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Market Cap
£29.24m
Change Today
0.000p ()
Share Price
6.75p
Final Results
IQE PLC
17 March 2008
17 March 2008
IQE plc
54% revenue jump drives return to operating profitability, outlook strong
IQE plc (AIM: IQE, "the Group"), the leading global supplier of advanced wafer
products and wafer services to the semiconductor industry, has announced its
Preliminary Results for the year ended 31 December 2007.
FINANCIAL HIGHLIGHTS
• Revenues jump 54% to £50.1m (2006: £32.4m), up 69% at constant exchange rates
• Continued margin improvement with gross profit up 250% to £8.2m (2006: £2.3m)
• EBITDA profit up £5.6m at £3.9m (2006: loss £1.7m) before exceptional items
• Operating profit up £4.6m at £0.6m (2006: loss £4.0m) before exceptional
items
• Cash generated from operations £1.9m (2006: outflow £4.4m)
BUSINESS HIGHLIGHTS
• Return to operating profitability demonstrating powerful, highly
leveraged business model
• Year of strong delivery on strategy
• Continued focus on high growth global markets driven by high speed
wireless communications, mobile devices, solar cells and solid state lighting
• Acquisitions made during 2006 successfully integrated into Group and
contributed strongly
• Firmly established as industry leader in advanced wafer outsourcing
TRADING OUTLOOK
• Q1 2008 continuing strongly, with revenues currently running between
30 to 40% ahead of 2007,
• Market conditions continuing to show robust demand for Gallium
Arsenide (GaAs) based products driven principally by 3G and other high speed
wireless applications
• Strong forward demand for GaAs wafers is a consequence of the rapidly
increasing number of GaAs components in each high speed mobile communication
device, resulting in demand growth for GaAs components which is significantly
outstripping growth in the overall handset and wireless communication markets.
Dr Drew Nelson, IQE Chief Executive, commenting on the results said:
"2007 saw the third consecutive year of substantial revenue growth averaging 50%
per annum and a return to operating profitability as a result of delivering on
our strategy, and our clear focus on high growth markets
"Our major markets have continued to be driven by the increasing demand for GaAs
based components for high speed, feature rich mobile devices that demand the
high levels of performance and functionality that our products deliver. IQE is
now widely recognised as the global market leader in advanced semiconductor
wafer outsourcing.
"Our strategy of focusing on rapidly growing technologies has given us a solid
base from which we can deliver continued and sustainable growth.
"Now that we are generating profits and cash from operations we have also put in
place significantly enhanced banking facilities to support our continued growth.
In the current economic climate, this new facility signals a resounding vote of
confidence in IQE's strategy, its business model and management team.
"We have maintained our strong growth throughout the first quarter of 2008, and
continue to see robust forward demand from our customers, particularly in the
high speed wireless communications sector. We are confident of another year of
strong growth."
Contacts:
IQE plc +44 29 2083 9400
Drew Nelson
Phil Rasmussen
Chris Meadows
College Hill +44 20 7457 2020
Adrian Duffield/Ben Way
Noble & Company Limited + 44 20 7763 2200
John Llewellyn-Lloyd/ Sam Reynolds
Panmure Gordon (UK) Limited +44 20 7459 3600
Aubrey Powell/ Ashton Clanfield
NOTE TO EDITORS
IQE plc is the leading global supplier of advanced semiconductor wafers with
products that cover a diverse range of applications. It is able to provide a
'one stop shop' for the wafer needs of the world's leading compound
semiconductor manufacturers, who in turn use these wafers to make the chips
which form the key components of virtually every high technology system. IQE has
particular focus on the growing global wireless sector for applications
including; mobile handsets, wireless infrastructure, Wi-Fi, WiMAX, base
stations, GPS and satellite communications; as well as for the optical
communication sector including; optical storage (CD, DVD), laser optical mice,
laser printers & photocopiers, thermal imagers, leading-edge medical products,
bar-coding, high efficiency LEDs and advanced solar cells.
