TIDMDTE
RNS Number : 6280S
Datong PLC
04 December 2012
Press Release 4 December 2012
DATONG PLC
("DATONG" or "the Group")
Final Results
DATONG PLC (DTE.L), a leading provider of covert intelligence
gathering solutions, today announces its final results for the year
ended 30 September 2012.
Highlights
-- Revenue of GBP9.69 million (2011: GBP11.75 million) reflecting
the economic and political climate in the USA and Europe
-- Operating loss before exceptional items of GBP0.03 million
(2011: profit of GBP0.05 million)
-- Earnings per share of 2.93p (2011: 1.03p)
-- Net cash of GBP2.48 million (2011: GBP1.27 million) and
no debt on the balance sheet
-- Significant orders received for new products from major
markets
-- Strategic review underway aimed at improving the predictability
and sustainability of future growth
-- Operational improvements and cost reductions delivering
tangible benefits
-- Major new project opportunity expected to support strong
revenue growth in 2013
Commenting on the results, Mark Cook, Chief Executive Officer,
said:
"The Group's performance during the period has been impacted by
the broader fiscal pressures and uncertainties in the USA and
Europe in particular; however the Board has commenced a strategic
review in order to identify and execute a series of action points
which will improve the predictability of future growth.
"By reinvesting short term profits into this strategic plan,
combined with further operational improvements and cost reductions,
the Board believes that DATONG will deliver sustainable profitable
growth in the medium and longer term.
"The Board is pleased that the Group has a strong sales
opportunity pipeline which underpins our confidence in achieving
revenue growth for the current financial year."
- Ends -
Enquiries:
DATONG PLC Tel: +44 (0) 113 239
5350
Mark Cook, Chief Executive Officer
Stephen Ayres, Finance Director
Nominated adviser and broker
Canaccord Genuity Tel: +44 (0) 207 523
8000
Simon Bridges / Mark Whitmore
Media enquiries
Abchurch Communications Tel: +44 (0) 207 398
7710
Sarah Hollins / Quincy Allan
quincy.allan@abchurch-group.com
CHAIRMAN'S STATEMENT
The effective combating of terrorist and criminal activity
remains a key priority of policy makers in our major markets with
proactive intelligence gathering being seen as a major enabling
strategy. The reliable provision of usable intelligence for our
customers has underpinned the Group's strategy and growth plans
over recent years.
DATONG is well positioned within its niche market sector,
however, in the current economic and political environment DATONG's
business is proving to be very volatile and this is reflected in
the financial result for the year. Overall, revenues have decreased
to GBP9.69 million (2011: GBP11.75 million) with an operating loss
before exceptional items of GBP0.03 million (2011: profit of
GBP0.05 million). Earnings per share were 2.93 pence (2011: 1.03
pence). In particular, demand from within Europe has remained weak
throughout the year exacerbated by a weak end to the year from the
Americas, however, this was partly offset by strong performances
from both the UK and ROW territories.
During 2013 the Group will continue to maintain its focus and
capability on our customers and despite significant uncertainty
surrounding the US market for 2013, the Board is expecting to
deliver revenue growth which, together with further operational
improvements and cost reductions, is expected to generate profits
that will allow DATONG, overtime, to transition its current
business model providing improved and more sustained and
predictable growth in the future. As such, and as more fully
outlined in the Business Review below, the Board is in the process
of reviewing the Group's strategy and expects to re-invest short
term profits in implementing a number of new strategic actions.
Dividend
The Board continues to remain prudent with regards to the
payment of a dividend, thereby preserving the existing strength of
the Group's Balance Sheet. Consequently the Board does not
recommend the payment of a dividend (2011: GBPnil) but is looking
to establish a progressive dividend policy when the Group's
financial performance allows.
Board changes
Mark Cook was appointed to the Board as Chief Executive Officer
on 9 January 2012. Mark has significant experience of successfully
developing high technology defence and security businesses in both
the UK and international markets which are proving invaluable to
DATONG.
Brian Smith, who had been acting interim Chief Executive Officer
since 13 July 2011, reverted to his position as a Non-Executive
Director on 9 January 2012.
