Print   



                    7.00am 25 September 2009

NIPSON DIGITAL PRINTING SYSTEMS PLC

UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009

Nipson Digital Printing Systems PLC ('Nipson' or 'the Group'), the manufacturer and distributor of digital printing systems and consumables, today announces its unaudited results for the six months to 30 June 2009.

	6 months to 30 June 2009 Unaudited £'000	Change  +/-%	6 months to 30 June 2008 Unaudited £'000	Full Year to 31 December 2008 Audited £'000
Revenue	13,214	-6.9%	14,188	27,312
Gross profit	2,676	+10.4%	2,423	2,869
Operating profit/(loss)	11,984		(2,104)	(13,371)
Profit/(Loss) on ordinary activities before tax	12,347		(3,021)	(15,910)
Attributable to :
Equity holders of the parent	4,135		(3,021)	(15,910)
Minority interest	8,212		-	-
	12,347		(3,021)	(15,910)
Operating loss excl. profit from loan waivers	(226)		-	-

• The French Courts in Belfort signed on the 7 July 2009 the approval of Nipson SAS's, the French subsidiary, restructuring plan along the lines of the project agreed with Creacorp NV('Creacorp'), the controlling shareholder of the Group since 14 October 2008;

• On the 26 June 2009, of the total amount owed by Nipson SAS (the French Subsidiary) to Creacorp  of € 14,531,377, Creacorp capitalised €874,280 (approx 6%) and waived the remaining €13,667,097 (approx 94%).  The waiver of these loans results in an exceptional profit of € 13,667,097;

• For the first six months, and compared to the same period of 2008, recurrent revenues increased by 5%; however, equipment revenues decreased by 38%.

Marc Maes, Nipson's Chairman commented: 'The positive result comes essentially from the waiver of loans by Creacorp.  This result does not reflect the underlying operational result.  The turnaround process shows some positive elements, but the Group still faces operational losses and severe cash pressures, which along with the unpredictable sales continue to make its continuity uncertain.  In addition, the Board of Nipson is holding negotiations with Roseman, Polar and Creacorp in order to come to long term solutions for the outstanding loans and open issues and to avoid an insolvency situation.  Finally, the cash support from Nipson SAS to Nipson can only be limited, since Nipson SAS is still supervised by the court administration in Belfort and under these arrangements cash has to be retained in the subsidiary for repayment of the debts related to the Redressement Judiciaire.'

A copy of this announcement and the audited results for the six months to 30 June 2009 are also available from the Company's website, www.nipson.com.

For further information, please contact:

Nipson Digital Printing Systems PLC

Marc Maes, Chairman - Tel: +32 (0)494 500 423

Guillaume Dumarey, Managing Director - Tel: +33 (0)384 545 270

Beaumont Cornish Ltd (Nomad)

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

  CHAIRMAN'S STATEMENT

Overview

The French Courts in Belfort signed on the 7 July 2009 the approval of Nipson SAS's, the French subsidiary, restructuring plan along the lines of the project agreed with Creacorp, but the operations are still loss making.

The positive result comes essentially from the waiver of loans by Creacorp.  This result does not reflect the underlying operational result.

The operating loss of almost £0.2m, incurred in the first half of 2009 was in line with our expectations despite the lower equipment sales, and the reorganisation costs. 

Other announcements were made recently concerning the tight cash situation of Nipson and the French subsidiary. The negative result impacted the Group's cash position. 

In the current market and economic circumstances, it is very difficult to predict as to how sales will evolve. 

The turnaround process shows some positive elements, but the Group still faces operational losses and severe cash pressures which, along with unpredictable sales, continue to make its continuity uncertain. 

Despite the difficult situation, the Group is continuing to produce machines, spare parts and consumables and continuing to provide a maintenance service to customers either directly or via its agreed distributors. 

Reference is made to the announcement of 18 September 2009. Management of Nipson has meanwhile had meetings with Roseman, Polar and Creacorp.  All parties concerned want to avoid insolvency if at all possible and have agreed to arrangements which allow Nipson to continue its operations in the short term.  Discussions are continuing between the parties to try to arrive at a longer term solution.  Polar, Roseman and Creacorp agreed to continue this dialogue, and will inform the Board of Directors as to the outcome on Wednesday 30 September 2009.  The Board has arranged for a further Board meeting on 1 October 2009.

Nipson is constrained by lack of cash resources which therefore has implications for it as a going concern.  Nipson has only limited access to cash from its subsidiary Nipson SAS, as Nipson SAS is still supervised by the court administration in Belfort. Under these arrangements cash has to be retained in the subsidiary for repayment of the debts related to the Redressement Judiciaire. 

