TIDMDTE
RNS Number : 6273H
Datong PLC
24 June 2013
Press Release 24 June 2013
DATONG PLC
("DATONG", "the Company" or "the Group")
Interim Results
DATONG PLC (DTE.L), a leading provider of covert intelligence
gathering solutions, today announces its interim results for the
six-month period ended 31 March 2013.
Financial Highlights
-- Revenue of GBP5.73 million (2012: GBP3.84 million)
-- Operating profit GBP0.02 million (2012: loss of GBP0.14 million)
-- Basic earnings per ordinary share of 0.17p (2012: 1.18p)
-- Net cash of GBP2.21 million (2012: GBP2.14 million)
- Ends -
Enquiries:
DATONG PLC Tel: +44 (0) 113 239
5350
Mark Cook, Chief Executive Officer
Stephen Ayres, Finance Director
Nominated adviser and broker
Canaccord Genuity Tel: +44 (0) 207 050
6500
Simon Bridges / Mark Whitmore
Media enquiries
Abchurch Communications Tel: +44 (0) 207 398
7718
Sarah Hollins / Quincy Allan
Sarah.hollins@abchurch-group.com
Business Review
Trading performance and Outlook
DATONG's position within the defence and security market has
supported a solid performance during the period in line with
management expectations. Delivered revenue for the period was
GBP5.73 million (2012: GBP3.84 million) and the operating profit
was GBP0.02 million (2012: loss of GBP0.14 million). Net cash at
the period end was GBP2.21 million (2012: GBP2.14 million).
Throughout the period, and in line with its previously stated
strategy, the Group has continued to invest in its product
portfolio and routes to market whilst also prudently controlling
its cost base.
As announced on 19 December 2012, a major UK contract win was
secured worth GBP7.5 million over the next two years. Of that
contract GBP1.26 million has been recognised as revenue in the
period.
Despite a strong performance from the Third Party product
business segment, further territory distribution rights have been
terminated during the period reflecting the commercial growth of
DATONG's supply partner and which will significantly impact future
financial performance. Revenue from the Third Party product
business segment in the period was GBP1.06 million (2012: GBP0.42
million).
The sales order pipeline for the second half of the financial
year and in particularly the expected timings of certain
opportunities is being adversely affected by the continuing
uncertainty surrounding the sequestration process in the US.
Post Balance Sheet Events
On 10 May 2013 Seven Technologies Holdings Limited ("Seven")
announced its intention to make a cash offer ("Offer") to acquire
the entire issued and to be issued share capital of DATONG at the
offer price of 50 pence per share. The offer document containing
the full terms and conditions of the Offer and the procedure for
acceptance was posted to DATONG shareholders together with the
related Form of Acceptance on 14 May 2013.
On 11 June 2013 Seven announced that as at 1.00 p.m. (London
time) on 10 June 2013, Seven had received valid acceptances under
the Offer from DATONG shareholders, in respect of 13,139,239 DATONG
Shares, which in aggregate represents approximately 94.975 per
cent. of the existing issued ordinary share capital of the Company
and accordingly, by virtue of such acceptances, Seven declared the
Offer wholly unconditional in all respects.
Having received valid acceptances under the Offer of more than
75 per cent. of the existing issued share capital of DATONG, at the
request of Seven, an application has been made to the London Stock
Exchange, to cancel the trading facility in the ordinary shares of
the Company on AIM. In accordance with the guidance to Rule 41 of
the AIM Rules for Companies, on 11 June 2013 the Company gave
notice that the cancellation of the admission to trading on AIM of
DATONG shares (the "Cancellation") is expected to be effective from
7.00 a.m. (London time) on 10 July 2013 and that the last day of
dealings in DATONG shares will be 9 July 2013.
The Cancellation will significantly reduce the liquidity and
marketability of any DATONG shares not asserted to the Offer and
their value may be affected in consequence. Seven also intends to
re-register the Company as a private company following the
Cancellation.
