --------
Net cash from operating activities 218 (35)
-------- --------
Cash flows from investing activities
Interest received 1 3
Proceeds from capital reduction
of available for sale investment - 483
Proceeds from disposal of available-for-sale
asset - 3,476
Disposal of discontinued operation 165 393
Payment for intangible asset (87) (87)
Acquisition of property, plant
and equipment (111) (116)
-------- --------
Net cash (used in)/generated from
investing activities (32) 4,152
-------- --------
Cash flows from financing activities
Inception of new loans 83 -
Repayment of borrowings (24) (287)
Interest paid (33) (92)
Change in invoice discounting
creditor (675) 450
Change in letters of credit (128) 675
Dividend paid to the owners of
the Company (968) (69)
Repayment of capital to the owners (2,821) -
of the Company
-------- --------
Net cash (used in)/generated from
financing activities (4,566) 677
-------- --------
Net (decrease)/increase in cash
and cash equivalents (4,380) 4,794
Cash and cash equivalents at 1(st)
January 6,002 1,107
Effect of exchange rate fluctuations
on cash held (6) 101
-------- --------
Cash and cash equivalents at 31(st)
December 1,616 6,002
-------- --------
Densitron Technologies plc
Statement of Changes in Shareholder's Equity
For the year ended 31 December 2011
Share Translation Special Available Revaluation Retained Total Non-controlling Total
Capital reserve reserve for reserve earnings attributable interest Equity
sale to equity
reserve holders
of parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
1(st) January
2010 3,483 34 188 54 - 3,752 7,511 45 7,556
Loss for
the year - - - - - (672) (672) (4) (676)
Other total
comprehensive
income - 137 - - - - 137 (2) 135
Revaluation
of land - - - - 450 - 450 - 450
Payment of
dividends - - - - - (69) (69) - (69)
Disposal
of available
for sale
investment - - - (54) - - (54) - (54)
Transfer
from special
reserve - - (71) - - 71 - - -
-------- ------------ -------- ---------- ------------ --------- ------------- ---------------- ---------
Balance at
31(st)
December
2010 3,483 171 117 - 450 3,082 7,303 39 7,342
-------- ------------ -------- ---------- ------------ --------- ------------- ---------------- ---------
Balance at
1(st) January
2011 3,483 171 117 - 450 3,082 7,303 39 7,342
Profit for
the year - - - - - 818 818 (2) 816
Other total
comprehensive
income - 52 - - - - 52 (2) 50
Payment of
dividends - - - - - (968) (968) - (968)
Capital
reduction (2,786) - - - - 2,806 20 - 20
Return of
capital to
shareholders - - - - - (2,786) (2,786) - (2,786)
Costs
associated
with capital
reduction - - - - - (55) (55) - (55)
Transfer
from special
reserve - - (10) - - 10 - - -
-------- ------------ -------- ---------- ------------ --------- ------------- ---------------- ---------
Balance at
31(st)
December
2011 697 223 107 - 450 2,907 4,384 35 4,419
-------- ------------ -------- ---------- ------------ --------- ------------- ---------------- ---------
Densitron Technologies plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2011
1. Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRSs) issued by the International Accounting
Standards Board (IASB) as adopted by the European Union (Adopted IFRSs)
and are in accordance with IFRS as issued by the IASB.
The accounting policies applied are consistent with those set out in
the financial statements of Densitron Technologies plc for the year
ended 31 December 2010. The financial information in the announcement
is unaudited and does not constitute the company's statutory accounts
for the years ended 31(st) December 2011 or 2010. The financial information
for the year ended 31 December 2010 is derived from the statutory accounts
for that year, which were prepared under IFRSs as adopted by the EU,
which have been delivered to the Registrar of Companies. The auditors
reported on those accounts; their report was unqualified, did not include
references to any matters to which the auditors drew attention by way
of emphasis without qualifying their reports and did not contain statements
under the Companies Act 2006.
The statutory accounts for the year ended 31 December 2011, prepared
in accordance with IFRSs as adopted by the EU, will be finalised on
the basis of the financial information presented by the directors in
this preliminary announcement and will be delivered to the Registrar
of Companies following the company's annual general meeting.
2. Other operating income
2011 2010
GBP000 GBP000
Royalties receivable 74 165
Other 4 9
---------- ----------
78 174
---------- ----------
3. Financial income and expense
2011 2010
GBP000 GBP000
Financial income
Bank deposit interest 1 -
Interest on deferred consideration - 6
---------- ----------
1 6
---------- ----------
Financial expenses
Bank borrowings 18 65
Invoice discounting charge 15 14
33 79
---------- ----------
4. Loss on disposal of available-for-sale
asset
2011 2010
GBP000 GBP000
Proceeds received from the disposal - 3,476
Carrying value of the investment - (4,617)
Balance on available-for sale
reserve - 54
Costs associated with the disposal - (87)
---------- ----------
Loss on disposal - (1,174)
---------- ----------
On 30 September 2010 the Group disposed of its investment in a Taiwanese
manufacturing company, Evervision Electronics Co. Ltd (Evervision).
