Feedback PLC - Final Results
23 Juni 1999 - 5:27PM
UK Regulatory
RNS No 2835m
FEEDBACK PLC
23 June 1999
Feedback PLC
- Final Results for the
year ended 31st March, 1999 -
Chairman's Statement
Whilst the result for the year is below original expectations, I am pleased to
report that the pre tax profit of #182,400 for the year shows an improvement
of over half a million pounds when compared with the loss of #337,900 for the
six months to September. The profit is after charging #116,600 of
re-organisation expenses and Shareholders will recall that in the Interim
Statement it was noted that these should lead to annual savings of
approximately #600,000 and there were some beneficial effects in the second
half of the year. This is a relatively satisfactory outcome bearing in mind
the background trading problems of the main subsidiary Feedback Instruments to
which I refer below.
Group turnover of #8,445,000 was 14% lower than in the previous year and
exports accounted for 47% of Group shipments compared with 66% in the previous
year, attributable to the lower level of business by Feedback Instruments.
Feedback Instruments Limited
The problems of the South East Asian economies, the low crude oil price which
adversely affected our customers in the Middle East, and the strength of
sterling generally, severely impacted on the level of export sales which fell
by over #2 million. However, as indicated in my report at the interim stage,
substantial UK business was obtained in the second half of the year. In
particular this included the on-line education systems using the 'Virtual
Campus Internet based delivery system' developed by our jointly owned company,
TekniCAL Limited, and the 'Discovery II Computer Based Training System'
developed by ourselves. Already these systems are providing on-line Internet
based education on over fifty sites.
The company, together with TekniCAL Limited, continues to invest in developing
and improving products in traditional hardware and especially software both
generally and in connection with Internet delivery. This enables us to remain
at the forefront of the technology used in the delivery and management of
teaching and training to both Educational establishments and directly to the
workplace. The Government has already announced initiatives designed to
deliver technical training and Life Long Learning to a wider audience. Our
new educational delivery systems, and learning materials, are well placed to
offer on-line Internet based solutions for this market opportunity.
Feedback Incorporated
The company had a satisfactory year although sales were lower than planned,
due to changes in the sales force. However, the sales team is now up to
strength again. Although still fundamentally a conduit for the sale of the
Instruments' products, the company will launch the newly developed TekniCAL
Internet based products in the U.S.A. later this year.
Feedback Data Limited
The company had a very good year, with turnover up by 27% and a record profit.
There was strong demand for data capture terminals following the increase in
the number of Resellers and the provision of additional support back-up. The
Access Control/Security product range and the hand-held portable data capture
units are now firmly established in the marketplace and a machine monitoring
terminal was introduced during the year. The newer products exploit our
software expertise and have opened new areas of business for us.
During the year approved interfacing software products to link with major
proprietary software systems have been developed through our German
subsidiary. This software is installed mainly on larger companies' computer
systems and, therefore, this development opens up markets for our terminals
not previously available to us.
The results of the German subsidiary showed a good turnaround when compared
with the previous year. We are still confident that it is in our long term
interests to be represented in this large economic area.
Current Trading and Future Prospects
The trading of Feedback Instruments to date has shown some improvement
compared with the first quarter of last year. The Company is seeing the
benefits of economic recovery in some of its traditional export markets. The
level of sales activity, formal quotations, and interest in the company's
products has improved significantly. Whilst this bodes well for the future
the pattern of orders has changed with greater dependency on centrally funded
larger projects. This makes forecasting the timing of this potential business
extremely difficult and the company therefore faces a challenging year in its
traditional markets.
TekniCAL is in an advanced stage of negotiations on several projects within
the UK where significant funding has already been approved. Confidence
remains high that these prospects will be converted into orders in the near
future. The scope of the TekniCAL operation has diversified our market
opportunity into non-engineering areas within a much broader commercial
training environment. TekniCAL is rapidly gaining a reputation as a company
capable of delivering Internet based training solutions.
Feedback Data continues to trade well and turnover and orders received are in
line with expectations.
Both the German and American subsidiaries are operating broadly as
anticipated.
I would wish to emphasise the various comments made above with regard to the
product ranges of all the companies. We are all conscious of the rapidly
changing technological requirements made of us and great emphasis is placed
upon keeping our products up to date and suitable for our markets. We are
ready to meet challenges from our customers and markets as they arise.
Dividend
The Board is not recommending that a dividend be paid on the ordinary shares.
General
During the year David Sawyer joined us as President of Feedback Incorporated,
having previously worked for twenty years in companies involved in the
educational market. I am sure that he will prove to be a great asset to us.
Shareholders may like to note that our Web Site address is http://www.fbk.com
should they like to visit us.
The year has not been an easy one for our executive directors and staff but
they have worked hard and loyally. Our thanks go to them.
