TIDMZYT
RNS Number : 6950L
Zytronic PLC
17 May 2022
17 May 2022
Zytronic plc
("Zytronic" or the "Company" and, together
with its subsidiaries, the "Group")
Interim Results for the six months ended 31 March 2022
(unaudited)
Zytronic plc, a leading specialist manufacturer of touch
sensors, announces its consolidated interim results for the six
months ended 31 March 2022. Comparative data is given for the six
months ended 31 March 2021, except where indicated.
Overview
-- Group revenue of GBP5.9m (2021: GBP4.8m)
-- EBITDA of GBP0.8m (2021: GBP0.2m)
-- Profit before tax of GBP0.4m (2021: loss of GBP0.3m)
-- Basic earnings per share of 3.0p (2021: loss per share 1.2p)
-- Positive cash generated from operations GBP0.1m (2021: GBP0.4m)
-- Net cash of GBP7.5m (30 September 2021: GBP9.2m)
Commenting on the results, David Buffham, Chair said:
"While the previously noted post-pandemic issues look likely to
present a headwind for the remainder of the financial year, the
Group remains well positioned to progress in its recovery,
particularly now as global sales and marketing activities resume
and provide the basis for the generation of new future
opportunities."
Enquiries:
Zytronic plc
Mark Cambridge, Chief Executive 0191 414
Claire Smith, Group Finance Director 5511
Singer Capital Markets (Nominated Adviser and
Broker)
Aubrey Powell, Rachel Hayes, Amanda Gray (Investment 020 7496
Banking) 3000
Notes to Editors
Zytronic is the developer and manufacturer of a unique range of
internationally award-winning and patented touch sensor products,
operating from three modern factories totaling 80,000ft(2) near
Newcastle-upon-Tyne in the United Kingdom.
Zytronic touch products employ an embedded sensing solution and
are readily configurable to enable multi-user and multi-touch touch
sensing sizes from five inches to ultra-large 85", making them an
ideal solution for system designers' specific requirements,
offering significant durability, environmental stability and
optical enhancement benefits to touch interactivity for industrial,
self-service and public access equipment.
Chair statement
Introduction
The Group continued to make encouraging progress over the first
half of the current year in its recovery from the impacts of the
Covid-19 pandemic, evidenced by the 24% year-on-year increase in
sales to GBP5.9m (2021: GBP4.8m). However, the ongoing travel
restrictions in many of its key geographic markets had the effect
of further impeding its sales and marketing activities over the
period, with the unfortunate postponement of several key
tradeshows. Also as previously reported, the considerable
disruption to global supply chains continues, particularly in the
electronics components sector from which the Group buys and also
supplies, adding upward pressure particularly on materials and
logistics costs. Customer confidence is shown to have improved in
certain markets, such as Gaming and Vending, which has benefited
both sales and gross margin through the volume increase in large
and shaped format sensors.
Results
Group revenue for the half year ended 31 March 2022 was GBP5.9m
(2021: GBP4.8m), remaining in line with the AGM trading update
published on 3 March 2022. The gross margin was 31.7% (2021:
27.0%), with EBITDA of GBP0.8m (2021: GBP0.2m) and profit before
tax of GBP0.4m (2021: loss of GBP0.3m). Basic earnings per share
was 3.0p (2021: loss per share 1.2p).
Sales have shown improvement, particularly in Gaming and
Vending, which has consequently resulted in improvements in both
the APAC and Americas territories. Innovation in the technical
capabilities of, and the products offered, remains a key driver,
with a further patent granted and a new application lodged.
Tradeshow participation has yet again been very restricted over the
period; albeit the Group continues to observe improvements in its
level of opportunities being addressed, particularly in Vending,
with significant global potential from future deployments of
commercial electric vehicle charging stations.
The Group is mindful of the situation with the conflict in
Ukraine and although the Group's revenue from the directly affected
countries is not material, it has withdrawn from any trading
opportunities into Russia. It will continue to monitor and take
advice from the government on these matters.
Cash
The Board announced on 17 February 2022, following further
consideration of the level of the Group's cash balances, that it
was in the interests of shareholders to again distribute surplus
cash. It was agreed that this was best achieved by way of share
buybacks in the market, utilising the headroom remaining under the
authority used for the Tender Offer implemented last year until its
expiry, and subsequently utilising the new authority granted by
shareholders at the 2022 AGM held on 3 March. By 31 March 2022,
750,500 shares had been purchased under the buyback at an average
price of 153.5p per share, returning GBP1.2m of cash. These
purchases have continued since the end of the half year.
Payments of a final dividend of GBP0.2m and capital expenditure
totalling GBP0.2m, alongside the cash returned under the buyback
programme, served to offset the small amount of cash generated from
operations (which itself was impacted by an increase in working
capital of GBP0.7m). These factors contributed to the net reduction
in cash over the half year period of GBP1.6m (2021: GBP6.3m).