John Kirtland stood down from his role as Group Sales Director
on 30 October 2012. John had been with the Group for nearly three
years, initially as Head of Group Sales and subsequently was
appointed to the Board on 17 January 2011.
Paul Lever
Chairman
4 December 2012
BUSINESS REVIEW
Strategy
Operating within a relatively niche market and developed over 35
years, DATONG has established a leading brand as a provider of
advanced location based intelligence gathering solutions to high
end users within military, security and law enforcement agencies on
an international scale. Despite the continuing fiscal uncertainties
surrounding Government funding of these agencies, strategic
spending reviews across a number of DATONG's key geographic markets
are delivering a common message; the priority focus is concentrated
on the use of special units and the gathering of intelligence in
order to proactively prevent incidents and any breach of borders or
security.
The Group's core strategy is to continue with its current
activities addressing this priority by investing in leading edge
product, software and service solutions, whilst developing and
extending its routes to market and customer base. To address the
volatility in its growth over recent years and to deliver a more
predictable and sustained level of growth in the future, the Board
has identified the following strategic actions to be taken:
1. Increase the Group's operational presence within the
strategically important US market, ensuring a greater coverage and
offered capability to its customer base.
2. Develop DATONG's capability to better support its customers
with specific developments to provide next generation integrated
systems.
3. Develop new products, services and systems for both its
current market place and technologically related markets.
4. Where appropriate, make strategic alliances and/or
acquisitions that provide critical mass, enhanced routes to market
or access to complementary technology or service offerings.
The profits over the next two to three years expected to be
generated from the Group's current activities will be used to fund
these strategic actions, which the Board anticipates will enable
long term growth and value creation to be achieved.
Market review
The Group has a broad international presence within the defence
and security market and in particular within the Special Forces
sector, an area of the market proving to be more resilient than
others. Fiscal pressures and uncertainties within a number of
countries have undoubtedly impacted DATONG during the year but to a
greater degree the lumpiness and volatility of customer spend,
particularly within the US and for Third Party products where the
size of orders can be large, are reflected in an overall reduction
in revenues to GBP9.69 million (2011: GBP11.75 million). An
analysis of the revenue by reportable segment and geographic market
is set out below:
Year on
year change
2012 2011
GBP'000 GBP'000 %
---------------------- -------- -------- -------------
Revenue
Own Products 8,099 9,407 -14%
Third Party products 1,591 2,338 -32%
-------- -------- -------------
9,690 11,745 -17%
-------- -------- -------------
Revenue
UK 3,094 2,738 13%
Europe 541 2,648 -80%
Americas 3,947 4,557 -13%
Rest of World 2,108 1,802 17%
-------- -------- -------------
9,690 11,745 -17%
-------- -------- -------------
Despite a strong take up from new products across the core UK
and Americas territories, revenues from Own Products in the year
have fallen 14% reflecting an overall decline principally from
Europe and the Americas. Revenue growth from this segment is
expected in 2013 which is expected to incorporate a major new
contract award, the customer order for which is expected to be
received during Q1 of calendar 2013.
Revenues from Third Party products have fallen 32% in the year
principally reflecting a decline in European sales. DATONG's
distribution rights to a number of countries for one of the Third
Party technologies have been terminated during the year reflecting
the commercial growth strategy of our partner. The Group expects to
see this trend continuing as our partner grows and consequently
anticipates a gradual reduction in the relative financial
importance of this business segment over time.
Americas
Uncertainty surrounding the US deficit, presidential elections
and possible sequestration process adversely impacted order intake
from that region at the end of the year, traditionally a strong
time for DATONG as the Group usually benefits from increased
customer spending at the end of the budget cycle.
DATONG has continued to expand its sales activity in the region
over the year and is developing strong relationships with a number
of new key customer groups. This, together with strong interest
being shown in recent product launches, gives the Board confidence
of future growth from this critical territory and as such DATONG
will continue to grow its presence in region.
However, significant economic uncertainty is likely to remain in
the short term and the Board expects to see a slower than usual
first half to this financial year with an upturn in business in the
second half.
