TIDMMST
RNS Number : 6614U
Mid-States PLC
20 October 2010
MID-STATES PLC (the "Company")
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2010
Mid-States PLC, a leading environmental technology group, is
pleased to announce its results for the financial year ended 30
June 2010.
Highlights
-- Revenues of GBP0.3 million (2009: GBP0.3 million); trading in
line with management expectations; order intake growing
-- Raised GBP3.8 million through a share placing in June 2010 to
support commercial roll-out
-- Increasing public awareness of airborne infection
-- Substantial opportunity for creating disinfected air and
surfaces in enclosed spaces such as hospitals, care homes, offices,
dental surgeries and ambulances
-- Key distributors in place in the UK, Spain, the Middle East
and India; in discussions with a number of potential new
distributors
-- Considerable scope to penetrate different market segments
across many countries
Javier Segura, Managing Director of Mid-States PLC, commented:
"We are excited by the substantial opportunity that our flagship
air disinfection unit, the AD, represents. While we are at
relatively early stages in terms of sales, the efficacy of the AD
is proven and we have gained interest in the AD through many
opportunities around the world. With the help of our carefully
selected distributors we are looking to maximise this opportunity
and fully exploit the undoubted potential of the AD."
For further information:
Mid-States PLC Tel: +44 (0) 20 7603 1515
Andrew Tonks, Finance Director
Panmure Gordon (UK) Limited Tel: +44 (0) 20 7459 3600
Andrew Godber
Cardew Group Tel: +44 (0) 20 7930 0777
Tim Robertson / Catherine Maitland
CHAIRMAN AND MANAGING DIRECTOR'S STATEMENT
Introduction
Mid-States PLC specialises in air disinfection technology and
products, and its flagship product is the AD, an independently
proven air disinfection unit, which is sold through Mid-States'
subsidiary company Inov8 Science. The AD disinfects the air and
surfaces of bacteria and viruses, eliminating airborne infections
in enclosed spaces using hydroxyl radicals.
In June 2010, the Company raised GBP3.8 million (net of
expenses) through a share placing, to support its strategy for
realising the commercial potential of the AD. The AD provides a
unique solution for disinfecting the air of harmful bacteria and
viruses, and the commercial potential for creating disinfected air
and surfaces in enclosed spaces such as hospitals, care homes,
offices, dental surgeries and ambulances, is believed to be
substantial.
The competitive strengths of the AD are its:
-- bactericidal, virucidal, fungicidal and sporicidal (airborne
and surface-borne) efficacy.
-- proven efficacy against several antibiotic resistant
microorganisms.
-- proven efficacy against norovirus.
-- fast acting on continuously introduced pathogens; non-reliant
on air circulation within the device.
-- deodorant (as it attacks bacterial activities generating
odours).
-- safe operation 24 hours a day in areas occupied by
people.
The Company is also developing variants of the AD, including a
miniature version specifically designed for the retail market.
Strategy
The AD is playing an important role in the ongoing fight against
viral and bacterial pathogens in UK hospitals. The successful
reduction in the number of virus outbreaks and ward closures
achieved at hospitals such as Hereford Hospitals Trust after
installation of AD units, and the selection of the AD as one of the
winners of the NHS Smart Solutions Programme 2009, is further
testament to the AD's efficacy and confirmation of its success
across the health market.
Inov8 Science was present at several prestigious exhibitions and
conferences, such as the HPA (Health Protection Agency) 2010 and
International Conference of the Hospital Infection Society (HIS
2010). Two scientific papers were presented that again show the
efficacy of the AD and add to the extensive tangible evidence of
the benefits in support of using the AD.
The strategy of the Company is to achieve further penetration of
the UK hospital market and of hospital markets in other selected
geographies, including India, the Middle East and Europe; and to
penetrate different market segments in multiple countries. In June
2010 the Company raised approximately GBP3.8m (net of expenses)
through a share placing, in order to fund the Company in
implementing its strategy, including additional sales and marketing
resources.
Whilst good progress has been made, we continue to invest in the
further resources required for additional sales and marketing to
support penetration of, and entry into new market segments and
territories. Key segments the Company plans to cover include:
-- healthcare, such as hospitals, care homes, dental surgeries,
pharmacies and ambulances;
-- hospitality, such as restaurants, hotels and passenger
ships;
-- offices, to reduce absences due to sickness.
