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Zytronic PLC  -  ZYT   

Interim Results for six months ended 31 March 2017

Released 07:00 16-May-2017

RNS Number : 1958F
Zytronic PLC
16 May 2017
 

 

16 May 2017

 

Zytronic plc

("Zytronic" or the "Group")

Interim Results for the six months ended 31 March 2017

Zytronic plc, a leading specialist manufacturer of touch sensors, announces its consolidated interim results for the six months ended 31 March 2017.

Overview

·    Group revenue of £11.3m (H1 2016: £9.9m)

·    Touch revenues increased to £10.0m (H1 2016: £8.3m)

·    Gross profit margin improved to 43.1% (H1 2016: 42.3%)

·    Profit before tax increased to £2.5m (H1 2016: £1.8m)

·    Basic earnings per share ("EPS") increased by 44% to 13.8p (H1 2016: 9.6p)

·    Interim dividend increased by 10% to 3.80p per share (2016: 3.45p)

·    Net cash increased by £0.9m to £12.5m (30 September 2016: £11.6m)

 

Commenting on the results, Chairman, Tudor Davies said:

"The second half of the year has started well and is in line with expectations and on this basis we expect to make further progress in creating value for shareholders."

 

 

Enquiries:

Zytronic plc

Mark Cambridge, Chief Executive

Claire Smith, Group Finance Director

 

0191 414 5511

N+1 Singer (Nominated Advisor and Broker)

Aubrey Powell, Liz Yong

020 7496 3000

 

Notes to Editors

 

Zytronic is the developer and manufacturer of a unique range of internationally award-winning and patented touch sensor products, operating from three modern factories totaling 80,000ft2 near Newcastle-upon-Tyne in the United Kingdom.

 

Zytronic touch products employ an embedded sensing solution and are readily configurable to enable multi-user and multi-touch touch sensing sizes from five inches to ultra-large 85", making them an ideal solution for system designers' specific requirements, offering significant durability, environmental stability and optical enhancement benefits to touch interactivity for industrial, self-service and public access equipment.

 

 

 

Chairman's statement

 

Introduction

The Board is pleased to announce that the period for the half year ended 31 March 2017 has continued to show an increase in demand, especially for our large format proprietary touch products, resulting in an improvement in the Group's overall margins and profits.

Results

Revenues have increased by 14% to £11.3m (H1 2016: £9.9m).  Administration overheads of £2.1m benefited from a reduction in the foreign exchange hedging charge of £0.1m compared with the previous half year of £0.4m. Overall after adjusting for the benefit of the reduction in foreign exchange charges the profit before tax increased by 19% to £2.6m (H1 2016: £2.2m).

Reported profit before tax was £2.5m (H1 2016: £1.8m) and after tax of 14.5% (H1 2016: 15.5%) this resulted in a profit after tax for the period of £2.2m (H1 2016: £1.5m) with basic earnings per share increasing by 44% to 13.8p (H1 2016: 9.6p). 

Touch revenues increased to £10.0m (H1 2016: £8.3m) and together with the focus on our proprietary technology for larger format and multi-user sensors, combined to improve gross margin to 43.1% (H1 2016: 42.3%). The principal drivers of growth continues to be the large format sizes in particular in the gaming sector for upright cabinet designs through both APAC and UK-based customers.

Cash generation

The Group continued to generate cash with £2.5m (H1 2016: £2.3m) being earned before the payment of £1.7m in respect of the final dividend for last year (final dividend 2016: £1.4m).

The Group's net cash position at 31 March 2017 was £12.5m (30 September 2016: £11.6m) after the £1.0m liability in relation to the property mortgage.

Capital reduction scheme

The capital reduction scheme resolution to increase distributable reserves, which was proposed and passed at the AGM on 16 February 2017, was approved by the Court on 15 March 2017 and was effected through the registration at Companies House on 22 March 2017.

Dividend

The Directors have declared a 10% increase to the interim dividend to 3.80p per share (2016: 3.45p) payable on 21 July 2017 to shareholders on the Register on 7 July 2017.

Outlook

The second half of the year has started well and is in line with expectations and on this basis we expect to make further progress in creating value for shareholders.