The manufacturers of these chips are increasingly seeking to outsource wafer
production to specialist foundries such as IQE in order to reduce overall wafer
costs and accelerate time to market. IQE is unique in being able to supply
wafers using all of the leading crystal growth technology platforms including
Metal Organic Vapour Phase Epitaxy (MOVPE) and Molecular Beam Epitaxy (MBE) and
the Group is able to leverage its global purchasing volumes to reduce the cost
of raw materials.
IQE also provides bespoke R&D services to deliver customized materials for
specific applications and offers specialist technical staff to manufacture to
specification either at its own facilities or on the customer's own sites. This
is backed by a strategy of duplicating each key product processes over multiple
sites to assure customers of security of supply as well as provide compelling
customer benefits in terms of flexibility and predictability of cost, thereby
significantly reducing operating risk.
IQE operates six manufacturing facilities; two in Cardiff and one in Milton
Keynes in the UK; two more in Bethlehem, Pennsylvania and Somerset, New Jersey
in the USA; and its most recent acquisition in Singapore. The Group also has 11
sales offices located in major economic centres worldwide.
PRELIMINARY RESULTS 2007
1. OVERVIEW
2007 represented a major milestone for the Group as our strategy to focus on
high speed mobile products delivered solid results and clearly demonstrated the
strength of our highly geared business model.
The Group returned to operating profitability through a strong focus on high
growth markets. 2007 represents the third year of strong revenue growth
averaging 50% per annum. The acquisitions made during 2006 were quickly and
efficiently integrated within the Group, and have contributed strongly to IQE's
strategic positioning and financial performance.
Following these acquisitions the Group now has a global footprint and is widely
recognised as the leading player within the compound semiconductor wafer
industry. Furthermore, IQE is unique in being able to offer a comprehensive
product portfolio using both MOVPE and MBE production platforms across
multi-site manufacturing facilities. Our global presence is further enhanced
through our network of sales locations which provide access to all the world's
major economic regions.
IQE has also been successful in reducing its business risk by expanding the
customer base and widening the product portfolio. This diversification means
that IQE's sales are now much more closely correlated with the end markets and
in particular the market for high speed wireless communication.
2. RESULTS
Revenue of £50.1m was significantly higher than 2006 (£32.4m), representing a
year on year increase of 54% (69% underlying increase before the impact of
foreign exchange translation).
From this 54% increase in revenues the business delivered a 250% increase in
gross profit from £2.3m to £8.2m. This substantial improvement clearly
demonstrates the powerful leverage of the business model and the benefit of
improved efficiencies.
Selling, General and Administrative expenses ("SG&A") were £8.1m (2006: £6.1m),
which represents 16.1% of sales (2006: 18.7%). Before exceptional items SG&A
increased by £1.4m due to the inclusion of the two businesses acquired during
2006. In addition, during 2007 we incurred £0.4m of one-off exceptional costs
relating to the relocation of our Singapore operation to a new state-of-the-art
facility which provides considerable room for expansion, This relocation is on
track and will be completed during 2008. In 2006 we recognised an exceptional
credit of £0.2m relating to the release of an onerous lease provision.
EBITDA (before exceptional items) for the year was £3.9m (2006: EBITDA loss of
£1.7m), and operating profit (before exceptional items) was £0.6m (2006:
operating loss of £4.0m). This strong financial performance and return to
operating profitability reflect that 2007 has been a milestone year for the
Group and marks a strong delivery against a robust strategy.
Including interest and exceptional costs, the retained loss was £0.9m (2006:
loss £4.0m), representing a loss per share of 0.21 pence (2006: 1.14 pence loss
per share)
Working capital was carefully managed and increased by only £0.8m on a £17.7m
increase in revenues. This limited absorption of cash into working capital has
assisted with the strong conversion of our operating profit into a positive cash
inflow from operating activities of £1.2m (2006: outflow of £4.7m)
Capital expenditure increased to £7.8m (2006: £1.4m) as it included £2.7m
relating to the purchase of property and an investment of £3.6m in additional
capacity in specific areas to address growing demand for specific customers.
