Feedback PLC - Final Results
21 Juni 2000 - 9:00AM
UK Regulatory
RNS Number:5889M
Feedback PLC
21 June 2000
Feedback PLC
- Final Results for the year ended 31st March 2000 -
Chairman's Statement
I am pleased to report a significant improvement in profits for the year. On
turnover, up 10% on the previous year to #9,294,400, pre-tax profits rose to
#611,700 for the year to 31 March 2000, compared with #182,400 for the year to
31 March 1999. Whilst most media coverage on the Group has continued to focus
on our Internet company, TekniCAL, the results for the year reflect the
underlying strength of the Instruments and Data companies. Export business
represented 55% of Group turnover with sales in over 60 countries. There was
a strong recovery in the Far Eastern markets, reflecting the economic
improvement in the region. The Middle East, which is basically a US dollar
trading area, held up well but the slide of the Euro hampered our efforts in
the more traditional Continental European markets.
Feedback Instruments Limited
Considerable progress was made at the Instruments company during the year with
turnover up 16% on the previous year. Having made a substantial operating
loss in the previous year, it is pleasing to report a return to profitability
at this company. The current level of available funding and focus in the
educational market, both in the UK and overseas, encouraged us to increase the
investment in sales and marketing during the year. Over 40 exhibitions and
seminars were mounted in the year and it is clear that the company is well
placed with the current hardware and software product ranges developed and
updated over recent years to meet market requirements.
The joint venture company, TekniCAL Limited, which supplies the 'Virtual
Campus' Internet based on-line delivery system for education and training, did
not achieve the expected results. Following a good first half performance when
the company supplied a confident and buoyant educational market, the delayed
implementation of Government initiatives caused uncertainty and a distortion
in the market. Whilst the Government's commitment to 'Life Long Learning' and
training for a much broader section of the population will undoubtedly benefit
TekniCAL, lack of clear guidance from the implementing body led to delays in
orders being placed in the second half of the year. During the year TekniCAL
was re-located from University premises to new offices which, although
increasing costs, provide the facilities necessary for the expansion of the
business. Expenditure on new product development was increased to ensure that
this company maintains a leading position in the delivery of Internet based
training solutions. I mentioned at the Interim stage that the TekniCAL
'Virtual Campus' has a well established educational user base. Work to
provide a 'Virtual Training Manager', based on Virtual Campus technologies,
suitable for the corporate market and professional training bodies, is now
complete. The level of interest in both these areas of the business remains
high and the current prospects are very encouraging.
Feedback Incorporated
After a good start to the year, activity in the third quarter of the year
slowed which resulted in a small operating loss for the year. However, the
level of business secured in the final quarter, whilst not sufficient to make
up the third quarter shortfall, was at a satisfactory level. A review by the
new management of this company led to a restructuring of the American
representatives network and a refocusing of the support given to them. This,
together with new products available from the Instruments company, will enable
Incorporated to address the post-secondary education market in a more positive
manner. The launch of the TekniCAL 'Virtual Campus' in the Americas is
progressing and prospects will be greatly enhanced with the installation of
the necessary computer server equipment in the USA.
Feedback Data
The Company had another very good year. The strong demand for data capture
terminals, the Company's core product range, continued. The market for Access
Control/Security product (Microtrak) has been developed further with
additional products. Whilst the take up of the machine monitoring terminal
has been slow, much has been learned in this market which will enable the
company to offer the product in a revised form. The newest terminal, designed
to meet the European Working Time Directive reporting requirements, is
creating a good level of interest which augers well for the future in what is
a new business area for the Company. The Company continues to place great
emphasis on the enhancement of hardware, software and service support in its
chosen market area. The results of the German subsidiary were disappointing.
However, on-going contracts for the coming year were secured which should
enable the operation to achieve better results in the future.
Current Trading and Future Prospects
The improvement in business seen at Feedback Instruments during last year has
continued in the first quarter of the current year. Orders received to date
show a marked improvement on the same period last year, with the receipt of a
number of larger contracts from the Far East. Whilst all the current signs
indicate further progress for the rest of the year, predicting the timing of
the centrally funded larger projects remains uncertain and makes firm
forecasting difficult.
Order receipts at TekniCAL in the first quarter have shown an improvement on
the second half of the last financial year. The level of interest and
prospects within this sector of the business is very encouraging. Discussions
are presently underway to supply the TekniCAL products to a number of
educational users and larger corporate customers.
In all other areas of the Group, order intake for the first quarter of the
current year is broadly in line with expectations and the Board remains
confident about the Group's future prospects.
Dividend
Your Board is not recommending that a dividend be paid on the ordinary shares.
General
The Company's shares are now included in the TechMARK listing on the London
Stock Exchange. Over the last year there has been a greater interest shown in
our shares by investors, with the share price moving similarly to many other
companies in the high technology field.
The year has been one of progress, particularly in the continuing development
and marketing of products to meet the needs of customers. This has been
achieved without impact on our balance sheet position, which remains strong
with cash resources of almost #800,000.
We should not underestimate the demands which this has made upon staff and I
would like to thank them for their efforts on behalf of the Company.
