RNS Number:1687U
Cyberview Tech Inc
02 April 2007
2 April 2007
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
Cyberview Technology, Inc. ("Cyberview" or "the Company"), a leading provider of
server-based systems to the gaming industry, today announces its preliminary
results for the year ended 31 December 2006.
Financial Highlights
*Turnover for the year increased 57% to #24.6m (2005: #15.7m).
*Operating profit (before exceptional items and share-based compensation)
of #100k (2005: loss #145k).
*Loss after tax for the year of #121k (2005: #574k).
*Cash balance at year end was #15.9m (2005: #16.7m) and net funds stood at
#15.7m (2005: #15.7m).
Business Highlights
*Launched new "Lara" terminal, which has been successful in increasing
revenues and lowering cost of operations for our customers.
*Received order for 7,000 Lara terminals from Ladbrokes in 2006, 3,000 of
which were delivered in 2006, confirmed Cyberview as sole supplier to
Ladbrokes.
*Strengthened management team with the appointments of Seamus McGill as
Chief Executive Officer and David Purvis as Managing Director based in the
UK.
*Sold a further 747 terminals in the Czech Republic during 2006.
Additional orders placed for 440 Lara terminals to be delivered in first
half of 2007.
*Signed license agreement with Codere for use of Company's server-based
technology.
*Launched Retrofit Kits which enable old terminals to be connected to
Cyberview's server-based platform.
*Progressed with gaming license applications in key US markets.
*Honoured with four gaming industry awards for excellence in new
technology applications and improvements.
For further information, please contact:
Cyberview Technology, Inc. 020 7761 3000
Mark Nanovich
Hogarth Partnership 020 7357 9477
Fiona Noblet
Arbuthnot Securities 020 7012 2000
Nick Marsh
Chairman's Statement
2006 was a very important year for Cyberview on a number of fronts:
*Reinforced key relationships with existing customers including Ladbrokes;
*Entered into new business relationships with operators such as Codere;
*Strengthened executive management team;
*Entered new markets including South America; and
*Enhanced our technology base.
Server-based gaming continues to gain widespread industry recognition as the
next innovation in gaming. This technology shift, which was already widespread
in Europe, is now gaining momentum in traditionally conservative markets such as
North America, which is the largest gaming market worldwide.
Although there still remain a number of challenges for the Company, 2006 was a
year of achievement in terms of proving to the industry that our vision of
server-based gaming as being the next replacement cycle was right, further
demonstrating the innovation and underlying value of our patented technology.
People and Management
In Q4 of 2006, the Company strengthened its management team to enable it to meet
the challenges of future growth. Seamus McGill joined as Chief Executive
Officer. Seamus brings a wealth of international gaming and business experience
to the Company, which will assist us in building upon our position as a leader
in the provision of server-based gaming technology. Prior to his appointment
Seamus was Executive Vice President and Managing Director of international
operations for WMS Gaming Inc.
David Purvis was appointed as Managing Director. Prior joining us David held the
position of Sales and Marketing Director at Inspired Gaming Group plc. David
brings considerable experience and knowledge of the UK betting and gaming
industry and will help us grow and expand our footprint in the Fixed Odds
Betting Terminals (FOBTs) and gaming markets both in the UK and internationally.
As Executive President, Jean-Marie Gatto will continue to drive our technology
innovation and lead key development projects, as well as overseeing the overall
strategy of the Company.
Markets
In 2006, we cemented our position in key markets. A major highlight was the
order from Ladbrokes for 7,000 of our newly designed Lara terminals. 2007 will
see the introduction of new gaming regulations in the UK, which we anticipate
will provide us with further opportunities in this market.
Also during the year we established field trials and established footholds in
several new markets in South America and Europe.
Server-based technology in the US (over 800,000 gaming machines), is viewed as
the next replacement cycle for the gaming industry. Numerous industry reports
state that 72% of casino operators surveyed said they would install downloadable
games, confirming the acceptance of this new technology. Industry observers
believe that gaming manufacturers are set to capitalise not only on the global
expansion of gaming but also on this replacement cycle. They also predict that
this new technology has the potential to replace approximately 80 percent of the
current slot machines over a three to four year period beginning in 2008.
