RNS Number:2430O
Feedback PLC
19 December 2006
Feedback plc
Unaudited Interim Report 30 September 2006
CHAIRMAN'S STATEMENT
During the first six months of the year Feedback plc and its subsidiary
companies (the Group) produced an operating profit of #119,700 before
reorganisation costs of #153,000, resulting in an operating loss of #33,300.
The restructuring of the Group continued during the period incurring
reorganisation costs as noted above, and these, together with interest charges
(mainly in connection with the preference share dividend) and finance costs of
the closed pension scheme brought about a loss on ordinary activities before
taxation of #265,700.
Restructuring has progressed well and the Group's UK operations were
consolidated onto one location by the end of September 2006. Vigorous efforts
were made to find a satisfactory solution to the pension deficit problem, in
conjunction with the Group's professional advisors, and this work is ongoing.
The local Council rejected the application to develop the Park Road site, but an
appeal is being considered.
Feedback Instruments has continued to see the benefits of earlier restructuring
and strengthening of the management team. There was a significant upturn in the
value of orders received compared with the corresponding period of 2005, and the
order book at the end of the period was very pleasing. In addition, the level
of routine business and the distribution of third party equipment to the schools
market have been encouraging.
Feedback Data, together with its German subsidiary made a small profit in the
first half of the year. There are indications that the new access control
product, Evolution, will be well received in the marketplace and work is
continuing to build up the reseller base in Europe.
Feedback Incorporated had a disappointing first half result but the order book,
as in the case of Feedback Instruments, was much improved compared with that of
2005.
Dividends
The company was unable to pay a dividend on its Cumulative Convertible
Redeemable Preference Shares due to the continued lack of distributable
reserves. However, unpaid preference dividends continue to be accrued.
Going Concern
The Group is currently paying contributions to the pension fund under an
agreement with the Occupational Pensions Regulatory Authority (Opra, now the
Pensions Regulator) dated February 2005, although other provisions within that
agreement no longer apply. A provisional actuarial valuation of the fund was
carried out at 31 March 2006 which indicates a deficit of #17,100,000 on a
buy-out basis. A full actuarial valuation is still being prepared by the Scheme
Actuary. The directors remain in regular contact with the pension fund trustees
and are continuing to take appropriate professional advice with a view to
addressing the pension scheme deficit. The process is not yet complete and
therefore the outcome remains uncertain. Nevertheless, the directors believe
that a conclusion which is acceptable to all parties is achievable.
Outlook
Although the financial position of the Group is overshadowed by the deficit in
the closed pension scheme, the substantial order book at the end of September
indicates that at a trading level, the third quarter of the year should be in
line with the Board's expectations.
David Harding
Chairman
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 months to 6 months to Year to
30 Sept 2006 30 Sept 2005 31 March 2006
#'000s #'000s #'000s
Unaudited Unaudited Audited
Turnover 4,177.9 4,090.8 7,638.6
Cost of sales (2,548.4) (2,140.8) (4,255.9)
----------------- ----------------- -----------------
Gross profit 1,629.5 1,950.0 3,382.7
Other operating expenses (1,509.8) (1,763.9) (3,223.2)
Operating profit before reorganisation costs
and pension adjustments 119.7 186.1 159.5
Reorganisation costs (153.0) - 0.0
Pension adjustments - 0.6 -
Operating (loss) / profit (33.3) 186.7 159.5
Net interest payable (101.4) (80.3) (148.8)
Other finance costs (131.0) (139.0) (306.0)
----------------- ----------------- -----------------
Loss on ordinary activities before taxation (265.7) (32.6) (295.3)
Tax on ordinary activities - - -
----------------- ----------------- -----------------
Retained loss for the period (265.7) (32.6) (295.3)
========= ========= =========
Basic and diluted loss per share (2.15)p (0.27)p (2.4)p
----------------- ----------------- -----------------
All activities are classed as continuing.