Board Changes
Following the announcement on 11 June 2013 by Seven that the
Offer was now wholly unconditional in all respects, the
non-executive directors of the Company, namely, Paul Lever, Grant
Ashley, Richard Brearley and Brian Smith resigned from their
offices with immediate effect. The Board therefore now comprises of
Stephen Ayres and Mark Cook.
Paul, Grant, Richard and Brian have all played an integral role
during the Company's life on AIM and on behalf of everyone involved
the Board thanks them all for their significant contributions over
the years.
Mark Cook
Chief Executive Officer
24 June 2013
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2013
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2013 2012 2012
Unaudited Unaudited Audited
Continuing operations Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ----------- ------------ ----------------
Revenue 3 5,726 3,839 9,690
Cost of sales (3,663) (2,164) (5,606)
----------------------------------- ---- ----------- ------------ ----------------
Gross profit 2,063 1,675 4,084
Overhead costs (2,047) (2,113) (4,108)
Share of post-tax result of
associate - (3) (8)
Exceptional litigation costs - 300 300
Profit/(loss) from operations 3 16 (141) 268
Investment income 3 - 1
Finance costs - (1) -
----------------------------------- ---- ----------- ------------ ----------------
Profit/(loss) before taxation 19 (142) 269
Taxation 4 305 137
----------------------------------- ---- ----------- ------------ ----------------
Profit for the period attributable
to equity holders of the
Company 23 163 406
----------------------------------- ---- ----------- ------------ ----------------
Profit per ordinary share
(pence)
Basic 4 0.17 1.18 2.93
Diluted 4 0.16 1.18 2.93
----------------------------------- ---- ----------- ------------ ----------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MARCH 2013
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------- ----------- ----------- ---------------
Profit for the period 23 163 406
Other comprehensive income
Currency translation differences (104) 26 47
--------------------------------- ----------- ----------- ---------------
Total comprehensive income
for the
period attributable to equity
holders
of the Company (81) 189 453
--------------------------------- ----------- ----------- ---------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2013
31 March 31 March 30 September
2013 2012 2012
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
--------------------------------- ----- --------- ---------- -------------
Assets
Non-current assets
Intangible assets 2,629 2,952 2.808
Property, plant and equipment 897 1,037 1,002
Investment in associates - 9 -
Deferred tax assets 5 263 4
---------------------------------------- --------- ---------- -------------
3,531 4,261 3,814
Current assets
Inventories 1,353 2,415 2,297
Trade and other receivables 4,063 2,483 3,039
Derivative financial instruments - 21 -
Tax receivables 101 10 100
Cash and cash equivalents 2,212 2,144 2,480
---------------------------------------- --------- ---------- -------------
7,729 7,073 7,916
Assets held for sale - -
--------------------------------- ----- --------- ---------- -------------
Total assets 11,260 11,334 11,730
---------------------------------------- --------- ---------- -------------
Liabilities
Current liabilities
Trade and other payables (1,029) (1,236) (1,427)
Non-current liabilities
Deferred tax liabilities (31) (35) (35)
Total liabilities (1,060) (1,271) (1,462)
---------------------------------------- --------- ---------- -------------
Net assets 10,200 10,063 10,268
---------------------------------------- --------- ---------- -------------
Equity
Share capital 69 69 69
Share premium 4,468 4,468 4,468
Currency translation reserve (74) 9 30
Retained earnings 5,737 5,517 5,701
---------------------------------------- --------- ---------- -------------
Equity attributable to equity
holders of the Company 10,200 10,063 10,268
---------------------------------------- --------- ---------- -------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 MARCH 2013
Currency
Share Share translation Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- ------- ------------ -------- --------
Unaudited
At 1 October 2012 69 4,468 30 5,701 10,268
Total comprehensive income
for the period - - (104) 23 (81)
Cost of share-based incentives - - - 13 13
At 31 March 2013 69 4,468 (74) 5,737 10,200
------------------------------- ------- ------- ------------ -------- --------
Unaudited
At 1 October 2011 69 4,468 (17) 5,352 9,872