During 2006, we also moved forward with regulatory and licensing milestones,
particularly in the US. Although on a longer timescale than anticipated, key
regulations have now been released or are being finalised in relation to
server-based systems. The process gained momentum in 2006 with the issuance of
server-based technical standards in multiple jurisdictions.
Technology
During 2006, we continued to expand upon our pioneering development of
server-based gaming. We introduced and sold our next generation gaming terminal
(Lara), which has proven to be very successful with both operators and players.
We also developed a range of innovative functionalities and tools enabling
further capabilities of our platform.
In late 2006 and early 2007, our latest innovations were, once again, honoured
with three industry awards in the first-ever Top Twenty International Gaming
Products competition. In addition, for the third year in a row, the Company
received recognition for excellence and innovation in the annual Gaming &
Technology awards. These awards were granted by gaming industry experts and
reinforce Cyberview's position as a leader in innovation in the gaming industry.
Summary
The Company is yet to fully realise the potential of its server-based
technology. Our experience and know how are underpinned by strong intellectual
property and a growing portfolio of patents. We consider that our strong patent
position will be crucial to our growth and success. This is especially true in
the US market, where patenting of intellectual property is key to forming
strategic alliances.
Overall, we believe we are now positioned to capitalise on our many years of
investment and our experience in server-based gaming. Although faced with
challenges, such as a slow regulatory environment and the long process of
obtaining gaming licenses, Cyberview is focused on driving profitability through
delivering a high quality product and service to its customers.
Chief Executive Officer's Statement
The Company made progress during 2006. We reported a 57% increase in turnover
compared to 2005 and despite significant investment in research and development,
our cash balance remained strong at #15.9m.
In 2006, new strategic initiatives were embarked upon that will position
Cyberview for growth and value. I joined the company as CEO at the end of
September and spent the first two months recruiting key personnel in the UK and
US. In addition, our executive team developed a comprehensive road map to
execute the strategy for achieving future growth and profit opportunities. The
goal is that in time for G2E, the world's largest gaming exhibition in Las Vegas
in November 2007, we will have significantly more technology and games to
support our growth.
Guided by Jean-Marie Gatto's innovative vision, we are committed to sustaining
our leadership role in secure server-based gaming systems with further
development and innovations.
Strategy
Our strategy is to provide our patented server-based technology on a recurring
revenue basis:
*either as a complete turnkey solution to gaming operators in various
markets, such as Casinos, Betting Shops, Bingo Halls or Lotteries; or
*to supply either key components of our technology or IP under licensing
agreements to gaming operators or manufacturers.
In 2006, the Company derived revenues from both elements of this strategy.
Operational Overview
A key achievement for the Company in 2006 was the order from Ladbrokes for 7,000
Lara terminals. Equally important in terms of strategic achievement, we entered
into agreements to license our technology to operators such as Codere, for
territories in South America, and Atlantis World/HBG Connex, in Italy. These
agreements have been a major milestone for Cyberview, as for the first time, the
Company has supplied its server-based technology to customers for use with their
own terminals. These agreements validate Cyberview's strategy of positioning
itself as a technology provider to the gaming industry.
Technology
During 2006, Cyberview re-confirmed its ability to innovate, and provide
pioneering features and functionalities. The Company has built on its strong
technical know how and proprietary technology to develop and launch new products
including:
* Lara
This state of the art dual screen terminal has proven to be a major success. Our
customers have seen an improvement in revenues generated and lower operating
costs, whilst the players get an enhanced gaming experience. We view the Lara
terminal as a valuable asset as we move forward in other non-casino gaming
markets.
* Retrofit Kits
We developed Retrofit Kits for any legacy gaming machines. The Retrofit Kits
allow standalone terminals to become connected to our server-based platform.
