RNS Number:2598J
Freeplay Energy PLC
21 September 2006
Embargoed until 07.00 21 September 2006
Freeplay Energy plc
("Freeplay" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
Freeplay Energy plc, the sustainable energy company that captures, stores and
delivers electric power to self-powered devices such as radios, torches and
mobile phone chargers, announces interim results for the six months ended 30
June 2006.
* Acquisition of Barrett Marketing Group Inc. and Dixie Sales Company
Inc., its wholly owned marketing and distribution subsidiary, completed on 19
July 2006
* Placing on 19 July 2006 raised #2.38 million, net of expenses, to fund
working capital and investment needs of the Enlarged Group
* Strong growth in turnover to US $3.0 million (2005 : US $1.1 million)
* Strengthened management team, including Peter Porteous as Chief Executive
* Good operational progress
- Initial shipments of Lifeline radios under Long Term Agreement signed
with UNICEF delivered in June, with remaining to be shipped by the end of
September 2006
- 5 year contract signed with WP Phones for 1.1 million FreeCharge mobile
phone units per annum in Africa and the Caribbean
- Three year licensing agreement with Nicco Industries in China for the use
of Freeplay technology
Rory Stear, Executive Chairman, commented: "The first half of 2006 has proved
very exciting for the Group. The acquisition of Dixie Sales has marked a
step-change for Freeplay and we are already seeing the benefits of having an
integrated sales, distribution and marketing function.
"The second half has started well and we are beginning to see sales from our
product launches and broadened distribution network. The Directors of Freeplay
remain confident about the prospects of the group for 2006 and beyond."
For further information, please contact:
Freeplay Energy plc 020 7851 2630
Rory Stear, Executive Chairman
Weber Shandwick Square Mile 020 7067 0700
Louise Robson/Rachel Taylor
Charles Stanley Securities 020 7149 6000
Mark Taylor / Freddy Crossley
Notes to Editors: Freeplay Energy's core technology revolves around the
efficient conversion and storage of applied human energy, and the delivery of
this energy on demand as electricity to create self-powered electronic devices.
Initial applications include radios (both consumer and humanitarian), torches,
mobile phone chargers and standalone foot chargers and the Company has a new
product development plan which anticipates broadening the application of its
technology into new product categories. Freeplay believes it was first to market
and commercialise self-powered technology and that it is recognised as a leading
brand in this market for such products. Further information about Freeplay
Energy and its products can be found at www.freeplayenergy.com.
Freeplay Energy plc
("Freeplay" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
The Board of Freeplay announces its interim results for the period ended 30 June
2006. During the period, the Group has focused its efforts on developing the
business to drive sales growth and this has involved new product launches and
development, the establishment of sales led distribution channels and investment
in operational management. The Directors believe that there is a growing demand
for sustainable energy products which underlines their confidence in the Group's
prospects in the next six months and thereafter.
Acquisition of Barrett Marketing Group Inc. and Dixie Sales Company
On 23 June 2006, Freeplay announced the acquisition of Barrett Marketing Group
Inc., and its wholly owned subsidiary, Dixie Sales Company Inc ("Dixie"),
together with a Placing to raise approximately #2.38 million net of expenses,
which completed after the period end on 19 July 2006. The acquisition of Dixie
and the fundraising marked a step-change for Freeplay, giving the Group direct
control in North America over its sales targets, through Dixie's strong formal
relationships with many US retailers and merchants. Although Dixie was not part
of Freeplay during the period under review, it has achieved its turnover and
profit forecasts for the first half of the year. Freeplay's results for the year
ended 30 December 2006 will incorporate just over five months of trading from
Dixie.
The overall integration of Dixie into Freeplay is progressing well and the Board
is examining opportunities for further synergies, specifically in the areas of
IT, human resources and logistics, where Dixie has particular expertise.
