TIDMRMS
RNS Number : 6187A
Remote Monitored Systems PLC
13 September 2018
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
13 September 2018
Remote Monitored Systems plc ("Remote Monitored Systems", the
"Company" or the "Group")
Half Yearly Report to 30 June 2018
Remote Monitored Systems plc, the AIM quoted survey, inspection
and monitoring company is pleased to present its unaudited half
yearly report for the six-month period ended 30 June 2018.
OVERVIEW
-- 47% increase in revenue to GBP600,330 (2017: GBP407,539 excluding discontinued operations)
-- 72% reduction in operating loss of GBP199,411 (2017: GBP713,956)
-- 39% reduction in administrative costs in continuing business
in addition to reductions achieved by discontinuing training and US
businesses
-- 98% reduction in EBITDA loss GBP8,736 (2017: GBP514,254)
-- Cash balances at the period end of GBP424,757 (2017: GBP285,898)
-- Geocurve Limited ("Geocurve") is continuing to successfully
transition to focus on recurring contracts and develop its
reputation as an innovative industry leader
-- Investment in GyroMetric Systems Limited ("GyroMetric") (and
acquisition of controlling interest in September 2018)
Trevor Brown, CEO of Remote Monitored Systems plc, commented
"The first half of 2018 saw the benefit of the decisions taken at
the end of 2017, resulting in a thorough rationalisation of the
cost base and significant growth at Geocurve. Following an initial
investment in April 2018, the recent acquisition of a controlling
interest in GyroMetric reflects the Board's increased confidence in
the prospects for GyroMetric. Strong new business prospects at
Geocurve and GyroMetric allow all stakeholders to look to the
future with renewed optimism. The Board continues to examine
opportunities to grow both organically and through acquisition of
complementary businesses and technologies which can enhance growth
in shareholder value."
CHAIRMAN'S STATEMENT
Survey & Inspection
Geocurve
During the first half of 2018 Geocurve continued to provide
Survey and Inspection services to a range of major blue-chip
companies and government agencies whilst allocating significant
resources to the initial phase of the Thames Estuary contract.
In January 2018, Geocurve was awarded a contract to provide an
innovative technology-based 3D and Virtual Reality survey service
for the Environment Agency's Thames Estuary Asset Management 2100
(TEAM2100) programme, which initially provides a fixed revenue of
GBP1.1m over three years. Approximately 40% of the Thames contract
was invoiced in the period to 30 June 2018.
In April 2018, Geocurve was selected as a specialist 'UAV Survey
and Inspection' Preferred Supplier by Aviva plc to provide a range
of inspection and survey services to their UK customer base. This
followed the successful use of Unmanned Aerial Vehicles (UAVs) to
create comprehensive roof condition surveys for a set of
Aviva-insured historic properties in central Edinburgh. The high
definition data captured by the UAVs was processed into a complete
set of geo-tagged images by Geocurve's Geo-Spatial Data Centre.
In July 2018, Geocurve commenced an initial four month contract
with Hesselberg Hydro, a specialist in the application of asphalt
in hydraulic engineering, and in particular systems for erosion
protection, underwater scour protection and waterproofing. The
contract can be extended on an indefinite basis and includes
options to add extra services in the future.
Also in July 2018, Geocurve, in conjunction with Essex
University, developed a room scale Virtual Reality suite. With this
resource, using UAV captured imagery, 3D models can be developed by
geo-referencing and stitching together many high-resolution images.
This technique has widespread potential usage for environmental and
industrial applications. Until now information has been displayed
using 2D projections of 3D computer information, importing data
into the new system permits visualisation and identification in a
way not possible before. Geocurve has already provided the first
Virtual Reality ("VR") deliverables to a commercial client using
this technology with the results significantly exceeding
expectations.
Geocurve continues to focus on the acquisition of major
corporate customers and to pursue its ambition to be the UK market
leader in the supply of innovative VR and Artificial Intelligence
("AI") surveying services to specialist customers on critical
infrastructure projects.
The directors believe that Geocurve's skill set and its use of
innovative technology has the potential to transform the practice
of surveying, and reflects Geocurve's continuing transition to
becoming:
1. A leading technology-based UK provider of data rich surveying
services including multi-sensors and data analytics to create 3D
mapping and VR imaging. Many of our existing clients are already
showing considerable interest in VR applications, which are at the
forefront of the survey industry's innovation drive and form a
powerful addition to our market leading data capture and processing
capabilities.