This kit provides a cost effective method to upgrade to a server-based system
and for operators to access the advantages of this technology.
* GDK (Award winner)
The Company's Game Development ToolKit (GDK) enables third-party developers to
create games for the Company or gaming operators on the Cyberview platform. The
GDK is available directly to Cyberview customers enabling a new level of
flexibility and control to design their own games either in-house or through
third party developers. The GDK allows operators and the Company to fulfil an
increasing demand for new and more entertaining games.
* RDA (Award Winner)
The Remote Diagnostics Application (RDA) is designed to enable operators to
resolve more gaming machine problems from the back-office. Overall the RDA can
lead to an optimisation of filed support resources, a reduction in the downtime
of gaming machines and also the ability to decrease the number of technicians
required. This product has been recognised by industry experts for the
significant cost savings associated with its implementation.
* SIVT (Award winner)
The Secure Interactive Video Lottery Terminal (SIVT) platform is designed to
ensure fail-safe security in IVT environments, where everyday challenges range
from unsupervised street operations, to areas where telecommunication is
unreliable. The SIVT brings a new dimension in security, in addition to all its
server-based capabilities, including game download and peripheral upgrades.
* Games
Cyberview continued to work on developing its games portfolio during 2006 and
will continue to do so in 2007, with a strong focus on providing a complete
range of new content for our customers. We are looking forward to breaking new
grounds in the gaming industry with our agreement with Ubisoft (one of the
world's largest video games publisher), whereby we will develop games to target
the next generation of players raised on video games.
Patents
The underlying strength of Cyberview lies in its technology and IP, which
underpins our strategy to be a technology provider to the gaming industry. Since
inception, the Company has focused on building and protecting its portfolio of
IP. During 2006, the Company was granted further patents, and has filed numerous
new applications.
Commercial success in markets, particularly the US, is dependent on a protected
IP base. The Company's portfolio of IP is a key element in its ability to
succeed as the shift to server-based gaming takes place in the North American
market.
Operations
UK Market
The UK continues to be our strongest and most established market and we have
made it a priority to expand and build upon this base.
We have a valuable long-term relationship with Ladbrokes, the worlds leading
fixed odds betting company. We are the sole supplier to Ladbrokes of FOBTs for
their estate of UK betting shops. Following the contracts for 7,000 Lara
terminals for the replacement cycle of their entire FOBT estate, we delivered
3,000 terminals in 2006 (mostly in Q4) and delivered the balance of 4,000
terminals during Q1 2007.
Going forward in the UK, we have key initiatives in place to attract new
customers to our FOBT product line including the new Lara terminal. We are
targeting additional business opportunities with existing and new customers by
offering new products and services.
We are in the process of preparing for the new regulations expected to affect
every type of gaming in the UK. The regulations are currently being finalised
and will come into effect as early as 1 September 2007. These should provide
exciting new opportunities and growth potential for Cyberview in the UK gaming
market. We have been actively participating in the consultation process with the
regulators and working to ensure our products will be fully tested and certified
prior to the 1 September deadline.
These new regulations will allow Cyberview to introduce new types of games in
existing estates including "jackpot games", which the Company already has in its
games portfolio for its international markets. In addition, we have a strong
advantage, as our library includes games from major manufacturers such as Konami
and WMS Gaming. Also, our new Lara terminal is already proving successful and
will be compatible with these new regulations.
US
In the US, the largest regulated gaming market worldwide, the Company has
positioned itself as a technology supplier to the gaming industry as a whole,
including both gaming operators and manufacturers.
Our strategy in the US is based upon:
*Selling or licensing our technology and/or platform to major operators.
*Providing turnkey solutions to smaller casinos.
*Licensing our IP and/or partnering with gaming manufacturers.
Major gaming operators are currently evaluating the Company's system in their
test laboratories. This is the first step taken by the Company to gain
acceptance as a potential supplier to the largest gaming operators in the world.
As the gaming industry in the US is highly regulated, our priority is to
continue to be extremely active with both technology certification and gaming
licenses.