The major items of capital expenditure were funded by £5.5m of new loans. The
Group also invested £1.4m (2006: £0.2m) in development expenditure which has
been capitalised.
Net debt at December was £14.2m (2006: £5.9m). Shortly after the year end, the
Group appointed Lloyds TSB Corporate Markets as its principal banker and agreed
new, significantly increased banking facilities of up to £15.5m for the purpose
of financing growth and working capital.
3. STRATEGY
IQE's strategy is to focus on fast growth, high volume technologies, and in
particular, high speed wireless communications and consumer opto electronics.
In addition, the Group is also actively engaged in developing advanced solar
cell technology, ultra efficient LEDs and ultra high speed microprocessor and
memory chip materials technology for these fast growth, high volume emerging
markets.
In order to provide customers with the most competitive outsource wafer service
globally, IQE has developed a unique set of advantages, including :
• offering a complete range of products covering all major applications;
• offering global multi-site production capabilities in the primary
manufacturing platforms to allow efficient capacity planning and for disaster
scenario contingency;
• maintaining a broad contact base with access to all the key global markets;
• delivering benefits from economies of scale including purchasing power
and research and development efficiencies;
• promoting the sharing of best practices and innovation to deliver
improved operating and cost efficiencies; and
• providing surge capacity to meet the expected growth in demand in the
mobile device sector and other high volume activities
This strategy has delivered tangible results in the current generation of
wireless products that have dominated IQE's output during 2007 and will continue
to deliver on current and next generation products. In addition, IQE is also
able to leverage its large manufacturing capacity in order to deliver tangible
benefits to customers, staff and shareholders alike.
4. PRODUCTS AND MARKETS
Our product roadmap and strategy continues to be driven by four key market
dynamics, all of which have fast growth, high volume prospects:
• The increasing adoption of high speed mobile communications, including
3G, WiFi , WiMAX, WiBro, GPS and other wireless technologies . As mobile
technologies continue to advance at an enormous pace with new features
constantly emerging, the role of advanced compound semiconductor materials has
becomes critical in enabling high speed data processing whilst maintaining low
levels of power consumption. IQE's products are absolutely critical in the drive
to 3G and beyond, along with the need for backward compatibility and the speed
and power to accommodate features such as high resolution imaging, video, high
speed wireless data access, VoIP and satellite navigation. Each high speed
communication device now contains multiple numbers of GaAs components compared
with earlier generations, creating a powerful demand driver for GaAs components
and wafers which far outsrips the growth of the overall communications market.
• The ubiquity of applications for high volume semiconductor lasers,
including HD DVD, laser mouse, laser projection, and office and industrial
applications. In particular, laser projection is viewed as one of the most
exciting applications of this technology, eventually being incorporated into
mobile handsets
• The accelerating drive for clean, efficient and sustainable energy
sources (solar cells), and highly efficient light sources (LEDs) in order to
reduce the impact on global warming, reliance on fossil fuels and provide a much
cleaner environment. Compound semiconductors are playing a critical role, and
IQE are involved in leading edge development for these applications, having
achieved world leading results through its partners for solar cell efficiencies.
• The continuing need for higher speed, more powerful microprocessors
and higher speed, ultra high density memories. This is driving the demand for
new materials solutions based on silicon substrates including the incorporation
of compound semiconductors directly onto silicon substrates. IQE has
established powerful positions in both these technologies, working with some of
the biggest names in the industry
Each of these markets has very powerful growth potential, with wireless being
the current key driver.