2. A leading provider of UAV ("drone") data collection and
monitoring services specialising in over-flying sensitive and
secure installations where sophisticated piloting skills are
required and equally capable on land, in water or in the air.
GyroMetric
In April 2018 the Group made an initial investment to acquire
37% of GyroMetric, which develops and manufactures digital
monitoring and safeguarding systems for rotating shafts. The
Gyrometric technology uses proprietary algorithms, software and AI
techniques to analyse remotely critical drive shaft performance so
as to diagnose and predict drive system maintenance requirements
before catastrophic damage occurs. The company's technology is
proven, operating reliably in harsh environments over many years.
In August 2018, the Group announced a further investment in
Gyrometric, increasing its shareholding to 58%.
The GyroMetric active protection system has been certified for
the marine market by IACS (International Association of
Classification Societies) and ABS (American Bureau of Shipping).
Working with global marine coupling supplier Vulkan GmbH,
GyroMetric has over 60 systems in service which protect large
marine drives and couplings, producing considerable cost savings
for their ship owners.
More recently, GyroMetric has moved into monitoring and
protecting wind turbines, having recently completed highly
successful trials using the world's newest and most powerful
offshore wind turbine drive train test facility at the Offshore
Renewable Energy (ORE) Catapult at Blyth. Working with ORE
Catapult's drivetrain experts, GyroMetric's technology has been
tested to improve the understanding of the behaviour of the
components in use, with a view to increasing the efficiency and
output of wind turbines, whilst reducing the requirement for
unplanned maintenance.
In addition to the company's established Incremental Motion
Encoder (IME) system, GyroMetric has recently filed a patent
application for a new method of measuring the axial movement of
rotating shafts which matches the reliability achieved by its
digital radial measurement method.
Further applications in other industrial sectors are being
considered as the company works to strengthen its sales and
marketing resources.
The majority investment in Gyrometric provides shareholders with
meaningful participation in a unique technology which is now
demonstrating clear potential to transform remote monitoring of
rotating shafts in a large number of settings globally. The Group's
investment in Gyrometric will continue to be developed through
close operational support and involvement. We believe that
Gyrometric will become a significant component of accretive
shareholder value over coming months.
Financial Review
Change of presentational currency to Sterling
The interim financial statements are presented in Sterling
(GBP), which is considered to be the Group's functional and
presentational currency.
The functional and presentational currency has been changed with
effect from 1 January 2018 from US dollars to Sterling. The change
in functional currency reflects the fact that the Group's training
and US activities have been discontinued with the closure of all US
entities almost finalised, and Geocurve is now the main trading
entity within the Group. All of Geocurve's contracts are with UK
customers and are invoiced in Sterling. The vast majority of the
Group's expenses are now also in Sterling. Therefore, Sterling is
considered to be the functional currency. The change in functional
currency has been adopted prospectively from 1 January 2018.
The change in presentational currency is considered to be a
change in the Group's accounting policies and has therefore been
accounted for retrospectively as though the presentational currency
of the Group was always Sterling. Opening equity as at 1 January
2017 has been translated at historic rates, the Statement of
Comprehensive Income has been translated at average rates for 2017
and the Statement of Financial Position has been translated at the
closing rate for 30 June 2017. The gains/losses arising from the
changes in presentational currency have been recorded in other
comprehensive income.
Financial Overview
During the period the Group recorded revenues of GBP600,330
compared with GBP451,842 for the six months to 30 June 2017. The
operating loss for the six months to 30 June 2018 was GBP199,411
(Period to 30 June 2017: GBP713,956). Administrative expenses
amounted to GBP346,724 (Period to 30 June 2017: GBP946,383), see
table and the bullet points below for details in relation to the
reduction in administrative expenses. The loss after tax for the
period was GBP276,171. The loss per share (after consolidation of
the share capital) was 0.14 pence (2017: loss per share after
consolidation of share capital of 1.55 pence).
-- The total revenue figure GBP600,330 for June 2018 relates to
Geocurve, whereas in 2017 GBP407,539 was generated by Geocurve and
the remaining GBP44,303 by the discontinued operations. Geocurve
secured a GBP1.1m contract at the beginning of 2018 to survey the
Thames. A significant investment of manpower was required to get
the Thames project running successfully and efficiently; this has
now been achieved and Geocurve is able to take on new projects
alongside the Thames project. Approximately 40% of the Thames
contract was invoiced in the period to 30 June 2018.
