RNS Number:1071I
NXT PLC
28 February 2003
28 February 2003
NXT plc
Interim Results for the six months ended 31 December 2002
NXT plc, the British audio and speech technology company, today announces its
interim results for the six months ended 31 December 2002.
* Relationship with 3M strengthened by exclusive license for non-speaker
related technologies. Agreement includes upfront fee of $4million with a
further $750,000 payable on delivery of additional functionality, royalties
for the life of the patents and sponsorship of continuing research into the
technology.
* Overall group sales were #2.5m (H1 2001: #2.6m).
* #1.7m decrease in annualised cash burn, with further reductions expected
from license and royalty income and recent cost reductions.
* Cash balances of #7.4m (H1 2001: #16.5m).
* Loss for the period was #6.4.m (H1 2001: #6.7m).
* New general license agreement signed with Pioneer, one of the world's
largest audio/visual companies.
* Continued progress from collaborations with strategic partners including
Philips Sound Systems and NEC which launched the world's first LCD monitor
to integrate the loudspeaker into the screen using NXT's SoundVu technology.
* First retail sales of products incorporating 20/20 Speech text-to-speech
software. New products such as Aurix(R) Activator and Aurix(R) ScriptSync
launched with orders expected shortly.
Commenting on the results, Gordon Owen, Chairman, said: "We are encouraged by
the continued commitment to NXT's technology by world-renowned global leaders as
evidenced by the fact that new licensees of the order of 3M and Pioneer have
chosen to embrace it. This, and the maturing of so many of our commercialisation
plans, give the board full confidence in the company's future prospects.
For additional information, please contact:
NXT PLC 020 7343 5050
David Pearson, Chief Executive
Peter Thoms, Finance Director
Capital Communications MS&L 020 7878 3181
Nick Lockwood 07941 783 324
Paula Crymble
CHAIRMAN'S STATEMENT
Results for the Six Months ended 31 December 2002
In the financial year to date there has been excellent progress in the
commercialisation of NXT and 20/20 technology. As separately announced today we
have concluded an exclusive licence with 3M of one of NXT's non-loudspeaker
technologies. This involves an upfront payment of $4m and ongoing royalties. The
first half also saw several important breakthroughs. The first SoundVu products
were launched in Japan. A two-year automotive exciter development agreement was
concluded with Philips underpinning our strategy to put the supply chain in
place for the automotive sector. The mobile phone key component supply chain has
also been established with companies in the Far East. A new audio full range
technology (AFR) was launched by NXT with early encouraging response. An audio
product sold through Brookstone retail outlets was featured on network TV in the
USA. And the first products featuring 20/20 Speech Aurix tts were sold in retail
outlets in the UK. Later in my statement and in the Chief Executive's operating
review there are further details of these exciting developments.
During the six months under review group sales were #2.5m. The loss for the
period was #6.4m compared with #6.7m in the corresponding period last year. With
reducing expenses, at the end of the period the Company had cash balances of
#7.4m compared with #12.2m six months earlier. The annualised cash burn has
declined from #10.8m to #9.1m and we expect this trend to continue. The
agreement with 3M and other projects in the pipeline will also help reduce cash
burn. Other key projects are under continuous review and it is reassuring that
so many are near commercialisation. We remain confident that we have the
resources to develop these but given the perennial possibility of any of these
key projects being delayed the Board continues actively to review the options
for improving NXT's cash position, including additional cost reductions and
further sales of non-core assets.
During the period there has been continued progress in the commercialisation of
NXT technology. Of particular note is the increasing strength of our
collaborations with strategic partners. NEC, our first SoundVu licensee,
launched the world's first SoundVu product in the Japanese market in October
2002. This was a LCD PC monitor, the ValueStar T and was swiftly followed by an
all-in-one unit, the ValueStar FS. These two products have helped NEC to regain
leadership of this market sector in Japan, and we are greatly encouraged by
NEC's planned investment in a new manufacturing facility in mainland China
intended for the further supply of product to NEC and others for the volume
markets. We expect further rapid expansion of this category of our business.