D H Harding
Chairman
FEEDBACK PLC
PROFIT AND LOSS ACCOUNT
Year ended Year ended
31 March 99 31 March 98
#'000s #'000s
Turnover: Group and share of joint venture 8,596.3 9,844.6
Less: Share of joint venture's turnover (151.3) (0.7)
Group Turnover 8,445.0 9,843.9
Cost of Sales (4,774.0) (5,753.5)
Gross profit 3,671.0 4,090.4
Other operating expenses (3,455.3) (3,486.8)
Reorganisation costs (116.6) -
Operating profit 99.1 603.6
Share of operating profit/(loss)
of joint venture 107.6 (23.0)
Profit on ordinary activities
before interest and tax 206.7 580.6
Net interest charge (24.3) (23.2)
-------- --------
Profit on ordinary activities before tax 182.4 557.4
Tax on profit on ordinary activities 43.0 (103.2)
-------- --------
Profit on ordinary activities after tax 225.4 454.2
-------- --------
Dividends - non equity (152.1) (148.8)
Preference share costs appropriation (3.6) (0.4)
Retained profit for Group and its
share of joint venture 69.7 305.0
Earnings per share (pence)
Basic 0.8p 3.6p
Fully diluted 0.8p 2.8p
All amounts relate to continuing operations.
FEEDBACK PLC
CONSOLIDATED BALANCE SHEET
31 March 1999 31 March 1998
#'000s #'000s #'000s #'000s
Fixed Assets
Tangible Assets 546.2 630.0
Investment in joint venture
- Share of gross assets 150.6 28.1
- Share of gross liabilities (25.6) 125.0 (1.1) 27.0
-------- -------- -------- --------
671.2 657.0
Current Assets
Stocks 1,477.6 1,734.2
Debtors 3,213.4 2,753.4
Cash at bank and in hand 1,017.3 929.3
-------- -------- -------- --------
5,708.3 5,416.9
Current liabilities
Amounts falling due
within one year
- Borrowings (94.9) (44.5)
- Other creditors (1,974.4) (1,760.2)
-------- -------- -------- --------
(2,069.3) (1,804.7)
Net Current Assets 3,639.0 3,612.2
-------- --------
Total assets less
current liabilities 4,310.2 4,269.2
Creditors
Amounts falling due after
more than one year
- Borrowings (231.1) (252.1)
-------- -------- -------- --------
Net assets 4,079.1 4,017.1
======== ======== ======== ========
Capital and reserves
Called up share capital 2,382.6 2,394.9
Share premium account 21.8 21.8
Revaluation reserve 214.2 214.2
Capital reserve 299.9 299.9
Other reserve 13.8 1.5
Profit and loss account 1,146.8 1,084.8
-------- -------- -------- --------
Total reserves 1,696.5 1,622.2
-------- --------
Shareholders' funds 4,079.1 4,017.1
======== ========
Included within shareholders' funds is an amount of #1,520,689 (1998:
#1,545,189) in respect of non-equity interests.
FEEDBACK PLC
CONSOLIDATED CASHFLOW STATEMENT
31 March 1999 31 March 1998
#'000s #'000s #'000s #'000s
Net cash inflow from
operating activities 413.0 838.3
Returns on investments
and servicing of finance
- Interest received 18.4 22.3
- Interest paid (42.7) (45.5)
- Non equity dividends paid (152.1) (148.8)
Net cash (outflow) from returns
on investments and servicing
of finance (176.4) (172.0)
-------- --------
236.6 666.3
Corporation tax (paid)/recovered (102.3) 90.1
Capital expenditure
- Payments to acquire
tangible fixed assets (60.5) (163.0)
- Receipts from sales of
tangible fixed assets 12.1 79.7
-------- --------
(48.4) (83.3)
Acquisitions
- Investments in joint venture - (50.0)
-------- --------
Net cash inflow before use of
liquid resources and financing
85.9 623.1
Management of liquid resources
- Treasury deposit (850.0) (350.0)
Financing
- Issue of preference share capital - 1,320.0
- Receipt of new loan - 300.0
- Repayments of bank and
other loans (30.0) (417.5)
- Repayments of obligations under
finance leases and hire
purchase contracts (20.5) (27.3)
Net cash (outflow)/inflow
from financing (50.5) 1,175.2
-------- --------
(Decrease)/Increase in cash (814.6) 1,448.3
-------- --------
Notes:
1. The earnings per share for the year ended 31 March 1999 is based on the
Group profit on ordinary activities after taxation and preference dividends of
#69,700 attributed to 8,606,521 ordinary shares, being the weighted average
number of ordinary shares in issue throughout the year (1998: 8,489,391).
Diluted earnings per share is calculated on the weighted average number of
ordinary shares assuming the conversion of all the 1,520,689 Convertible
Redeemable Cumulative Preference Shares (7,603,445 ordinary shares) and the
exercise of share options (75,790). Group profit on ordinary activities after
taxation has been adjusted for the preference dividend paid. 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.
2. The financial information for the year ended 31 March 1998 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 1999 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 10.00am on 5 August 1999.
Enquiries: Roger Barnett
Feedback plc
01892 653 322
END
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