Peter Porteous, CEO of Dixie, is now Chief Executive of Freeplay and his
responsibility is the day-to-day operational focus of the business. Rory Stear
remains as Executive Chairman and he is now focusing on Group strategy and
looking for new opportunities for the Group, including new geographic markets
such as India and Brazil.
Financial Results
For the period ended 30 June 2006, turnover was US $3.0 million (2005: US $1.1
million). The improvement in turnover was achieved from a number of areas. In
North America sales were US $0.9 million (2005: negative $0.2 million). Aid
Sales of US $0.9 million (2005: US $0.2 million) also saw significant growth
following initial deliveries under the Long Term Agreement signed with UNICEF.
Revenue growth has also been seen in Africa (2006: US $0.6 million; 2005: US
$0.3 million) and Europe excluding the United Kingdom (2006: US $0.2 million;
2005: US $0.05 million). This has partially been offset by a reduction in
turnover in the United Kingdom (2006: US $0.4 million; 2005 : US $0.8 million)
following slower than expected sell through of the Digital radio ("Devo").
Gross profit improved to US $0.9 million (2005: US $0.4 million) as a result of
the increase in revenue. Administrative expenses grew by 28% to US $3.2 million
(2005: US $2.5 million) reflecting the continuing investment in business
development begun during 2005. Freeplay reported an increase in operating loss
of 8% to US $2.2 million (2005: loss of US $2.1 million) and the loss before
taxation increased to US $2.4 million (2004: loss of US $2.1 million).
The Group utilised research and development tax credit claims of US $0.1 million
bringing the loss for the financial year to US $2.3 million (2005: US $2.1
million). The loss per share for the period was US $0.08, compared with a loss
of US $0.12 for the same period last year.
During the period net debt increased by US $2.8 million (2005: reduction of US
$6.2 million). This was due to losses from the first six months operations (US
$2.2 million), an increase in debtors of US $0.5 million following the increase
in trade and an increase in inventories (US $0.3 million). This was partially
offset by a reduction in trade and other liabilities (US $0.2 million). At 30
June 2006, Freeplay had a net overdraft of US $4.0 million.
Following the Placing on 19 July 2006, US $4.4 million was raised net of
expense. This will be used to repay debt (US $2.2 million), some investment in
new tooling (US $0.2 million), with remainder (US $2.0 million) to sustain
ongoing working capital requirements.
A Pro Forma Consolidated Balance Sheet as at 30 June 2006 has been included at
the end of this announcement in order to provide an indicative expected impact
of the acquisition of Barrett Marketing Group Inc.
Operational Review
Product Development
The Group has made good progress with its product development plan and has now
brought to market all the new products scheduled to date. As a result, the
Freeplay product range has increased to 17 as at 19 September 2006.
Production continues to progress in line with our development plans. During the
period, the Group commenced shipments of the Weza, the FreeCharge portable
energy source and the 12V FreeCharge Mobile Phone Charger. In addition,
Freeplay has been notified by the European patent office that a patent has been
granted for the Weza in Europe. This follows on from the approval by the UK
Patent Office in March of this year.
The Group has also completed the deliverables required under the first phase of
the project to develop a self powered laptop for the Massachusett's Institute of
Technology "One Laptop per Child" project.
On 14 September 2006, the Group signed a three year licensing agreement with
Nicco Industries, a Chinese manufacturer of sustainable energy products, whereby
Nicco will incorporate Freeplay's leading technology in a range of its
flashlights, which are specifically designed for the North American market.
On 19 September, Freeplay launched its latest product, the Freeplay Indigo LED
Lantern, a modern version of an old style camping lantern, which will be
available through all major retailers in the UK from September 2006. This
follows the successful launch in North America through Dixie Sales, where the
lantern is already being sold through retailers such as Target and REI. Using
Freeplay's self-sufficient, leading energy technology, the Indigo is believed to
be the most reliable and dependable lantern in the market today.
The Group has continued to make progress on adapting medical devices, including
a foetal heart rate monitor and pulse oximeter, to be driven by human power.
