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Announcement of Half-Year Results for the 6 months to 30 September 2009

30 November 2009 

Chairman's Statement 

I can report that turnover for the six months ended 30 September 2009 was 47% higher, at £1.35 million (2008: £0.9 million). This reflects further growth in sales of FollowMe ® product lines and a further decline in the older Token Ring products and N-Lynx sales. 

Operating costs have increased due to a much larger sales department in UK and increased manufacturing and sales departments in USA with a current total employee count of 47 (avg. 38 in 2008) as well as the development of new products in the LED lighting space. The increase in sales during the period resulted in an operating profit of £10,000 (2008: loss of £77,000). The Group made a pre-tax profit of £9,000 for the six months ended 30 September 2009 compared to a loss of £81,000 in the same period last year. 

The loss per share for the half year is 0.44p. Due to the continued squeeze of operating funds in the world during that period we have not been able to achieve the profit growth we had targeted. 

We have continued our strategy, investing in our sales and support operations in the US and UK. As expected the increased cost base has resulted in only a small profit for the period. 

We have reviewed our models for the next 18 months and expect to be able to report an overall profit for the second half of this financial year, in line with the seasonality of our business sector. The Company's mix of sales is currently: 88% FollowMe ® Printing Systems, 4% Token-Ring and N-Lynx products, 7% LED Lighting; with only 1% in legacy products. 

Guidance 

Our flagship product lines FollowMe and Renewable Energy are likely to continue to gain momentum in sales and market share. We do not expect Access Control sales to recover until there is a real recovery of the world economies. 

There is an uncertainty in the valuation of inventory should the legacy product lines or Access Control market not recover which is also reflected in the Annual Report of March 2009. However, the Directors believe this will not have an impact on the operation but may curtail profits for the full period.

Our product focus has been successfully re-aligned to the current economic situation and corporate spending patterns we therefore believe that the full year is likely to conclude with an overall profit.

The Directors continue to consider a restructuring of the Company's shares to allow payment of a dividend at the earliest possible time. 

Klaus Bollmann 

Chairman 

Responsibility Statement 

We confirm that to the best of our knowledge:

(a)    the condensed set of financial statements contained in this document has been prepared in accordance with International Accounting Standard 34 ('IAS 34'), 'Interim Financial Reporting' as adopted by the European Union;

(b)    the Interim management report contained in this document includes a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules ('DTR') 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c)    this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

The Directors are listed in the Annual Report and Accounts for 31 March 2009.

By order of the Board

Klaus Bollmann
Chairman

30 November 2009

CONSOLIDATED INCOME STATEMENT
				6 Months to 30.9.09 £'000		6 Months to 30.9.08 £'000		12 Months to 31.3.09 £'000
Revenue				1,355		899		2,117
Cost of Sales				(318)		(221)		(477)
Gross Profit				1,037		678		1,640
Operating costs				(1,027)		(755)		(1,594)
Operating Profit/(Loss)				10		(77)		46
Finance income				-		-		13
Finance costs				(1)		(4)		(14)
Profit/(Loss) before taxation				9		(81)		45
Tax on loss on ordinary activities				(18)		(4)		(30)
Profit/(Loss) for the period				(9)		(85)		15
Profit/(Loss) per Ordinary Share				-0.44p		-4.14p		0.7p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
				6 Months to 30.9.09 £'000		6 Months to 30.9.08 £'000		12 Months to 31.3.09 £'000
Profit/(Loss) for the period				(9)		(85)		15
Other comprehensive income:
Loss on investment revaluation				0		0		(12)
Exchange differences on translation of foreign operations				(103)		44		312
Total comprehensive income for the period				(112)		(41)		315

