RNS Number : 3843B
Nipson Digital Printing Systems PLC
15 August 2008
NIPSON DIGITAL PRINTING SYSTEMS PLC
FOR IMMEDIATE RELEASE 15 August 2008
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008 (UNAUDITED)
Nipson Digital Printing Systems PLC ("Nipson" or "the Group"), the manufacturer and distributor of digital printing systems and
consumables, today announces its results for the six months to 30 June 2008.
6 months to Change 6 months to Full Year to
30 June +/-% 30 June 31 December
2008 compared to 6 mths 2007 2007
Unaudited 30/06/07 Unaudited Audited
�'000 �'000 �'000
Revenue 14,188 +16.1% 12,225 27,335
Gross profit 2,423 +36.6% 1,774 3,463
Operating (loss) (2,104) (2,036) (4,657)
(Loss) on ordinary activities (3,021) (2,580) (6,209)
before tax
* For the first six months, and compared to the same period of 2007, recurrent revenues increased by 10.0% and equipment revenues
increased by more than 35% with the equipment pipeline remaining strong;
* The first half year's result also impacted the Group's cash position. The company is currently in discussion with several parties with
a view to raising additional required funding.
A copy of this announcement and the interim results will also be available on the Group's web site: www.nipson.com
For further information, please contact:
Nipson Digital Printing Systems PLC
Alfons Buts, Managing Director - Tel: + 32 (0)3 740 02 05
Robert Cahill, Group Finance Director - Tel: +33 (0)384 54 52 50
Beaumont Cornish Ltd (Nomad)
Roland Cornish / Rosalind Hill Abrahams - Tel: +44 (0)20 7628 3396
Keith, Bayley, Rogers & Co Ltd (Broker)
Derek Crowhurst / Brinsley Holman - Tel: +44 (0)20 3100 8300
Bankside Consultants Ltd
Oliver Winters - Tel: +44 (0)20 7367 8874
CHAIRMAN'S STATEMENT
Overview
The loss incurred in the second quarter of 2008 exceeded expectations due to the lower than expected revenues, the incremental costs of
technical issues and the impact of the weak US Dollar.
While the order intake for the third quarter and the pipeline for the second half remain good, and although these technical issues have
now been addressed, the first half year's negative result also impacted the Group's cash position.
The company is currently in discussion with several parties which may entail equity and or debt transactions. There is no certainty of
any such new funding being achieved. If no such transaction can be attained the company may have a requirement for additional funding to
meet its obligations.
Revenue and Operating Results
Revenue for the six months to 30 June 2008 was �14.2m, an increase of 16.1% over the same period last year. The increase occurred both
in new equipment sales and recurring revenues. Sales increased across virtually all markets compared to the same period last year.
Equipment sales, at �3.9m for the six months, showed an increase of more than 35% over the comparative period. Sales of a further �1.2m,
expected to be delivered in June, were actually made in July due to supply chain issues. The order book and pipeline for the second half of
2008 remain strong.
Recurrent revenues for the six months to 30 June 2008 were �10.2m, an increase of 10.0% as compared to the same period last year. The
Group's recurrent revenue is expected to continue to grow steadily.
Gross profit for the six months to 30 June 2008 was �2.4m, 36.6% higher than the comparative period last year but significantly lower
than anticipated. The lower than expected equipment sales resulted in a lower contribution to fixed production costs. Margins on recurrent
revenues improved slightly although less than anticipated. Finally, gross margins suffered from the continued weakness of the US Dollar.
The operating result for the six months to 30 June 2008 showed a loss of �2.1m against a loss of �2.0m for the corresponding period in
2007. Operating costs at �4.5m (2007: �3.8m) were higher due to �300,000 costs for Drupa (the largest print fair held every four years)
charged to the accounts in the period and to higher amortisation on previously capitalised R&D projects. In the first half of 2007 the Group
also received R&D tax credits, which were not received in the first half of 2008. The relative weakness of the GB Pound to the Euro is also
a major reason for the adverse difference.
The costs of Research & Development in the first quarter of 2008 were �1.9m of which �0.8m was capitalised. For the first six months of
2008, �0.4m was capitalised net of amortisation of R&D intangible assets (2007: �1.2m).
The net loss was �3.0m (2007: net loss of �2.6m). Other than the cost of Drupa and the additional R&D amortisation, this difference is
due to the finance costs which were higher in the first half of 2008 caused mainly by currency movements of the US Dollar and GB Pound.
As at 30 June 2008 cash balances were �1.1m (�1.3m as at 31 December 2007). With higher equipment sales and recurrent sales, and the
financing of the machines used at Drupa, the inventory levels increased to �12.4m at the end of the period (�9.7m as at 31 December 2007).