Manufacturing
Freeplay's products are currently manufactured through five factories in China,
which allows the Group to take advantage of the specialist manufacturing and
technologically advanced capabilities needed for its newer products and provides
the Group with enough capacity for its current growth plans, thereby reducing
reliance on a single provider.
Sales and Distribution
We have made strong progress in North America following the first complete
period of trading under the exclusive distribution agreement signed with Dixie
Sales Company in May 2005. The distribution relationship with Dixie Sales has
achieved notable recent success in signing up and receiving orders from retail
groups in the North American market, including Target, Tractor Supply Company,
Sharper Image and REI. In addition, Dixie has signed Philips, the consumer
electronics company, as a new customer in Canada, which indicates the strength
of Dixie and its ability to sign up key consumer brands. The acquisition of
Dixie Sales brings us a dedicated sales team, infrastructure and reduced lead
times in North America, as well as allowing the Group to leverage Dixie's
expertise into other markets around the world. This underpins Freeplay's
optimism for achieving significant revenue growth in North America during 2006
and, in the longer term, globally.
In South Africa Freeplay completed the first shipments to its exclusive retail
distributor, Connoisseur Electronics (Pty) Limited, which was appointed on 30
March 2006. Plans are in place to extend to sectors and products not covered by
this agreement, including a direct sales approach. During the period, a number
of regional non-exclusive distribution partners were appointed throughout
Southern Africa and Freeplay has opened an office in Nairobi to support
customers in the strategically important East Africa.
On 15 May 2006, we announced a five year distribution agreement with WP Phones
for the FreeCharge mobile phone charger in sub-Saharan Africa for a minimum of
one million units per annum. The agreement was subsequently extended to cover an
additional 100,000 units for the Caribbean, bringing the total agreement to 1.1
million units per annum over the next five years. During the period we have been
working closely with WP Phones to ensure that the FreeCharge is fully compatible
with WP Phones' products. We have now developed a number of customised samples
which are being tested in the market. We are currently on track to deliver the
first shipment of the fully developed product in the last quarter of 2006.
The Aid sector continues to be extremely important for Freeplay, where we have a
strong enquiry and order book. We are seeing major opportunities in Africa. The
strong performance during the first half was a result of large orders received
from Freeplay Foundation and UNICEF in April and May.
In June Freeplay signed a Long Term Arrangement with UNICEF to be the sole
supplier of the Freeplay Lifeline radio to UNICEF. The significant opening order
of 20,000 radios for Madagascar followed independent testing by UNICEF and makes
the Lifeline radio available to the entire United Nations through UNICEF. The
second half of the 20,000 unit UNICEF order will be shipped in late September.
We continue to work closely with the Freeplay Foundation and have received a
further order for 10,000 Lifeline radios, which will be delivered at the end of
the third quarter.
The UK market slowed during the first half of 2006. We saw further deliveries of
the Devo, our DAB digital radio, in the first half and continue to see sell
through. Current pipeline orders indicate that the UK will achieve a consistent
level of sales by the end of 2006. Since the period end, the Group received a
large order of 24,000 units, through Tango Group, from the Gurkha Welfare Trust
for Ranger radios and Kito lanterns. This order was shipped on 31 August 2006. A
key focus in the UK is distribution and during the period we have appointed
Rocom as a distributor to work alongside Tango Group. In addition, Freeplay are
engaging directly with key retailers.
In Continental Europe, we continue to deliver through several small distributors
to serve the Dutch and French markets. Further orders have been received in
these areas, including a 7,000 unit order for a range of Freeplay products from
Catter, our main European distributor, and new regions are being pursued in
varying degrees of progress.
People
Through the acquisition of Dixie, Freeplay has significantly strengthened both
its Board and senior management team.
Peter Porteous, CEO of Dixie, was appointed chief executive of Freeplay and
William and Edward Barrett, Harold Reiter, Barrett Corporation President and COO
and Stuart Kinney, Barrett Corporation General Counsel joined as non-executive
directors. Both Rory Stear and Richard Court remain as Executive Chairman and
Finance Director respectively.