The focus will be on territories in developed and emerging
markets which the Board considers have high potential growth rates
for AD sales, including Europe, Middle East, India and South
America. To support this strategy the Company is currently seeking
to appoint an experienced Sales and Marketing Director.
A core part of our strategy is selecting the right distributors
to enable us to penetrate our different target geographies and
market sectors. The Company currently works with key distributors
in the UK, Spain, the Middle East and India, and is in discussions
with a number of potential new distributors.
We are pleased at the good progress being made in India. During
August our distributor, Innova Technology Solutions, launched the
AD to the hospital market, this launch was attended by a number of
leading hospital doctors.
We have recently entered the shipping market in the UK by
signing an agreement with Huttons, a leading supplier to ships in
the UK. Entry has also been made into the dental sector in the UK
and other European countries including Poland and Slovakia.
Product Development
Further resources will be also be utilised for continued product
development to meet market requirements. This is planned to include
the development of a miniaturised AD specifically designed for the
retail market and we are pleased with the progress made on this
project.
There is also the potential for the existing products to be
developed further. Current product development activity is strongly
focussed on the AD and ensuring that new variants are available to
meet the specific requirements of both existing customers and the
new markets targeted. In the short term, opportunities exist for
different versions of the AD and as a consequence, these will
continue to be the Company's product development focus.
Nevertheless, the Company intends to broaden its product
offering to customers through strategic partnerships including
offering air testing services to all sectors, including healthcare,
and complimentary products such as disinfectant hand gels and
wipes.
Results for the Financial Year Ended 30 June 2010
The order intake for the year was 1,564 ADs, and the fourth
quarter order intake of 477 confirms order intake has increased
each quarter for the last financial year. The 885 order intake in
the second half of the year was also 30% higher than the 679
achieved in the first half year.
Revenue for the financial year to 30 June 2010 GBP311,000 (2009:
GBP336 000). The loss for the year after tax was GBP2.3 million
(2009: loss from continuing operations GBP2.4 million).
At 30 June 2010 the cash at bank was GBP3.8 million (GBP2009:
GBP2.2 million), and shareholders' funds were GBP5.2 million (2009:
GBP3.7 million).
The Directors do not recommend payment of a dividend for the
year ended 30 June 2010 (2009 GBPnil).
The Financial Review provides further details of the results for
the year.
Current trading and prospects
During the last year the Company has been working to improve
revenues in other geographies and market segments which has been
encouraging, and we have focused on selecting the right distributor
in order to launch and establish the AD in each particular
geography or segment.
The Board is pleased to announce that in the first quarter of
the financial year ended 30 June 2011 orders for 541 AD units were
received against the orders for 301 AD received in the first
quarter of the last financial year. This is the fifth consecutive
quarter of growth in order intake.
The Board is encouraged by the progress that has been made, and
we have a clear strategy to exploit the undoubted potential of the
AD.
John Bateson Javier Segura
Chairman Managing Director
FINANCIAL REVIEW
The following review explains the financial performance for the
year ended 30 June 2010.
The results for the year to 30 June 2010 are prepared in
accordance with the accounting policies discussed in the full
statutory accounts on pages 18 to 23.
Revenue
Revenue for the year totalled GBP311,000 (2009: GBP336,000) and
this was all attributable to the Air Disinfection business.
Operating loss
The operating loss for continuing operations before tax was
GBP2.4 million (2009: GBP2.4 million loss) Operating costs for 2010
included amortisation of intangible assets GBP118,000 (2009:
GBP118,000) and 2009 included reorganisation costs of GBP307,000.
The overall performance in the year reflects the continued
investment in establishing the AD in new markets.
Loss for the year
The loss for the year after tax was GBP2.3 million (2009: GBP1.6
million loss, including a profit on discontinued operations of
GBP789,000).
Taxation
As a result of brought forward losses and the operating loss in
the year the Group's tax charge for 2010 was GBPnil (2009: GBPnil),
however there is a deferred tax credit of GBP34,000 for 2010 (2009:
GBP33,000 credit). No R&D tax credit was received during the
year ended 30 June 2010 (2009: GBPnil), however a claim was made
and GBP66,000 was received in August 2010, which will be accounted
for in the period ended 30 June 2011.