We have announced separately today a strengthened relationship with 3M that has
been in development for over two years. We are granting 3M an exclusive
worldwide license to jointly develop and commercialise one of NXT's
non-loudspeaker technologies. Under the terms of the new agreement 3M will pay
NXT a $4m up-front payment, a further $750k if additional functionality is
achieved, and royalties for the life of the patents. 3M will sponsor continuing
research at NXT as part of the agreement.
This agreement confirms the market acceptance of a specific derivative of NXT
bending wave technology that was first disclosed only two years ago. Outstanding
scientific and engineering development combined with strong commercial skills
has led to this opportunity.
I am also pleased to announce that Pioneer, one of the world's leading
audio-video companies has taken out a General Licence with NXT. Some two and a
half years ago, after David Pearson joined the group as CEO, we set out to
identify the leading companies in a number of target sectors and work closely
with them to bring our technologies to market. With world leaders such as NEC,
Pioneer, Philips and 3M making substantial investments in NXT technology we can
now see the effectiveness of that strategy. There are other global leaders of
similar renown collaborating with NXT but these companies will not permit
disclosure until their own product launch plans are ready to be revealed. In the
key automotive and telecommunications sectors very good progress has been made
to establish the infrastructure to supply the key OEMs which NXT solutions when
their testing procedures are completed.
Similar focus has been brought to bear on 20/20 Speech Ltd leading to the first
retail sales of products incorporating its text-to-speech software. These were
achieved by Kane Wireless in its Car Pilot, a development of the Compaq IPAQ
platform first sold into branches of the Dixons Stores Group for the Christmas
season. 20/20 Speech has in the last few months made great strides in the
development of its proprietary technologies and identified potentially valuable
markets for them.
Cyrus has enjoyed another good season with strong demand for its high quality
electronics and maintenance of targeted margins.
Our staff are increasingly focused on helping customers get product to market.
We are encouraged by the continued commitment to NXT's technology by
world-renowned global leaders as evidenced by the fact that new licensees of the
order of 3M and Pioneer have chosen to embrace it. This, and the maturing of so
many of our commercialisation plans, give the board full confidence in your
company's future prospects.
Gordon M W Owen CBE
Chairman
OPERATING REVIEW
For the 6 months ended 31 December 2002
Introduction
The second half of 2002 has been a period of mixed fortunes for NXT plc.
Royalties from the Group's core sound technology business have not grown as fast
as we planned. However, Dixons started selling the first commercially available
20/20 Speech retail products; NEC launched two LCD monitors with built-in
SoundVu technology in the vital Japanese market; Brookstone became a powerful
advocate of NXT technology in the United States, thanks to the success of the
Wafer Thin CD system over the Christmas period, and most recently 3M has
concluded an exclusive licence for one of our non-loudspeaker technologies.
Our strategy of pursuing opportunities across multiple industry sectors
simultaneously helps minimise the impact of a downturn in any one industry. In
addition, by leveraging the enormous expertise we have in bending wave theory we
have been able to develop related technologies to augment the licensing fees and
royalties we earn from our core sound technologies, thereby developing new
revenue streams and mitigating risk. However, in the present uncertain global
economic environment our customers remain risk adverse and are cautious about
introducing new products with new technologies such as NXT's.
We meet this challenge in three ways. First, we have looked to build close
working partnerships with a limited number of our best customers. Examples of
these partnerships include NEC for SoundVu, and, 3M for both SoundVu and other
technologies. These are organisations that have recognised the potential for
NXT's technology to add value to their own business propositions. Secondly, we
use our detailed knowledge of the value chain to work closely with the suppliers
as well as the brands to speed up the adoption of new technologies. This
approach is well illustrated in the automotive market where we have signed a
two-year development agreement with Philips to co-develop, market and sell the
automotive exciter. Thirdly, we give our customers support to ensure the
adoption of NXT technology in the most straightforward and risk free way. This
involves delivering high-class training, providing access to best practice
methodologies and offering practical support by way of locally based engineering
resource.
A review of progress across the Group's operating companies and divisions is set
out below.