We were pleased that the senior management team of Dixie joined the Freeplay
Energy Group at the time of the acquisition and look forward to working with
Mike Rounsavall, recently promoted to President, and his team in North America,
where their expertise in sales, marketing and distribution is already proving to
be of significant benefit to the Group, continuing to grow Dixie's traditional
business and expanding the Freeplay brand in North America and globally.
Focus has been on growing and supporting the Business Development team to drive
revenue. David Floyd joined as Business Development Manager for Europe in
February 2006 and his remit is to lead growth in the region. Sameer Hajee, who
joined in December 2005, is Business Development Manager for the Aid business
and, continues to make considerable progress in growing sales in this area. In
addition, we are now seeing the benefits from having Jenny Kotze, who has been
Business Development Manager for Africa for eighteen months. We will continue to
seek suitable new candidates who will be able to work with us to expand the
business.
The Board would like to thank all the Freeplay employees for their considerable
hard work during the year and welcome the Dixie employees to the Group.
Current Trading and Outlook
The efforts and changes implemented throughout the business since flotation in
March 2005 have begun to bear fruit. Freeplay has and continues to experience a
significant increase in orders, which are underpinned by the investment in the
new business development team. We continue to see numerous opportunities for
Freeplay's existing set of sustainable energy products, particularly in lighting
and mobile telephony, which underpins our confidence in achieving a significant
uplift in revenue during 2006 and beyond.
Freeplay's strategy to develop the Group into a broad based sustainable energy
company remains sound. There are exciting growth opportunities in the current
product range as well as in the wider market place.
The second half has started well and we have begun to see sales from our recent
product launches, including the Indigo lantern where we started shipments to key
retailers in September, and our broadened distribution network. In the short
term the Board's focus is to fully integrate Dixie into the Group and for the
new management team to unlock the potential of the current product range in the
Group's core markets. The Directors of Freeplay remain confident of the
prospects of the Group for 2006 and beyond.
For further information, please contact:
Freeplay Energy plc 020 7851 2630
Rory Stear, Executive Chairman
Weber Shandwick Square Mile 020 7067 0700
Louise Robson/Rachel Taylor
Charles Stanley Securities 020 7149 6000
Mark Taylor/Freddy Crossley
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30 June 2006
Notes For the six For the six For the year
months ended months ended ended 30
30 June 2006 30 June 2005 December 2005
(Unaudited) (Unaudited) (Audited)
US $'000 US $'000 US $'000
------------------------- ------ --------- --------- ---------
Turnover - continuing
operations 3,001 1,129 3,083
Cost of sales
- continuing operations (2,074) (728) (1,977)
------------------------- ------ --------- --------- ---------
Gross profit 927 401 1,106
Net operating expenses -
continuing operations (3,162) (2,471) (5,524)
------------------------- ------ --------- --------- ---------
Operating loss
- continuing operations (2,235) (2,070) (4,418)
Interest receivable and
similar income - 11 36
Interest payable and
similar charges (128) (66) (129)
------------------------- ------ --------- --------- ---------
Loss on ordinary
activities before
taxation (2,363) (2,125) (4,511)
Tax credit on loss on
ordinary activities 58 - 212
------------------------- ------ --------- --------- ---------
Loss for the financial
period (2,305) (2,125) (4,299)
------------------------- ------ --------- --------- ---------
Basic and diluted loss
per 5p ordinary share
(in US $) 1 (0.08) (0.12) (0.22)
------------------------- ------ --------- --------- ---------
CONSOLIDATED BALANCE SHEET
At 30 June 2006
30 June 2006 30 June 2005 30 Dec 2005
US $'000 US $'000 US $'000
(Unaudited) (Unaudited) (Audited)
--------------------------------- --------- --------- ---------
Fixed assets
Tangible assets 574 455 651
Investments - - -