Total comprehensive income
for the period - - 26 163 189
Cost of share-based incentives - - - 2 2
At 31 March 2012 69 4,468 9 5,517 10,063
------------------------------- ------- ------- ------------ -------- --------
Audited
At 1 October 2011 69 4,468 (17) 5,352 9,872
Total comprehensive income
for the period - - 47 406 453
Cost of share-based incentives - - - (57) (57)
At 30 September 2012 69 4,468 30 5,701 10,268
------------------------------- ------- ------- ------------ -------- --------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 MARCH 2013
Six months Six months Twelve months
to 31 March to 31 March to 30 September
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------------- ----------- ----------- ---------------
Cash flows from operating activities
Profit/(loss)from operations 16 (141) 268
Adjustments for:
Depreciation and amortisation 760 694 1,545
Impairment of investments in associates - - 4
Share of post-tax result of associate - 3 8
Loss on disposal of tangible assets - - 3
Cost of share-based incentives 13 2 (57)
Fair value gains on derivative
financial instruments - (21) -
Decrease/(increase) in inventories 946 (385) (272)
(Increase)/decrease in trade and
other receivables (995) 1,578 1,025
Decrease in trade and other payables (554) (549) (345)
Tax (paid)/received (1) 184 185
---------------------------------------- ----------- ----------- ---------------
Net cash generated from operating
activities 185 1,365 2,364
---------------------------------------- ----------- ----------- ---------------
Cash flows from investing activities
Interest received 3 - 1
Sales of property, plant and equipment - - 2
Purchases of property, plant and
equipment (18) (45) (172)
Purchase of intangible assets (454) (422) (974)
Investment in associate - (20) (20)
---------------------------------------- ----------- ----------- ---------------
Net cash used in investing activities (469) (487) (1,163)
---------------------------------------- ----------- ----------- ---------------
Cash flows from financing activities
Interest paid - (1) -
Net cash used in financing activities - (1) -
---------------------------------------- ----------- ----------- ---------------
Net (decrease)/increase in cash
and
cash equivalents (284) 877 1,201
Cash and cash equivalents at the
start
of the period 2,480 1,268 1,268
Effect of foreign currency translation 16 (1) 11
---------------------------------------- ----------- ----------- ---------------
Cash and cash equivalents at the
end
of the period 2,212 2,144 2,480
---------------------------------------- ----------- ----------- ---------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 MARCH 2013
1. Accounting policies
Basis of Preparation
These financial statements are the unaudited interim
consolidated financial statements of DATONG plc, a company
incorporated in the United Kingdom, and its subsidiaries (together
referred to as the "Group") for the six month period ended 31 March
2013. They have been prepared in accordance with IAS 34 'Interim
Financial Reporting' and should be read in conjunction with the
consolidated financial statements for the 12-month period ended 30
September 2012. They were approved for issue by the Board of
Directors on 15 January 2013. The financial information contained
in these financial statements does not constitute statutory
accounts as defined in the Companies Act 2006.
The accounting policies used in the preparation of the interim
financial statements are the same as those applied in the
preparation of the financial statements for the year ended 30
September 2012.
The preparation of the interim financial statements requires the
use of certain estimates and requires management to exercise its
judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or
complexity or areas where assumptions and estimates are significant
to the interim financial statements are consistent with those
disclosed in the consolidated financial statements for the year
ended 30 September 2012.
The comparative figures for the year ended 30 September 2012
have been taken from but do not constitute the company's statutory
financial statements for that financial year. Those financial
statements have been reported on by the Company's Auditors and
delivered to the Registrar of Companies. Their report was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006.
TAXATION
The charge for taxation is recognised based upon the estimated
effective rate for the full financial year, expressed as a
percentage of the expected result for the year and then applied to
the interim results.