Nipson received a default judgement with regard to a contractual issue with the former CEO. Nipson is preparing an application to the court.

Revenue and Operating Results

Revenue for the six months to 30 June 2009 was £13.2m, a decrease of 6.9% over the same period last year. The decrease came essentially from lower sales of new equipment.

Equipment sales, at £2.5m for the six months, showed a decrease of 38% over the comparative period. 

Recurrent revenues for the six months to 30 June 2009 were £10.8m, an increase of 5% as compared to the same period last year. The Group's recurrent revenue continues to grow. 

Gross profit for the six months to 30 June 2009 was £2.7m, 10% higher than the comparative period last year. The margin made on equipment sales and recurrent revenues improved as a result of the decrease in production costs following the restructuring plan, and helped by the margin made on equipment sales especially in the Middle East area.  Gross margins are still suffering from the adverse US Dollar exchange rate, which remains weak against the Euro. 

The operating result for the six months to 30 June 2009 showed a profit of £11.9m against a loss of £2.1m for the corresponding period in 2008.  This result includes the profit from the loans waived by Creacorp of €13.7m in June 2009.  Operating expenses at £4.8m (2008: £4.5m) were higher mainly due to fees supported by the French Subsidiary for the administration and legal costs of the 'Redressement Judiciaire', also no R&D costs were capitalised during the first half year of 2009.

The costs of Research & Development for the first six months of 2009 were £1.8m (against £1.9m in the first 6 months of 2008) of which none were capitalised (first 6 months of 2008: £0.8m capitalised).  No R&D costs were capitalised in the first 6 months as management considered those projects to support existing business and would not create additional future positive cash flow streams.

The net profit for the first six months was £12.3m (2008: net loss of £3.0m). Other than the improvement of the gross profit and loans waived by Creacorp, the finance costs are lower in 2009 mainly due to less interest on loans, and less use of financing facilities (bank overdraft and factoring).

As at 30 June 2009 cash balances were £1.1m (£2.1m at 31 December 2008).  The inventory level of £8.2m decreased compared to £12.3m at 30 June 2008 but remained stable in local currency compared to 31 December 2008.  The level of trade and other receivables decreased to £6.0m (£7.4m at 31 December 2008 and £8.3m at 30 June 2008).  The level of trade and other payables decreased to £15.1m compared to £17.2m at 31 December 2008.  The trade and other payables also include the debt due by the French Subsidiary to the social security and certain amounts due to employees of the French Subsidiary as part of the restructuring plan.  This debt has to be repaid over a 3 years period.

Comments on the valuation of the Loan Notes for D Roseman Nipson Limited Partnership ('Roseman') and for Polar Communications LTD ('Polar') are detailed in Note 4 to the accounts.  As at 30 June 2009, the total amount owing to the Polar for loans was £1.9m.

The results announcement makes reference for the first time to Minority Interests. This follows the conversion by Creacorp, as previously announced, of part of the debt owed to it by Nipson SAS into shares of Nipson SAS. As such Nipson now holds approximately 52.3% of Nipson SAS and Creacorp holds the remaining 47.7%.

Marc Maes, Chairman, Nipson Digital Printing Systems PLC

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

CONSOLIDATED INCOME STATEMENT

	6 months to 30 June 2009 £'000	6 months to 30 June 2008 £'000	Full Year to 31 December 2008 £'000
Continuing Operations Revenue	13,214	14,188	27,312
Cost of Sales	(10,538)	(11,765)	(24,443)
Gross Profit	2,676	2,423	2,869
Administrative Expenses	(4,791)	(4,527)	(9,100)
Other Operating Profit/(Loss)	14,099	-	(7,140)
Profit/(Loss) on Continuous Operations before interest	11,984	(2,104)	(13,371)
Finance Income	729	154	470
Finance Costs	(366)	(1,071)	(3,009)
Profit/(Loss) from Continuing Operations before tax	12,347	(3,021)	(15,910)
Taxation	-	-	-
Profit/(Loss) from Continuing Operations after tax	12,347	(3,021)	(15,910)
Attributable to :
Equity holders of the parent	4,135	(3,021)	(15,910)
Minority interest	8,212	-	-
	12,347	(3,021)	(15,910)
Profit/(Loss) per Ordinary Share	23.6p	(5.8p)	(30.4p)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	6 months to 30 June 2009 £'000	6 months to 30 June 2008 £'000	Full Year to 31 December 2008 £'000
Exchange Difference on Translation of Foreign Operations	336	517	(1,494)
Net Income Recognised Directly in Equity	336	517	(1,494)
Profit/(Loss) for the Year	12,347	(3,021)	(15,910)
Total Recognised Income and Expense for the Year	12,683	(2,504)	(17,404)
Attributable to :
Equity holders of the parent	4,311	(2,504)	(17,404)
Minority interest	8,372	-	-
	12,683	(2,504)	(17,404)