-- Consolidated net assets at 30 June 2018 amounted to GBP1,153,459 (30 June 2017: GBP606,063).
-- Cash balances at the period end amounted to GBP424,757 (30 June 2017: GBP285,898).
-- During the period the Company raised GBP744,231 net of costs
through the issue of new shares.
-- Operational salaries incurred in Geocurve amounting to
GBP182,803 have been reclassified from administrative expenses to
cost of sales in 2018. When presented on a consistent basis the
cost of sales for the period to 30 June 2017 were GBP194,156.
-- Significant administrative cost reductions were achieved in
comparison with 2017, both by reducing costs in the continuing
operations as well as by discontinuing the training and US
businesses:
2017 (restated) Reduction Reduction
2018 (GBP) (GBP) (GBP) (%)
Salaries 116,385 177,784 61,399 34.5%
---------- --------------- --------- ---------
Rent, rates, office expenses 39,120 85,954 46,834 54.5%
---------- --------------- --------- ---------
Audit and accountancy fees 20,142 75,467 55,325 73.3%
---------- --------------- --------- ---------
Plc costs (broker, Nomad, PR
& Marketing) 54,589 74,562 19,973 26.8%
---------- --------------- --------- ---------
Board costs 90,079 130,086 40,007 30.7%
---------- --------------- --------- ---------
Other 26,409 27,074 665 2.5%
---------- --------------- --------- ---------
Sub Total 346,724 570,927 224,203 39.3%
---------- --------------- --------- ---------
Salaries reclassified to cost
of sales (for consistency with
2018) - 169,842
---------- --------------- --------- ---------
Costs of operations shown as
discontinued in 2018 - 205,614
---------- --------------- --------- ---------
Total Administrative Expenses
(as per statement of comprehensive
income) 346,724 946,383
---------- --------------- --------- ---------
-- The EBITDA for June 2018 was (GBP8,736) an improvement of 98%
compared to the previous period's EBITDA of (GBP514,254).
-- The reduction in audit and accountancy fees is due to a new
Financial Planning and Control System implemented during the
period.
-- Depreciation increased to GBP51,893 (2017: GBP37,847) as a
result of additional depreciation following the acquisition of the
Pegasus 2 equipment by Geocurve at the beginning of March 2018.
-- Amortisation of GBP138,782 is the release of goodwill arising
from the acquisition of Geocurve in 2015 on a straight-line basis
over 5 years.
-- Impairment of GBP58,216 is a non-recurring item arising from
the write off of intercompany balances relating to discontinued
operations.
-- Geocurve became the first company in the UK, and one of only
a few companies in Europe, to acquire a Pegasus 2 multi-sensor
surveying systems which has world leading surveying capabilities
and opens up many business opportunities. The system, with an
acquisition value of GBP0.5m, was acquired on 19 February 2018 from
Academy Leasing Ltd under a finance lease arrangement over a period
of 12 months and subject to an annual interest rate of 8.4%.
-- 33% of the Pegasus 2 equipment finance was paid in the period
ended June 2018 and Geocurve is on target to pay off the remaining
finance before the end of Q1 2019. The prompt payment of finance is
again part of the initiative to drive down costs - finance costs
have decreased by 73% GBP16,540 (2017: GBP60,500). The finance
costs in 2017 primarily relate to the interest on the Farina loan
which was repaid in full during the period ended 30 June 2018.
-- Borrowings eliminated (other than the remaining GBP333,333
related to the acquisition of the Pegasus 2 equipment).
-- On 30 April 2018, Remote Monitored Systems granted a total of
100,000,000 options (5,000,000 after consolidation of share
capital) to subscribe for ordinary shares in the Company
("Options") to certain employees. The Options can be exercised in
whole or in part, subject to meeting revenue and profit based
vesting conditions, at any time up to the fifth anniversary of
grant at a price of 0.06p per option (1.2p after consolidation of
share capital), subject to the overriding condition that no Option
may be exercised unless the quoted price of the Company's ordinary
shares is at least 2.0p.