New Technologies
As announced separately today, 3M, the US-based diversified technology company,
has acquired an exclusive license to jointly develop and commercialise one of
NXT's patented non-loudspeaker technologies. The agreement sees 3M pay an
upfront fee of $4million with a further $750,000 payable on delivery of
additional functionality. There will be royalties for the life of the patents
and 3M will also sponsor our research into the technology over the next two
years. We believe that the arrangements with 3M vindicate our approach of
partnering with major industry players.
Automotive
Partnering with the major brands and their suppliers is core to our development
of the automotive market. In July 2002 we announced a two-year joint development
agreement with Philips Sound Solutions (PSS) to develop, manufacture and market
an exciter for automotive use. The arrangement with PSS is one of 27 different
projects we are managing in the automotive arena and as a result we believe that
there will be a vehicle using NXT technology commercially available by the close
of 2004. Our confidence in this regard has grown with the positive response we
have had to the Acoustic Full-Range (AFR) drive unit. The AFR combines
distributed mode loudspeaker technology with a conventional pistonic driver to
create a low profile, lower weight and full-range drive unit. Designed as a
drop-in replacement for conventional in-car loudspeakers, AFR offers a way of
introducing NXT technology to a vehicle in the short term. We have demonstrated
the technology to a number of car manufacturers and are in discussions with
their suppliers about establishing production.
Commercial Audio
The broad dispersion pattern of the sound output; the inherent design freedom;
the ease of integration into architecturally sensitive environments; and, the
light weight of the speaker solutions make NXT technology an attractive option
in commercial and professional audio situations. The market however remains very
fragmented. There are few, if any, dominant brands or manufacturers and
achieving volume sales takes time. Our focus in the last six months has been on
showcasing the new bass panel public address system and this has now been
demonstrated at the largest commercial audio trade shows in the UK and USA.
Elsewhere, NXT continues to open up possibilities unavailable to conventional
technology. For example, Dimension Audio was able to use NXT technology to turn
advertising boards at the Manchester Commonwealth games stadium into
loudspeakers. Armstrong remains committed to the development of its i-ceilings
product and Mission has recently entered the professional audio arena with a
commercial adaptation of its successful fs2 home audio product.
Home Audio
In home audio, we have been delighted by the success Brookstone has achieved
with its Wafer Thin CD System. Launched in the late autumn of 2002, the product
was amongst Brookstone's best selling products during the Christmas period
thanks in part to widespread media coverage in the US. Brookstone is now a
committed advocate of NXT technology and their sales staff are demonstrably well
briefed on the benefits of NXT audio technology. Mission has enjoyed critical
success with its third generation NXT loudspeaker package, the fs1. With a host
of awards and star ratings behind it, the product is selling well. Existing
licensees have been joined by a number of new customers and the latest of these
is the leading Japanese audio-video company Pioneer.
Merchandising and Special Applications
We intend to introduce new size variants of the SoundpaX loudspeakers including
a 14" travel version and to establish cheaper sources of manufacture. Ellula has
added a 2.1 version, which combines inflatable NXT satellites with a
conventional sub-woofer, to its existing range of Hot Air loudspeakers. These
are now available in the UK, mainland Europe, the USA and soon, Japan. In the
area of electronic gaming, Radica launched its Gameboy Advance accessory
loudspeaker, the Mini Woofer in time for the Christmas buying period and is now
working on additional NXT based products for launch this year.
Multimedia and Computing
TDK has widened the distribution of its recently launched S40 product to include
the US, Japan and Europe. A second-generation version of the S80 is scheduled
for launch in Japan in the near future. Philips too has augmented its initial
range of 4.1 and 5.1 NXT-based multimedia speakers with a 2.1 version and Slab,
a cross licensee, has been successful in selling in its entry level 2.1 system
to Maxell in the USA and Packard Bell in the UK.
