REG - Zytronic PLC - Interim Results <Origin Href="QuoteRef">ZYT.L</Origin>

ZytronicAnnouncement

15/07/2015 18:13

RNS Number : 5646N
Zytronic PLC
19 May 2015
For Immediate Release
19 May 2015
Zytronic plc
("Zytronic" or the "Group")
Interim Results for the six months ended 31 March 2015
Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2015.
Overview
 Revenue increased to 10.0m (2014: 8.8m) 
 Touch revenues account for 80% of total (2014: 77%)
 Gross profit margin improved to 39.9% (2014: 33.9%) 
 Profit before tax increased by 15% to 1.6m (2014: 1.4m)
 Earnings per share ("EPS") increased to 8.7p (2014: 7.7p)
 Interim dividend increased by 10% to 3.14p per share (2014 interim dividend: 2.85p)
 Net cash increased to 7.3m (30 September 2014: 6.3m)
Commenting on the results, Chairman, Tudor Davies said: 
"We are continuing to benefit from an improvement in current trading and on this basis expect to make further progress for the remainder of this year."
Enquiries:
Zytronic plc
Mark Cambridge, Chief Executive
Claire Smith, Group Finance Director
(Today: 020 7466 5000; thereafter 0191 414 5511)
Buchanan
Richard Darby, Gabriella Clinkard, Stephanie Watson
020 7466 5000
N+1 Singer
Aubrey Powell, Thomas Smale
020 7496 3000
Notes to Editors
Zytronic is the developer and manufacturer of a unique range of internationally award-winning touch sensor products. 
These products employ an embedded sensing element and are based around projected capacitive technology ("PCT") sensing. PCT offers significant durability, environmental stability and optical enhancement benefits to system designers of touch interactive, industrial, self-service and public access equipment. 
During 2012, Zytronic developed new know-how to create mutual projected capacitive technology ("MPCT") which enables multi-user and multi-touch touch sensing in ultra-large form factor sizes up to 84".
Operating from three modern factories near Newcastle-upon-Tyne in the United Kingdom, Zytronic assembles touch sensors using special glass and plastic materials, in environmentally controlled clean rooms.

Chairman's statement
Introduction
We are pleased to announce that the period has seen an increase in demand for our proprietary touchscreen products and a continuing improvement in revenues, margins and profits for the half year ended 31 March 2015. 
Results
Revenues increased by 13% to 10.0m (2014: 8.8m), operating profit increased by 15% to 1.6m (2014: 1.4m), profit before tax increased by 15% to 1.6m (2014: 1.4m) and after tax of 18% (2014: 18%) resulted in profit after tax of 1.3m (2014: 1.2m). Earnings per share increased by 13% to 8.7p (2014: 7.7p).
The production efficiencies, and recent capital expenditure projects from last year, together with the increased revenues, and focus on products with our proprietary technology such as the larger format and multi-touch sensors, combined to increase gross margins to 40% (2014: 34%). However, the improvement in gross margins was, in part, offset by an increase in administration overheads, of which 0.4m (2014: 0.1m gain) arose from adverse currency movements as the US dollar exchange rate reduced to $1.5 from our hedged positions between $1.6 and $1.7. 
We have continued to see increased market penetration and growth in our largest market sectors of financial (ATM machines) and vending, as well as exploit the potential for our newer multi-touch and larger format touchscreens in other niche markets which require rugged, toughened glass solutions. In particular, our showcase of the new touchscreens incorporated into table and gaming machines for the leisure markets at the most recent gaming expos in the USA and UK have resulted in considerable interest. 
Cash Generation
The Group continued to generate cash with a net 2.1m being earned before the payment of 1.1m in respect of the final dividend for last year.
The Group's net cash position at 31 March 2015 was 7.3m (30 September 2014: 6.3m) after a liability of 1.4m in relation to a property mortgage. 
Dividend
The Directors have declared a 10% increase to the dividend of 3.14p per share (2014: 2.85p) payable on 24 July 2015 to shareholders on the register on 10 July 2015.
Outlook
We are continuing to benefit from an improvement in current trading and on this basis expect to make further progress for the remainder of this year.
Tudor Davies B.Sc.
Chairman
19 May 2015