-- In April 2018, the Group announced the acquisition of 36.9%
of the enlarged share capital of Gyrometric for a cash
consideration of GBP250,000. The Gyrometric technology uses
proprietary software and AI techniques to analyse remotely critical
drive shaft performance to diagnose and predict drive system
maintenance needs before catastrophic damage occurs. In August
2018, the Group announced a further investment of GBP273,600
(funded by issuing new share capital) in Gyrometric increasing the
shareholding from 36.9% to 57.8%. The investment in Gyrometric
provides the Group's shareholders with a stake in a new and unique
technology with promising prospects. The Group's investment in
Gyrometric will continue to be developed through close operational
support and involvement. Gyrometric will be an important component
of growth and shareholder value in the months and years ahead.
Consolidation of share capital
A resolution was passed at the Group's AGM on 29 June 2018 to
consolidate every 20 ordinary shares of 0.01p each in the issued
share capital of Remote Monitored Systems into one ordinary share
of 0.2p each. Thus, with effect from 2 July 2018, there were
308,676,386 New Ordinary Shares of 0.2p each ("Shares") in issue
compared with the June 2018 total of 6,173,527,709 Ordinary Shares
of 0.01p. As there are no shares held in treasury, the total voting
rights therefore changed from 6,173,527,709 to 308,676,386
(currently 332,467,690 following the issue of further shares on 3
September 2018). The EPS calculated as part of the condensed
consolidated statement of comprehensive income reflects the
consolidated share capital and the prior year EPS calculations have
been adjusted for comparative purposes.
Acknowledgments
On behalf of the Board, I would like to extend our thanks to our
business partners, customers, employees and shareholders for their
continued support throughout the period.
Nigel Burton
Non-Executive Chairman
ENQUIRIES:
Remote Monitored Systems plc
Trevor Brown (Executive Director) +41 7941 55384
Nigel Burton (Non-Executive Chairman) +44 7785 234447
SP Angel Corporate Finance LLP +44 20 3470 0470
Stuart Gledhill
Jeff Keating
Caroline Rowe
Peterhouse Corporate Finance +44 20 7469 0930
Lucy Williams
Fungai Ndoro
REMOTE MONITORED SYSTEMS PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 June
2018
Unaudited Unaudited
6 months 6 months
ended ended
30 30
June June
2018 2017 (restated)
Note GBP GBP
------------------------------------------------ ----- ---------- ------------------
Revenue 600,330 451,842
Cost of sales (256,325) (24,314)
------------------------------------------------ ----- ---------- ------------------
Gross profit 344,005 427,528
Administration expenses (346,724) (946,383)
Other Gains/(Losses) (2,646) -
Gain/(Loss) on foreign exchange - 4,601
Depreciation (51,893) (37,847)
Amortisation (138,782) (161,855)
Impairment (58,216) -
Share options and warrants 54,845 -
Operating Loss (199,411) (713,956)
------------------------------------------------ ----- ---------- ------------------
Finance income 4 7
Finance costs (16,540) (60,500)
Share of loss of associate accounted for
using the equity method (32,260) -
Loss before income tax (248,207) (774,449)
Income tax credit 6 79,532 20,881
------------------------------------------------ ----- ---------- ------------------
Loss after tax for the period from continuing
operations (168,675) (753,568)
------------------------------------------------ ----- ---------- ------------------
Loss from discontinued operations (net (107,496) -
of tax)
------------------------------------------------ ----- ---------- ------------------
Loss for the period (276,171) (753,568)
------------------------------------------------ ----- ---------- ------------------
Other Comprehensive Income
Items that may be subsequently be reclassified
to profit or loss:
Currency translation difference 4,936 (6,124)
------------------------------------------------ ----- ---------- ------------------
Total comprehensive income for the period
attributable to owners of the parent (271,235) (759,692)
------------------------------------------------ ----- ---------- ------------------
Earnings per ordinary share attributable
to owners of the parent during the period
(expressed in pence per share)
Basic and diluted 5 (0.14) (1.55)
From continuing operations - basic and
diluted 5 (0.09) (1.55)
From discontinued operations - basic and
diluted 5 (0.05) -
REMOTE MONITORED SYSTEMS PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
Unaudited Unaudited
30 30
June June
2018 2017
(restated)
Note GBP GBP
------------------------------------------------- ---------- ---------------- -------------
Non-current assets
Intangible assets 720,028 1,198,951
Property, plant and equipment 7 555,408 143,320
Investments in associates 8 217,740 -
------------------------------------------------- ---------- ---------------- -------------
Total non-current assets 1,493,176 1,342,271
------------------------------------------------- ---------- ---------------- -------------