Mobile Communications
We have licensed 5 out of the top 6 mobile phone manufacturers and if all goes
to schedule, we expect a phone utilising our technology to be on the market
later this year. The ease of integration, the broader bandwidth and greater
degree of intelligibility in hands free mode, and the greater ease of coupling
of the speaker to the ear all make NXT a very powerful proposition in the mobile
communication market place. To ensure that the time to market is reduced and all
possible barriers to manufacture removed we have focused on developing the
supply chain. We have seconded a senior engineer, an expert in piezo technology,
to Taipei in Taiwan and have now established 10 separate DMA (Distributed Mode
Actuator) manufacturers in the region; four in each of Japan and Taiwan and two
in Korea.
TV and Display
Through the integration of the loudspeaker within the screen, SoundVu technology
perfectly synchronises sound and moving image. The launch by NEC of its
ValueStar T and FS products marks the emergence of this technology into the real
world. It is remarkable how NXT technology has progressed in the five years
since NEC launched the first NXT multimedia loudspeakers in 1997. The NEC
ValueStar LCD monitors with their crystal clear high-resolution screens and
integrated SoundVu technology are a world apart from the small, early generation
flat panel speakers that NEC launched then. It is heartening that NEC's
commitment to us has grown over that time and major plans are in place to open a
new production line in mainland China dedicated to SoundVu products to expand
the production outside Japan. In larger scale applications such as Plasma we
have also taken significant technical steps forward, developing better methods
of integration helped, in part, by the development of second generation exciters
that deliver improved efficiencies and greater volume levels.
In addition to the opportunities for SoundVu technology in the TV market we have
been greatly encouraged by the enthusiastic reaction we have received to new
technical breakthroughs in SurfaceSound technology that offer design advantages
as well as the established acoustic benefits.
20/20 Speech
Sales revenues for our speech technology business were below our expectations as
a result in part of delays in introducing ASR (Automatic Speech Recognition) on
the pocket PC product, and an insufficient focus on sales activity. In recent
months we have taken a number of measures to correct this.
Firstly, technical developments are now focused on three areas: Aurix Activator,
the combined text-to-speech and speech recogniser developed for Pocket PC
applications; Aurix st, our automatic subtitling tool; and, Audio Mining, a
speech recogniser that allows for the recognition of specific words or phrases.
Secondly, we are concentrating on two key markets: 'people on the move' -
consumer and business applications: and 'speech in media'.
In the 'people on the move' market the launch of Aurix Activator, builds on
MailSpeak, and allows a two-way interface to a PDA (Personal Digital Assistant)
and enables people to safely retrieve e-mails, interact with them, and respond
whilst on the move. We expect products using the Aurix Activator software to be
available on major high streets across the UK in the short term and that the
likely introduction of legislation limiting the use of mobile devices whilst on
the move will have a positive impact on overall sales. The Aurix tts (text to
speech) engine is already fully operational in a Pocket PC format and is
available through Dixon's and PC World.
In the mobile business sector a recent agreement with Wireless Delivered has
positioned the Aurix tts product into the courier market, enabling route
alterations to be given to couriers safely whilst on the move.
In the 'speech in media' sector the deployment of Aurix st has demonstrated
substantial efficiency improvements in the area of subtitling by the BBC. We
believe that Aurix st offers significant opportunities for 20/20 Speech in the
media sector, as has been demonstrated by our recent agreement with a leading
Californian subtitling organisation for the deployment of Aurix st in DVD
production.
Aurix st offers efficiencies in any market where both speech and text are used
in volume. For instance, one of our partners is using Aurix st to improve access
to parliamentary legislative proceedings, enabling text to be synchronised with
video recordings, and searching by subject.
In the USA, the legal process includes interviews of witnesses, defendants, and
plaintiffs prior to trial known as "Depositions". This is a significant market,
and it is estimated that 10,000 depositions are taken each day within the US.
There is an increasing trend to video these recordings, and a subsequent
requirement to align the text and video. The alignment is currently undertaken
by data bureaux, which align the text 24-48 hours after the recording. Aurix st
can accurately align text and video in a fraction of the time. This enables the
aligned recording to be available to the lawyers within hours, and uses the text
to offer an index to the video. 20/20 Speech is finalising agreements with some
of the key organisations that supply this service, and believe that this will be
a substantial source of revenue for 20/20 Speech in the future.