Cash flow and net cash
The total cash inflow for the year ended 30 June 2010 was GBP1.6
million (2009: GBP1.7 million inflow) and included in this figure
was the proceeds from a share issue of GBP3.8 million (2009: GBP4.0
million). The net cash used in operating activities for the year
was GBP2.2 million (2009: GBP2.3 million).
The Group's cash balances were GBP3.8 million at 30 June 2010
(2008: GBP2.2 million).
Key performance indicators
The Group considers the key performance indicators as the growth
of revenues for AD devices and consumables, and the net current
assets and cash balances for the Air Disinfection business.
2010 2009
GBP'000 GBP'000
------------------------- ------- -------
Air Disinfection Revenue 311 336
Net current assets 3,523 1,888
Cash at bank and in hand 3,818 2,230
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 June 2010
Year to Year to
30 June 30 June
2010 2009
Note GBP'000 GBP'000
----------------------------------- ----- --------- ---------
Continuing operations
Revenue 3 311 336
Cost of sales (299) (296)
----------------------------------- ----- --------- ---------
Gross profit 12 40
Distribution expenses (11) -
Administrative expenses (2,391) (2,449)
Results from operating activities (2,390) (2,409)
Finance income 25 10
Net finance income 25 10
Loss before income tax (2,365) (2,399)
Income tax 5 34 33
Loss from continuing operations (2,331) (2,366)
----------------------------------- ----- --------- ---------
Discontinued operations - 789
Loss for the period (2,331) (1,577)
----------------------------------- ----- --------- ---------
Total comprehensive expense for
the period (2,331) (1,577)
----------------------------------- ----- --------- ---------
Basic and diluted
Loss per share (continuing
operations) 4 (1.88)p (2.53)p
Loss per share (total operations) 4 (1.88)p (1.69)p
----------------------------------- ----- --------- ---------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2010
30 June 30 June
2010 2009
Note GBP'000 GBP'000
--------------------------------------- ------ --------- ---------
Assets
Property, plant and equipment 123 129
Goodwill 1,115 1,115
Other intangible assets 660 778
--------------------------------------- ------ --------- ---------
Total non-current assets 1,898 2,022
Inventories 6 160 280
Trade and other receivables 7 69 14
Other current assets 8 97 51
Cash and cash equivalents 3,818 2,230
--------------------------------------- ------ --------- ---------
Total current assets 4,144 2,575
Total assets 6,042 4,597
--------------------------------------- ------ --------- ---------
Equity
Share capital 11 2,609 1,161
Share premium 6,955 4,543
Share based payments reserve 83 67
Capital redemption reserve 253 253
Merger reserve 3,250 3,250
Retained earnings (7,910) (5,579)
--------------------------------------- ------ --------- ---------
Total equity attributable to equity holders
of the company 5,240 3,695
Total equity 5,240 3,695
--------------------------------------- ------ --------- ---------
Liabilities
Deferred tax liabilities 181 215
Total non-current liabilities 181 215
Trade payables 9 211 124
Other payables and accruals 9 212 463
Deferred income 9 9 16
Short-term provisions 10 189 84
--------------------------------------- ------ --------- ---------
Total current liabilities 621 687
--------------------------------------- ------ --------- ---------
Total liabilities 802 902
--------------------------------------- ------ --------- ---------
Total equity and liabilities 6,042 4,597
--------------------------------------- ------ --------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2010
Share
based Capital
Share Share payment redemption Merger Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------- ------- ------- ---------- ------- -------- -------
1 July 2009 1,161 4,543 67 253 3,250 (5,579) 3,695
Issue of new
shares 1,448 2,412 - - - - 3,860
Share-based
payment
transactions - - 16 - - - 16
Transactions
with owners 1,448 2,412 16 - - - 3,876
Loss for the
year and
total
comprehensive
loss - - - - - (2,331) (2,331)
-------------- ------- ------- ------- ---------- ------- -------- -------
30 June 2010 2,609 6,955 83 253 3,250 (7,910) 5,240
1 July 2008 787 906 51 253 3,250 (4,002) 1,245
Issue of new
shares 374 3,637 - - - - 4,011
Share-based
payment
transactions - - 16 - - - 16
-------------- ------- ------- ------- ---------- ------- -------- -------
Transactions
with owners 374 3,637 16 - - - 4,027
Loss for the
year and
total
comprehensive
loss - - - - - (1,577) (1,577)
-------------- ------- ------- ------- ---------- ------- -------- -------
30 June 2009 1,161 4,543 67 253 3,250 (5,579) 3,695
-------------- ------- ------- ------- ---------- ------- -------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 30 June 2010
Year to Year to
30 June 30 June
2010 2009
GBP'000 GBP'000
------------------------------------------ --------- ---------
Cash flows from operating activities
Loss for the period (2,331) (2,366)
Adjustments for:
Depreciation 80 21