UNAUDITED CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months to 6 months to Year to
30 Sept 2006 30 Sept 2005 31 March 2006
#'000s #'000s #'000s
Unaudited Unaudited Audited
Loss for the period (265.7) (32.6) (295.3)
Unrealised surplus on revaluation of land and
buildings - - 223.2
Currency translation differences on foreign
currency net investments 38.4 32.1 86.5
Actual return less expected return on pension
scheme assets (251.0) 827.0 1,315.0
Experience gains and losses arising from scheme
liabilities - - 596.0
Changes in assumptions underlying the present
value of the scheme liabilities 149.0 (1,025.0) (2,068.0)
------------------ ------------------ ------------------
Total losses relating to the period (329.3) (198.5) (142.6)
Prior year adjustment 0.0 (7,156.0) (7,156.0)
------------------ ------------------ ------------------
Total recognised losses since the last annual
report (329.3) (7,354.5) (7,298.6)
========== ========== ==========
UNAUDITED CONSOLIDATED BALANCE SHEET
6 months to 6 months to Year to
30 Sept 2006 30 Sept 2005 31 March 2006
#'000s #'000s #'000s
Unaudited Unaudited Audited
Fixed Assets 697.9 516.9 714.9
Current Assets
Stock 885.9 1,218.3 1,000.3
Debtors 2,464.5 1,758.9 1,616.3
Cash at bank and in hand 96.2 682.5 805.7
3,446.6 3,659.7 3,422.3
Creditors: amounts falling due within one
year
Borrowings (1,070.8) (15.0) (1,132.1)
Other creditors (1,853.1) (1,624.9) (1,447.4)
(2,923.9) (1,639.9) (2,579.5)
-------------------- -------------------- --------------------
Net current assets 522.7 2,019.8 842.8
-------------------- -------------------- --------------------
Total assets less current liabilities 1,220.6 2,536.7 1,557.7
Creditors: amounts falling due after more
than one year
Borrowings (535.3) (1,555.3) (579.0)
Net assets excluding pension liability 685.3 981.4 978.7
Pension liability (8,257.0) (8,315.0) (8,233.0)
-------------------- -------------------- --------------------
Net liabilities including pension (7,571.7) (7,333.6) (7,254.3)
liability
=========== =========== ===========
Ordinary share capital 1,234.5 1,234.1 1,234.5
Share premium account 409.8 410.2 409.9
Revaluation reserve 595.6 379.7 595.6
Capital reserve 299.9 299.9 299.9
Profit and loss account (10,111.5) (9,657.5) (9,794.2)
Reserves (8,806.2) (8,567.7) (8,488.8)
-------------------- -------------------- --------------------
Shareholders' funds (7,571.7) (7,333.6) (7,254.3)
=========== =========== ===========
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
6 months to 6 months to Year to
30 Sept 2006 30 Sept 2005 31 March 2006
#'000s #'000s #'000s
Unaudited Unaudited Audited
Net cash (outflow) / inflow from operating
activities (556.3) 19.1 62.7
Returns on investments and servicing of
finance
Other interest paid (17.4) (33.8) (47.8)
Capital expenditure and financial investment
Purchase of tangible fixed assets - (13.8) (26.0)
Financing
Financing - repayments of bank and other
loans (15.0) (15.0) (30.0)
-------------------- -------------------- --------------------
Decrease in cash (588.7) (43.5) (41.1)
=========== =========== ===========
Reconciliation of operating (loss) / profit to net cash flow from operating
activities
Operating (loss) / profit (33.3) 186.7 159.5
Depreciation of tangible fixed assets 17.0 23.2 60.9
Decrease / (increase) in stock 114.4 (7.6) 210.4
(Increase) / decrease in debtors (848.2) (5.3) 137.3
Increase / (decrease) in creditors 402.8 31.1 (88.4)
Pension contributions paid (209.0) (209.0) (417.0)
-------------------- -------------------- --------------------
Net cash (outflow) / inflow from operating (556.3) 19.1 62.7
activities
=========== =========== ===========
Notes to the Unaudited Interim Report
Basis of the Report
This Interim Report was approved by the directors on 19 December 2006.
The interim figures for the six months to 30 September 2006, which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Annual Report for the year ended 31 March 2006. The financial information
contained in this Interim Report does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985. The results for the year
ended 31 March 2006 are based upon the published accounts for that period on
which the auditors gave a report which did not contain statements under Sections
237 (2) or (3) of the Companies Act 1985. The Auditors included an emphasis of
matter paragraph in relation to going concern in their report but their opinion
was not qualified in this respect.