UK
In the UK, the market has remained relatively stable during 2012
and a further robust year is expected in 2013.
Europe
Despite isolated pockets of strong performance within Europe,
overall the challenging economic environment across the region has
had a dramatic adverse impact on the Group particularly with
respect to Third Party product orders which by their nature tend to
be more volatile reflecting their relative size and number.
No improvement in the economic environment has yet been seen and
the Board remains relatively cautious with respect to 2013.
Rest of World
The Group continues to enjoy success in developing its business
within certain other countries including parts of the Middle East
and South East Asia. Fiscal pressures within these markets have
tended not to be a dominant factor in these areas however political
uncertainty can directly impact the timing of orders
significantly.
Research and Development
Research and development ("R&D") is a fundamental and
central part of DATONG's organic growth strategy. Consequently, the
Group has continued to invest heavily in this area in response to
both customer's funded and non-funded opportunities and their end
user requirements. The main development drivers have been around
miniaturisation, longevity of mission life, ease of use and
increased interoperability and integration.
Gross R&D expenditure in the year was GBP1.78 million (2011:
GBP1.74 million) representing 22% of Own Product revenues (2011:
18%). Capitalised development costs were GBP0.97 million (2011:
GBP1.32 million) and the net costs written off against profits were
GBP2.03 million (2011: GBP1.54 million).
Following a high number of product launches over the last 2-3
years, the Group has modernised virtually its entire product
portfolio. The development activity during 2013 has continued this
modernisation activity but also been focussed on the development of
additional features and capability aimed at increasing possible
market applications of the technology and to support DATONG's
strategy of broadening its customer base. Customer interest in
these developments is strong, particularly from the traditional
geographic markets.
Patent infringement litigation
As more fully disclosed in the Company's Annual Report and
Accounts for the year ended 30 September 2011, DATONG was subject
to a patent infringement claim. During the year the Court of Appeal
has judged that the patent in suit is invalid and, as a result,
neither damages nor legal costs will be payable or recoverable by
the Company. Consequently the financial provision of GBP0.30
million previously carried has been released into profit as an
exceptional credit during the year.
FINANCIAL REVIEW
Revenue and profit from operations
Group revenue for the year fell to GBP9.69 million (2011:
GBP11.75 million) reflecting the performance within the reporting
segments as noted above. Profit from operations before exceptional
items fell slightly to a loss of GBP0.03 million (2011: profit of
GBP0.05 million).
During the year a number of operational improvement and cost
reduction initiatives have been implemented and are delivering
significant tangible benefit to the Group although underlying
margin improvements have been offset by the reduced volume in the
year. These initiatives will continue through 2013 with further
restructuring being undertaken during the first quarter of this
financial year. Restructuring costs included within the profit for
the year amounted to GBP0.11 million (2011: GBP0.29 million) and
for 2013 is expected to be around GBP0.25 million.
By the nature of its operations, the Group is exposed to
fluctuations in the US dollar exchange rate, which is largely
managed by way of forward exchange contracts. The average rate in
the period was $1.59 (2011: $1.60) resulting in a negligible
translation impact in the year compared to a constant currency
position.
Taxation
The tax credit for the period of GBP0.14 million (2011: GBP0.10
million) incorporates the continuing benefit of UK tax incentives
associated with the Group's research and development
activities.
Earnings per share and dividends
Basic and diluted earnings per share for the year were 2.93
pence per share (2011: 1.03 pence). The adjusted earnings per
share, calculated using the profit for the year before exceptional
items divided by the weighted average number of shares in issue,
was 0.77 pence per share.
The Board is not recommending the payment of a dividend (2011:
GBPnil).
Cash flow and net cash
The net cash inflow from operating activities but after the
purchase of tangible and intangible assets during the year was
GBP1.22 million (2011: outflow of GBP1.67 million) and benefitted
from a cash inflow from a change in working capital of GBP0.41
million (2011: outflow of GBP1.90 million).