D H Harding
Chairman
21 June 2000
FEEDBACK PLC
PROFIT AND LOSS ACCOUNT
Year ended Year ended
31 March 2000 31 March 1999
#'000s #'000s
Turnover: Group and share of joint venture 9,700.7 8,596.3
Less: Share of joint venture's turnover (406.3) (151.3)
-------- --------
Group Turnover 9,294.4 8,445.0
Cost of Sales (5,459.2) (4,774.0)
-------- --------
Gross profit 3,835.2 3,671.0
Other operating expenses (3,249.8) (3,455.3)
Reorganisation costs - (116.6)
-------- --------
Operating profit 585.4 99.1
Share of operating profit of joint venture 28.3 107.6
-------- --------
Profit on ordinary activities before
interest and tax 613.7 206.7
Net interest charge (2.0) (24.3)
-------- --------
Profit on ordinary activities before tax 611.7 182.4
Tax on profit on ordinary activities (207.6) 43.0
-------- --------
Profit on ordinary activities after tax 404.1 225.4
-------- --------
Dividends - non equity (105.6) (152.1)
Preference share costs appropriation (86.6) (3.6)
-------- --------
Retained profit for Group and
its share of joint venture 211.9 69.7
-------- --------
Earnings per share (pence)
Basic 2.1p 0.8p
Fully diluted 2.1p 0.8p
All amounts relate to continuing operations.
FEEDBACK PLC
CONSOLIDATED BALANCE SHEET
31 March 2000 31 March 1999
#'000s #'000s #'000s #'000s
Fixed Assets
Tangible Assets 483.0 546.2
Investment in joint venture
- Share of gross assets 191.3 150.6
- Share of gross liabilities (44.2) (25.6)
-------- --------
147.1 125.0
-------- --------
630.1 671.2
Current Assets
Stocks 1,444.7 1,477.6
Debtors 4,222.3 3,213.4
Cash at bank and in hand 787.2 1,017.3
-------- --------
6,454.2 5,708.3
-------- --------
Current liabilities
Amounts falling due
within one year
- Borrowings (84.6) (94.9)
- Other creditors (2,514.5) (1,974.4)
-------- --------
(2,599.1) (2,069.3)
-------- --------
Net Current Assets 3,855.1 3,639.0
-------- --------
Total assets less
current liabilities 4,485.2 4,310.2
Creditors
Amounts falling due
after more than one year
- Borrowings (190.9) (231.1)
-------- --------
Net assets 4,294.3 4,079.1
======== ========
Capital and reserves
Called up share capital 2,090.2 2,382.6
Share premium account 24.8 21.8
Revaluation reserve 214.2 214.2
Capital reserve 299.9 299.9
Other reserve 307.5 13.8
Profit and loss account 1,357.7 1,146.8
-------- --------
-------- --------
Total reserves 2,204.1 1,696.5
-------- --------
Shareholders' funds 4,294.3 4,079.1
======== ========
Included within shareholders' funds is an amount of #795,600 (1999:
#1,296,100) in respect of non-equity interests.
FEEDBACK PLC
CONSOLIDATED CASHFLOW STATEMENT
Year ended Year ended
31 March 2000 31 March 1999
#'000s #'000s #'000s #'000s
Net cash inflow from
operating activities 24.2 413.0
Returns on investments
and servicing of finance
- Interest received 45.0 18.4
- Interest paid (47.0) (42.7)
- Non equity dividends paid (105.6) (152.1)
-------- --------
Net cash (outflow) from
returns on investments
and servicing of finance
(107.6) (176.4)
-------- --------
(83.4) 236.6
Corporation tax paid (31.8) (102.3)
Capital expenditure
- Payments to acquire
tangible fixed assets (79.7) (60.5)
- Receipts from sales of
tangible fixed assets 10.9 12.1
-------- --------
(68.8) (48.4)
-------- --------
Net cash (outflow)/inflow
before use of liquid
resources and financing (184.0) 85.9
Management of
liquid resources
- Treasury deposit 200.0 (850.0)
Financing
- Issue of ordinary
share capital 4.4 -
- Repayments of bank
and other loans (30.0) (30.0)
- Repayments of obligations
under finance leases
and hire purchase contracts (11.8) (20.5)
-------- --------
Net cash (outflow) from
financing (37.4) (50.5)
-------- --------
(Decrease) in cash (21.4) (814.6)
-------- --------
Notes:
1. The earnings per share for the year ended 31 March 2000 is based on the
Group profit on ordinary activities after taxation and preference dividends
attributed to 10,181,320 ordinary shares, being the weighted average number of
ordinary shares in issue throughout the year (1999: 8,606,521). The diluted
earnings per share is calculated allowing for both the full conversion of the
Preference Shares and the full exercise of outstanding share options.
However, in accordance with the Financial Reporting Standard (FRS) 14, as
neither of these conversions have a dilutive effect, the earnings per share
figure remains unaltered. The adjusted weighted average number of shares is
14,370,947 (1999 - 16,222,836). The Group profit on ordinary activities after
taxation has been adjusted by the preference dividend paid.
2. The financial information for the year ended 31 March 1999 is extracted
from the Group's financial statements to that date which received an
unqualified auditors' report and have been filed with the registrar of
companies. The financial information for the year ended 31 March 2000 is
extracted from the Group's financial statements to that date which received an
unqualified auditors' report and will be filed with the registrar of
companies.
3. The Report and Accounts will be posted to shareholders in due course and
the Annual General Meeting will be held at 10.30 a.m. on 23 August 2000.
Enquiries: Roger Barnett
Group Managing Director
Feedback plc
01892 653 322
END
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