Amortisation of intangible assets 118 118
Share based payments 16 16
(2,117) (2,211)
Change in inventories 120 (278)
Change in trade and other receivables (100) 297
Change in trade and other payables (182) (59)
Change in provisions 105 -
Change in deferred income (7) (33)
------------------------------------------ --------- ---------
(2,181) (2,284)
Interest income (25) (10)
------------------------------------------ --------- ---------
Net cash (used in) operating
activities (2,206) (2,294)
Cash flows from investing activities
Interest received 25 10
Purchase of property, plant
and equipment (91) (2)
------------------------------------------ --------- ---------
Net cash (used in)/from investing
activities (66) 8
------------------------------------------ --------- ---------
Cash flows from financing activities
Proceeds from issue of share
capital 3,860 4,011
Net cash from financing activities 3,860 4,011
------------------------------------------ --------- ---------
Net increase in cash and cash
equivalents 1,588 1,725
Cash and cash equivalents at beginning
of the period 2,230 505
Cash and cash equivalents at end of the
period 3,818 2,230
------------------------------------------ --------- ---------
Notes to the Preliminary Results Announcement
1 NATURE OF OPERATIONS AND GENERAL INFORMATION
Mid-States PLC and subsidiaries' ('the Group') principal
activities are in the area of environmental technology, focussing
in particular on disinfecting air through its innovative
technology.
Mid-States PLC consolidated financial statements are presented
in Pounds Sterling (GBP), which is also the functional currency of
the parent company.
2 ACCOUNTING POLICIES
Basis of preparation
The financial information contained within this preliminary
report has been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRS) as adopted by
the EU and applying at 30 June 2010. The information in this
preliminary statement has been extracted from the audited financial
statements for the year ended 30 June 2010 and as such, does not
contain all the information required to be disclosed in the
financial statements prepared in accordance with the International
Financial Reporting Standards.
The figures for the year ended 30 June 2010 and 2009 do not
constitute statutory accounts within the meaning of section 434(3)
of the Companies Act 2006.
3 SEGMENTAL ANALYSIS
The Group has one segment under IFRS 8, which is air
disinfection.
Geographical analysis
Revenue, operating loss and net assets originate in the United
Kingdom. The geographical analysis of total revenue by destination
is as follows:
2010 2009
GBP'000 GBP'000
----------------------- -------- --------
United Kingdom 36 315
Other EU 145 21
Rest of World 130 -
Continuing operations 311 336
----------------------- -------- --------
4 LOSS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following information:
2010 2009
Loss GBP'000 GBP'000
---------------------------------------------------- -------- --------
Loss for the purpose of basic earnings per share
being the net loss
attributable to equity holders of the parent:
- continuing operations (2,331) (2,366)
- continuing and discontinued operations (2,331) (1,577)
Loss for the purpose of diluted earnings per share
being the net loss
attributable to equity holders of the parent:
- continuing operations (2,331) (2,366)
- continuing and discontinued operations (2,331) (1,577)
Number of shares 2010 2009
---------------------------------- ------------ -----------
Weighted average number of
ordinary shares for the purpose
of basic loss per share 123,621,062 93,432,152
Weighted average number of
ordinary shares for the purpose
of basic loss per share 123,621,062 93,432,152
Loss per share 2010 2009
---------------------------------- ------------ -----------
Basic loss per share
:
- continuing operations (1.88)p (2.53)p
- continuing and discontinued
operations (1.88)p (1.69)p
Basic loss per share :
- continuing operations (1.88)p (2.53)p
- continuing and discontinued
operations (1.88)p (1.69)p
5 TAX ON LOSS ON ORDINARY ACTIVITIES
2010 2009
GBP'000 GBP'000
------------------------- -------- ---------
Deferred tax (34) (33)
------------------------- -------- ---------
Tax on loss on ordinary
activities (34) (33)
------------------------- -------- ---------
The differences between the total current tax charge shown above
and the amount calculated by applying the standard rate of UK
corporation tax to the profit before tax is as follows:
Loss on ordinary activities before tax on
continuing operations (2,365) (2,399)
Tax on loss on ordinary activities at 28%
(2009: 28%) (622) (672)
Factors affecting charge for the year:
- Non deductable expenses 15 34
- Tax losses for which no deferred tax asset
is recognised 613 605
Tax charge in
year (34) (33)
---------------------------------------------- -------- --------
The Group has tax losses arising in the UK of GBP6.6 million
(2009: GBP4.3 million) that are available indefinitely for offset
against future taxable profits in those companies in which the
losses arose.
