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1st Dental Laboratories plc ('1st Dental' or the 'Company')

 

Interim Results

1st Dental Laboratories plc (AIM:FDT), the UK's leading quoted provider of laboratory services to the dental industry, announces interim results for the six months to 31 May 2008.

The results for the first six months of our trading year, which reflect the business disruptions that I mentioned earlier in the year are disappointing. These disruptions resulted in a downturn in both turnover and margin at our Stourport and Blackpool laboratories. 

However, we are pleased to report that at Stourport turnover and margin has now returned to 84% of the pre-disruptions level. 

With the assistance of a dedicated sales and marketing team we also hope to rebuild the Blackpool business to previous levels within the year; we have already seen a number of clients returning to us.

The underlying business continues to perform as well as it did in the second half of last year with certain laboratories showing good growth especially in the Midlands and Yorkshire areas. This growth comes from an increase in private prescriptions and areas of NHS growth, an indicator that the PCT changes are behind us.

e-teeth continues to grow at an impressive rate and since its launch we have seen month-on-month compound turnover growth of 16%. e-teeth has become a very successful business unit having now over taken three of our smaller laboratories in terms of turnover. This business is made up of new clients and we see no migration from existing accounts across to e-teeth. We are looking forward to further increases in performance throughout the year. 

Financial results and highlights

Turnover £4,874k (2007: £5,376k)

Gross profit £1,634k (2007: £1,919k)

Gross margin 33.5% (2007: 35.7%)

Loss for period £141k (2007: Loss £195k, restated profit under IFRS £63k)

Net profit contributions from Laboratories £487k (2007: £781k)

Head office costs £428k (2007: £519k)

Group Administrative cost £1,697k (2007: £1,768k)

Bank debt reduction in period of £358k to £1,390k (2007: £1,748k)

Outlook

These results are disappointing following the 2007 financial statements. However, this is due to the disruptions as previously mentioned and these laboratories are now recovering. At the half year we see a loss of £141k and at the same period before restatement in 2007 we reported a loss of £195k. From this position we went onto produce last year's results of recurring EBITDA* of £1,029k and operating profit before goodwill amortisation of £555k. We should note there has been positive cash generation in the first half of this year.

Despite the business interruptions at the start of the year, the core laboratory business units are performing well, added to the continuing growth of e-teeth, a strengthened management team and Board, the executives believe the Company's prospects to the end of the year are good.

* recurring is defined as profit from the laboratory business

Andrew Garner
Chairman  

27th August 2008

For Further information:

 

Andrew Garner                               01509 650 111

Chairman 1st Dental Laboratories plc  

Nicola Marrin

Seymour Pierce Limited                    020 7107 8000

1st Dental Laboratories plc
Consolidated Income Statement
for the 6 months ended 31 May 2008
	Unaudited  6 months ended			Restated Unaudited 6 months ended			Restated Unaudited year ended
	31 May 08			31 May 07			30 Nov 07
Continuing operations	£'000			£'000			£'000
Revenue	4,874			5,376			11,022
Cost of sales	(3,240)			(3,457)			(6,840)
Gross profit	1,634			1,919			4,182
	33.5%			35.7%			37.9%
Total administrative expenses	(1,697)			(1,768)			(3,629)
Operating (loss) / profit	(63)			151			553
Finance costs
Finance income	22			27			53
Finance costs	(100)			(115)			(227)
(Loss) / profit on ordinary activities before tax	(141)			63			379
Tax on (loss) / profit on ordinary activities	-			-			-
(Loss) / profit for the period from continuing operations	(141)			63			379
(Loss) / earnings per share:
Basic and diluted	(0.34)	p		0.15	p		0.90	p

1st Dental Laboratories plc
Consolidated Balance Sheet
	Unaudited		Restated unaudited		Restated unaudited
	31 May 08		31 May 07		30 Nov 07
Assets	£'000		£'000		£'000
Non Current Assets
Intangible assets	7,087		7,084		7,087
Property, plant and equipment	1,894		1,897		1,832
	8,981		8,981		8,919
Current Assets
Inventories	302		302		321
Trade & other receivables	1,367		1,696		1,553
Cash and cash equivalent	712		752		1,067
	2,381		2,750		2,941
Total Assets	11,362		11,731		11,860
Current Liabilities
Trade creditors & other payables	(731)		(899)		(946)
Interest bearing loans & borrowings	(642)		(488)		(632)
	(1,373)		(1,387)		(1,578)
Non Current Liabilities
Interest bearing loans & borrowings	(1,460)		(2,011)		(1,625)
Total Liabilities	(2,833)		(3,398)		(3,203)
Net Assets	8,529		8,333		8,657
Equity
Called up share capital	4,202		4,202		4,202
Share premium account	6,358		6,358		6,358
Equity reserve	99		78		86
Profit and loss account	(2,130)		(2,305)		(1,989)
Total Equity	8,529		8,333		8,657
These financial statements were approved by the board of directors on 27th August 2008 and were signed on its behalf by:
Roger Smallwood
Director