Current Assets
Inventories - -
Trade and other receivables 9 394,106 238,807
Cash and cash equivalents 424,757 285,898
------------------------------------------------- ---------- ---------------- -------------
Total current assets 818,863 524,705
------------------------------------------------- ---------- ---------------- -------------
TOTAL ASSETS 2,312,039 1,866,976
------------------------------------------------- ---------- ---------------- -------------
Equity attributable to owners of
the parent
Share capital 3 4,744,163 4,323,241
Share premium 6,102,763 4,584,242
Other reserves (307,954) (331,223)
Translation reserve 160,350 136,298
Retained loss (9,545,863) (8,106,495)
------------------------------------------------- ---------- ---------------- -------------
TOTAL EQUITY 1,153,459 606,063
------------------------------------------------- ---------- ---------------- -------------
Current liabilities
Trade and other payables 623,546 559,085
Borrowings 333,333 110,000
------------------------------------------------- ---------- ---------------- -------------
Total current liabilities 956,879 669,085
------------------------------------------------- ---------- ---------------- -------------
Non-current liabilities
Other payables - -
Borrowings - 314,957
Convertible loans - -
------------------------------------------------- ---------- ---------------- -------------
Deferred tax liabilities 201,701 276,871
------------------------------------------------- ---------- ---------------- -------------
Total non-current liabilities 201,701 591,828
------------------------------------------------- ---------- ---------------- -------------
TOTAL LIABILITIES 1,158,580 1,260,913
------------------------------------------------- ---------- ---------------- -------------
TOTAL EQUITY AND LIABILITIES 2,312,039 1,866,976
------------------------------------------------- ---------- ---------------- -------------
REMOTE MONITORED
SYSTEMS
PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2018
Attributable to owners of the parent
----------------------------------------------------------------------------------------
Share Share Other Translation Retained
capital premium reserves reserve loss Total
GBP GBP GBP GBP GBP GBP
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
As at 1 January
2017
(restated) 2,743,240 4,790,405 (414,386) 142,422 (7,352,927) (91,246)
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Loss for the
period - - - - (753,568) (753,568)
Other
comprehensive
income for the
period
Currency
translation
difference - - - (6,124) - (6,124)
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Total
comprehensive
income for the
period - - - (6,124) (753,568) (759,692)
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Proceeds from
shares
issued
(net of costs) 1,230,000 (123,000) - - - 1,107,000
Share based
payments 350,001 (83,163) - - - 266,838
Warrants Issued - 83,163 - - 83,163
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Transactions with
owners,
recognised
directly in
equity 1,580,001 (206,163) 83,163 - - 1,457,001
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
As at 30 June
2017
(restated) 4,323,241 4,584,242 (331,223) 136,298 (8,106,495) 606,063
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
As at 1 January
2018 4,512,087 5,499,946 (253,109) 155,414 (9,269,692) 644,646
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Loss for the
period - - - - (276,171) (276,171)
Other
comprehensive
income
for the period
Currency
translation
difference - - - 4,936 - 4,936
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Total
comprehensive
income
for the period - - - 4,936 (276,171) (271,235)
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Proceeds from
shares
issued
(net of costs) 189,305 441,925 - - - 631,230
Share based
payments 42,771 77,729 - - - 120,500
Warrants Issued - 83,163 (54,845) - - 28,318
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
Transactions with
owners,
recognised
directly in
equity 232,076 602,817 (54,845) - - 780,048
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
As at 30 June
2018 4,744,163 6,102,763 (307,954) 160,350 (9,545,863) 1,153,459
------------------ ----------------- ---------- ---------- ---------------- ------------- ------------
REMOTE MONITORED SYSTEMS PLC
CONSOLIDATED STATEMENT OF CASH FLOW
For the six month period ended 30 June 2018
Unaudited Unaudited
6 months 6 months
ended ended
30 June 30 June
2018 2017 (restated)
Note GBP GBP
------------------------------------------- ------ ---------- -----------------
Cash Flows from Operating Activities
Loss for the period before tax (248,207) (774,449)
Depreciation of property, plant
and equipment 51,893 37,847
Amortisation of intangible assets 138,782 161,855
Share based payments 65,655 266,838
Impairments 90,476 -
Finance costs 16,540 60,500
Finance income (4) (7)
Foreign exchange on operating activities 1,605 (4,601)
Taxation 100,297 20,881
Loss on discontinued operations (107,496)
Increase in inventories - -