Net cash and cash equivalents at 30 September 2012 were GBP2.48
million (2011: GBP1.27 million). The Group had no debt.
PRINCIPAL RISKS
The Board monitors potential business risks and endeavours to
manage those risks through appropriate means including employee
involvement, robust financial and business controls and polices and
contracts of insurance.
As an international provider of advanced electronic and software
based systems into government bodies, DATONG is subject to many of
the same risks faced by similar such organisations. Specific risks
to DATONG include:
Customer Base
DATONG's customer base largely compromises government bodies and
as such DATONG faces risks and opportunities associated with
changes in political and economic policies and changes to
international trade relationships and restrictions. DATONG's
strategy involves further expansion of its product and service
portfolio, customer base and geographic markets that will further
diversify this risk.
Technological changes
The market in which DATONG operates is characterised by
technological change, changes in customer requirements and changes
in industry standards resulting in the frequent introduction of new
products.
DATONG has created and maintains appropriate personnel policies
necessary to attract, develop and retain appropriately qualified
personnel and ensures sufficient resources are allocated to
research and development activities to meet the technical demands
of the business.
Third Party Product Supply
Third Party sales represent products bought in from third
parties and distributed by DATONG. They represented 16% (2011: 20%)
of the Group revenues in the period. Distribution rights have been
protected by formal agreements with our partners.
Foreign Currency Risk
DATONG is exposed to movements in foreign exchange rates,
particularly the US dollar, which is managed by way of forward
exchange contracts. The exchange rates used during the period to
translate dollar based transactions and year end dollar based
assets are shown in the table below:
US Dollar Average rate during Average rate Period end Period end
the year to 30 during the year rate at 30 rate at 30
September 2012 to 30 September September September
2011 2012 2011
----------- -------------------- ----------------- ------------ ------------
GBP1 1.59 1.60 1.62 1.56
----------- -------------------- ----------------- ------------ ------------
*Average represents the average rate weighted by sales
distribution.
KEY PERFORMANCE INDICATORS
The key performance indicators used to measure the performance
of the Group are as follows:
Year ended Year ended
30 September 30 September
2012 2011
------------------------------- -------------- --------------
Orders received (GBP'000) 9,826 10,742
------------------------------- -------------- --------------
Revenue (GBP'000) 9,690 11,745
------------------------------- -------------- --------------
Revenue per employee
(GBP'000) 120 129
------------------------------- -------------- --------------
(Loss)/profit from operations
before exceptional items
(GBP'000) (32) 48
------------------------------- -------------- --------------
Operating margin (%)* (0.33) 0.41
------------------------------- -------------- --------------
Return on capital employed
(%)** (0.41) 0.56
------------------------------- -------------- --------------
*Operating margin is the profit from operations before
exceptions items expressed as a percentage of revenue.
** Return on capital employed is the profit from operations
before exceptional items expressed as a percentage of capital
employed. Capital employed is net assets less net cash.
CURRENT TRADING AND PROSPECTS
The confirmed orderbook at 30 September 2012 was GBP1.03 million
(2011: GBP1.03 million) and orders received in the weeks since the
year end has been in line with last year.
The sales order pipeline is strong and underpins the Boards
confidence of achieving revenue growth for the 2013 financial year,
however, it expects the results to be weighted to the second half
reflecting the current uncertainties within the US market and the
expected delivery timescales of certain order opportunities in the
sales pipeline.