1st Dental Laboratories plc
Consolidated Statement of Changes in Equity
as at 31 May 2008
					Share capital	Share premium	Equity reserve	Profit and loss account	Total
					£'000	£'000	£'000	£'000	£'000
Balance at 1 December 2006					4,202	6,358	71	(2,368)	8,263
Profit for the period					-	-	-	379	379
Change in equity reserve					-	-	15	-	15
Balance as at 30 November 2007					4,202	6,358	86	(1,989)	8,657
Loss for the period					-	-	-	(141)	(141)
Change in equity reserve					-	-	13	-	13
Balance as at 31 May 2008					4,202	6,358	99	(2,130)	8,529
The Equity reserve relates to share based payments reserve and represents the increase in equity that corresponds to the expense recognised in the income statement in respect of the Group's share option scheme.

1st Dental Laboratories plc
Consolidated Cashflow Statement
for the year ended 31 May 2008
		Unaudited for the 6 months ended		Restated Unaudited 6 months ended		Restated Unaudited year ended
		31 May 08		31 May 07		30 Nov 07
		£'000		£'000		£'000
Cash flows from operating activities
Cash generated from operations		86		315		1,103
Income taxes received		-		53		52
Finance income		22		27		53
Finance costs		(100)		(115)		(227)
Net cash from operating activities		8		280		981
Cash outflows from investing activities
Purchase of property, plant & equipment		(154)		(82)		(169)
Proceeds from sale of property, plant & equipment		13		5		22
Acquisition of subsidiary		-		-		(75)
Net cash used in investing activities		(141)		(77)		(222)
Cash flows from financing activities
Payment of finance lease liabilities		(67)		(31)		(60)
Repayment of borrowings		(155)		(596)		(808)
Net cash used in financing activities		(222)		(627)		(868)
Net decrease in cash and cash equivalents		(355)		(424)		(109)
Cash and cash equivalents at beginning of period		1,067		1,176		1,176
Cash and cash equivalents at end of period		712		752		1,067
Reconciliation of (loss) / profit before tax to cash flows from operating activities		Unaudited for the 6 months ended		Restated Unaudited 6 months ended		Restated Unaudited year ended
		31 May 08		31 May 07		30 Nov 07
(Loss) / profit after tax		(141)		63		379
Adjustments for
depreciation		133		134		264
equity settled share based payment expenses		13		7		15
(profit)/loss on sale of property, plant and equipment		13		(1)		4
net finance cost		78		88		174
Changes in working capital
stock		19		34		15
trade and other receivables		186		241		384
trade and other payables		(215)		(251)		(132)
Cash generated from operations		86		315		1,103

 

1st Dental Laboratories plc 

Notes to the interim financial statements 

for the six months ended 31 May 2008

 

1. Significant accounting policies 

Basis of preparation 

The interim results have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. These are the Group's first interim financial statements prepared under IFRS and are in accordance with IAS 34 'Interim Financial Reporting'. The disclosures required by IFRS1 'First time adoption of IFRS' concerning the transition from UK GAAP to IFRS have been included in these notes. 

These interim results are unaudited and have not been reviewed by the Group's auditors. They were approved by the Board of Directors on 27th August 2008. 

The statutory accounts for the period ended 30 November 2007, which were prepared under UK GAAP, have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditors was unqualified and did not contain the statements under section 237(2) or (3) of the Companies Act 1985. The interim financial information does not constitute statutory accounts as defined under Section 240 of the Companies Act 1985.

The accounting policies applied by the Group resulting from changes for IFRS are set out below. In all other respects, they are the same as those applied in the consolidated financial statements for the period ended 30 November 2007.

 

Goodwill 

Acquisitions are accounted for using the acquisition method. Goodwill is stated at cost less any accumulated impairment losses. 

Holiday pay accrual

Holiday pay accrual is reflected in both current interim and prior years.

2. Seasonality 

In the directors' opinion there are no seasonal variations in business operations. 