(Increase)/Decrease in trade and
other receivables (385,296) 60,367
Increase/(Decrease) in trade and
other payables 184,433 (514,086)
------------------------------------------- ------ ---------- -----------------
Cash used in operations (91,322) (684,855)
Interest expense (22,759) (60,500)
------------------------------------------- ------ ---------- -----------------
Net cash used in operating activities (114,081) (745,355)
------------------------------------------- ------ ---------- -----------------
Cash Flows used in Investing Activities
Purchases of intangible assets - -
Purchases of property, plant and
equipment 7 (536,316) (46,523)
Proceeds from disposal of property,
plant and equipment 500
Investments in associates (250,000) -
Interest income 4 7
------------------------------------------- ------ ---------- -----------------
Net cash used in investing activities (785,812) (46,516)
------------------------------------------- ------ ---------- -----------------
Cash Flows from Financing Activities
Net proceeds from/(Repayments of)
borrowings 215,527 (22,481)
Issue of shares, net of issue costs 631,230 1,107,000
------------------------------------------- ------ ---------- -----------------
Net cash generated from financing
activities 846,757 1,084,519
------------------------------------------- ------ ---------- -----------------
Net (decrease)/increase in cash
and cash equivalents (53,136) 292,648
Exchange gains/(losses) (25,105) (9,068)
Cash and cash equivalents at beginning
of period 502,998 2,318
------------------------------------------- ------ ---------- -----------------
Cash and cash equivalents at end
of period 424,757 285,898
------------------------------------------- ------ ---------- -----------------
NOTES TO THE INTERIM RESULTS:
1. General information and accounting policies
The principal activity of Remote Monitored Systems plc ("the
Company") and its subsidiaries (together "the Group") is the
provision by Geocurve of Survey & Inspection services. The
Company also has a 58% stake in GyroMetric Systems, which
specialises in next generation digital monitoring and safeguarding
technology and services for rotating shafts.
The Company is a public limited company, incorporated and
domiciled in the United Kingdom, with its shares traded on the
London Stock Exchange's AIM. Its registered office is: Ground
Floor, Tintagel House, Kelvedon, CO5 9BP.
This announcement is for the unaudited interim results for the
period ended 30 June 2018.
The Directors approved these unaudited interim results on 12
September 2018.
2. Basis of preparation
The condensed consolidated interim financial information (the
"Financial Information") has been prepared in accordance with the
requirements of the AIM Rules for Companies. As permitted, the
Company has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this Financial Information. The Financial
Information should be read in conjunction with the annual financial
statements for the year ended 31 December 2017, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union. In the opinion
of the Directors the Financial Information for the period
represents fairly the financial position, results from operations
and cash flows for the period in conformity with generally accepted
accounting principles consistently applied.
The Financial Information set out above does not constitute
statutory accounts within the meaning of the Companies Act 2006.
The Financial Information has been prepared on a going concern
basis in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the period
ended 31 December 2017 were approved by the Board of Directors on 6
June 2018 and subsequently delivered to the Registrar of Companies
and are also available on the Group's website:
www.remotemonitoredsystems.com. The independent auditor's report on
those financial statements was unqualified.
The 2018 Financial Information of the Group has not been
audited, however the auditors have carried out assurance testing on
the retranslation from US Dollars to Sterling (GBP).
Theses interim results are presented in Sterling rounded to the
nearest pound.
Going concern basis
The Group's functional and presentational currency has changed
from US Dollars to Sterling (GBP) as described in the Financial
Review in the Chairman's Statements. These interim results have
been prepared assuming the Group and Company will continue as a
going concern. This assessment has been made based on the Group's
economic prospects in the financial forecasts. In assessing whether
the going concern assumption is appropriate, the Directors have
taken into account all available information for the foreseeable
future including the nature of the business in which Remote
Monitored Systems plc operates, the expected contracts to be
awarded, the expectation that if required, cost cutting measures
can be implemented and if required additional funds can be raised
on the open market.
The operational requirements of the Group comprise of
maintaining a Head Office in the UK alongside its UK operations.