Mark Cook
Chief Executive
Stephen Ayres
Finance Director
4 December 2012
Consolidated Income Statement for the year ended 30 September
2012
Year Year
ended ended
30 September 30 September
2012 2011
Continuing operations Note GBP'000 GBP'000
------------------------------------ ---------- ----- ------------- ---------------
Revenue 2 9,690 11,745
Cost of sales (5,606) (6,563)
------------------------------------------------ ----- ------------- ---------------
Gross profit 4,084 5,182
Overhead costs (4,108) (5,126)
Share of post-tax result
of associate (8) (8)
Exceptional litigation costs 300 -
Profit from operations 2 268 48
Investment income 1 1
Finance costs - (1)
------------------------------------------------ ----- ------------- ---------------
Profit before taxation 269 48
Taxation 3 137 95
------------------------------------------------ ----- ------------- ---------------
Profit for the period attributable
to equity holders of the
Company 406 143
------------------------------------------------ ----- ------------- ---------------
Earnings per ordinary share
(pence)
Basic 4 2.93 1.03
Diluted 4 2.93 1.03
------------------------------------------------ ----- ------------- --------------- --------
Consolidated Statement of Comprehensive Income for the year
ended 30 September 2012
Year Year
ended ended
30 September 30 September
2012 2011
GBP'000 GBP'000
---------------------------------------- ------------- -------------
Profit for the period 406 143
Other comprehensive income
Currency translation differences 47 (18)
---------------------------------------- ------------- -------------
Total comprehensive income for the
period attributable to equity holders
of the Company 453 125
---------------------------------------- ------------- -------------
Consolidated Statement of Financial Position at 30 September
2012
2012 2011
------------------ ------------------
Note GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----- -------- -------- -------- --------
Assets
Non-current assets
Intangible assets 2,808 3,070
Property, plant and equipment 1,002 1,148
Investments in associates - (8)
Deferred tax assets 4 4
------------------------------- ----- -------- -------- -------- --------
3,814 4,214
Current assets
Inventories 5 2,297 2,028
Trade and other receivables 6 3,039 4,112
Tax receivables 100 161
Cash and cash equivalents 2,480 1,268
------------------------------- ----- -------- -------- -------- --------
7,916 7,569
Total assets 11,730 11,783
------------------------------- ----- -------- -------- -------- --------
Liabilities
Current liabilities
Trade and other payables 7 (1,427) (1,563)
(1,427) (1,563)
Non-current liabilities
Deferred tax liabilities (35) (48)
Provisions - (300)
------------------------------- ----- -------- -------- -------- --------
(35) (348)
------------------------------- ----- -------- -------- -------- --------
Total liabilities (1,462) (1,911)
------------------------------- ----- -------- -------- -------- --------
Net assets 10,268 9,872
------------------------------- ----- -------- -------- -------- --------
Equity
Share capital 69 69
Share premium 4,468 4,468
Currency translation reserve 30 (17)
Retained earnings 5,701 5,352
------------------------------- ----- -------- -------- -------- --------
Equity attributable to equity
holders of the Company 10,268 9,872
------------------------------- ----- -------- -------- -------- --------
Consolidated Statement of Changes in Equity for the year ended
30 September 2012
Currency
Share Share translation Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- ------------ --------- --------
At 1 October 2010 69 4,468 1 5,370 9,908
Total comprehensive income
for the period - - (18) 143 125
Cost of share-based incentives - - - (161) (161)
At 30 September 2011 69 4,468 (17) 5,352 9,872
Total comprehensive income
for the period - - 47 406 453
Cost of share-based incentives - - - (57) (57)
At 30 September 2012 69 4,468 30 5,701 10,268
-------------------------------- -------- -------- ------------ --------- --------
Consolidated Statement of Cash Flows for the year ended 30
September 2012
Year Year
ended ended
30 September 30 September
2012 2011
GBP'000 GBP'000
----------------------------------------- ------------- -------------
Cash flows from operating activities
Profit from operations 268 48
Adjustments for:
Depreciation and amortisation 1,545 1,576
Impairment of investments in associates 4 -
Share of post-tax result of associate 8 8
Profit on disposal of property, 3 -
plant and equipment
Cost of share-based incentives (57) (161)
Fair value loss on derivative
financial instruments - 22
Increase in inventories (272) (45)
Decrease/(increase) in trade and
other receivables 1,025 (1,224)
Decrease in trade and other payables (345) (627)
Tax received 185 254
----------------------------------------- ------------- -------------
Net cash generated from/(used
in) operating activities 2,364 (149)
----------------------------------------- ------------- -------------
Cash flows from investing activities