* Technology Certification
It has been necessary to work with regulators on the development of new
technical standards on server-based gaming, to allow the implementation of this
technology. These efforts have taken considerable time and effort. The last 12
months have seen a flurry of new regulations regarding server-based gaming. New
Jersey, Nevada, and Gaming Laboratories International (GLI) have all recently
issued either new or heavily revised versions of server-based gaming regulations
and standards.
We have been one of the most active companies in working with regulators on
these new standards. This is demonstrated by Cyberview being invited to consult
with regulators from the States of Florida, Pennsylvania, New Jersey,
Connecticut and New Mexico, as they draft rules and regulations regarding
server-based gaming.
We are pleased to report that, every jurisdiction that has been asked to expand
their rules to include server-based gaming has approved it in one form or
another. Over the next twelve months, we will continue to play a leading role in
the formulation of server-based gaming standards and controls throughout North
America.
* Gaming Licenses
Another essential step was to finalise our applications to gain gaming licenses
in key jurisdictions. In New Jersey, our application was deemed complete on 6
September 2006 and the due diligence process is now well underway. In
Pennsylvania, the Company's investigation is in the final stages, which we are
anticipating will be considered by the Pennsylvania Gaming Control Board
sometime in Q2 of 2007. Pennsylvania will become one of the largest new American
gaming jurisdictions of consequence since the 1990s. In February 2007, we
applied for a gaming license in Nevada, one of the world's largest markets and
home to many of the major gaming operators.
* New Casino Terminal
We are in the final development stage of designing a new terminal specifically
for this market, which will enable us to improve our state of the art turnkey
solution in 2007. This new terminal will include all the innovations that we
have implemented in Lara, as well as additional features required for the North
American casino market. This terminal will have the potential to be rolled out
in other territories, which have similar high tech specifications.
International
Although our penetration of the international market has proven more challenging
than expected, our international exposure increased in 2006. We have deployed
our technology in new markets including expanded regions of Europe and South
America.
* South America
Our experience in South America shows us that significant opportunities exist
for us there. To take advantage of this potential, Cyberview has appointed a new
Sales Manager focused on Central and South America. This will enable Cyberview
to enhance its presence and have a better focus in these territories.
In 2006, we started a project with Codere, a leading gaming operator. Codere
utilises the Cyberview Retrofit Kits to convert their older standalone gaming
machines into modern video terminals with server-based downloadable gaming
capability. The roll-out of terminals has now started in Colombia. The project
also involves the licensing of our platform enabling Codere to connect the newly
retrofitted terminals to our server. This enables them to benefit from our state
of the art security and audit capabilities as well as the download of games and
estate wide jackpot feature.
We have refocused our business in Venezuela and changed distribution partners in
order to realise the potential in this market. This change may delay the planned
shipment of gaming terminals into this market. The Company has decided to put on
hold the multi-draw jackpot project.
* Rest of the World
Cyberview has established a presence in various European markets in the past
year.
Currently, our biggest customer in these territories continues to be Sazka in
the Czech Republic. Sazka is the largest lottery operator in the Czech Republic.
We sold an additional 747 terminals in 2006 and have orders for a further 440
terminals which will be delivered in the first half of 2007. These additional
orders will bring the total number of terminals sold to Sazka to 1,800.
Cyberview signed two major technology licensing agreements in Italy in 2006 with
Atlantis World and HBG Connex, which combined, operate over 66,000 gaming
machines. These agreements involve the licensing of the Cyberview platform to
provide security and audit capabilities to current AWP type machines in this
market. They also place Cyberview as exclusive supplier to both companies when
new regulations are introduced to allow video lottery terminals (VLT's) in Italy
. The roll-out under these agreements has been delayed due to regulatory issues.
Several trials are underway or due to commence shortly in Europe and South
America involving in excess of 200 terminals. One of these trials is currently
taking place in Slovakia with Gaver, a subsidiary of Slov-Matic, the leading
gaming operator in the market. Cyberview is actively working on developing its
presence in these markets.
