Print   

For Immediate Release

27 May 2008

NIPSON DIGITAL PRINTING SYSTEMS PLC

RESULTS FOR THE 3 MONTHS ENDED 31 MARCH 2008

Nipson Digital Printing Systems PLC ('Nipson' or 'the Group'), the manufacturer and distributor of digital printing systems and consumables, today announces its results for the three months to 31 March 2008.

	3 months to 31 March 2008 £'000	Change  +/-%	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Revenue	7,572	+29.7%	5,837	27,335
Gross profit	1,423	+67.8%	848	3,463
Operating (loss)	(682)		(1,020)	(4,657)
(Loss) on ordinary activities before tax	(1,349)		(1,287)	(6,209)

• Recurrent revenues in the first 3 months continued to grow, increasing by 7.2% compared to the same period of 2007;

• Equipment revenues in the first 3 months increased by nearly 150% compared to the same period of 2007; and

• Cost reduction programmes continue to make their contribution despite the effect on gross margins of a weak US Dollar. 

New equipment sales for the first quarter of 2008 show that the new technology is now creating a positive impact both on sales and the Group's results. The Group will be presenting the complete range of their digital printing machines at 'Drupa', the international print trade fair held at Dusseldorf every four years, from 29 May to 11 June 2008.

Rimon Ben-Shaoul, Chairman, commenting on the results, said the following:

'There are positive signs of recovery and this despite the current economic climate, including the continued weakness of the US Dollar.'

For further information, please contact:

Nipson Digital Printing Systems PLC

Alfons Buts, Managing Director - Tel: + 32 (0)3 740 02 05

Robert Cahill, Group Finance Director - Tel: +33 (0)384 54 52 50

Beaumont Cornish Ltd (Nomad)

Roland Cornish / Rosalind Hill Abrahams - Tel: +44 (0)20 7628 3396

Keith, Bayley, Rogers & Co Ltd (Broker)

Derek Crowhurst / Brinsley Holman - Tel: +44 (0)20 3100 8300

Bankside Consultants Ltd

Ian Seaton - Tel: +44 (0)20 7367 8891 or Oliver Winters - Tel: +44 (0)20 7367 8874

  CHAIRMAN'S STATEMENT

Overview

Revenue for the 3 months to 31 March 2008 was £7.6m, an increase of 29.7% over the same period last year. The increase occurred both in new equipment sales and recurring revenues. Sales increased across all markets compared to the same period last year. 

Equipment sales, at £2.4m for the 3 months, showed an increase of nearly 150% over the comparative period.  The order book and pipeline for the second quarter of 2008 remain strong. 

Recurrent revenues for the 3 months to 31 March 2008 were £5.2m, an increase of 7.2% as compared to the same period last year. The Group's recurrent revenue is expected to continue to grow steadily. 

Gross profit for the 3 months to 31 March 2008 was £1.4m, 67.8% higher than the comparative period last year mainly due to the higher volume of equipment sales. Recurrent margins improved slightly as a result of a significant reduction in costs associated with the introduction of the new technology.  Improvements continued to flow through from the cost reduction programmes. Nevertheless, overall, gross margins were below expected levels, which for a major part was due to a further weakening of the US Dollar.

Operating Results

The operating result for the 3 months to 31 March 2008 showed a loss of £0.7m against a loss of £1.0m for the corresponding period in 2007. The net loss was £1.3m (2007: net loss of £1.3m). Operating costs at £2.1m (2007: £1.9m) were higher due to higher amortisation on previously capitalised R&D projects.  In the first quarter of 2007 the Group also received R&D tax credits, which were not received in the first quarter of 2008. The relative weakness of the GB Pound to the Euro is also a major reason for this difference. 

As at 31 March 2008 cash balances were £1.8m (£1.3m as at 31 December 2007). With higher equipment sales and recurrent sales, the inventory levels increased to £10.8m at the end of the period (£9.7m as at 31 December 2007). The level of trade and other receivables decreased to £9.2m (£9.5m as at 31 December 2007) despite the higher activity in equipment sales.