Excluding the effects of the returns of cash via the Tender and
buybacks in the relevant periods, the net movement in cash was a
decrease of GBP0.5m (2021: increase of GBP0.4m), the principal
shift being the absorption of working capital during the recovery
in activity levels.
The Board considers the cash balances as of 31 March 2022 of
GBP7.5m (30 September 2021: GBP9.2m) to be more than adequate for
operational purposes and the funding of further share buybacks
using the remaining headroom under the existing authority.
Dividends
The Board, having returned to paying dividends, with a final
dividend for 2021 paid in March 2022, has decided that, as per last
year, it will again not pay an interim dividend and will consider
recommending a final dividend dependent on the full-year
performance of the Group.
Outlook
While the previously noted post-pandemic issues look likely to
present a headwind for the remainder of the financial year, the
Group remains well positioned to progress in its recovery,
particularly now as the global sales and marketing activities
resume and provide the basis for the generation of new future
opportunities.
David Buffham
Chair
17 May 2022
Consolidated statement of comprehensive income
Unaudited results for the six months to 31 March 2022
Six months Six months Year to
to to
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
----------------------------------- ------ ----------- ----------- -------------
Group revenue 5,910 4,784 11,683
Cost of sales (4,034) (3,490) (8,146)
----------------------------------- ------ ----------- ----------- -------------
Gross profit 1,876 1,294 3,537
Distribution costs (132) (66) (183)
Administration expenses (1,345) (1,542) (2,901)
----------------------------------- ------ ----------- ----------- -------------
Group trading profit/(loss) 399 (314) 453
Group operating profit/(loss) 399 (314) 453
Profit/(loss) before tax 399 (314) 453
Tax (expense)/credit 3 (56) 130 (47)
----------------------------------- ------ ----------- ----------- -------------
Profit/(loss) for the period 343 (184) 406
----------------------------------- ------ ----------- ----------- -------------
Other comprehensive income - - -
----------------------------------- ------ ----------- ----------- -------------
Total comprehensive income/(loss) 343 (184) 406
----------------------------------- ------ ----------- ----------- -------------
Earnings/(loss) per share
Basic 4 3.0p (1.2)p 3.0p
----------------------------------- ------ ----------- ----------- -------------
All activities are from continuing operations.
Consolidated statement of changes in equity
Unaudited results for the six months to 31 March 2022
Called Capital
up
share Share redemption Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- ----------- --------- --------
At 1 October 2021 114 8,994 46 7,611 16,765
Profit for the period - - - 343 343
Dividends - - - (170) (170)
Repurchase and cancellation of
shares (8) - 8 (1,152) (1,152)
-------------------------------- -------- -------- ----------- --------- --------
At 31 March 2022 (unaudited) 106 8,994 54 6,632 15,786
-------------------------------- -------- -------- ----------- --------- --------
Consolidated statement of financial position
Unaudited results at 31 March 2022
At At At
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
---------------------------------- ------ ---------- ---------- -------------
Assets
Non-current assets
Intangible assets 635 875 733
Property, plant and equipment 5,310 5,490 5,370
---------------------------------- ------ ---------- ---------- -------------
5,945 6,365 6,103
---------------------------------- ------ ---------- ---------- -------------
Current assets
Inventories 2,093 1,621 1,435
Trade and other receivables 2,078 1,912 2,200
Derivative financial assets - 8 -
Cash and short term deposits 6 7,538 7,752 9,157
---------------------------------- ------ ---------- ---------- -------------
11,709 11,293 12,792
---------------------------------- ------ ---------- ---------- -------------
Total assets 17,654 17,658 18,895
---------------------------------- ------ ---------- ---------- -------------
Equity and liabilities
Current liabilities
Trade and other payables 881 489 1,080
Derivative financial liabilities 18 - 16
Accruals 580 489 551
Government grants - 25 26
Tax liabilities 53 - 121
---------------------------------- ------ ---------- ---------- -------------
1,532 1,003 1,794
---------------------------------- ------ ---------- ---------- -------------
Non-current liabilities
Deferred tax liabilities (net) 336 480 336
---------------------------------- ------ ---------- ---------- -------------
336 480 336
---------------------------------- ------ ---------- ---------- -------------
Total liabilities 1,868 1,483 2,130
---------------------------------- ------ ---------- ---------- -------------
Net assets 15,786 16,175 16,765
---------------------------------- ------ ---------- ---------- -------------
Capital and reserves 7
Equity share capital 106 114 114
Share premium 8,994 8,994 8,994
Capital redemption reserve 54 46 46
Retained earnings 6,632 7,021 7,611
---------------------------------- ------ ---------- ---------- -------------
Total equity 15,786 16,175 16,765
---------------------------------- ------ ---------- ---------- -------------
Consolidated cashflow statement
Unaudited results for the six months to 31 March 2022
Six months Six months Year to
to to
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ------ ----------- ----------- -------------
Operating activities
Profit/(loss) before tax 399 (314) 453
Depreciation and impairment of property,
plant and
equipment 279 333 629
Amortisation, impairment and write-off
of intangible assets 121 188 379
Amortisation of government grant (26) (2) (1)
Fair value movement on foreign exchange