The flexibility of our platform allows us to adapt to many different regulatory
environments. The fact that our platform is already GLI 21 (standard for
server-based downloadable systems) approved is facilitating our entry into new
markets as regulators tend to adopt similar standards.
* IBS
Our International Sports Betting (IBS) product is now part of our catalogue of
solutions. IBS offers a wide range of sports betting to licensed premises and
provides customers with the ability to widen their offering to players. We have
installed our IBS system in several international markets including South
America, Eastern Europe and Russia. We also are looking at extending the
penetration of this product to South Africa. The Company is reviewing the
commercial potential of each market.
Outlook
For the remainder of 2007, we will focus on exploiting the opportunities
available within the various international gaming markets, including:
*Taking advantage of the new UK regulations, which we believe will create
significant value for the Company;
*Capitalising on the issuance of technical standards for server-based
gaming in key jurisdictions in the US; and
*Advancing the completion of our gaming license application process which
is already well under way in major US jurisdictions.
Using its strong IP backbone and enhanced technology, the Company will focus on:
*Increasing the footprint and profitability of our UK market;
*Consolidating our position in the Czech Republic;
*Expanding our international exposure in Europe and South America; and
*Positioning ourselves to penetrate the lucrative North American market by
the end of 2007.
Finance Director's Review
Turnover
Turnover for 2006 totalled #24.6m (2005: #15.7m) which consisted of #14.3m
(2005: #9.8m) for FOBTs/Bet Capture; #5.5m (2005: #2.8m) for license fees; #4.4m
(2005: #3.0m) for VLTs and #0.3m (2005: #0.1m) for IBS. The license fees
represent non-recurring sums under contract from WMS Gaming, Inc. The increase
in turnover from the FOBTs/Bet Capture business was primarily attributable to
the non-recurring revenues in the second half of 2006 from the sale of 3,000
terminals to Ladbrokes compared to 715 terminals in 2005, which was partly
offset by the William Hill contract which ended in January 2006. Turnover from
the video lottery operations increased in line with the number of terminals sold
during 2006 (747 compared to 613 in 2005) and uplift in recurring revenues from
the underlying increase in the installed base.
Gross profit
The increase in gross profit to #10.1m (2005: #7.9m) was largely attributable to
license fees. The margin from the increase in sales of FOBT terminals was partly
offset by the reduction in margin from the non-renewal of the William Hill
contract.
Operating expenditure
Investment in research and development increased during the year to #5.5m (2005:
#4.3m). This was primarily due to an increase in headcount and reflects the
Company's commitment to increase its product offering in markets outside the UK.
We are actively working on maintaining our server-based technology lead, as well
as increasing our game content. Increased efforts internationally have resulted
in the rise in sales and marketing costs to #2.4m (2005: #2.1m). Administration
costs of #2.1m (2005: #1.6m) increased as a result of becoming a public company
in July 2005.
The average monthly number of employees for the year was 135 (2005: 106). The
increase was due to the enhancement of international operations. Average staff
numbers at our Czech Republic operations increased by 19 to 27 and our US
personnel, which are involved in activities across the Group, by 10 to 22.
Following the adoption of FRS 20 "Share-based Payment", a compensation charge of
#281,000 (2005: #103,000) arose on options issued to employees and directors.
There is no cash impact from this new expense, and no impact on net assets,
since the charge is taken to reserves.
The exceptional items include a #331,000 write down in the book value of FOBTs
and associated equipment relating to the non-renewal of a contract. The
terminals were supplied on a profit share basis and owned by Cyberview. The
Company is continuing to seek opportunities to place these terminals. The
balance of exceptional items of #212,000 represents a provision against assets
associated with the Company's IBS venture in Venezuela arising from the
uncertainty over the recoverability of monies owing.