5. OPERATIONAL UPDATE
Following the acquisitions in 2006, we completed a number of key operational
initiatives during 2007 to enhance the Group's productive efficiency, and
leverage the inherent large manufacturing capacity in order to offer our
customers multi-site, multi-platform manufacturing solutions. Most notably
these successes include :
• the successful integration of both acquisitions, with both subsidiaries
contributing strongly during 2007;
• securing a new state-of-the-art manufacturing facility in Singapore on very
attractive terms, with the successful installation of equipment and initial
manufacturing already commenced;
• the successful alignment of key switch technologies across the Group
for dual-site manufacture for several customers;
• the transfer to, and successful product qualification of, advanced HBT
(power amplifier) technology in Cardiff from New Jersey;
• the successful management of ramping production to satisfy rapid
growth in customer demand and;
• the successful completion of several major R&D projects which are
leading to significant follow on awards.
6. TRADING OUTLOOK
Following the successful integration of the two major acquisitions made in 2006,
the Group is widely recognised as the global market leader in advanced wafer
outsourcing. The successes of 2007 have provided clear evidence of our core
strategy delivering tangible results with a third consecutive year of
substantially increased revenue and a return to operating profitability. In
particular, with the successful qualification of various customers and new tools
during Q4'07, the year ended very strongly.
Trading for the first quarter of 2008 has continued strongly, with revenues
currently running between 30-40% ahead of the equivalent period last year, and
the market conditions for IQE's products continuing to show robust demand driven
principally by 3G and other high speed wireless applications.
Whilst we remain highly focussed on the wireless mobile communications markets,
there are also a number of other key high growth and high volume opportunities
being rapidly developed across the Group. As a result, we look forward to
another year of high growth and sustained profitability.
PRELIMINARY RESULTS FOR
YEAR ENDED 31 DECEMBER 2007
CONSOLIDATED INCOME 6 months to 6 months to 12 months to 12 months to
STATEMENT 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Note Unaudited Unaudited Unaudited Unaudited
Revenue 26,385 17,830 50,065 32,421
Cost of sales (22,031) (16,747) (41,838) (30,072)
Gross profit 4,354 1,083 8,227 2,349
Selling, general and
administrative expenses
(including exceptional
items) 3 (4,243) (3,263) (8,053) (6,050)
Operating profit/(loss) 111 (2,180) 174 (3,701)
Operating profit/(loss) % 0.4 (12.2) 0.3 (11.4)
Operating profit/(loss) 550 (2,180) 613 (3,956)
before exceptional items
Exceptional items 3 (439) 0 (439) 255
Operating profit/(loss) 111 (2,180) 174 (3,701)
Operating profit/(loss) %
before exceptional items 2.1 (12.2) 1.2 (12.2)
Finance income 53 55 58 104
Finance costs (523) (224) (1,094) (393)
Loss for the period
attributable to equity
shareholders (359) (2,349) (862) (3,990)
Basic Loss Pence per 4 (0.08) (0.61) (0.20) (1.14)
Ordinary 1p Share
Diluted Loss Pence per 4 (0.08) (0.61) (0.20) (1.14)
Ordinary 1p Share
EBITDA is calculated as
follows:
Loss for the period
attributable to equity
shareholders (359) (2,349) (862) (3,990)
Share based payments 372 330 571 501
Exceptional items 439 0 439 (255)
Net interest payable 469 169 1,036 289
Depreciation of tangible
fixed assets 1,289 935 2,400 1,617
Amortisation of intangible
fixed assets 150 90 307 136
Earnings before interest,
taxes, depreciation,
amortisation and
exceptionals (EBITDA) 2,360 (825) 3,891 (1,702)
CONSOLIDATED STATEMENT OF
RECOGNISED 6 months to 6 months to 12 months to 12 months to
INCOME AND EXPENSE 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited Unaudited Unaudited