forward contracts 2 8 16
Loss on disposal of asset - - 23
Working capital adjustments
(Increase)/decrease in inventories (658) 711 897
Decrease/(increase) in trade and other
receivables 122 47 (433)
(Decrease)/increase in trade and other
payables and provisions (169) (589) 85
-------------------------------------------- ------ ----------- ----------- -------------
Cash generated from operations 70 382 2,048
Tax (paid)/received (125) 61 48
-------------------------------------------- ------ ----------- ----------- -------------
Net cashflow (used in)/from operating
activities (55) 443 2,096
-------------------------------------------- ------ ----------- ----------- -------------
Investing activities
Payments to acquire property, plant and
equipment (219) (3) (179)
Payments to acquire intangible assets (23) (20) (92)
-------------------------------------------- ------ ----------- ----------- -------------
Net cashflow used in investing activities (242) (23) (271)
-------------------------------------------- ------ ----------- ----------- -------------
Financing activities
Dividends paid to equity shareholders (170) -
of the Parent -
Repurchase and cancellation of shares (1,152) (6,706) (6,706)
Net cashflow used in financing activities (1,322) (6,706) (6,706)
-------------------------------------------- ------ ----------- ----------- -------------
Decrease in cash and cash equivalents (1,619) (6,286) (4,881)
-------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the beginning
of the period 9,157 14,038 14,038
-------------------------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents at the end of
the period 6 7,538 7,752 9,157
-------------------------------------------- ------ ----------- ----------- -------------
Notes to the interim report
Unaudited results for the six months to 31 March 2022
1. Basis of preparation
The financial information in these interim statements is
prepared under the historical cost convention and in accordance
with international accounting standards. It does not constitute
statutory accounts as defined in Section 435 of the Companies Act
2006 and does not reflect all the information contained in the
Group's annual report and financial statements.
The tax charge is calculated by applying the Directors' best
estimate of the annual tax rate to the profit for the period. Other
expenses are accrued in accordance with the same principles used in
the preparation of the annual report and financial statements.
The interim results for the six months to 31 March 2022 are not
reviewed by Crowe U.K. LLP and accordingly no opinion has been
given.
The interim financial statements have been prepared using the
same accounting policies and methods of computation used to prepare
the 2021 annual report and financial statements.
The financial information for the six months to 31 March 2022
and the comparative financial information for the six months to 31
March 2021 have not been audited. The comparative financial
information for the year ended 30 September 2021 has been extracted
from the 2021 annual report and financial statements.
The annual report and financial statements for the year ended 30
September 2021, which were approved by the Board of Directors on 6
December 2021, received an unqualified audit report, did not
contain a statement under Sections 498(2) or (3) of the Companies
Act 2006 and have been filed with the Registrar of Companies.
The Group has one reportable business segment comprising the
development and manufacture of customised optical products to
enhance electronic display performance. Products in this reportable
business segment include touch sensors, filters and other laminated
products. All revenue, profits or losses before tax and net assets
are attributable to this reportable business segment.
2. Basis of consolidation
The Group results consolidate the accounts of Zytronic plc and
all its subsidiary undertakings drawn up to 31 March 2022.
3. Tax charge on profit/(loss) on ordinary activities
The estimated tax rate for the year of 14% has been applied to
the half year's profit before tax, in accordance with the Auditing
Standards Board's statement on interim reports.
4. Earnings/(loss) per share ("EPS" / "LPS")
Basic EPS/LPS is calculated by dividing the profit/(loss)
attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period. All activities are continuing operations and therefore
there is no difference between EPS/LPS arising from total
operations and EPS/LPS arising from continuing operations.
For the six months to 31 March 2022 and 2021
Weighted Weighted
average average
number number
Profit of shares EPS Loss of shares LPS
31 March 31 March 31 March 31 March 31 March 31 March
2022 2022 2022 2021 2021 2021
GBP'000 Thousands Pence GBP'000 Thousands Pence
--------------------------- --------- ---------- --------- --------- ---------- ---------
Profit/(loss) on ordinary
activities after tax 343 11,357 3.0 (184) 15,273 (1.2)
--------------------------- --------- ---------- --------- --------- ---------- ---------
Basic EPS/LPS 343 11,357 3.0 (184) 15,273 (1.2)
--------------------------- --------- ---------- --------- --------- ---------- ---------
For the year to 30 September 2021
Weighted
average
number
Profit of shares EPS
30 September 30 September 30 September
2021 2021 2021
GBP'000 Thousands Pence
----------------------------------------- ------------- ------------- -------------
Profit on ordinary activities after tax 406 13,346 3.0
----------------------------------------- ------------- ------------- -------------
Basic EPS 406 13,346 3.0
----------------------------------------- ------------- ------------- -------------
5. Dividends
As the Group recovers from the effects of the Covid-19 pandemic,
the Directors considered it prudent not to pay an interim dividend.