The Group owned 24.48% of the ordinary share capital of Evervision but,
in the director's opinion, was not able to exert significant influence
and consequently had treated the investment as available-for-sale. During
2009 the Group received approximately GBP1.2m in respect of a capital
reduction by Evervision and in 2010 a further GBP0.5m was received.
The directors believed that it was unlikely that further income would
be received in the near future so took the opportunity to realise, what
they considered to be, a reasonable offer on the investment, despite
the fact that this led to a loss on disposal being realised in the 2010
results.
5. Business and geographical segments
The chief operating decision maker in the organization is made up of
an Executive Committee comprising the Executive Directors and Chairman,
and they have determined the operating segments detailed within this
report, and on which the business is managed.
The Group is managed by the geographical location of its subsidiaries
and resources are allocated as required on this basis:
0 Europe - The European market, being so diverse, is serviced by subsidiaries
based in four locations:
0 UK - the UK is responsible for business conducted in the UK, management
of the Group's distribution network and sales into other locations where
the Group does not have a physical presence. The UK business contributed
26% (2010: 26%) to Group revenues.
0 France - the subsidiary in France is responsible for business conducted
in France and with French customers whose manufacturing operations may
be located elsewhere in the world. The French business contributed 15%
(2010: 11%) to Group revenues.
0 Finland - Densitron Nordic is the Group's subsidiary located in Finland
and servicing business locally along with Sweden and customers located
in the Baltic region. The Finnish business contributed 2% (2010: 3%)
to Group revenues.
0 Germany - Densitron Deutschland is the Group's subsidiary based in
Germany. It is responsible for business conducted in Germany, Switzerland
and Austria and through the Group's distributor based in Germany. The
German business contributed 10% (2010: 14%) to Group revenues.
In total the European region represented the largest part of the business
contributing 53% (2010: 54%) to Group revenues.
0 US - the US segment is responsible for business conducted in the US,
Canada and Central and South America. It represents 34% (2010: 33%)
of the Group total revenues.
0 Asia - The Asian segment is made up of subsidiaries located in Japan
and Taiwan.
0 Japan - Densitron Japan is responsible for sales into Japan. It contributed
11% (2010: 9%) to Group revenues.
0 Taiwan - Densitron Asia is the Group's subsidiary located in Taiwan.
It is primarily a facilitating function for the rest of the Group managing
suppliers located in Taiwan and China. It contributed 2% (2010: 4%)
to Group revenues.
Inter-segment transfer pricing is based on the level of work carried
out and the risk encountered by each party in order to make a third
party sale.
UK France Finland Germany US Japan Taiwan Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2011
Revenue
Total 7,794 3,516 472 2,328 7,997 2,434 7,045 31,586
Intercompany (1,703) (50) (21) - (158) - (6,524) (8,456)
-------- ------- -------- -------- ------- ------- -------- --------
Revenue
from external
customers 6,091 3,466 451 2,328 7,839 2,434 521 23,130
-------- ------- -------- -------- ------- ------- -------- --------
Profit/(loss)
before tax 338 81 (14) 55 779 306 71 1,616
-------- ------- -------- -------- ------- ------- -------- --------
Balance
Sheet
Assets 1,899 1,137 209 734 2,255 1,438 565 8,237
Liabilities (1,777) (268) (44) (101) (910) (263) (766) (4,129)
-------- ------- -------- -------- ------- ------- -------- --------
Net assets 122 869 165 633 1,345 1,175 (201) 4,108
-------- ------- -------- -------- ------- ------- -------- --------
Other
Interest
payable 39 8 - - 3 1 - 51
Capital
expenditure
- Property,
plant and
equipment - 7 - - 89 15 - 111
- Depreciation 1 3 1 1 51 - - 57
-------- ------- -------- -------- ------- ------- -------- --------
UK France Finland Germany US Japan Taiwan Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2010
Revenue
Total 7,734 2,421 635 2,928 6,869 1,882 6,489 28,958
Intercompany (2,453) (66) - - (46) (22) (5,601) (8,188)
-------- ------- -------- -------- ------- ------- -------- --------
Revenue
from external
customers 5,281 2,355 635 2,928 6,823 1,860 888 20,770
-------- ------- -------- -------- ------- ------- -------- --------
Profit/(loss)
before tax 117 (16) (21) (49) 575 112 89 807
-------- ------- -------- -------- ------- ------- -------- --------
Balance
Sheet
Assets 3,191 938 244 816 1,970 1,092 1,381 9,632
Liabilities (2,984) (264) (44) (107) (763) (115) (1,519) (5,796)
-------- ------- -------- -------- ------- ------- -------- --------
Net assets 207 674 200 709 1,207 977 (138) 3,836
-------- ------- -------- -------- ------- ------- -------- --------
Other
Interest
payable 42 3 - - 8 1 - 54
Capital
expenditure
- Property,