Loss for the period (359) (2,349) (862) (3,990)
Currency translation
differences on foreign
currency net investments (510) (603) (743) (916)
Total recognised expense for
the period (869) (2,952) (1,605) (4,906)
As At As At
CONSOLIDATED BALANCE SHEET 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited
Non-current assets :
Intangible assets 12,110 11,095
Tangible assets 17,243 11,803
Total non-current assets 29,353 22,898
Current assets :
Inventories 7,643 8,580
Trade and other receivables 10,599 6,480
Cash and cash equivalents 11 4,071
Total current assets 18,253 19,131
Total assets 47,606 42,029
Current liabilities :
Borrowings (5,911) (2,754)
Trade and other payables (10,354) (8,041)
Total current liabilities (16,265) (10,795)
Non-current liabilities :
Borrowings (8,259) (7,234)
Deferred income (122) (160)
Total non-current liabilities (8,381) (7,394)
Total liabilities (24,646) (18,189)
Net assets 22,960 23,840
Shareholders' equity :
Ordinary shares 4,310 4,299
Share premium 172,183 172,030
Other reserves (1,092) (910)
Profit and loss account (152,441) (151,579)
Total shareholders' equity 22,960 23,840
Approved by the Directors of IQE plc on
16 March 2008
CONSOLIDATED CASH FLOW 6 months to 6 months to 12 months to 12 months to
STATEMENT 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Note Unaudited Unaudited Unaudited Unaudited
Cash flows from operating
activities :
Cash inflow/(outflow) from
operations 6 1,435 (982) 1,828 (4,418)
Interest received 53 55 58 104
Interest paid (335) (198) (763) (367)
Net cash inflow/(outflow)
from operating activities 1,153 (1,125) 1,123 (4,681)
Cash flows from investing
activities :
Purchase of subsidiary
undertakings 0 (11,227) 0 (11,227)
Cash acquired in subsidiary
undertakings 0 1,023 0 1,023
Development expenditure (642) (222) (1,372) (222)
Investment in other
intangible fixed assets (20) 0 (20) 0
Purchase of tangible fixed
assets (3,840) (454) (7,814) (1,431)
Proceeds from sale of
tangible fixed assets 97 91 97 251
Net cash used in investing
activities (4,405) (10,789) (9,109) (11,606)
Cash flows from financing
activities :
Issues of ordinary share
capital 26 15,868 154 15,920
Loans and leases received/
(repaid) 952 (1,077) 2,750 (1,807)
Net cash generated from
financing activities 978 14,792 2,904 14,113
Net (decrease)/increase in
cash and cash equivalents (2,274) 2,878 (5,082) (2,174)
Cash and cash equivalents
at the beginning of the period 1,263 1,193 4,071 6,245
Cash and cash equivalents
at the end of the period 7 (1,011) 4,071 (1,011) 4,071
NOTES TO THE PRELIMINARY RESULTS
1 BASIS OF PREPARATION
These unaudited preliminary results have been prepared under the historical cost
convention and in accordance with International Financial Reporting Standards
("IFRS") and interpretations in issue at 31 December 2007.
The Group published an IFRS transition statement on 14 August 2007 which set out
the effect of adopting IFRS for the Group, the basis of preparation, the
accounting policies, and details of significant adjustments in respect of the
opening balance sheet at 1 January 2006, the results for the year ended 31
December 2006 and the balance sheet at 31 December 2006. These are detailed in
Notes 8 to 10 below.
The preliminary results were approved by the Board of Directors and the Audit
Committee on 16 March 2008. The preliminary results do not constitute statutory
accounts within the meaning of the Companies Act 1985 and have not been audited.
Comparative figures in the results for the year ended 31 December 2006 have
been taken from the IFRS preliminary results transitional statement. All periods
presented are unaudited.
The preliminary results will be announced to all shareholders on the London
Stock Exchange and published on the Group's website on 17 March 2008. Copies
will be available to members of the public upon application to the Company
Secretary at Pascal Close, Cypress Drive, St Mellons, Cardiff CF3 0LW.