With the increased focus on deployable products and sales activity, we remain
confident of the opportunities for 20/20 Speech.
Cyrus
Cyrus enjoyed a great end to 2002 as retailers reacted positively to the
introduction of new models into the Cyrus range and positive press reaction was
generated. Outside of the UK we have looked at ways of strengthening our sales
with new distributors in Europe and candidates lined up for North America. All
of the new models received outstanding press recommendations: in July Cyrus won
a group test of all the main premium brand audio systems by What Hi-Fi? and
Hi-Fi Choice: the CD 7Q won the Best Buy award at the What Hi-Fi? Awards in
London: and, in France Cyrus won the Diafson-D'or.
Intellectual Property
NXT continues to hold a very robust portfolio of Intellectual Property. Our
approach has been to ensure our key inventions are protected in the key sales
markets and centres of production. As new patents are granted we have been able
to rationalise the existing portfolio maintaining the required coverage and
making considerable financial savings, without loss of any protection.
Summary
During the period we have reduced the headcount in our technology businesses by
about 10% and focussed the remaining personnel on assisting our customers bring
products to market. We are now seeing the benefits of this approach with the
creation of valuable customer relationships and, for their hard work in this
respect, I would like to thank all our staff - scientific, engineering,
marketing and sales.
As NXT technology strengthens there is increasing commitment to its adoption by
both OEM brands and their suppliers. In all key sectors that we have targeted
the infrastructure is in place to supply NXT equipped products of improving
quality. The 3M agreement is an excellent example of how we can turn the
brilliance of our invention into commercial reality. In partnership with some of
the world's great companies we are working hard to turn the significant
investment in Research and Development into a prosperous future.
David Pearson
Chief Executive
FINANCIAL REVIEW
Turnover Unaudited results for the six Unaudited results for the six Unaudited results for the
months ended 31 December 2002 months ended 31 December 2001 year ended 30 June 2002
#'000 #'000 #'000
NXT 411 601 1,298
20/20 Speech 256 261 617
Cyrus 1,842 1,757 3,095
Total 2,509 2,619 5,010
Turnover for the six months under review is #2,509,000, compared with #2,619,000
in the same period last year.
Lower royalties and design fees booked in the first half resulted in revenues at
NXT of #411,000, down from the #601,000 achieved in the same period last year.
Royalties from new products introduced before Christmas and increased licensing
fees should deliver increased sales in the second half. Also as part of our
continuing process of improving the financial management of our royalty stream
we are increasingly moving towards more timely reports of royalty returns from
our licensees.
Revenues at 20/20 Speech continue to be adversely effected by cuts in spending
at the Ministry of Defence. However new products launched in the last three
months should contribute to increased software sales in the second half.
Cyrus' sales again showed an increase over the same period last year with
improved margins achieved across the line.
Operating expenses in the period for NXT totalled #6,396,000, some #1,000,000
lower than the same period last year. The reduction primarily relates to cost
controls and lower intellectual property costs as our portfolio of patents
proceeds to grant.
At 20/20 Speech operating expenses of #1,483,000 reflect incremental sales costs
and redundancy payments. With reduced actual and predicted consulting income it
has been necessary to reduce the headcount by one third. The savings from this
action will be evident in the second half of the year. Cyrus' selling costs
increased compared with previous periods but these were offset by the better
gross margins achieved.
The operating loss relating to NXT of #5,985,000 (2001 #6,823,000) reflects the
benefit of lower costs and will reduce further with increased sales. 20/20
Speech's operating loss has increased due to one off costs but will start to
reduce as a result of cost savings and increased sales. Cyrus made a profit of
#143,000 level with the same period last year.
An exceptional credit of #168,000 to the Profit & Loss Account from the Group's
reserve, Shares To Be Issued, reverses an entry made in 2000 and relates to
share options which lapsed on the redundancy of several 20/20 Speech employees.
In the period a R & D Tax Credit of #250,000 has been accrued and the group
received #1,294,000 in payments relating to previous periods.