Balance sheet
The cash balance as at 31 December 2006 was #15.9m and net funds stood at
#15.7m. The marked increase in the value of inventory #7.1m (2005: #2.5m) mainly
comprises of complete Lara terminals and component parts associated with the
supply of 4,000 terminals to Ladbrokes in Q1 2007. Similarly, the increase in
creditor balances falling due within one year of #12.8m (2005: #3.5m) is linked
to the supply of Lara terminals. The difference represents deposits paid by
customers and amounts owing to manufacturing subcontractors. The debtors balance
increased to #6.2m (2005: #2.4m) as a result of advance payments to suppliers to
meet orders for Lara terminals and the license fee payment due from WMS Gaming
Inc. of #2.6m.
IFRS
As an AIM listed company Cyberview will adopt International Financial Reporting
Standards ("IFRS") for our financial statements for the periods beginning 1
January 2007. The Directors have not yet completed a full review of the impact
if IFRS but do not anticipate a material adjustment to the financial statements.
Consolidated Profit & Loss Account
For the year ended 31 December 2006
Notes Unaudited Audited
2006 2005
Restated
#'000 #'000
Turnover 24,575 15,664
Cost of sales (14,461) (7,714)
--------- ---------
Gross profit 10,114 7,950
--------- ---------
Research & development costs (5,454) (4,330)
Sales & marketing (2,422) (2,117)
Administration costs (2,138) (1,648)
Share-based compensation (281) (103)
Exceptional items 2 (543) (530)
--------- ---------
Operating loss (724) (778)
--------------------------------- -------- --------- ---------
Operating profit/(loss) before exceptional items
and share based compensation 100 (145)
Share-based compensation (281) (103)
Impairment of fixed assets (331) (400)
Provision against business assets (212) -
Redundancy costs - (130)
--------- ---------
Operating loss (724) (778)
--------------------------------- -------- --------- ---------
Interest receivable 633 313
Interest payable (11) (94)
--------- ---------
Loss on ordinary activities before taxation (102) (559)
Tax charge on loss on ordinary activities 5 (19) (15)
--------- ---------
Loss for the financial year (121) (574)
========= =========
Basic and diluted loss per share 4 (0.80p) (4.48p)
========= =========
All of the Group's activities are continuing.
Statement of Group Total Recognised Gains & Losses
For the year ended 31 December 2006
Unaudited Audited
2006 2005
Restated
#'000 #'000
Loss for the financial year (121) (574)
Currency translation differences on foreign currency
investments (1,208) 162
---------- ---------
Total recognised losses for the financial year (1,329) (412)
========== =========
Reconciliation of Movements in Group Shareholders' Funds
For the year ended 31 December 2006
Unaudited Audited
2006 2005
Restated
#'000 #'000
Loss for the financial year (121) (574)
Dividend accrual on preferred shares - (318)
---------- ---------
(121) (892)
Currency translation differences on foreign currency
investments (1,208) 162
Net proceeds from equity shares issued 6 20,256
Share-based compensation 281 103
Preference shares dividend paid - (780)
Reversal of non-equity appropriations - 318
---------- ---------
Net (decrease)/increase in shareholders' funds (1,042) 19,167
Opening shareholders' funds 19,807 640
---------- ---------
Closing shareholders' funds 18,765 19,807
========== =========
Consolidated Balance Sheet
As at 31 December 2006
Unaudited Audited
2006 2005
Restated
#'000 #'000
Fixed assets
Intangible assets 918 503
Tangible assets 1,617 1,422
---------- ---------
2,535 1,925
Current assets
Stock 7,112 2,488
Debtors 6,150 2,371
Cash at bank and in hand 15,885 16,732
---------- ---------
29,147 21,591
Creditors: amounts falling due within one year (12,787) (3,509)
---------- ---------
Net current assets 16,360 18,082
---------- ---------
Total assets less current liabilities 18,895 20,007
Creditors: amounts falling due after more than one year (50) (140)
Provisions for liabilities and charges (80) (60)
---------- ---------
---------- ---------
Net assets 18,765 19,807
========== =========
Capital and reserves
Called up share capital 9 9
Share premium account 34,126 34,120
Profit and loss account (15,370) (14,322)
---------- ---------
Total shareholders' funds 18,765 19,807
========== =========