Following the announcement on 6 February 2008 and the passing of the necessary resolutions at the General Meeting of 28 February 2008, the Company issued approximately £1.5m of 5% unsecured convertible loan notes for cash to new investors and approximately £2.1m of 5% unsecured convertible loan notes to Nipson's major shareholder, Polar Communications by way of conversion of existing debt.  The remaining amount of the Polar loans and accruing interest following this issue and as of 31 March 2008 was approx £9m (31 December 2007: £10m). 

The costs of Research & Development in the first quarter of 2008 were £0.9m of which £0.4m were capitalised. For the first 3 months of 2008, £0.2m was capitalised net of amortisation of R&D intangible assets (2007: £1.2m).

Going Forward

There are positive signs of recovery and this despite the current economic climate, including the continued weakness of the US Dollar.

Rimon Ben-Shaoul, Chairman, Nipson Digital Printing Systems PLC

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

CONSOLIDATED INCOME STATEMENT

	3 months to 31 March 2008 £'000	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Continuing Operations Revenue	7,572	5,837	27,335
Cost of Sales	(6,149)	(4,989)	(23,872)
Gross Profit	1,423	848	3,463
Administrative Expenses	(2,105)	(1,868)	(7,667)
Other Operating Income	-	-	(453)
(Loss) on Continuous Operations before interest	(682)	(1,020)	(4,657)
Finance Income Finance Costs	141 (808)	10 (277)	191 (1,743)
(Loss) from Continuing Operations before taxation	(1,349)	(1,287)	(6,209)
Taxation	-	-	-
(Loss) from Continuing Operations after taxation	(1,349)	(1,287)	(6,209)
(Loss) per Ordinary Share	(2.6p)	(2.5p)	(11.9p)

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

	3 months to 31 March 2008 £'000	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Exchange Difference on Translation of Foreign Operations	532	56	234
Net Income/(Expense) Recognised Directly in Equity	532	56	234
(Loss) for the Year	(1,349)	(1,287)	(6,209)
Total Recognised Income and Expense for the Year	(817)	(1,231)	(5,975)

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

CONSOLIDATED BALANCE SHEET

	3 months to 31 March 2008 £'000	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Assets Non-Current Assets Goodwill	785	725	755
Other Intangible Assets	4,162	2,621	3,636
Property, Plant & Equipment	3,887	7,160	3,645
Deferred Tax Asset	672	549	597
Other Non-Current Assets	552	854	498
	10,058	11,909	9,131
Current Assets
Inventories	10,760	9,548	9,679
Trade and Other Receivables	9,186	9,776	9,545
Cash and Cash Equivalents	1,805	2,690	1,348
	21,751	22,014	20,572
Liabilities
Current Liabilities
Trade and Other Payables	(7,694)	(7,117)	(7,696)
Borrowings	(15,550)	(11,783)	(12,870)
	(23,244)	(18,900)	(20,566)
Net Current (Liabilities)/Assets	(1,493)	3,114	6
Non-Current Liabilities
Borrowings	(3,863)	(5,033)	(3,776)
Deferred Tax Liabilities	(672)	(549)	(597)
Retirement Benefit Liability	(1,099)	(949)	(1,016)
	(5,634)	(6,531)	(5,389)
Net Assets	2,931	8,492	3,748
Shareholder's Equity
Ordinary Share Capital	523	523	523
Share Premium	13,915	13,915	13,915
Reverse Acquisition Merger Reserve	3,057	3,057	3,057
Translation Reserve	698	(12)	166
Retained Earnings	(15,262)	(8,991)	(13,913)
Total Equity Attributable to Equity Holders	2,931	8,492	3,748