The cash balance at 31 December 2002 was #7,439,000, down by #4,754,000 since 30
June 2002. This reflects the careful husbandry of our resources, the continued
control on cash spend, and the generation of cash from balance sheet assets.
With the signing of the 3M license there will be a cash receipt of approximately
#2,400,000 in the second half of the year. Combined with an anticipated increase
in sales this will result in a considerably lower cash burn in the second half.
Peter Thoms
Finance Director
Unaudited Interim Results of the Group for the Six Months Ended 31 December 2002
Unaudited results for the Unaudited results for the Audited results for the
six months ended 31 six months ended 31 year ended 30 June 2002
December 2002 December 2001
#'000 #'000 #'000
Turnover
Continuing operations 2,509 2,619 5,010
Cost of sales (1,057) (1,074) (1,959)
Gross Profit 1,452 1,545 3,051
Net operating expenses - NXT (6,396) (7,424) (13,840)
Net operating expenses - (1,483) (1,265) (2,496)
20/20 Speech
Net operating expenses - (642) (539) (1,050)
Cyrus
Net operating expenses - 168 - 504
exceptional
Operating loss
NXT (5,985) (6,823) (12,542)
20/20 Speech (1,227) (1,004) (1,879)
Cyrus 143 144 86
Exceptional item 168 - 504
(6,901) (7,683) (13,831)
Interest receivable 206 536 771
Interest payable (21) (93) (86)
Loss on ordinary activities (6,716) (7,240) (13,146)
before taxation
Taxation 250 - 1,459
Loss on ordinary activities (6,466) (7,240) (11,687)
after taxation
Equity minority interests 75 502 848
Retained loss for the (6,391) (6,738) (10,839)
financial period
Basic and fully diluted loss ( 8.6 )p ( 9.2 )p ( 14.8 )p
per share
Unaudited Statement of Total Recognised Gains and Losses
#'000 #'000 #'000
Retained loss for the financial period (6,391) (6,738) (10,839)
Currency translation differences on foreign currency net investments 63 7 2
Total recognised gains and losses for the period (6,328) (6,731) (10,837)
Unaudited Consolidated Balance Sheet at 31 December 2002
Unaudited balance sheet at Unaudited balance sheet Audited balance sheet at
31 December 2002 at 31 December 2001 30 June 2002
#'000 #'000 #'000
Fixed assets
Intangible 7,393 8,610 8,001
Goodwill 1,683 1,782 1,732
Tangible 1,546 4,567 1,755
Investments 298 1,158 298
10,920 16,117 11,786
Current assets
Stock 502 514 547
Debtors 3,428 3,645 4,357
Cash at bank and in hand 7,439 16,528 12,193
11,369 20,687 17,097
Creditors - amounts falling
due within one year
Bank borrowings - (111) -
Other (2,067) (2,803) (2,286)
(2,067) (2,914) (2,286)
Net current assets 9,302 17,773 14,811
Total assets less current 20,222 33,890 26,597
liabilities
Creditors: Amounts falling due (506) (1,878) (143)
after more than one year
Provisions for liabilities and (987) - (1,200)
charges
Net assets 18,729 32,012 25,254
Capital and reserves
Share capital 18,548 18,232 18,523
Share premium account 76,582 75,760 76,561
Shares to be issued 1,834 5,400 2,002
Profit and loss account (78,235) (67,801) (71,907)
Shareholders' funds 18,729 31,591 25,179
Minority interests (all - 421 75
equity)
Total capital employed 18,729 32,012 25,254
Unaudited Reconciliation of the Movement of Shareholders' Funds
Six months ended 31 Six months ended 31 Year ended 30 June 2002
December 2002 December 2001
#'000 #'000 #'000
Retained loss for the financial (6,391) (6,738) (10,839)
period
Issue of shares (net of 46 33 1,125
expenses)
Shares to be issued (168) - (3,398)
Currency translation 63 7 2
differences
Net (reduction) addition to (6,450) (6,698) (13,110)
shareholders' funds
Opening shareholders' funds 25,179 38,289 38,289
Closing shareholders' funds 18,729 31,591 25,179
Unaudited Consolidated Cashflow Statement for the Six Months ended 31 December 2002
Unaudited cashflow for Unaudited cashflow for Audited cashflow for the
the six months ended 31 the six months ended 31 year ended 30 June 2002
December 2002 December 2001
#'000 #'000 #'000
Net cash outflow from operating (6,402) (6,901) (13,209)
activities