The Group's US operations from its US subsidiary are in the process
of being shut down. The Directors have reviewed the Group's working
capital forecasts and believe that the funds raised in the first
half of the year will be sufficient for the operational
requirements of the Group for a period of at least 12 months from
the date of issue of this financial information.
However, if the Group's revenues fall short of expectations in
terms of quantum or timing then the Group will put in place cost
cutting measures or will seek to raise the appropriate funds to
meet its working capital requirements.
Risks and uncertainties
The Board continuously assesses and monitors the key risks
facing the business. The key risks that could affect the Group's
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Group's
2017 Annual Report and Financial Statements. The Group is exposed
to market risks (including foreign exchange risk and price risk),
credit risk and to a limited extent, interest rate risk and
liquidity risk.
Critical accounting estimates and judgements
The preparation of Financial Information in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the end of the reporting
period. It also requires management to exercise its judgement in
the process of applying the Group's Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial
Information, are disclosed in Note 4 of the Group's 2017 Annual
Report and Financial Statements.
Accounting Policies
There has been a change in the Group's functional and
presentation currency as described in the 'Financial Review'
section of these interim results. There have been no other changes
to the Group's accounting policies, presentation and methods of
computation in this Financial Information compared to those which
were applied in the preparation of the Group's Annual Financial
Statements for the year ended 31 December 2017.
3. Share capital
On 29 December 2017 the Company issued 1,173,624,395
(consolidated 58,681,220) new ordinary shares of 0.01p
(consolidated 0.2p) each at a price of 0.035p (consolidated 0.7p)
per share raising GBP410,768. On the same date the Company issued
418,000,000 (20,900,000) consolidated warrants exercisable for two
years from the date of grant at an exercise price of 0.225p
(consolidated 4.5p).
On 4 January 2018 the Company issued 135,714,286 (consolidated
6,785,714) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share in consideration for
outstanding fees payable by the Company to an adviser.
On 11 January 2018 the Company issued 85,714,286 (consolidated
4,285,714) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share as a result of an
exercise of warrants.
On 19 January 2018 the Company issued 35,714,286 (consolidated
1,785,714) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share as a result of an
exercise of warrants.
On 26 January 2018 the Company issued 114,285,714 (consolidated
5,714,286) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share as a result of an
exercise of warrants.
On 23 April 2018 the Company issued 557,142,857 (consolidated
27,857,143) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share as a result of an
exercise of warrants. These warrants were exercised by directors
and are listed in the directors' transactions below.
On 5 June 2018 the Company issued 218,571,428 (consolidated
10,928,571) new ordinary shares of 0.01p (consolidated 0.2p) at a
price of 0.035p (consolidated 0.7p) per share as a result of an
exercise of warrants.
On 3 September 2018 the Company issued 23,791,304 Shares of 0.2p
per share at a price of 1.15p per share as consideration for an
additional 20.9% shareholding in GyroMetric increasing the
shareholding from 36.9% to 57.8%.
4. Directors' Transactions
The directors and previous directors of the Company who
participated in the December 2017 Open Offer were as follows:
-- Paul Ryan subscribed for 186,010,627 (consolidated 9,300,531)
new ordinary shares of 0.01p (consolidated 0.2p) each at a price of
0.035p (consolidated 0.7p) for GBP65,104.
The directors of the Company who exercised warrants in April
2018 were as follows:
-- Trevor Brown exercised 485,714,286 (consolidated 24,285,714)
warrants at an exercise price of 0.035p (consolidated 0.7p) for a
consideration of GBP170,000.
-- Nigel Burton exercised 71,428,571 (consolidated 3,571,429)
warrants at an exercise price of 0.035p (consolidated 0.7p) for a
consideration of GBP25,000.
5. Earnings per share
Basic earnings per share have been calculated by dividing the
loss attributable to equity holders of the Company after taxation
by the weighted average number of shares in issue during the
period. There is no difference between the basic and diluted
earnings per share as the effect on the exercise of options and
warrants would be to decrease the earnings per share.
6 months ended 6 months
30 June 2018 ended 30 June
2017 (restated)
Basic and Diluted GBP GBP
------------------------------------------ --------------- --------------------
Loss after taxation (276,171) (753,568)
------------------------------------------ --------------- --------------------
Weighted average number of shares 194,939,322 48,572,619*
Earnings per share (pence) (0.14) (1.55)*
From continuing operations - basic and
diluted (0.09) (1.55)*
From discontinued operations - basic and (0.05) -
diluted
------------------------------------------ --------------- --------------------
* Restated to reflect 1:20 share consolidation
6. Tax
No income tax charge was recognised in the statement of
comprehensive income due to losses incurred.