Consolidated statement of comprehensive income
Unaudited results for the six months to 31 March 2015
Six months to
Six months to
Year to
31 March
31 March
30 September
2015
2014
2014
Unaudited
Unaudited
Audited
Notes
'000
'000
'000
Group revenue

10,004
8,828
18,886
Cost of sales

(6,015)
(5,839)
(11,979)
Gross profit

3,989
2,989
6,907
Distribution costs

(115)
(72)
(156)
Administration expenses

(2,246)
(1,500)
(3,488)
Group operating profit 

1,628
1,417
3,263
Finance costs

(15)
(18)
(35)
Finance revenue

11
12
33
Profit before tax

1,624
1,411
3,261
Tax expense
3
(290)
(254)
(301)
Profit for the period 

1,334
1,157
2,960
Earnings per share




Basic
4
8.7p
7.7p
19.6p
Diluted
4
8.6p
7.6p
19.5p
All profits are from continuing operations
Consolidated statement of changes in equity
Unaudited results for the six months to 31 March 2015

Called up




share
Share
Retained


capital
premium
earnings
Total

'000
'000
'000
'000
At 30 September 2014
152
7,290
10,611
18,053
Profit for the period
-
-
1,334
1,334
Exercise of share options
1
140
-
141
Share-based payments
-
-
88
88
Dividends
-
-
(1,093)
(1,093)
At 30 March 2015 (unaudited)
153
7,430
10,940
18,523


Consolidated balance sheet
Unaudited results at 31 March 2015

At
At
At

31 March
31 March
30 September

2015
2014
2014

Unaudited
Unaudited
Audited

Notes
'000
'000
'000
Assets



Non-current assets



Intangible assets
1,415
1,455
1,413
Property, plant and equipment
7,677
7,616
7,443

9,092
9,071
8,856
Current assets



Inventories
3,085
3,342
3,126
Trade and other receivables
3,076
2,671
3,068
Other current financial assets
110
-
48
Cash and short term deposits
8,730
6,270
7,806

15,001
12,283
14,048
Total assets
24,093
21,354
22,904
Liabilities



Current liabilities



Trade and other payables
1,656
1,325
1,057
Financial liabilities
200
200
200
Other current financial liabilities
519
-
224
Accruals
959
1,058
1,264
Taxation liabilities
232
241
30

3,566
2,824
2,775
Non-current liabilities



Financial liabilities
1,243
1,439
1,341
Provisions
5
102
-
139
Government grants
63
-
-
Deferred tax liabilities (net)
596
626
596

2,004
2,065
2,076
Total liabilities
5,570
4,889
4,851
Net assets
18,523
16,465
18,053
Equity



Equity share capital
153
151
152
Share premium
7,430
7,144
7,290
Revenue reserve
10,940
9,170
10,611
Total equity
18,523
16,465
18,053

Consolidated cashflow statement
Unaudited results for the six months to 31 March 2015