--------------------------------- --------- --------- ---------
574 455 651
Current assets
Stocks 1,094 504 838
Debtors 3,131 2,640 2,643
Cash at bank and in hand 25 702 325
--------------------------------- --------- --------- ---------
4,250 3,846 3,806
Creditors: amounts falling due
within one year (including
convertible loan stock) (7,376) (2,827) (4,661)
--------------------------------- --------- --------- ---------
Net current assets / (liabilities) (3,126) 1,019 (855)
--------------------------------- --------- --------- ---------
Total assets less current
liabilities (2,552) 1,474 (204)
Creditors: amounts falling due
after more than one year (32) - (45)
--------------------------------- --------- --------- ---------
Net assets / (liabilities) (2,584) 1,474 (249)
--------------------------------- --------- --------- ---------
Capital and reserves
Called up share capital 3,936 3,936 3,936
Share premium account 17,052 16,956 17,052
Merger reserve 1,947 1,947 1,947
Other reserve 60 60 60
Profit and loss account (25,579) (21,425) (23,244)
--------------------------------- --------- --------- ---------
Total shareholders' funds /
(deficit) (2,584) 1,474 (249)
--------------------------------- --------- --------- ---------
Represented by:
Equity shareholders' funds /
(deficit) (2,584) 1,474 (249)
Non-equity shareholders' funds - - -
--------------------------------- --------- --------- ---------
Total shareholders' funds /
(deficit) (2,584) 1,474 (249)
--------------------------------- --------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2006
For the six For the six For the year
months ended months ended ended 30
30 June 2006 30 June 2005 December 2005
(Unaudited) (Unaudited) (Audited)
US $'000 US $'000 US $'000
---------------------------------- --------- --------- ---------
Net cash outflow from operating
activities (2,681) (4,066) (6,206)
Returns on investments and
servicing of finance
Interest paid (102) (35) (75)
Interest element of finance lease
rentals payment (4) - (1)
Interest received - 11 36
---------------------------------- --------- --------- ---------
Net cash outflow from returns on
investments and servicing
of finance (106) (24) (40)
Taxation refund 58 - 212
Capital expenditure and financial
investment
Purchase of tangible fixed assets (52) (53) (291)
---------------------------------- --------- --------- ---------
Net cash outflow for capital
expenditure and financial
investment (52) (53) (291)
---------------------------------- --------- --------- ---------
Net cash outflow before financing (2,781) (4,143) (6,325)
---------------------------------- --------- --------- ---------
Financing
Issue of ordinary share capital - 12,318 6,650
Expense of share issue - - (2,296)
New convertible loan stock - - 2,819
Issue of preference share capital - - -
Issue of preference share warrants - - -
Capital element of finance lease
payments (4) - (1)
(Decrease)/increase in borrowings 20 (5,680) (455)
---------------------------------- --------- --------- ---------
Net cash inflow from financing 16 6,638 6,717
---------------------------------- --------- --------- ---------
Increase/(decrease) in cash (2,765) 2,495 392
---------------------------------- --------- --------- ---------
CASH FLOW FROM OPERATING ACTIVITIES
Reconciliation of operating loss to net cash outflow from operating activities:
For the six For the six For the year
months ended months ended ended 30
30 June 2006 30 June 2005 December 2005
(Unaudited) (Unaudited) (Audited)
US $'000 US $'000 US $'000
---------------------------------- --------- --------- ---------
Operating loss (2,235) (2,070) (4,418)
Depreciation charge 119 100 199
Profit on sale of fixed assets (1) - -
Increase in stocks (256) (364) (698)
Increase in debtors (488) (193) (196)
(Decrease)/increase in creditors 180 (1,484) (1,038)
Decrease in provisions - (55) (55)
---------------------------------- --------- --------- ---------
Total net cash outflow from
operating activities (2,681) (4,066) (6,206)
---------------------------------- --------- --------- ---------
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the period ended 30 June 2006
For the six For the six For the year
months ended months ended ended 30
30 June 2006 30 June 2005 December 2005
(Unaudited) (Unaudited) (Audited)
US $'000 US $'000 US $'000