plant and
equipment 4 2 - 1 100 - - 107
- Depreciation 1 2 2 1 37 - - 43
-------- ------- -------- -------- ------- ------- -------- --------
Reconciliation of reportable segments, profit and loss, assets and
liabilities to the Group's corresponding amounts:
2011 2010
GBP000 GBP000
Revenue
Total revenue for reported segments 31,586 28,958
Elimination of inter-segmental
revenues (8,456) (8,188)
-------- -------------
Group's revenue per consolidated
statement of comprehensive income 23,130 20,770
-------- -------------
2011 2010
GBP000 GBP000
Profit/(loss) after income
tax expense
Total profit for reporting
segments 1,616 807
Costs associated with
head office (555) (202)
Loss on disposal of available
for sale investment - (1,174)
Income tax expenses (245) (109)
-------- -------------
Profit/(loss) after income
tax expense 816 (678)
-------- -------------
2011 2010
GBP000 GBP000
Assets
Total assets for reportable
segments 8,237 9,632
Assets attributable to
Head Office 432 3,451
Land at Blackheath 499 499
Group assets 9,168 13,582
-------- -------------
Liabilities
Total liabilities for reportable
segments 4,129 5,796
Liabilities attributable
to Head Office 620 444
-------- -------------
Group liabilities 4,749 6,240
-------- -------------
The analysis of the Group's segmental information by
geographical location is:
External revenue Non current Capital expenditure
by location assets by location by location
of customers of asset of assets
2011 2010 2011 2010 2011 2010
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total operations
UK 2,349 2,735 617 612 14 100
France 3,466 2,355 18 16 7 2
Finland 451 635 10 11 - -
Germany 2,328 2,928 100 101 - 1
Portugal 703 454 - - - -
Italy 557 122 - - - -
Other European 740 284 - - - -
USA 6,392 7,438 381 260 162 100
Canada 785 - - - - -
Other Americas 22 - - - - -
Japan 1,909 1,860 17 28 15 -
Taiwan 531 890 28 -
Malaysia 523 158 - - - -
China 1,405 623 - - - -
Other Asia 512 - - - - -
Tunisia 326 186 - - - -
Other Rest of the world 131 102 - - - -
--------- -------- ---------- ---------- ---------- ----------
23,130 20,770 1,171 1,028 198 203
--------- -------- ---------- ---------- ---------- ----------
6. Tax expense
2011 2010
GBP000 GBP000
Current tax expense
UK corporation tax and income tax of overseas operations
on profits for the year 408 34
Adjustments for over provision in
prior periods (59) (72)
------- -------
349 (38)
Deferred tax expense
Origination and reversal of temporary
differences (104) 147
------- -------
Total tax charge 245 109
------- -------
The reasons for the difference between the actual tax charge for the
year and the standard rate of corporation tax in the UK applied to
profits for the year are as follows:
2011 2010
GBP000 GBP000
Profit/(loss) before tax 1,061 (569)
------- -------
Expected tax charge based on the
standard rate of corporation tax
in the UK of 26% (2010: 28%) 276 (159)
Losses carried forward 4 91
Disallowed expenses 37 442
Non taxable income - (171)
Movement in unprovided deferred tax
assets - 2
Utilisation of tax losses brought
forward (85) (36)
Adjustments for overseas rate 72 12
Adjustments to prior years tax charge (59) (72)
245 109
------- -------
7. Earnings per share
The earnings and weighted average number of ordinary shares used in
the calculation of earnings per share are as follows.
2011 2010
GBP000 GBP000
Profit/(loss) attributable to ordinary
shareholders 818 (674)
Exceptional loss - 1,174
----------- -----------
Adjusted profit attributable to ordinary
shareholders 818 500
----------- -----------
2011 2010
Number Number
Weighted average number of ordinary
shares
Issued ordinary shares at 1(st) January 69,669,106 69,669,106
Effect of purchase of Treasury shares on 23 October
2008 (500,000) (500,000)
----------- -----------
Weighted average number of ordinary shares at 31
December 69,169,106 69,169,106
----------- -----------
8. Contingent liabilities
The Group is a defendant in a claim involving a property in which it is
alleged that the Group is the legal tenant. The management of the Group
has taken legal advice and based on this advice is vigorously defending
its position. While the directors are confident of the Group's position,
should the matter go to court the outcome is uncertain and the Group may
be required to make a settlement.
The claim against the Group relates to a building occupied by Densitron
Ferrograph Limited, a former subsidiary of the Group, that was disposed
of in 2006. The claim against the Group is approximately GBP300,000 in
unpaid back rent. If the action were to succeed there would also be a liability
for unpaid past business rates of approximately GBP70,000. The lease of
the premises runs until 2023 and contains provisions for rent reviews in
2013 and 2018 and an outstanding rent review in 2008. The annual rent on
the premises is currently GBP167,000 and the annual business rates on the
premises are currently GBP60,000. The premises are at present unoccupied.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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