Tudor Davies

Chairman

16 May 2017

 

Consolidated statement of comprehensive income

Unaudited results for the six months to 31 March 2017

 

 

Six months to

Six months to

Year to

 

 

31 March

31 March

30 September

 

 

2017

2016

2016

 

 

Unaudited

Unaudited

Audited

 

Notes

£'000

£'000

£'000

Group revenue

 

11,281

9,868

21,087

Cost of sales

 

(6,414)

(5,692)

(12,071)

Gross profit

 

4,867

4,176

9,016

Distribution costs

 

(229)

(198)

(378)

Administration expenses

 

(2,117)

(2,220)

(4,365)

Group trading profit

 

2,521

1,758

4,273

Finance costs

 

(9)

(12)

(23)

Finance revenue

 

5

8

20

Profit before tax

 

2,517

1,754

4,270

Tax expenses

3

(366)

(271)

(183)

Profit for the period

 

2,151

1,483

4,087

Earnings per share

 

 

 

 

Basic

4

13.8p

9.6p

26.6p

Diluted

4

13.6p

9.5p

26.1p

All profits are from continuing operations.

 

 

Consolidated statement of changes in equity

Unaudited results for the six months to 31 March 2017

 

 

Called up

 

 

 

 

share

Share

Retained

 

 

capital

premium

earnings

Total

 

£'000

£'000

£'000

£'000

At 1 October 2016

154

7,766

15,316

23,236

Profit for the period

-

-

2,151

2,151

Exercise of share options

5

1,039

-

1,044

Issue of capital reduction shares*

8,919

-

(8,919)

-

Cancellation of capital reduction shares*

(8,919)

-

8,919

-

Dividends

-

-

(1,744)

(1,744)

At 31 March 2017 (unaudited)

159

8,805

15,723

24,687

* Refer to note 8.

 

 

 

Consolidated balance sheet

Unaudited results at 31 March 2017

 

 

At

At

At

 

 

31 March

31 March

30 September

 

 

2017

2016

2016

 

 

Unaudited

Unaudited

Audited

 

Notes

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

1,585

1,507

1,457

Property, plant and equipment

 

7,228

7,547

7,389

 

 

8,813

9,054

8,846

Current assets

 

 

 

 

Inventories

 

3,479

3,140

2,760

Trade and other receivables

 

3,563

3,362

3,745

Cash and short term deposits

 

13,520

10,757

12,763

 

 

20,562

17,259

19,268

Total assets

 

29,375

26,313

28,114

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

1,494

1,378

1,302

Financial liabilities

 

1,049

200

1,148

Derivative financial liabilities

 

442

470

959

Provisions

 

-

-

205

Accruals

 

1,021

1,013

834

Tax liabilities

 

405

286

122

 

 

4,411

3,347

4,570

Non-current liabilities

 

 

 

 

Financial liabilities

 

-

1,096

-

Provisions

5

-

170

-

Government grants

 

17

54

48

Deferred tax liabilities (net)

 

260

590

260

 

 

277

1,910

308

Total liabilities

 

4,688

5,257

4,878

Net assets

 

24,687

21,056

23,236

Equity

 

 

 

 

Equity share capital

 

159

154

154

Share premium

 

8,805

7,766

7,766

Revenue reserve

8

15,723

13,136

15,316

Total equity

 

24,687

21,056

23,236

 

 

 

Consolidated cashflow statement

Unaudited results for the six months to 31 March 2017

 

 

Six months to

Six months to

Year to

 

 

31 March

31 March

30 September

 

 

2017

2016

2016

 

 

Unaudited

Unaudited

Audited

 

Notes

£'000

£'000

£'000

Operating activities

 

 

 

 

Profit before tax

 

2,517

1,754

4,270

Net finance costs

 

4

4

3

Depreciation and impairment of property, plant and

equipment

 

387

405

766

Amortisation and impairment of intangible assets

 

178

152

355

Loss on disposal of intangible assets

 

28

-

-

Amortisation of government grant

 

(31)

(5)

(11)

Share-based payments

 

-

35

71

Fair value movement on foreign exchange forward contracts

 

(517)

381

870

Working capital adjustments

 

 

 

 

(Increase)/decrease in inventories

 

(719)

74

454

Decrease/(increase) in trade and other receivables

 

316

(313)

(690)

Increase in trade and other payables and provisions

 

27

286

76

Cash generated from operations

 

2,190

2,773

6,164

Tax paid

 

(83)

(234)

(576)

Net cashflow from operating activities

 

2,107

2,539

5,588

Investing activities

 

 

 

 

Interest received

 

5

8

20

Payments to acquire property, plant and equipment

 

(214)

(176)

(387)

Payments to acquire intangible assets

 

(333)

(232)

(385)

Net cashflow from investing activities

 

(542)

(400)

(752)

Financing activities

 

 

 

 

Interest paid

 

(8)

(12)

(21)

Dividends paid to equity shareholders of the Parent

 

(1,744)

(1,368)

(1,900)

Proceeds from share issues relating to options

 

1,044

215

215

Repayment of borrowings

 

(100)

(50)

(200)

Net cashflow from financing activities

 

(808)

(1,215)

(1,906)

Increase in cash and cash equivalents

 

757

924

2,930

Cash and cash equivalents at the beginning of the period

 

12,763

9,833

9,833

Cash and cash equivalents at the end of the period

7

13,520

10,757

12,763

 

 

 

Notes to the interim report

Unaudited results for the six months to 31 March 2017

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 interim results for the six months to 31 March 2017 are not reviewed by Ernst & Young LLP and accordingly no opinion has been given.