---------------------------------- --------- --------- ---------
Loss for the financial period (2,305) (2,125) (4,299)
Currency translation differences
on net investment in foreign
subsidiaries (30) 360 713
---------------------------------- --------- --------- ---------
Total recognised losses for the
period (2,335) (1,765) (3,586)
---------------------------------- --------- --------- ---------
RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS / (DEFICIT)
For the six months ended 30 June 2006
For the six For the six For the year
months ended months ended ended 30
30 June 2006 30 June 2005 December 2005
(Unaudited) (Unaudited) (Audited)
US $'000 US $'000 US $'000
---------------------------------- --------- --------- ---------
Loss for the financial period (2,305) (2,125) (4,299)
Currency translation differences
on net investment in foreign
subsidiaries (30) 360 713
Net proceeds from equity shares
issued - 7,085 4,354
Conversion of loans to equity
shares - 5,231 8,060
Net proceeds from non-equity
share warrants issued - - -
---------------------------------- --------- --------- ---------
Net increase/(decrease) in
shareholders' funds/(deficit) (2,335) 10,551 8,828
Opening shareholders' deficit (249) (9,077) (9,077)
---------------------------------- --------- --------- ---------
Closing shareholders' funds /
(deficit) (2,584) 1,474 (249)
---------------------------------- --------- --------- ---------
NOTES TO THIS INTERIM ANNOUNCEMENT
1. The calculation of earnings per share is based on the loss of US $2.305
million (for the six months ended 30 June 2005: US $2.125 million; for the
year ended 30 December 2005: US $4.299 million) and on 29,110,647 Ordinary
shares (for the six months ended 30 June 2005: 18,477,610; for the year
ended 30 December 2005: 13,990,342) in issue.
2. The financial statements have been prepared on the basis of the accounting
policies set out in the Group's statutory accounts for 2005.
3. The financial information set out above does not constitute the Company's
statutory accounts within the meaning of section 240 of the Companies Act
1985.
4. The 2005 comparatives are derived from the statutory accounts for the year
ended 30 December 2005 which have been delivered to the Registrar of
Companies and received an unqualified audit report and did not contain a
statement under the Companies Act 1985, s237(2) or (3).
5. This statement will be made available online at www.freeplayenergy.com and
copies will be made available at the Company's registered office, 2 Stone
Buildings, Lincoln's Inn, London WC2A 3TH.
PRO-FORMA CONSOLIDATED BALANCE SHEET
At 30 June 2006
30 June 2006
US $'000
(Unaudited)
------------------------------------------------------------- ----------
Fixed assets
Intangible assets 7,539
Tangible assets 1,629
Investments 25
------------------------------------------------------------- ----------
9,193
Current assets
Stocks 9,546
Debtors 9,515
Cash at bank and in hand 674
------------------------------------------------------------- ----------
19,735
Creditors: amounts falling due within one year (including
convertible loan stock) (16,343)
------------------------------------------------------------- ----------
Net current assets 3,392
------------------------------------------------------------- ----------
Total assets less current liabilities 12,585
Creditors: amounts falling due after more than one year (1,263)
------------------------------------------------------------- ----------
Net assets 11,322
------------------------------------------------------------- ----------
Capital and reserves
Called up share capital 6,626
Share premium account 28,264
Merger reserve 1,947
Other reserve 60
Profit and loss account (25,575)
------------------------------------------------------------- ----------
Total shareholders' funds 11,322
------------------------------------------------------------- ----------
Represented by:
Equity shareholders' funds 10,238
Non-equity shareholders' funds 1,084
------------------------------------------------------------- ----------
Total shareholders' funds 11,322
------------------------------------------------------------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFSDAEIIFIR
Freeplay Energy (LSE:FRE)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Freeplay Energy (LSE:FRE)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