6 months ended 6 months
30 June 2018 ended 30
June 2017
(restated)
Income tax GBP GBP
-------------------------- -------------- --------------
Current tax
UK Corporation tax credit - 20,881
-------------------------- -------------- --------------
Deferred tax
Current year 79,532 -
-------------------------- -------------- --------------
Tax credit 79,532 20,881
-------------------------- -------------- --------------
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to the profits/(losses) of the consolidated
entities as follows:
6 months ended 6 months ended 30 June 2017 (restated)
30 June 2018
GBP GBP
-------------------------------------------------- -------------- -----------------------------------------
Loss before tax (248,207) (774,449)
-------------------------------------------------- -------------- -----------------------------------------
Tax at the applicable rate of 19% (2017: 21.74%): (47,159) (168,365)
Effect of:
Depreciation in excess of capital allowances - (3,108)
R&D tax credit - 20,881
Fixed asset timing differences 79,532 -
Net tax effect of losses carried forward 47,159 150,592
-------------------------------------------------- -------------- -----------------------------------------
Tax credit for the year 79,532 -
-------------------------------------------------- -------------- -----------------------------------------
The tax rate used is the standard rate of corporation tax in the
UK 19% as all US operations have been discontinued. The 2017 rate
is a combination of 20% to March 2017 and 19% thereafter; the
standard rate of corporation tax in the UK and US tax rate of 35%
to give an applicable rate of 21.74%.
7. Property, plant and equipment
Fixed asset additions during the period were all acquired by
Geocurve Limited. The majority of the additions of GBP536,316
relate to the acquisition of the Pegasus 2 surveying equipment for
GBP500,000 and UAV equipment amounting to GBP18,427.
8. Investment in associates
6 months ended 6 months ended 30 June 2017 (restated)
30 June 2018
GBP GBP
-------------- -------------- -----------------------------------------
1 Jan 2018 - -
Additions 250,000 -
Share of loss (32,260) -
30 Jun 2018 217,740 -
-------------- -------------- -----------------------------------------
Nature of investment in associates during 2018:
Name of entity Registered office % ownership interest Measurement method
address
------------------ --------------------- -------------------- ------------------
GyroMetric Systems Dockholme Lock 36.9%* Equity
Limited Cottage, 380 Bennett
Street, Long Eaton,
Nottingham, NG10
4JF
------------------ --------------------- -------------------- ------------------
* see note 11 on events after the reporting period.
9. Trade and Other Receivables
Included within the trade and other receivables balance of
GBP394,106 is GBP195,383 owing from TEAM2100 in respect of the
Thames Project. The GBP195,383 was received during July 2018.
10. Dividends
No dividend has been declared or paid by the Company during the
6 months ended 30 June 2018 (2017: nil).
11. Events after the reporting period
In September 2018, the Company gained control of GyroMetric
through acquiring an additional 20.9% of its share capital,
resulting in a total holding of 57.8%.
On acquisition
GBP
Purchase consideration
Cash 250,000
Shares (23,791,304 shares @ 1.15p) 273,600
--------
523,600
Fair value of net assets acquired (see below) (174,252)
---------------
Goodwill 349,348*
---------------
*GBP349,348 represents both the Goodwill and the Loss on
acquisition of GyroMetric.
The net assets and liabilities arising from the acquisition,
provisionally determined, are as follows:
On acquisition
GBP
Cash and cash equivalents 167,550
Property, plant and equipment 718
Inventory 4,184
Trade and other receivables 18,414
Trade and other payables (10,501)
Director loans (6,113)
---------------
Net assets acquired 174,252
---------------
If new information obtained within one year from the acquisition
date about the facts and circumstances that existed at the
acquisition date identifies adjustments to the above amounts, or
any additional provisions that existed at the acquisition date,
then the acquisition accounting will be revised.
12. Approval of the interim financial information
The condensed Financial Information were approved by the Board
of Directors on 12 September 2018.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LFFLIASIFLIT
(END) Dow Jones Newswires
September 13, 2018 02:00 ET (06:00 GMT)
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