Accordingly, no interim dividend is proposed for the period (2021:
Nil). The table below reflects historic dividend payments.
Six months Six months Year to
to 31 March to 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------------------- ------------- ------------- --------------
Ordinary dividends on equity shares
Final dividend of 1.5p per ordinary share paid
on 170 - -
18 March 2022
----------------------------------------------- ------------- ------------- --------------
170 - -
----------------------------------------------- ------------- ------------- --------------
6. Cash and cash equivalents
Six months Six months Year to
to 31 March to 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- ------------- ------------- --------------
Cash at bank and in hand 7,538 7,752 9,157
-------------------------- ------------- ------------- --------------
For the purpose of the consolidated cashflow statement, cash and
cash equivalents comprise the following:
Six months Six months Year
to 31 March to 31 March to 30
September
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------- -------------- -------------- ------------
Cash at bank and in hand 7,267 7,752 8,886
Short term deposits 271 - 271
7,538 7,752 9,157
-------------------------- -------------- -------------- ------------
Cash at bank earns interest at floating rates based on daily
bank deposit rates. Short term deposits are made for variable
lengths, being overnight, three months or one year (with break
conditions), depending on the immediate cash requirements of the
Group, and earn interest at variable rates.
At 31 March 2022 the Group had available a net GBP1.0m (cash
less overdrawn accounts) overdraft facility from Barclays Bank plc,
which will fall for review in October 2022.
The fair value of cash and cash equivalents is GBP7.5 (2021:
GBP7.8m).
7. Capital and reserves
On 1 February 2021 the Company announced a proposed return of up
to GBP10.0m of capital by way of a Tender Offer which was accepted
by shareholders on 25 February 2021. As a result, 4,624,889 shares
were purchased and subsequently cancelled by the Company at a price
of 145p per share, returning GBP6.7m of the Company's cash.
On 17 February 2022 the Company announced a further proposed
return of capital, via a share buyback programme, under the
authorities obtained at the Company's last AGM held on 25 February
2021. The Company subsequently purchased 115,500 shares at an
average price of 151.0p. The Company then held its 2022 AGM on 3
March 2022 and the authorities to continue the buyback were again
granted, enabling the Company to further purchase up to 1,141,915
shares. Since the 2022 AGM, the Company has purchased 635,000
shares, at an average price of 153.9p, up until 31 March 2022. The
total amount of cash returned to shareholders in the first half of
this financial year is GBP1.2m.
8. Availability of the interim report
The interim report and interim results presentation are
available on the Company's corporate website, www.zytronicplc.com.
Copies can be requested from the Company's registered office:
Whiteley Road, Blaydon-on-Tyne, Tyne and Wear NE21 5NJ.
Corporate information
Websites:
www.zytronicplc.com
www.zytronic.co.uk
www.zytronic-inc.com
www.zytronic.cn
www.zytronic.jp
Secretary
Claire Smith
Email: claire.smith@zytronic.co.uk
Registered office
Whiteley Road
Blaydon-on-Tyne
Tyne and Wear
NE21 5NJ
Tel: 0191 414 5511
Fax: 0191 414 0545
Registration number
3881244
Stockbroker and Nominated Adviser
Singer Capital Markets
1 Bartholomew Lane
London
EC2N 2AX
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Auditor
Crowe U.K. LLP
Black Country House
Rounds Green Road
Oldbury
B69 2DJ
Bankers
Barclays Bank plc
71 Grey Street
Newcastle-upon-Tyne
NE99 1JP
Handelsbanken
8 Keel Row
The watermark
Gateshead
NE11 9SZ
Santander Corporate Banking
Baltic Place
South Shore Road
Gateshead
NE8 3AE
Yorkshire Bank
131-135 Northumberland Street
Newcastle-upon-Tyne
NE1 7AG
Regions Bank
2653 Marietta Hwy
Canton, GA
30114
USA
Solicitors
Ward Hadaway
Sandgate House
102 Quayside
Newcastle-upon-Tyne
NE1 3DX
Muckle LLP
Time Central
32 Gallowgate
Newcastle-upon-Tyne
NE1 4BF
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END
IR MZGMKZVKGZZZ
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May 17, 2022 02:01 ET (06:01 GMT)
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