Interest received 1 1
Sales of property, plant and equipment 2 375
Purchases of property, plant and
equipment (172) (203)
Purchase of intangible assets (974) (1,318)
Investment in associate (20) -
----------------------------------------- ------------- -------------
Net cash used in investing activities (1,163) (1,145)
----------------------------------------- ------------- -------------
Cash flows from financing activities
Interest paid - (1)
Capital element of finance leases
repaid - (16)
Net cash used in financing activities - (17)
----------------------------------------- ------------- -------------
Net increase/(decrease) in cash
and cash equivalents 1,201 (1,311)
Cash and cash equivalents at the
start of the period 1,268 2,575
Effect of foreign currency translation 11 4
----------------------------------------- ------------- -------------
Cash and cash equivalents at the
end of the period 2,480 1,268
----------------------------------------- ------------- -------------
Notes
1. Basis of preparation
This financial information has been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS"). The accounting policies used in its
preparation are the same as those applied and set out in the
Company's financial statements for the year ended 30 September
2011. The financial information represents consolidated financial
information for the Company and its subsidiary undertakings and is
derived from the Group's consolidated financial statements for the
year ended 30 September 2012. It does not constitute the Company's
statutory accounts. Statutory accounts for the year ended 30
September 2011 have been delivered to the registrar of companies,
and those for the year ended 30 September 2012 will be delivered in
due course. The Group's auditors, Saffery Champness, gave an
unqualified report on the 2011 financial statements.
2. Segment information
Information reported to the chief operating decision maker for
the purposes of resource allocation and assessment of segment
performance focuses on types of goods delivered. The Group's
reportable segments under IFRS 8 Operating Segments are Own
products and Third Party products. Own products represents products
developed, manufactured and distributed by the Group. Third Party
products represents products bought in from a third party and
distributed by the Group.
Segment revenues and results
The segment results for the year are as follows:
Year ended 30 Year ended 30 September
September 2012 2011
------------------ --------------------------
Revenue Result Revenue Result
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------- ------------ ------------
Segment revenue and results
Own products 8,099 3,601 9,407 4,205
Third Party products 1,591 669 2,338 832
----------------------------- -------- -------- ------------ ------------
9,690 4,270 11,745 5,037
-------- ------------
Unallocated costs (3,994) (4,981)
Share of post-tax result of
associate (8) (8)
----------------------------- -------- -------- ------------ ------------
Profit from operations 268 48
Investment income 1 1
Finance costs - (1)
----------------------------- -------- -------- ------------ ------------
Profit before taxation 269 48
Taxation 137 95
----------------------------- -------- -------- ------------ ------------
Profit for the period 406 143
----------------------------- -------- -------- ------------ ------------
Segment revenue represents revenue generated from external
customers. Inter segment sales were not significant.
The products from both reportable segments are offered for sale
in the same market sectors and consequently the reportable segments
are managed together as one business operating from the same
locations. Accordingly only directly attributable items have been
allocated across the segments.
An analysis of the Group's revenue by its major products and
services is represented by the above analysis by reportable
segment.
Other segment information
The segments' assets and liabilities at 30 September 2012 for
the period then ended are as follows:
2012 2011
---------------------- ----------------------
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- ------------ -------- ------------
Segment assets and liabilities
Own products 8,219 873 9,087 794
Third Party products 837 378 1,014 798
-------------------------------- -------- ------------ -------- ------------
9,056 1,251 10,101 1,592
Unallocated 2,674 211 1,682 319
-------------------------------- -------- ------------ -------- ------------
11,730 1,462 11,783 1,911
-------------------------------- -------- ------------ -------- ------------
Segment assets principally relate to property, plant and
equipment, intangible assets, inventories and trade and other
receivables. Unallocated assets principally relate to unallocated
property, plant and equipment, tax receivables and cash and cash
equivalents.
Segment liabilities principally relate to provisions and trade
and other payables. Unallocated liabilities principally relate to
tax payables and borrowings.