12 months to 12 months to
2 SEGMENTAL INFORMATION 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited
Revenue by business segment :
Wireless 38,088 20,271
Optoelectronics 9,212 10,066
Electronics 2,765 2,084
Total revenue 50,065 32,421
Operating proft/(loss) by business segment :
Wireless 3,583 (166)
Optoelectronics (2,840) (2,361)
Electronics (569) (1,174)
Total operating profit/(loss) 174 (3,701)
12 months to 12 months to
3 EXCEPTIONAL ITEMS 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited
Exceptional items comprise :
Relocation costs 439 0
Onerous lease provisions 0 (255)
Exceptional items (included in selling, general
and administrative expenses) 439 (255)
The exceptional charge of £439,000 in 2007 relates to the one-off costs incurred
in relocating the Singapore operation to a new state-of-the-art facility. The
relocation is progressing according to plan and will be completed during 2008.
The exceptional credit of £255,000 in 2006 relates to the release of an onerous
lease provision in respect of a property which the Gropup has vacated.
4 LOSS PER SHARE 6 months to 6 months to 12 months to 12 months to
31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
Unaudited Unaudited Unaudited Unaudited
Loss for the period GBP 000s (359) (2,349) (862) (3,990)
Weighted average number of ordinary shares 430,840,183 315,976,014 430,601,406 350,729,318
Diluted share options 14,883,360 8,593,469 14,883,360 8,593,469
Adjusted weighted average number of
ordinary shares 445,723,543 324,569,483 445,484,766 359,322,787
Basic loss pence per share (0.08) (0.61) (0.20) (1.14)
Diluted loss pence per share (0.08) (0.61) (0.20) (1.14)
Basic loss per share is calculated by dividing the loss attributable to ordinary
shareholders by the weighted average number of ordinary shares during the
period. Diluted loss per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares.
IAS 33 requires the presentation of diluted Loss Pence per Share when a company
could be called upon to issue shares that would decrease net profit or increase
net loss per share. For a loss-making company with outstanding share options,
net loss per share would only be increased by the exercise of the out of the
money options. Since it seems inappropriate to assume that option holders would
act irrationally, no adjustment has been made to diluted Loss Pence per Share
for out of the money share options.
5 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 6 months to 6 months to 12 months to 12 months to
31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited Unaudited Unaudited
At the beginning of the period 23,430 10,595 23,840 12,325
Loss for the period attributable to equity (359) (2,349) (862) (3,990)
shareholders
Share option costs credited to reserves 373 329 571 501
Shares issued net of issue costs 26 15,868 154 15,920
Net exchange differences offset in reserves (510) (603) (743) (916)
At the end of the period 22,960 23,840 22,960 23,840
6 months to 6 months to 12 months to 12 months to
6 CASH GENERATED FROM OPERATIONS 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited Unaudited Unaudited
Operating loss 111 (2,180) 174 (3,701)
Depreciation of tangible assets 1,289 935 2,400 1,618
Amortisation of intangible assets 183 90 307 136
Loss/(gain) on sale of tangible assets (5) 24 (5) (38)
Government grants released (19) (19) (39) (39)
Non cash share based payments 372 330 571 501
Operating profit/(loss) before changes in 1,931 (820) 3,408 (1,523)
working capital
Decrease/(increase) in inventories 451 (256) 937 (1,536)
(Increase)/decrease in trade and other (2,058) (361) (4,118) (1,930)
receivables
Increase/(decrease) in trade and other payables 1,111 455 1,601 571