Consolidated Cash Flow Statement
For the year ended 31 December 2006
Notes Unaudited Audited
2006 2005
Restated
#'000 #'000
Net cash inflow/(outflow) from operating
activities 6 1,284 (2,050)
Returns on investments and servicing of finance
Interest received 664 274
Interest paid (1) (650)
Interest element of finance lease payments (10) (4)
Dividend paid on preference shares - (780)
---------- ---------
Net cash inflow/(outflow) from returns on
investments and
servicing of finance 653 (1,160)
Taxation (20) (7)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,526) (567)
Purchase of intangible fixed assets (620) (165)
---------- ---------
Net cash outflow from capital expenditure (2,146) (732)
Net cash inflow/(outflow) from management of liquid
resources 263 (12,951)
Net cash inflow/(outflow) before financing 34 (16,900)
Financing
Issue of common share capital 6 23,077
Cost of issue of shares - (2,821)
Repayment of borrowings - secured loans - (500)
Capital element of finance lease payments (53) (42)
Repayment of director loans (175) (1,815)
---------- ---------
Net cash (outflow)/inflow from financing (222) 17,899
---------- ---------
(Decrease)/increase in net cash 7 (188) 999
========== =========
Notes to the Consolidated Financial Information
1. Basis of preparation
The financial information contained in these preliminary results does not
constitute statutory financial statements within the meaning of section 240 of
the Companies Act 1985. The financial information disclosed for the year ended
31 December 2006 is unaudited and has been extracted from the Group's financial
statements which will be reported on by the auditors and despatched to
shareholders shortly.
The financial information is presented on the basis of the accounting policies
of the Group set out in the Annual Report for the year ended 31 December 2005
(under the historical cost convention and in accordance with applicable
accounting standards in the United Kingdom) apart from the following changes to
accounting policies:
i. The adoption of Financial Reporting Standard 20, Share-based Payment
("FRS 20"). Refer note 3.
ii. During the period the Directors reviewed the policy with respect to
development costs. Expenditure incurred in the development of products or
enhancements during the year totalling #384,000 was capitalised as an intangible
asset as the future economic benefits expected to arise are deemed probable and
the costs can be reliably measured. Development costs not meeting these criteria
and all research costs are expensed as incurred. Capitalised development costs
are amortised on a straight line basis over their useful economic lives once the
related product or enhancement is available for use. Prior to 31 December 2005
no development costs had been capitalised.
The financial information for the year ended 31 December 2005 has been extracted
from the statutory financial statements for that year, which contained an
unqualified audit report and no adverse statement under Section 237(2) or (3) of
the Companies Act 1985. The information has been restated for the impact of FRS
20 which is unaudited.
2. Exceptional items
Unaudited Audited
Year End Year End
31 Dec 2006 31 Dec 2005
Restated
#'000 #'000
Impairment of tangible fixed assets 331 400
Provision against business assets 212 -
Redundancy costs - 130
---------- ---------
543 530
========== =========
3. FRS 20 "Share-based Payment" and prior period adjustments
The adoption during the period of FRS 20 requires that the cost of share based
payments be recognised in the profit and loss account. The only type of payment
made by the Group that constitutes a share based payment is the cost of share
options granted to employees and directors. The Black Scholes valuation model
has been used to calculate the fair value of the share options at the date of
grant. This fair value is then charged to the profit and loss account over the
vesting period of the options. Since this charge is not a cash item (it has no
effect on the Consolidated Cash Flow Statement) nor a diminution in asset value,
there is an equal and opposite credit to reserves of the amount of the share
option charge with the result that there is no net change in shareholders'
funds. This credit is reported in the Reconciliation of Movements in
Shareholders' Funds.