The accounts for the year ended 31 March 2006 have been filed with the Registrar
of Companies. Copies of the audited accounts for the year ended 31 March 2006
and further copies of this Interim Report and the Interim Statement for the six
months ended 30 September 2005 are available upon request from the company's
registered office at Park Road, Crowborough, East Sussex, TN6 2QR.
Loss per share
The loss per share for the six months ended 30 September 2006 is based on the
Group loss on ordinary activities after taxation of #265,700 (2005 - loss of
#32,600) attributable to 12,344,896 (2005 - 12,294,532) ordinary shares, being
the weighted average number of shares in issue. The diluted earnings per share
is calculated allowing for the full conversion of the Preference Shares.
However, in accordance with Financial Reporting Standard 14, as these
conversions do not have a dilutive effect the loss per share remains unaltered.
Going Concern
The financial information for the period ended 30 September 2006 shows that,
after including the pension scheme liability of #8,257,000 the Group has a
deficiency of shareholders' funds of #7,571,700. The Interim Report has been
prepared on the going concern basis which assumes that the Group will be able to
continue in operational existence for the foreseeable future, as a minimum for a
period of one year from the date of approval of this Interim Report. The
validity of this assumption depends on the successful outcome of discussions
with the pension fund trustees.
The Group is currently paying contributions to the pension fund under an
agreement with the Occupational Pensions Regulatory Authority (Opra, now the
Pensions Regulator) dated February 2005, although other provisions within that
agreement no longer apply. A provisional actuarial valuation of the fund was
carried out at 31 March 2006 which indicates a deficit of #17,100,000 on a
buy-out basis. A full actuarial valuation is still being prepared by the Scheme
Actuary. The directors remain in regular contact with the pension fund trustees
and are continuing to take appropriate professional advice with a view to
addressing the pension scheme deficit. The process is not yet complete and
therefore the outcome remains uncertain. Nevertheless, the directors believe
that a conclusion which is acceptable to all parties is achievable.
The Group is currently operating within its overdraft facilities which the
directors have agreed with the Group's bankers to the normal renewal date of 31
March 2007. The directors are of the view that there is no reason why the
overdraft facilities will not be renewed after that date.
Whilst the directors are presently uncertain as to the outcome of the matters
referred to above, they believe it is appropriate to continue to prepare the
Interim Report on the going concern basis.
INDEPENDENT REVIEW REPORT TO FEEDBACK PLC
Introduction
We have been instructed by the company to review the financial information which
comprises the Consolidated Profit and Loss Account, the Consolidated Statement
of Total Recognised Gains and Losses, the Consolidated Balance Sheet, the
Consolidated Cash Flow Statement and the Notes to the Interim Report and we have
read the other information in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim report and for no other purpose. We do
not, therefore, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
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 AIM Market
Rules which require that the accounting policies and presentation applied to the
interim figures must be consistent with those that will be adopted in the
company's annual accounts.
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, as if that
Bulletin applied. A review consists principally of making enquiries of group
management and applying analytical procedures to the financial information and
underlying financial data and based thereon, assessing whether the disclosed
accounting policies 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 and therefore provides a lower level of assurance. 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 30 September 2006.
Emphasis of matter - going concern
In arriving at our review conclusion, we have considered the adequacy of the
disclosures made in the notes to the interim report under the heading 'Going
concern' concerning the group's ability to continue as a going concern. The
group's liabilities (including the pension liability of #8,257,000) exceeded its
assets at 30 September 2006 by #7,571,700, and the continuation of group
overdraft facilities past the next renewal date of 31 March 2007 has not yet
been agreed with the company's bankers. This situation, as further explained in
the note referred to above, indicates the existence of a material uncertainty
which may cast significant doubt about the group's ability to continue as a
going concern. The interim financial information does not include the
adjustments that would result if the group was unable to continue as a going
concern.
BAKER TILLY
Chartered Accountants
Hanover House
18 Mount Ephraim Road
Tunbridge Wells
Kent
TN1 1ED
19 December 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZGMMZDLDGVZM
Feedback (LSE:FDBK)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Feedback (LSE:FDBK)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