Geographical information
The Group's two reportable segments operate in four main
geographical areas, even though they are managed on a worldwide
basis. The revenue from external customers across those geographic
areas was:
Year ended 30 Year ended 30
September 2012 September 2011
GBP'000 GBP'000
Geographical segments
United Kingdom 3,094 2,738
Europe 541 2,648
Americas 3,947 4,557
Rest of World 2,108 1,802
----------------------- ----------------- -----------------
9,690 11,745
----------------------- ----------------- -----------------
Revenue is reported by the geographical location of
customers.
3. Taxation
Year ended 30 Year ended 30
September 2012 September 2011
GBP'000 GBP'000
--------------------------- ---------------- ----------------
UK tax:
- current year (90) (151)
- prior year (34) -
--------------------------- ---------------- ----------------
Total UK tax (124) (151)
--------------------------- ---------------- ----------------
Deferred tax:
- current year (2) (2)
- prior year (11) 58
--------------------------- ---------------- ----------------
Total deferred tax (13) 56
--------------------------- ---------------- ----------------
Tax credit for the period (137) (95)
--------------------------- ---------------- ----------------
The tax credit included in the share of the post-tax result of
associate is GBP2,000 (2011: GBP2,000).
The current tax credit differs from the theoretical amount that
would arise using the profit before taxation and the standard rate
of UK corporation tax as follows:
Year Year
ended ended
30 September 30 September
2012 2011
GBP'000 GBP'000
---------------------------------------- ------------- -------------
Profit before taxation 269 48
---------------------------------------- ------------- -------------
Tax at UK corporation tax rate of 25%
(2010: 26%) 67 13
Effects of:
- permanent timing differences (233) (176)
- adjustment in respect of prior years (45) 58
- unrecognised deferred tax assets 72 8
- share of tax on result of associate 2 2
Tax credit for the period (137) (95)
---------------------------------------- ------------- -------------
4. Earnings per ordinary share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive shares arising from
outstanding share options. For this adjustment, a calculation is
made to determine the number of shares that could have been
acquired at fair value (determined as the average annual market
share price during the period) based on the monetary value of the
subscription rights attached to outstanding share options. The
number of shares calculated as above is compared with the number of
shares that would have been issued assuming the exercise of share
options. The difference is added to the denominator as additional
shares for no consideration. There is no adjustment made to the
numerator.
Year Year
ended ended
30 September 30 September
2012 2011
-------------------------------------------- ------------- -------------
Profit for the period attributable to
equity holders of the Company (GBP'000) 406 143
-------------------------------------------- ------------- -------------
Weighted average number of ordinary shares
in issue for basic and diluted earnings
per share 13,834,375 13,834,375
-------------------------------------------- ------------- -------------
Basic and diluted earnings per share
(pence) 2.93p 1.03p
-------------------------------------------- ------------- -------------
At 30 September 2012 options over 1,306,010 (2011: 737,010)
additional shares had been granted that could potentially dilute
basic earnings per share in the future, but were not included in
the calculation of dilutive shares because, based on the conditions
during the period, the effect would not have been dilutive.
5. Inventories
2012 2011
GBP'000 GBP'000
------------------------------ -------- --------
Raw materials 673 851
Work in progress 437 355
Finished goods and goods for
resale 1,187 822
------------------------------ -------- --------
2,297 2,028
------------------------------ -------- --------
6. Trade and other receivables
2012 2011
GBP'000 GBP'000
-------------------------------- -------- --------
Trade receivables 2,819 3,685
Less: provision for impairment - -
of trade receivables
-------------------------------- -------- --------
2,819 3,685
Other receivables 90 258
Prepayments and accrued
income 130 169
-------------------------------- -------- --------
3,039 4,112
-------------------------------- -------- --------
Movements on the provision for impairment of trade receivables
are as follows:
2012 2011
GBP'000 GBP'000
-------------------------------- --------- --------
At start of year - 43
Receivables written off during
the year - (43)
At end of year - -
-------------------------------- --------- --------
7. Trade and other payables
2012 2011
GBP'000 GBP'000
--------------------------------- -------- --------
Trade payables 805 1,010
Other taxes and social security 100 108
Other creditors 76 163
Accruals and deferred income 446 282
--------------------------------- -------- --------
1,427 1,563
--------------------------------- -------- --------
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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