3. Segmental reporting

There is one geographical market segment - UK and one business segment relating to the principal activity, being the manufacture of dental appliances.

4. Taxation 

There is no taxation in the periods.

5. (Loss) / earnings per share 

The calculation of loss per share is based on restated loss of £141k in May 2008, profit of £379k in November 2007 and loss of £63k in May 2007, and 42 million shares (Nov 2007: 42m, May 2007: 42m), being the average number of shares in issue. The share options are non-dilutive.

6. Property, plant and equipment			£'000
Net book value at 1 December   2007			1,832
Additions			208
Disposals			(13)
Depreciation			(133)
Net book value at 31 May 2008			1,894

7. Explanation of transition to IFRS 

1st Dental Laboratories plc's consolidated financial statements were prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) until 30 November 2007. The date of transition to IFRS was 1 December 2006. The comparative figures in respect of 2007 have been restated to reflect changes in accounting policies as a result of adoption of IFRS. IFRS 1 permits companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. These interim financial statements have been prepared on the basis of taking the following exemptions:

 

-    Business combinations prior to 1 December 2006 have not been restated to comply with IFRS 3 'Business combinations'. 
     Accordingly there has been no adjustment to the accounting treatment adopted by the Group for previous acquisitions. 

 

-    Share based payments - IFRS 2. Share based payments has only been applied to awards granted after 7 November 2007.

8. Material adjustments to the Balance Sheet and Income statement

		Note	Restated Unaudited 6 months ended	Restated Unaudited year ended
			31 May 07	30 Nov 07
			£'000	£'000
Income Statement
Loss for the period under UK GAAP			(195)	(44)
Amortisation		(a)	209	425
Holiday pay accrual		(b)	49	(2)
Profit for the period under IFRS			63	379

1st Dental Laboratories plc
Restatement of Balance Sheet as at 31 May 2008
		At 31 May 2008			At 31 May 2007				At 30 November 2007
		Unaudited					Restated unaudited					Restated unaudited
	Note	Under IAS			Under UK GAAP	Effect under transition	Under IAS		Under UK GAAP	Effect under transition		Under IAS
Assets		£'000			£'000	£'000	£'000		£'000	£'000		£'000
Non Current Assets
Intangible assets	(a)	7,087			6,875	209	7,084		6,662	425		7,087
Property, plant and equipment		1,894			1,897	-	1,897		1,832	-		1,832
		8,981			8,772	209	8,981		8,494	425		8,919
Current Assets
Inventories		302			302	-	302		321	-		321
Trade & other receivables		1,367			1,696	-	1,696		1,553	-		1,553
Cash and cash equivalent		712			752	-	752		1,067	-		1,067
		2,381			2,750	-	2,750		2,941	-		2,941
Total Assets		11,362			11,522	209	11,731		11,435	425		11,860
Current Liabilities
Trade creditors & other payables	(b)	(731)			(882)	(17)	(899)		(878)	(68)		(946)
Interest bearing loans & borrowings		(642)			(488)	-	(488)		(632)	-		(632)
		(1,373)			(1,370)	(17)	(1,387)		(1,510)	(68)		(1,578)
Non Current Liabilities
Interest bearing loans & borrowings		(1,460)			(2,011)	-	(2,011)		(1,625)	-		(1,625)
Total Liabilities		(2,833)			(3,381)	(17)	(3,398)		(3,135)	(68)		(3,203)
Net Assets		8,529			8,141	192	8,333		8,300	357		8,657
Equity
Called up share capital		4,202			4,202	-	4,202		4,202	-		4,202
Share premium account		6,358			6,358	-	6,358		6,358	-		6,358
Equity reserve	(c)	99			-	78	78		-	86		86
Profit and loss account	(d)	(2,130)			(2,419)	114	(2,305)		(2,260)	271		(1,989)
Total Equity		8,529			8,141	192	8,333		8,300	357		8,657

Explanation

 

 

	31 May 2007		30 Nov 2007		1 Dec 2006
	£'000		£'000		£'000
Goodwill amortisation	209		425		-
Holiday pay accrual	(17)		(68)		(66)
Share based payment
expenses transferred to equity reserve	(78)		(86)		(71)
Total adjustments	114		271		(137)

The transition has not had any material impact on the Group's cashflow.

9. Copies of the Interim Report

Copies of the interim report are being sent to shareholders and are also available to the public from the company's website and head office - Company Secretary, 1st Dental Laboratories plc, 112 Wetherby Road, Harrogate HG2 7AB.

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