STATEMENT OF FINANCIAL POSITION
			30.9.09 £'000		30.9.08 £'000		31.3.09 £'000
Non Current Assets
Property, Plant & Equipment			317		242		355
Investments			28		40		28
Development Costs			1,189		983		1,219
Deferred Tax Asset			11		71		11
			1,545		1,336		1,613
Current Assets
Inventories			1,154		975		1,222
Trade and Other Receivables			450		406		346
Cash and Cash Equivalents			211		50		155
			1,815		1,431		1,723
			3,360		2,767		3,336
Current Liabilities
Trade and Other Payables			1,651		1,443		1,496
Bank Overdrafts and Loans			107		96		92
			1,758		1,539		1,588
Non Current Liabilities
Loans			690		560		724
Total Liabilities			2,448		2,099		2,312
Equity
Called Up Share Capital			4,112		4,112		4,112
Share Premium Account			8,028		8,028		8,028
Currency Translation Reserve			141		(24)		244
Capital Redemption Reserve			12		12		12
Revaluation Reserve			0		12		0
Retained Loss			(11,381)		(11,472)		(11,372)
Total Equity			912		668		1,024
Total Liabilities and Equity			3,360		2,767		3,336

CONSOLIDATED STATEMENT OF CASHFLOWS
				6 Months to 30.9.09 £'000		6 Months to 30.9.08 £'000			12 Months to 31.3.09 £'000
Cashflows from operations
Operating Profit/(Loss) for the period				10		(77)			46
Depreciation				35		31			70
Amortisation				50		40			189
Exchange (losses)/gains				41		(112)			(66)
Changes in working capital:
Inventories				69		(77)			(324)
Trade and other receivables				(104)		175			235
Trade and other payables				155		221			274
Cashflow from operations				256		201			424
Finance Income				-			-			13
Finance costs				(1)		(4)			(14)
Tax paid/(received)				(18)		(4)			42
Net cashflows from operating activities				237		193			465
Investing Activities
Payments to Acquire Tangible Fixed Assets				(15)		(38)			(156)
Payments to Acquire Intangible Fixed Assets				(147)		(142)			(299)
Net Cash Inflow/(Outflow) from Investing				(162)		(180)			(455)
Financing Activities
Repayment of Borrowings				(116)		0			0
Increase/(Decrease) in Bank Overdrafts				15		(32)			(115)
Proceeds from Borrowings				82		34			225
Net Cash Inflow/(Outflow) from Financing				(19)		2			110
Cash and Cash Equivalents at Beginning of Period				155		35			35
Cash and Cash Equivalents at End of Period				211		50			155

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
						Foreign
		Revaluation	Share	Share	Other	Currency	Retained	Total
		Reserve	Capital	Premium	Reserves	Translation	Loss	£'000
		£'000	£'000	£'000	£'000	£'000	£'000
1st April 2008		12	4,112	8,028	12	(68)	(11,387)	709
Loss for the Period							(85)	(85)
Currency Translation						44		44
30th September 2008		12	4,112	8,028	12	(24)	(11,472)	668
Profit for the Period							100	100
Currency Translation						268		268
Revaluation		(12)						(12)
31st March 2009		0	4,112	8,028	12	244	(11,372)	1,024
Loss for the Period							(9)	(9)
Currency Translation						(103)		(103)
30th September 2009		0	4,112	8,028	12	141	(11,381)	912

NOTES TO THE INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009

1. Basis of Preparation

The interim financial statements have been prepared in accordance with the accounting policies as set out in the Group financial statements for the 12 months ended 31 March 2009 except for the adoption of IAS 1 (revised) with the effect of the addition of the statement of comprehensive income and calling the Balance Sheet 'Statement of Financial Position' as per amended IAS 1. The statements do not comprise full financial statements within the meaning of section 435 of the Companies Act 2006. The statements are unaudited and have not been independently reviewed. 

The figures for the 12 months ended 31 March 2009 have been extracted from those financial statements which have been filed with the Registrar of Companies. Those accounts have been reported upon by the Group's auditors. The report of the auditors was qualified by a limitation of scope regarding the net realisable value of inventory of £629,000 included in the group's inventory of £1,222,000. The Annual Report can be found on the Group's corporate website.