In accordance with the transitional provisions of FRS 20, the standard has been
applied retrospectively to all options granted after 7 November 2002 that were
not yet vested as of 1 January 2006. The charge for the year ended 31 December
2006 was: #281,000. Comparatives for the year ended 31 December 2005 have been
restated as shown below:
Audited
Year End
31 Dec 2005
Restated
#'000
Loss for financial year previously reported (471)
FRS 20 Share-based payment charge (103)
---------
Loss for financial year restated (574)
=========
4. Earnings per share
Basic loss per share is calculated on the loss for the year of #121,000
(December 2005: loss #574,000 as restated) and the weighted average number of
common shares in issue during the year of 15,147,238 (December 2005: 12,816,662)
which are at par value of US$0.001. The loss and weighted average number of
shares for the purpose of calculating the diluted loss per share are identical
to those used for the basic loss per share, as the exercise of share options and
warrants would have the effect of reducing the loss per share and is therefore
not dilutive.
5. Taxation
As at 31 December 2006, the Group has significant tax losses that will be
carried forward for utilisation against future taxable profit. The tax charge
for the year represented US state franchise taxes.
6. Reconciliation of operating loss to net cash inflow/(outflow) from operating
activities:
Unaudited Audited
Year End Year End
31 Dec 2006 31 Dec 2005
Restated
#'000 #'000
Operating loss (724) (778)
Depreciation of tangible fixed assets 561 883
Amortisation of intangible fixed assets 136 31
Write off of intangible fixed assets - 65
Provision for diminution of rental equipment 331 400
Provision for diminution against IBS business 212 -
Increase in provision for liabilities and charges 20 60
Share-based compensation expense 281 103
Decrease in deferred revenue (692) (1,451)
Increase in stocks (5,119) (902)
Increase in debtors (4,420) (275)
Increase/(decrease) in creditors 10,698 (186)
---------- ---------
Net cash inflow/(outflow) from operating
activities 1,284 (2,050)
========== =========
7. (i) Reconciliation of net cash flow to movement in net funds/(debt):
Unaudited Audited
Year End Year End
31 Dec 2006 31 Dec 2005
Restated
#'000 #'000
(Decrease)/increase in net cash in financial year (188) 999
(Decrease)/increase in liquid resources (263) 12,951
Cash outflows from decrease in debt 228 2,917
Foreign exchange movement (380) (232)
Other non-cash changes 608 1,364
---------- ---------
Movement in net funds in the financial year 5 17,999
Net funds/(debt) at beginning of the financial
year 15,653 (2,346)
---------- ---------
Net funds at end of year 15,658 15,653
========== =========
Liquid resources arise from the movement of cash balances on deposit.
(ii) Analysis of net funds:
1 Jan 2006 Cash flow Foreign Non-cash 31 Dec 2006
exchange
differences changes
#'000 #'000 #'000 #'000 #'000
Cash at bank
and in hand 1,281 (188) (396) - 697
Liquid
resources 15,451 (263) - - 15,188
--------- -------- --------- -------- ----------
16,732 (451) (396) - 15,885
--------- -------- --------- -------- ----------
Debt due
within one
year (917) 175 14 593 (135)
Debt due after
one year (99) - - 99 -
Finance leases (63) 53 2 (84) (92)
--------- -------- --------- -------- ----------
(1,079) 228 16 608 (227)
--------- -------- --------- -------- ----------
Net funds 15,653 (223) (380) 608 15,658
--------- -------- --------- -------- ----------
8. Dividends
The directors are not proposing a dividend on common shares for the year ending
31 December 2006 (2005: #nil). Dividends for the year ended 31 December 2005
were on the Company's convertible cumulative redeemable preferred shares. These
shares converted to common shares on admission to AIM in 2005.
Statement of Directors' Responsibilities in Respect of the Financial
Statements
The preliminary 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 report in accordance with the AIM rules issued
by the London Stock Exchange which require that the accounting policies and
presentation applied to the preliminary figures should be consistent with those
applied in preparing the preceding annual financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Cyberview (LSE:CYBV)
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から 6 2023 まで 6 2024