The level of trade and other receivables decreased to �8.3m (�9.5m as at 31 December 2007).
As of 30 June 2008, the total amount owing to the Polar Group for loans, accruing interest and including the 5% Convertible Loan Notes
of nearly �2.1m, was approx �11.6m (31 December 2007: �10m); �0.8m of this increase is due singularly to reporting requirements being the
currency translation effect of converting the loans established in Euros into the reporting currency of GB Pounds. The comments on the
valuation of the Convertible Loan Notes both for Roseman and for Polar are detailed in Note 4.
Rimon Ben-Shaoul, Chairman, Nipson Digital Printing Systems PLC
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2008
CONSOLIDATED INCOME STATEMENT
6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Continuing Operations 14,188 12,225 27,335
Revenue
Cost of Sales (11,765) (10,451) (23,872)
Gross Profit 2,423 1,774 3,463
Administrative Expenses (4,527) (3,810) (7,667)
Other Operating Income - - (453)
(Loss) on Continuous Operations (2,104) (2,036) (4,657)
before interest
Finance Income 154 111 191
Finance Costs (1,071) (655) (1,743)
(Loss) from Continuing Operations (3,021) (2,580) (6,209)
before taxation
Taxation - - -
(Loss) from Continuing Operations (3,021) (2,580) (6,209)
after taxation
(Loss) per Ordinary Share (5.8p) (4.9p) (11.9p)
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Exchange Difference on Translation of 517 22 234
Foreign Operations
Net Income Recognised Directly in 517 22 234
Equity
(Loss) for the Year (3,021) (2,580) (6,209)
Total Recognised Income and Expense (2,504) (2,558) (5,975)
for the Year
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2008
CONSOLIDATED BALANCE SHEET
6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Assets 783 723 755
Non-Current Assets
Goodwill
Other Intangible Assets 4,235 2,849 3,636
Property, Plant & Equipment 3,556 6,826 3,645
Deferred Tax Asset 634 487 597
Other Non-Current Assets 556 610 498
9,764 11,495 9,131
Current Assets
Inventories 12,375 10,068 9,679
Trade and Other Receivables 8,263 7,981 9,545
Cash and Cash Equivalents 1,094 2,395 1,348
21,732 20,444 20,572
Liabilities
Current Liabilities
Trade and Other Payables (8,524) (6,943) (7,696)
Borrowings (15,648) (12,229) (12,870)
(24,172) (19,172) (20,566)
Net Current Assets (2,440) 1,272 6
Non-Current Liabilities
Borrowings (3,483) (4,187) (3,776)
Deferred Tax Liabilities (634) (496) (597)
Retirement Benefit Liability (1,050) (919) (1,016)
(5,167) (5,602) (5,389)
Net Assets 2,157 7,165 3,748
Shareholder's Equity
Ordinary Share Capital 523 523 523
Share Premium 13,915 13,915 13,915
Equity Portion of Convertible Loan 913 - -
Notes
Reverse Acquisition Merger Reserve 3,057 3,057 3,057
Translation Reserve 683 (46) 166
Retained Earnings (16,934) (10,284) (13,913)
Total Equity Attributable to Equity 2,157 7,165 3,748
Holders
Approved by the Board of Directors on Wednesday 13 August 2008
Alfons Buts Robert Cahill
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2008
CONSOLIDATED CASH FLOW STATEMENT
6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Net Cash (Decrease) from Operating (1,386) (235) (1,444)
Activities
Cash Flows from Investing Activities
Purchase of Intangible Assets (790) (1,020) (2,480)
Purchase of Property, Plant & (46) (140) (188)
Equipment
Disposal of fixed assets 169 - 2,100
Interest Received - 15 75
Net Cash Used in Investing Activities (667) (1,145) (493)
Cash Flows from Financing Activities
Interest Paid (187) (587) (541)
Capital Repayments on Finance Leases (121) (352) (2,388)
Borrowings Raised - from Third Party 1,574 342 215
from Parent Undertaking 586 2,142 5,203
Borrowings Repaid (53) (362) (1,796)
Net Cash Raised in Financing 1,799 1,183 693
Activities
Net (Decrease) in Cash & Cash (254) (197) (1,244)
Equivalents
Cash & Cash Equivalents at 1 January 1,348 2,592 2,592
Cash & Cash Equivalents at end of 1,094 2,395 1,348
period
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Generated from Operations 6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Continuing Operations (3,021) (2,580) (6,209)
Loss before Taxation
Adjustments for:
Depreciation and Amortisation 1,138 536 1,619
Disposal of fixed assets - - 542
Finance Income (154) (111) (191)
Finance Expense 1,071 655 1,743
Increase in Retirement Benefit 34 - 97
Obligation
Share Based Payment Charge - - -
Other gains and losses 190 - -
Changes in Working Capital
(Increase) in Inventories (2,696) (902) (513)
Decrease in Trade & Other Receivables 1,224 2,028 576
Increase in Payables 828 139 892
Cash (Used in) Continuing Operations (1,386) (235) (1,444)
Corporation Tax Paid - - -
Net Cash (Decrease) from Continuing (1,386) (235) (1,444)
Operations
NOTES
1. Nature of Financial Information
The financial information contained within this interim report is unaudited. It does not constitute statutory accounts with in the
meaning of section 240 of the Companies Act 1985. The auditor's report on the accounts for the year ended 31 December 2007 was unqualified
and did not contain statements under section 237(2) or (3) of the Companies Act 1985.