The Group's future cash forecasts and revenue projections, which are considered to be based on prudent assumptions, indicate that the Group will be able to operate within the level of its current committed facilities and as such the Directors believe that it is appropriate to continue to prepare the financial statements of the Group on a going concern basis

2. Interim Dividend

The Directors continue to be unable to recommend the payment of a dividend for the 6 months ended 30 September 2009.

3. Loss per Share

Loss per share has been calculated on a loss after taxation of £9,000 (2008: loss £85,000) and 2,055,971 £2 ordinary shares (2008: 2,055,971 £2 ordinary shares). 

4. Inventory

The Directors have reviewed the Group's inventory and remain confident that it will all be sold for at least its book value. However, in view of the current state of the market there must be a level of uncertainty surrounding the ability to realise certain items of inventory at greater than or equal to book value. 

5. Creditors' amounts due within one year

Included within creditors is the sum of £233,343 due to the executive directors, who have given loans to the company to finance the increase in sales and marketing activities in the previous period. 

6. Related Party Transactions

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed. The following transactions to place in the period ended 30th September 2009 at arms length:

Woodgate Trust charged £36,360 in respect of rent and an amount of £30,600 was outstanding to Woodgate Trust in respect of this at 30th September 2009. A further £36,731 was owed by the group to Woodgate Trust by way of an unsecured loan. 

Webpage-Marketing.Com Limited is considered to be a related party as it is controlled by close family of K. Bollmann and Mrs H. Bollmann. During the period, purchases of £113,992 were made from this company. At 30th September 2009 £775,608 was outstanding to Webpage-Marketing.Com Limited. 

Woodgate Property Inc is considered to be a related party as it is controlled by K. Bollmann and Mrs H. Bollmann. Woodgate Property Inc charged the group £29,293 in respect of rent during the period and at the end of the period £148,746 was owed by the group to Woodgate Property Inc.

Woodgate FURBS is considered to be a related party as K. Bollmann and Mrs H. Bollmann are trustees. At the end of the period £238,700 was owed by the group to Woodgate FURBS.

The ultimate controlling party is K. Bollmann and Mrs H. Bollmann via their shareholdings and as trustees of The Woodgate Trust which also holds shares in the Company. At the end of the period £233,343 was owed by the group to K. Bollmann and Mrs H. Bollmann.

7. Segmental Information 

For management purposes, the Group is currently organised into one business segment, which is computer products and services. Since this is the only primary reporting segment no further information has been shown. The following table provides an analysis of the Group's revenue by geographical market, irrespective of the origin of the goods and services: 

 

				6 Months to 30.9.09 £'000		6 Months to 30.9.08 £'000		12 Months to 31.3.09 £'000
Revenue by Geographical Market
United Kingdom				203		278		385
EC and other European Countries				462		240		740
United States of America				420		273		665
Japan and Asia Pacific				190		7		32
Rest of World				80		101		295
				1,355		899		2,117

The following is an analysis of the carrying amount of segmental assets, and additions to property, plant and equipment and intangible assets, analysed by the geographical area in which the assets are located: 

Carrying amount of Segment Assets
United Kingdom				1,167		945		1,006
United States of America				2,108		1,760		2,268
Germany				85		62		62
				3,360		2,767		3,336
Carrying amount of Segment Liabilities
United Kingdom				1,206		819		1,037
United States of America				1,218		1,262		1,259
Germany				24		18		16
				2,448		2,099		2,312
Additions to Tangible and Intangible Assets
United Kingdom				7		30		108
United States of America				155		150		347
Germany				0		0		0
				162		180		455
Depreciation and Amortisation
United Kingdom				18		17		28
United States of America				67		54		231
Germany				0		0		0
				85		71		259
Results by Segment
United Kingdom				310		161		(195)
United States of America				(319)		(248)		210
Germany				0		2		0
				(9)		(85)		15

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