2. Segmental Information
The Group's reportable segments under IFRS 8 are Own products
and Third Party products. Own products represent products
developed, manufactured and distributed by the Group. Third Party
products represent products bought in from a third party and
distributed by the Group.
The products from both reportable segments are offered for sale
in the same market sectors and consequently are managed together as
one business operating from the same locations. Accordingly only
directly attributable items have been allocated across the
segments.
segment REVENUES AND RESULTS
The segment results for the period are as follows:
Six months Six months Twelve months
to 31 to 31 March to 30 September
March
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ----------- ---------------
Segment revenue
Own products 4,665 3,423 8,099
Third Party products 1,061 416 1,591
-------------------------------------- ---------- ----------- ---------------
Total 5,726 3,839 9,690
-------------------------------------- ---------- ----------- ---------------
Segment profit
Own products 1,694 1,404 3,601
Third Party products 319 217 669
-------------------------------------- ---------- ----------- ---------------
Total 2,013 1,621 4,270
-------------------------------------- ---------- ----------- ---------------
Unallocated costs (1,997) (2,059) (3,994)
Share of post-tax result of associate - (3) (8)
Exceptional litigation costs - 300 -
Investment income 3 - 1
Finance costs - (1) -
-------------------------------------- ---------- ----------- ---------------
Profit/(loss) before taxation 19 (142) 269
-------------------------------------- ---------- ----------- ---------------
Segment revenue represents revenue generated from external
customers. Inter-segment sales were not significant.
The products from both reportable segments are offered for sale
in the same market sectors and consequently the reportable segments
are managed together as one business operating from the same
locations. Accordingly only directly attributable items have been
allocated across the segments.
An analysis of the Group's revenue by its major products and
services is represented by the above analysis by reportable
segment.
OTHER SEGMENT INFORMATION
The segments' assets and liabilities at the period end are as
follows:
31 March 31 March 30 September
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------- --------- --------- ------------
Segment assets
Own products 7,320 8,702 8,219
Third Party products 1,623 155 837
--------------------- --------- --------- ------------
8,943 8,857 9,056
Unallocated 2,317 2,477 2,674
--------------------- --------- --------- ------------
11,260 11,334 11,730
--------------------- --------- --------- ------------
Segment liabilities
Own products 670 962 873
Third Party products 172 34 378
--------------------- --------- --------- ------------
842 996 1,251
Unallocated 218 275 211
--------------------- --------- --------- ------------
1,060 1,271 1,462
--------------------- --------- --------- ------------
Geographical information
The Group's two reportable segments operate in four main
geographical areas, although they are managed on a worldwide
basis.
Six months Six months Twelve
months
to 31 to 31 March to 30 September
March
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------- ---------- ----------- ---------------
Revenue from external customers
United Kingdom 2,055 998 3,094
Europe 495 239 541
Americas 1,978 2,139 3,947
Rest of World 1,198 463 2,108
-------------------------------- ---------- ----------- ---------------
5,726 3,839 9,690
-------------------------------- ---------- ----------- ---------------
4. Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive shares arising from
outstanding share options. For this adjustment, a calculation is
made to determine the number of shares that could have been
acquired at fair value (determined as the average annual market
share price during the period) based on the monetary value of the
subscription rights attached to outstanding share options. The
number of shares calculated as above is compared with the number of
shares that would have been issued assuming the exercise of share
options. The difference is added to the denominator as additional
shares for no consideration. There is no adjustment made to the
numerator.
Six months Six months Twelve
months
to 31 to 31 March to 30 September
March
2013 2012 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ------------ ----------------
Earnings
Profit for the period attributable
to equity holders
of the Company 23 163 406
Number of shares
Weighted average number of ordinary
shares
in issue for basic earnings per
share 13,834,375 13,834,375 13,834,375
Potential dilutive shares arising
from share options 668,000 - -
Weighted average number of ordinary
shares
in issue for diluted earnings per
share 14,502,375 13,834,375 13,834,375
------------------------------------ ----------- ------------ ----------------
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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