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	6 months to 30 June 2009 £'000	6 months to 30 June 2008 £'000	Full Year to 31 December 2008 £'000
Assets Non-Current Assets Goodwill	846	783	861
Other Intangible Assets	3,408	4,235	4,653
Property, Plant & Equipment	3,127	3,556	2,998
Deferred Tax Asset	566	634	424
Other Non-Current Assets	235	556	239
	8,182	9,764	9,165
Current Assets
Inventories	8,183	12,375	9,325
Trade and Other Receivables	6,003	8,263	7,454
Cash and Cash Equivalents	1,131	1,094	2,164
	15,317	21,732	18,943
Liabilities
Current Liabilities
Trade and Other Payables	(15,127)	(8,524)	(17,233)
Borrowings	(2,276)	(15,648)	(18,780)
	(17,403)	(24,172)	(36,013)
Net Current Assets	(2,086)	(2,440)	(17,070)
Non-Current Liabilities
Borrowings	(5,405)	(3,483)	(4,145)
Deferred Tax Liabilities	(566)	(634)	(424)
Retirement Benefit Liability	(605)	(1,050)	(689)
	(6,576)	(5,167)	(5,258)
Net Assets	(480)	2,157	(13,163)
Shareholder's Equity
Ordinary Share Capital	523	523	523
Share Premium	13,915	13,915	13,915
Equity Portion of Convertible Loan Notes	493	913	493
Reverse Acquisition Merger Reserve	3,057	3,057	3,057
Translation Reserve	(992)	683	(1,328)
Retained Earnings	(19,188)	(16,934)	(29,823)
	(2,192)	2,157	(13,163)
Minority Interest	1,712	-	-
Total Equity Attributable to Equity Holders	(480)	2,157	(13,163)

Approved by the Board of Directors on 24 September 2009

Guillaume Dumarey                                      Robert Cahill            

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

CONSOLIDATED STATEMENT OF CASH FLOWS 

	6 months to 30 June 2009 £'000	6 months to 30 June 2008 £'000	Full Year to 31 December 2008 £'000
Net Cash (Decrease)/Increase from Operating Activities	(720)	(1,386)	2,179
Cash Flows from Investing Activities
Purchase of Intangible Assets	-	(790)	(1,414)
Purchase of Property, Plant & Equipment	(95)	(46)	(63)
Disposal of fixed assets	189	169	98
Interest Received	-	-	-
Net Cash Raised/(Used) in Investing Activities	94	(667)	(1,379)
Cash Flows from Financing Activities
Interest Paid	(94)	(187)	(409)
Capital Repayments on Finance Leases	(116)	(121)	(234)
Borrowings Raised - from Third Party	-	1,574	1,562
from Parent Undertaking	179	586	565
Borrowings Repaid	(376)	(53)	(1,468)
Net Cash (Used)/Raised in Financing Activities	(407)	1,799	16
Net (Decrease)/Increase in Cash & Cash Equivalents	(1,033)	(254)	816
Cash & Cash Equivalents at 1 January	2,164	1,348	1,348
Cash & Cash Equivalents at end of period	1,131	1,094	2,164

 

 NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

CASH FLOWS FROM OPERATING ACTIVITIES

Cash Generated from Operations	6 months to 30 June 2009 £'000	6 months to 30 June 2008 £'000	Full Year to 31 December 2008 £'000
Continuing Operations Profit/(Loss) before Taxation	12,347	(3,021)	(15,910)
Adjustments for:
Depreciation and Amortisation	991	1,138	2,330
Disposal of fixed assets	(152)	-	-
Finance Income	(729)	(154)	(470)
Finance Expense	366	1,071	3,009
Increase in Retirement Benefit Obligation	-	34	134
Share Based Payment Charge	-	-	-
Other gains and losses	(13,893)	190	8,224
Changes in Working Capital
(Increase)/Decrease in Inventories	(220)	(2,696)	518
Decrease in Trade & Other Receivables	380	1,224	4,519
Increase/(Decrease) in Payables	190	828	(175)
Cash (Used in)/from Continuing Operations	(720)	(1,386)	2,179
Corporation Tax Paid	-	-	-
Net Cash (Decrease)/Increase from Continuing Operations	(720)	(1,386)	2,179

 

 