2. Loss per Share
The Loss per Ordinary Share is calculated on the weighted average number of ordinary shares in issue during the period of 52,303,581
(2007: 52,303,581). Due to the loss in the period the basic and diluted EPS are the same.
3. Accounting Policies
The interim results have been prepared in accordance with IFRS accounting rules. The Accounting Policies used in the preparation of
these results were the accounting policies used in the preparation of the results for the year ended 31 December 2007 and detailed in the
notes to those results (see Annual Report 2007 issued 13 May 2008).
4.a Evaluation of Convertible Loan Notes
The theoretical equity portion of the Roseman and Polar convertible loan notes was estimated, as required under the IAS 32 and IAS 39,
by comparing the face value of the loan notes to their fair value after discounting the future stream of liabilities at a rate of 20%.
NIPSON DIGITAL PRINTING SYSTEMS PLC
Unaudited results for the six months ended 30 June 2008
Note 4.b : Evaluation of Convertible Loan Notes
Roseman Polar Total
�'000s �' �'
000s 000s
Face Value of Convertible Loan Notes 1,506 2,067 3,573
Issue Costs (71) (99) (170)
Net 1,435 1,968 3,403
Analysed as follows:
Equity Portion of Convertible Loan Notes 385 528 913
Loan Portion of Convertible Loan Notes 1,050 1,440 2,490
Note 5 : STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share Equity Reverse Translation Retained Total
Capit Premiu Portion of Acquisi Reserve Earnings
al m Convertible tion
Loans Reserve
�'000
�'000 �'000 �'000
�'000 �'000 �'000
At 1 January 2007 523 13,915 - 3,057 (68) (7,704) 9,723
Loss for the Period - - - - - (2,580) (2,580)
Exchange Differences on - - - 22 - 22
Translation of Foreign
Operations
-
At 30 June 2007 523 13,915 - 3,057 (46) (10,284) 7,165
At 1 January 2008 523 13,915 - 3,057 166 (13,913) 3,748
Loss for the Period - - - - - (3,021) (3,021)
Equity Portion of - - - - - 913
Convertible Loans 913
Exchange Differences on - - - 517 - 517
Translation of Foreign
Operations
-
At 30 June 2008 523 13,915 913 3,057 683 (16,934) 2,157
NOTE 6 (A) : GEOGRAPHICAL ANALYSIS OF SALES
Country / Region 6 months to 6 months to Full Year to
30 June 30 June 31 December
2008 2007 2007
�'000s �'000s �'000s
France 2,653 2,164 5,331
Rest of Europe 4,722 4,003 8,786
USA and Canada 3,098 2,930 5,685
Asia 1,567 1,436 3,255
Latin America 1,435 890 1,828
Other 713 802 2,450
Total 14,188 12,225 27,335
NOTE 6 (B) : SEGMENTAL ANALYSIS
France Rest of USA PLC Total
Europe
6m = 6 months 6m to 6m to FY to 6m to 6m to FY to 6m to 6m to FY to 6m to 6m to FY to 6m to 6m to FY to
FY = Full Year 30 30 31 Dec 30 30 June 31 30 30 31 30 30 31 30 30 31 Dec
June June 2007 June 2007 Dec June June Dec June June Dec June June 2007
2008 2007 �'000s 2008 �'000s 2007 2008 2007 2007 2008 2007 2007 2008 2007 �'000s
�'000s �'000s �' �' �' �' �' �' �' �' �'000s �'000s
000s 000s 000s 000s 000s 000s 000s 000s
Revenue 12,034 9,906 23,126 1,186 951 2,805 967 1,368 1,404 - - - 14,188 12,225 27,335
Assets 16,691 18,039 17,399 3,151 2,921 3,468 2,128 2,365 2,568 9,527 8,614 6,268 31,496 31,939 29,703
Capital Expenditure 423 1,445 2,486 1 4 9 1 10 17 2 - - 427 1,458 2,512
This information is provided by RNS
The company news service from the London Stock Exchange
END
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