Cash inflow/(outflow) generated from operations 1,435 (982) 1,828 (4,418)
As At As At
7 ANALYSIS OF NET DEBT 31 Dec 2007 31 Dec 2006
(All figures GBP000s) Unaudited Unaudited
Cash at bank and in hand 0 3,085
Highly liquid investments 11 986
Total cash and cash equivalents 11 4,071
Overdraft (1,022) 0
Loans due after one year (7,862) (7,226)
Loans due within one year (5,151) (2,731)
Finance leases due after one year (89) (7)
Finance leases due within one year (45) (24)
Total borrowings (14,170) (9,988)
Net debt (14,159) (5,917)
8 RECONCILIATION OF OPERATING LOSS FOR YEAR ENDED
31 DECEMBER 2006 12 months to
UNDER UK GAAP TO IFRS 31 Dec 2006
(All figures GBP000s) Unaudited
Operating loss per UK GAAP (3,977)
Capitalisation of development costs 222
Amortisation of intangible assets (136)
Amortisation of goodwill 166
Provision for holiday pay 24
Operating loss per IFRS (3,701)
9 RECONCILIATION UK GAAP IFRS 3 IAS 38 IAS 19 IFRS
OF SHAREHOLDERS' Re-formatted Business Intangible Assets Employee Benefits
EQUITY AT Combinations
31 DECEMBER
2005UNDER UK
GAAP TO IFRS
(All figures GBP000s) Unaudited Unaudited Unaudited Unaudited Unaudited
Non-current assets :
Intangible assets 0 0 183 0 183
Tangible assets 8,816 0 (62) 0 8,754
Total non-current
assets 8,816 0 121 0 8,937
Current assets:
Inventories 4,312 0 0 0 4,312
Trade and other receivables 3,404 0 0 0 3,404
Cash and cash equivalents 6,245 0 0 0 6,245
Total current assets 13,961 0 0 0 13,961
Current liabilities:
Borrowings (1,739) 0 0 0 (1,739)
Trade and other payables (4,616) 0 0 (117) (4,734)
Total current liabilities (6,355) 0 0 (117) (6,473)
Non-current liabilities:
Borrowings (3,646) 0 0 0 (3,646)
Deferred income (199) 0 0 0 (199)
Provision for liabilities
and charges (255) 0 0 0 (255)
Total non-current
liabilities (4,100) 0 0 0 (4,100)
Net assets 12,323 0 121 (117) 12,325
Shareholders' equity:
Ordinary shares 3,163 0 0 0 3,163
Share premium 157,264 0 0 0 157,262
Other reserves (509) 0 0 0 (509)
Profit and loss account (147,594) 0 121 (117) (147,591)
Total shareholders'
equity 12,323 0 121 (117) 12,325
UK GAAP IFRS 3 IAS 38 IAS 19 IFRS
10 RECONCILIATION Re-formatted Business Combinations Intangible Assets Employee Benefits
OF SHAREHOLDERS'
EQUITY AT 31
DECEMBER 2006
UNDER UK GAAP TO IFRS
(All figures GBP000s) Unaudited Unaudited Unaudited Unaudited Unaudited
Non-current assets :
Goodwill 10,903 (2,303) 0 0 8,600
Intangible assets 0 2,172 323 0 2,495
Tangible assets 11,861 0 (58) 0 11,803
Total non-current
assets 22,764 (131) 265 0 22,898
Current assets:
Inventories 8,580 0 0 0 8,580
Trade and other
receivables 6,480 0 0 0 6,480
Cash and cash
equivalents 4,071 0 0 0 4,071
Total current assets 19,131 0 0 0 19,131
Current liabilities :
Borrowings (2,754) 0 0 0 (2,754)
Trade and other payables (8,162) 214 0 (93) (8,041)
Total current liabilities (10,916) 214 0 (93) (10,795)
Non-current liabilities :
Borrowings (7,234) 0 0 0 (7,234)
Deferred income (160) 0 0 0 (160)
Total (7,394) 0 0 0 (7,394)
non-current liabilities
Net assets 23,585 83 265 (93) 23,840
Shareholders' equity:
Ordinary shares 4,299 0 0 0 4,299
Share premium 172,031 0 0 0 172,031
Other reserves (910) 0 0 0 (910)
Profit and loss account (151,834) 83 265 (93) (151,579)
Total shareholders'
equity 23,585 83 265 (93) 23,840
11 CONTINGENT LIABILITY
The Group received a claim in 2005 for approximately £1 million in respect of
national insurance contributions in relation to share options that were issued
in 1999. Having sought legal opinion, the Board remains robust in its opinion
that the Group has meritorious defences to this claim. Accordingly, no
provision has been made in the preliminary results for 2007.
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