NOTES

1.  Basis of Preparation of Interim Report

The information for the interim accounts for the six month period ended 30 June 2009 has neither been audited or reviewed by the auditors, and does not constitute statutory accounts as defined in section 240 of the Companies Act 1985 (section 435 of the Companies Act 2006). The figures and financial information for the year ended 31 December 2008 do not constitute financial statements for that year. Those financial statements have been delivered to the Registrar and included an audit report which was unqualified, contained no statements under either section 237(2) or (3) of the 1985 Act (section 498(2) or (3) of the 2006 act). The audit report in those financial statements ended 31 December 2008 did however contain the following emphasis of matter:

'In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 23 to the consolidated financial concerning the Group's ability to continue as a going concern which is reliant on support of the ultimately controlling party Creacorp N.V. This support, which includes agreements to write off certain loans and provide further finance, is contingent on successful completion of the Redressement Judiciaire process for Nipson SAS in France, for which a decision is not expected until 23 June 2009. These conditions indicate a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.'

NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

2.  Profit/(Loss) per Share

The Profit/(Loss) per Ordinary Share is calculated on the weighted average number of ordinary shares in issue during the period of 52,303,581 (2008: 52,303,581).  In the period the basic and diluted EPS have been taken to be the same.

3. Accounting Policies

The interim results have been prepared in accordance with IFRS accounting rules.  With the exception of the adoption here of IAS1, the Accounting Policies used in the preparation of these results were the accounting policies used in the preparation of the results for the year ended 31 December 2008 and detailed in the notes to those results (see Annual Report 2008 issued 8 June 2009).

4.  Equity Portion of Convertible Loan Notes

The fair value of the liability component and the value of the equity component of the Roseman and Creacorp convertible loan notes, were determined at the same time as the issue of the notes; calculated using a market interest rate based upon equity venture capital loans at a rate of 20%. 

Note 5 : STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

	Share Capital £'000	Share Premium £'000	Equity Portion of Convertible Loans £'000	Reverse Acquisition Reserve £'000	Translation Reserve £'000	Retained Earnings £'000	Total £'000
At 1 January 2008	523	13,915	-	3,057	166	(13,913)	3,748
Loss for the Period	-	-	-	-	-	(3,021)	(3,021)
Equity Portion of Convertible Loans	-	-	913	-	-	-	913
Exchange Differences on Translation of Foreign Operations	-	-	-	-	517	-	517
At 30 June 2008	523	13,915	913	3,057	683	(16,934)	2,157
At 1 January 2009	523	13,915	493	3,057	(1,328)	(29,823)	(13,163)
Profit for the Period	-	-	-	-	-	12,347	12,347
Equity Portion of Convertible Loans	-	-	-	-	-	-	-
Exchange Differences on Translation of Foreign Operations	-	-	-	-	336	-	336
At 30 June 2009	523	13,915	493	3,057	(992)	(17,476)	(480)

  NIPSON DIGITAL PRINTING SYSTEMS PLC

Unaudited results for the six months ended 30 June 2009

NOTE 6 (A) : GEOGRAPHICAL ANALYSIS OF SALES

Country / Region	6 months to 30 June 2009 £'000	6 months to 30 June 2009 £'000	Full Year to 31 December 2008 £'000
France	2,770	2,653	4,806
Rest of Europe	4,307	4,722	8,762
USA and Canada	2,403	3,098	6,330
Asia	900	1,567	2,704
Latin America	1,292	1,435	2,463
Other	1,542	713	2,247
Total	13,214	14,188	27,312

NOTE 6 (B) : SEGMENTAL ANALYSIS

		France			Rest of			USA			PLC			Total
					Europe
6m = 6 months FY = Full Year	6m to 30 June  2009 £'000s	6m to 30 June 2008 £'000s	FY to 31 Dec 2008 £'000s	6m to 30 June 2009 £'000s	6m to 30 June 2008 £'000s	FY to 31 Dec 2008 £'000s	6m to 30 June  2009 £'000s	6m to 30 June 2008 £'000s	FY to 31 Dec 2008 £'000s	6m to 30 June 2009 £'000s	6m to 30 June 2008 £'000s	FY to 31 Dec 2008 £'000s	6m to 30 June 2009 £'000s	6m to 30 June 2008 £'000s	FY to 31 Dec 2008 £'000s
Revenue	10,880	12,034	22,562	1,267	1,186	2,101	1,067	967	2,649	-	-	-	13,214	14,188	27,312
Assets	18,764	16,691	12,997	1,157	3,151	3,301	1,854	2,128	2,247	1,724	9,527	9,563	23,499	31,496	28,108
Capital Expenditure	93	423	1,445	2	1	1	(26)	1	31	2	2	-	71	427	1,477

ENDIR PUUQUBUPBGMC