Six months to
Six months to
Year to


31 March
31 March
30 September


2015
2014
2014


Unaudited
Unaudited
Audited

Notes
'000
'000
'000
Operating activities




Profit from continuing operations

1,624
1,411
3,261
Net finance costs

4
6
2
Depreciation and impairment of property, plant and equipment

362
345
672
Amortisation and impairment ofintangibleassets

166
161
362
Loss on disposals of intangible assets

-
18
-
Share-based payments

88
23
93
Fair value movement on foreign exchange forward contracts

233
-
176
Working capital adjustments




Decrease in inventories

41
167
383
Increase in trade and other receivables

(8)
(242)
(638)
Increase in trade and other payables and provisions

163
251
370
Cash generated from operations

2,673
2,140
4,681
Taxation paid

(89)
(206)
(497)
Net cashflow from operating activities

2,584
1,934
4,184
Investing activities




Interest received

11
12
33
Proceeds from disposal of property, plant and equipment

-
-
36
Receipt of government grant

63
-
-
Payments to acquire property, plant and equipment

(499)
(35)
(263)
Payments to acquire intangible assets

(168)
(181)
(322)
Net cashflow from investing activities

(593)
(204)
(516)
Financing activities




Interest paid

(15)
(18)
(35)
Dividends paid to equity shareholders ofthe parent

(1,093)
(958)
(1,390)
Proceeds from share issues re. options

141
142
289
Repayment of borrowings

(100)
(100)
(200)
Net cash outflow from financing activities

(1,067)
(934)
(1,336)
Increase in cash and cash equivalents

924
796
2,332
Cash and cash equivalents atthebeginning of the period

7,806
5,474
5,474
Cash and cash equivalents at the period end
7
8,730
6,270
7,806

Notes to the interim report
Unaudited results for the six months to 31 March 2015
1. Basis of preparation
The financial information in these interim statements is prepared under the historical cost convention and in accordance with international accounting standards. It does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and does not reflect all the information contained in the Group's annual report and financial statements.
The taxation charge is calculated by applying the Directors' best estimate of the annual tax rate to the profit for the period. Other expenses are accrued in accordance with the same principles used in the preparation of the annual report and financial statements.
The interim results for the six months to 31 March 2015 are not reviewed by Ernst & Young LLP and accordingly noopinion has been given.
The interim financial statements have been prepared using the same accounting policies and methods of computation used to prepare the 2014 annual report and financial statements.
The financial information for the six months to 31 March 2015 and the comparative financial information for the six months to 31 March 2014 have not been audited. The comparative financial information for the year ended 30 September 2014 has been extracted from the 2014 annual report and financial statements.
The annual report and financial statements for the year ended 30 September 2014, which were approved by the Board ofDirectors on 8 December 2014, received an unqualified audit report, did not contain a statement under Section 498(2) or (3) ofthe Companies Act 2006 and have been filed with the Registrar of Companies.
The Group has one reportable business segment comprising the development and manufacture of customised optical products to enhance electronic display performance. Products in this reportable business segment include touch sensors, filters and other laminated products. All revenue, profits or losses before tax and net assets are attributable to this reportable business segment.
2. Basis of consolidation
The Group results consolidate the accounts of Zytronic plc and all its subsidiary undertakings drawn up to 31 March 2015.
3. Tax charge on profit on ordinary activities
The estimated tax rate for the year of 18% has been applied to the half year's profit before tax, in accordance with the ASB's statement on interim reports.
4. Earnings per share
Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the period. All activities are continuing operations and therefore there is no difference between EPS arising from total operations and EPS arising from continuing operations.
For the six months to 31 March 2015 and 2014


Weighted


Weighted



average


average



number


number


Earnings
of shares
EPS
Earnings
of shares
EPS

31 March
31 March
31 March
31 March
31 March
31 March

2015
2015
2015
2014
2014
2014

'000
Thousands
Pence
'000
Thousands
Pence
Profit on ordinary activities after taxation
1,334
15,221
8.7
1,157
15,112
7.7
Basic EPS
1,334
15,221
8.7
1,157
15,112
7.7
The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:


Weighted


Weighted



average


average



number


number


Earnings
of shares
EPS
Earnings
of shares
EPS

31 March
31 March
31 March
31 March
31 March
31 March

2015
2015
2015
2014
2014
2014

'000
Thousands
Pence
'000
Thousands
Pence
Profit on ordinary activities after taxation 
1,334
15,221
8.7
1,157
15,112
7.7
Weighted average number of shares under option 
-
235
(0.1)
-
50
(0.1)
Diluted EPS
1,334
15,456
8.6
1,157
15,162
7.6
For the year to 30 September 2014