Returns on investments and
servicing of finance
Net interest received 185 443 685
Net cash inflow from returns on 185 443 685
investments and servicing of
finance
Taxation 1,294 - (31)
Capital expenditure and
financial investment
Purchase of tangible fixed (72) (220) (171)
assets
Sale of assets - 18 2,710
Sale of investments - 635 635
Net cash (outflow) inflow from (72) 433 3,174
capital expenditure and
financial investment
Acquisitions and disposals
Sale of business - 38 38
Net cash inflow from - 38 38
acquisitions and disposals
Management of liquid resources
Decrease in cash on short term 5,143 5,773 10,562
deposit
Net cash inflow from management 5,143 5,773 10,562
of liquid resources
Net cash inflow (outflow) 148 (214) 1,219
before financing
Financing
Issue of ordinary share capital - 3 1,067
(net of expenses)
Capital element of finance (159) (143) (197)
lease rental payments
Repayment of bank and other - (56) (2,045)
loans
New loan 400 - -
Net cash inflow (outflow) from 241 (196) (1,175)
financing
Increase (decrease) in cash 389 (410) 44
Notes to the unaudited
consolidated cashflow statement
a) Reconciliation of operating
loss to net cash outflow from
operating activities
Operating loss (6,901) (7,683) (13,831)
Depreciation charges 937 1,010 1,991
Decrease (increase) in stock 45 (25) (58)
(Increase) decrease in debtors (115) 431 1,209
Decrease in creditors (97) (609) (1,155)
Foreign currency translation 63 7 2
Shares to be issued (168) - (3,398)
Shares issued for non cash 46 30 58
consideration
Provision against investment - - 860
(Release) increase of provision (213) (48) 1,152
Loss (profit) on sale of fixed 1 (14) (39)
assets
Net cash outflow from operating (6,402) (6,901) (13,209)
activities
b) Analysis of net funds
At 1 July 2002 Non-cash changes Cash flow At 31 December 2002
Cash at bank 1,011 - 389 1,400
Cash on deposit 11,182 - (5,143) 6,039
Loan due after one year - - (400) (400)
Finance leases (380) - 159 (221)
11,813 - (4,995) 6,818
NOTES:
1. The Directors do not recommend the payment of an interim dividend.
2. Basic and fully diluted earnings per share have been calculated on the
Group loss for the financial period and on the weighted average number of
ordinary shares in issue for the relevant period, which in the six months to 31
December 2002 was 74,128,266 ordinary shares. Whilst unexercised share options
and warrants in the Company would increase the weighted average number of
potential shares in the period, due to the losses of the Group in the period
they are not considered to be dilutive.
3. The exceptional credit of #168,000 arises from the reversal of a discount
on share options issued in 2000, which have now lapsed.
4. The financial information contained in this document does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The financial information for the year ended 30 June 2001 is extracted from the
audited financial statements for that year on which the auditors gave an
unqualified report and which did not contain a statement under Sections 237(2)
or 237(3) of the Companies Act 1985. A copy of those financial statements has
been filed with the Registrar of Companies.
5. This interim statement has been sent to shareholders and further copies
are available from the registered office at 37 Ixworth Place, London SW3 3QH.
INDEPENDENT REVIEW REPORT TO NXT PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 December 2001 which comprises the Profit and Loss
Account, the Balance Sheet, the Cash Flow Statement, the Statement of Total
Recognised Gains and Losses and the related notes. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and the underlying financial data and
based thereon, assessing whether the accounting policies and presentation have
been consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2002.
Horwath Clark Whitehill
Chartered Accountants and Registered Auditor
London
27 February 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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