Approved by the Board of Directors on Monday 25 May 2008

Alfons Buts                     Robert Cahill            

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

CONSOLIDATED CASH FLOW STATEMENT

	3 months to 31 March 2008 £'000	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Net Cash (Decrease) from Operating Activities	(428)	(786)	(1,444)
Cash Flows from Investing Activities
Purchase of Intangible Assets	(414)	(792)	(2,480)
Purchase of Property, Plant & Equipment	(15)	(198)	(188)
Disposal of fixed assets	10	-	2,100
Interest Received	-	10	75
Net Cash Used in Investing Activities	(419)	(980)	(493)
Cash Flows from Financing Activities
Interest Paid	(53)	(248)	(541)
Capital Repayments on Finance Leases	(73)	(79)	(2,388)
Borrowings Raised - from Third Party	1,368	1,093	215
from Parent Undertaking	379	1,108	5,203
Borrowings Repaid	(317)	(10)	(1,796)
Net Cash Used in Financing Activities	1,304	1,864	693
Net Increase/(Decrease) in Cash & Cash Equivalents	457	98	(1,244)
Cash & Cash Equivalents at 1 January	1,348	2,592	2,592
Cash & Cash Equivalents at end of period	1,805	2,690	1,348

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

CASH FLOWS FROM OPERATING ACTIVITIES

Cash Generated from Operations	3 months to 31 March 2008 £'000	3 months to 31 March 2007 £'000	Full Year to 31 December 2007 £'000
Continuing Operations Loss before Taxation	(1,349)	(1,287)	(6,209)
Adjustments for:
Depreciation and Amortisation	705	272	1,619
Disposal of fixed assets	-	-	542
Finance Income	(141)	(10)	(191)
Finance Expense	808	277	1,743
Increase in Retirement Benefit Obligation	83	30	97
Share Based Payment Charge	-	-	-
Other gains and losses	244	-	-
Changes in Working Capital
(Increase)/Decrease in Inventories	(1,081)	(382)	(513)
Decrease/(Increase) in Trade & Other Receivables	305	(11)	576
(Decrease)/Increase in Payables	(2)	325	892
Cash (Used in)/Generated from Continuing Operations	(428)	(786)	(1,444)
Corporation Tax Paid	-	-	-
Net Cash (Decrease)/Increase from Continuing Operations	(428)	(786)	(1,444)

NOTES

1. Nature of Financial Information

The financial information contained within this interim report is unaudited. It does not constitute statutory accounts with in the meaning of section 240 of the Companies Act 1985.  The statutory accounts for the year ended 31 December 2007 have been signed and are awaiting approval by members at the AGM to be held 4 June 2008. The auditor's report on those accounts was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

2. Loss per Share

The Loss per Ordinary Share is calculated on the weighted average number of ordinary shares in issue during the period of 52,303,581 (2007: 52,303,581).  Due to the loss in the period the basic and diluted EPS are the same.

3. Accounting Policies

The interim results have been prepared in accordance with IFRS accounting rules.  The Accounting Policies used in the preparation of these results were the accounting policies used in the preparation of the results for the year of 2007 and detailed in the notes to those results (see Annual Report 2007 issued 13 May 2008).

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

Note 4 : STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

	Share Capital £'000	Share Premium £'000	Reverse Acquisition Reserve £'000	Translation Reserve £'000	Retained Earnings £'000	Total £'000
At 1 January 2007	523	13,915	3,057	(68)	(7,704)	9,723
Loss for the Period	-	-	-	-	(1,287)	(1,287)
Exchange Differences on Translation of Foreign Operations	-	-	-	56	-	56
At 31 March 2007	523	13,915	3,057	(12)	(8,991)	8,492
At 1 January 2008	523	13,915	3,057	166	(13,913)	3,748
Loss for the Period	-	-	-	-	(1,349)	(1,349)
Exchange Differences on Translation of Foreign Operations	-	-	-	532	-	532
At 31 March 2008	523	13,915	3,057	698	(15,262)	2,931

NOTE 5 (A) : GEOGRAPHICAL ANALYSIS OF SALES

Country / Region	3 months to 31 March 2008 £'000s	3 months to 31 March 2007 £'000s	Full Year to 31 December 2007 £'000s
France	1,440	998	5,331
Rest of Europe	2,419	2,299	8,786
USA and Canada	1,692	1,291	5,685
Asia	589	458	3,255
Latin America	937	467	1,828
Other	495	324	2,450
Total	7,572	5,837	27,335

NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the three months ended 31 March 2008

NOTE 5 (B) : SEGMENTAL ANALYSIS

 

ENDQRFILFFFESIDFIT