Weighted



average



number


Earnings
of shares
EPS

30 September
30 September
30 September

2014
2014
2014

'000
Thousands
Pence
Profit on ordinary activities after taxation 
2,960
15,098
19.6
Basic EPS
2,960
15,098
19.6
The weighted average number of shares for diluted EPS is calculated by including the weighted average number of shares under option:


Weighted



average



number


Earnings
of shares
EPS

30 September
30 September
30 September

2014
2014
2014

'000
Thousands
Pence
Profit on ordinary activities after taxation 
2,960
15,098
19.6
Weighted average number of shares under option
-
95
(0.1)
Diluted EPS
2,960
15,193
19.5
5. Provisions









Holiday
Long term


pay
incentive
Total

'000
'000
'000
At 1 October 2014
71
68
139
Arising during the year
-
34
34
Released during the year
(71)
-
(71)
At 31 March 2015
-
102
102
Non-current
-
102
102
Holiday pay
The holiday pay provision relates to the estimated exposure to additional costs in relation to the inclusion of overtime in holiday payments as a result of recent rulings on the interpretation of the EU Working Time Directive. The provision has since been released following the business decision to include overtime in holiday payments, which has therefore put any potential claim out of time.
Long term incentive
The provision for the long term incentive scheme relating to the Chief Executive, Group Finance Director and other management personnel is calculated based on future expectations that the bonus will be payable. Management has assessed the criteria that determines the payout and has taken a view that a proportion of the bonus should be provided for in the year ended 30 September 2014 and the half year ended 31 March 2015.
6. Dividends
The Directors propose the payment of an interim dividend of 3.14p per share (2014 interim dividend: 2.85p), payable on 24 July 2015 toshareholders on the register on 10 July 2015. This dividend has not been accrued in these interim accounts. Thedividend payment will be approximately 479,000.

Six months to
Six months to
Year to

31 March
31 March
30 September

2015
2014
2014

Unaudited
Unaudited
Audited

'000
'000
'000
Ordinary dividends on equity shares



Final dividend of 6.35p per ordinary share paid on 14 March 2014
-
958
958
Interim dividend of 2.85p per ordinary share paid on 25 July 2014
-
432
432
Final dividend of 7.16p per ordinary share paid on 13 March 2015
1,093
-
-

1,093
1,390
1,390
7. Cash and cash equivalents

Six months to
Six months to
Year to

31 March
31 March
30 September

2015
2014
2014

Unaudited
Unaudited
Audited

'000
'000
'000
Cash at bank and in hand
8,730
6,270
7,806
For the purpose of the consolidated cashflow statement, cash and cash equivalents comprise the following: 

Six months to
Six months to
Year to

31 March
31 March
30 September

2015
2014
2014

Unaudited
Unaudited
Audited

'000
'000
'000
Cash at bank and in hand
7,588
4,922
6,950
Short term deposits
2,570
2,545
2,560
Bank overdraft
(1,428)
(1,197)
(1,704)

8,730
6,270
7,806
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for variable lengths, being overnight, three months or one year (with break conditions), depending on the immediate cash requirements of the Group, and earn interest atvariable rates.
At 31 March 2015 the Group had available a net 1.0m (cash less overdrawn accounts) overdraft facility from Barclays Bank plc which will fall for review in January 2016.
The fair value of cash and cash equivalents is 8.7m (31 March 2014: 6.3m).
7. Availability of the Interim Report
A copy of the interim report is available on the Company's website www.zytronicplc.com and can be obtained from the Company's registered office: Whiteley Road, Blaydon-on-Tyne, Tyne & Wear, NE21 5NJ. Copies will be sent to shareholders shortly.

This information is provided by RNS
The company news service from the London Stock Exchange
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