6 INVENTORIES
2010 2009
GBP'000 GBP'000
-------------------------------- -------- --------
Raw Materials 126 215
Provision for obsolete / slow
moving stock (69) (154)
Finished goods 103 183
Work in progress - 36
160 280
------------------------------- -------- --------
7 TRADE RECEIVABLES
2010 2009
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Current:
Trade Receivables 70 14
Less provision for impairment of trade receivables (1) -
Net trade receivables 69 14
----------------------------------------------------- -------- --------
There is no material difference between the carrying amount and
the fair value of the trade receivables.
Trade receivables that are less than three months past due are
not considered impaired. As of 30 June 2010 there were no trade
receivables that were past due but not impaired. (2009:GBPnil)
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies.
2010 2009
GBP'000 GBP'000
------------------------ -------- --------
Sterling 30 7
Euros 39 7
Net trade receivables 69 14
------------------------ -------- --------
8 OTHER CURRENT ASSETS
2010 2009
GBP'000 GBP'000
------------------------------------------------ -------- --------
Value added tax recoverable 38 9
Prepayments, accrued income and other current
assets 59 42
97 51
------------------------------------------------ -------- --------
9 TRADE PAYABLES AND OTHER CURRENT LIABILITIES
2010 2009
GBP'000 GBP'000
--------------------------------- -------- --------
Trade payables 211 124
Social security and other taxes 47 29
Pension creditors 3 4
Value added
tax - 2
Other creditors and accruals 162 428
Deferred income 9 16
432 603
--------------------------------- -------- --------
10 PROVISIONS
2010 2009
Warranty provision GBP'000 GBP'000
------------------------------- -------- --------
At 1 July 2009 84 207
Provided for during the year 105 (123)
189 84
------------------------------- -------- --------
Analysis of total provision
2010 2009
GBP'000 GBP'000
----------------- -------- --------
Current 189 84
Total provision 189 84
----------------- -------- --------
The AD is still a relatively new product and as a consequence
the warranty provision assumes warranty costs and distribution
expenses will be incurred within the next year. This is reviewed on
a regular basis as more post sales data is obtained.
11 CALLED UP SHARE CAPITAL
Allotted, called up and fully paid
Number of shares GBP'000
At 1 July 2009 116,082,412 1,161
Shares issued on 11 June 2010 144,821,427 1,448
At 30 June 2010 260,903,839 2,609
12 ANNUAL REPORT
The financial information set out in the announcement does not
constitute the company's statutory accounts for the years ended 30
June 2010 or 2009. The financial information for the year ended 30
June 2009 is derived from the statutory accounts for that year
which have been delivered to the Registrar of Companies. The
auditors reported on those accounts. Their report was unqualified
and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006. The statutory accounts for the year ended 30
June 2010 have been finalised on the basis of the financial
information presented by the directors in this preliminary
announcement
Copies of the Annual Report and accounts for the year ended 30
June 2010 will be posted to shareholders and will be available on
the Company's website (www.mid-statesplc.com).
This information is provided by RNS. The company news service
from the London Stock Exchange
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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