The interim financial statements have been prepared using the same accounting policies and methods of computation used to prepare the 2016 annual report and financial statements.

The financial information for the six months to 31 March 2017 and the comparative financial information for the six months to 31 March 2016 have not been audited. The comparative financial information for the year ended 30 September 2016 has been extracted from the 2016 annual report and financial statements.

The annual report and financial statements for the year ended 30 September 2016, which were approved by the Board of Directors on 12 December 2016, received an unqualified audit report, did not contain a statement under Section 498(2) or (3) of the 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 2017.

3. Tax charge on profit on ordinary activities

The estimated tax rate for the year of 14.5% has been applied to the half year's profit before tax, in accordance with the Auditing Standard Board'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 2017 and 2016

 

 

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

 

2017

2017

2017

2016

2016

2016

 

£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after tax

2,151

15,626

13.8

1,483

15,369

9.6

Basic EPS

2,151

15,626

13.8

1,483

15,369

9.6

 

 

 

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

 

2017

2017

2017

2016

2016

2016

 

£'000

Thousands

Pence

£'000

Thousands

Pence

Profit on ordinary activities after tax

2,151

15,626

13.8

1,483

15,369

9.6

Weighted average number of shares under option

-

168

(0.2)

-

197

(0.1)

Diluted EPS

2,151

15,794

13.6

1,483

15,566

9.5

 

For the year to 30 September 2016

 

 

Weighted

 

 

 

average

 

 

 

number

 

 

Earnings

of shares

EPS

 

30 September

30 September

30 September

 

2016

2016

2016

 

£'000

Thousands

Pence

Profit on ordinary activities after tax

4,087

15,346

26.6

Basic EPS

4,087

15,346

26.6

 

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

 

2016

2016

2016

 

£'000

Thousands

Pence

Profit on ordinary activities after tax

4,087

15,346

26.6

Weighted average number of shares under option

-

299

(0.5)

Diluted EPS

4,087

15,645

26.1

 

5. Provisions

 

 

 

 

 

Total

 

£'000

At 1 October 2016

205

Utilised during the year

(205)

At 31 March 2017

-

 

Long term incentive scheme

6. Dividends

The Directors propose the payment of an interim dividend of 3.80p per share (2016: 3.45p), payable on 21 July 2017 to shareholders on the Register on 7 July 2017. This dividend has not been accrued in these interim accounts. The dividend payment will be approximately £606,000.

 

 

 

 

 

Six months to 31 March

Six months to 31 March

Year to 30 September

 

2017

2016

2016

 

Unaudited

Unaudited

Audited

 

£'000

£'000

£'000

Ordinary dividends on equity shares

 

 

 

Final dividend of 8.87p per ordinary share paid on
11 March 2016

-

1,368

1,368

Interim dividend of 3.45p per ordinary share paid on
22 July 2016

-

-

532

Final dividend of 10.96p per ordinary share paid on
3 March 2017

1,744

-

-

 

1,744

1,368

1,900

 

7. Cash and cash equivalents

 

 

 

 

 

Six months to  31 March

Six months to  31 March

Year to  30 September

 

2017

2016

2016

 

Unaudited

Unaudited

Audited

 

£'000

£'000

£'000

Cash at bank and in hand

13,520

10,757

12,763

 

For the purpose of the consolidated cashflow statement, cash and cash equivalents comprise the following:

 

 

 

 

 

 Six months to 31 March

 Six months to 31 March

 Year to 30 September

 

2017

2016

2016

 

Unaudited

Unaudited

Audited

 

£'000

£'000

£'000

Cash at bank and in hand

10,709

9,088

9,097

Short term deposits

3,671

2,586

3,666

Bank overdraft

(860)

(917)

-

 

13,520

10,757

12,763

 

The fair value of cash and cash equivalents is £13.5m (31 March 2016: £10.8m).

8. Revenue reserve

9. 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 and 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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Interim Results for six months ended 31 March 2017 - RNS