PSION PLC 
By 9 August 2012
PSION PLC
Results for the six months ended 30 June 2012Psion PLC, the mobile computing solutions company, today announces unaudited results for the six months ended 30 June 2012.
FINANCIAL OVERVIEW | £m (except per share amounts) | 6 months to 30.6.2012 | 6 months to 30.6.2011 |
Revenue | 80.2 | 81.4 | |
Adjusted EBITDA3 | 2.3 | 2.1 | |
Operating Loss | (8.6) | (5.2) | |
Normalised Operating Loss3 | (1.8) | (3.9) | |
Loss before tax | (8.7) | (5.3) | |
EPS (Diluted) | (6.4p) | (2.8p) | |
Dividend per share | - | 1.3p | |
Cash generated from operations | 1.7 | 0.4 | |
Cash | 18.5 | 26.8 |
HIGHLIGHTS | · Completed restructuring plan in first half to reduce cost base by £6m annually with £4m benefit in 2012. Cost of restructuring of £3.6m in H1 2012 |
· Revenue flat in constant currency terms reflects continued tough trading conditions in the period | |
· Euro currency weakness (compared with prior period) impacted revenue translation and gross margin achieved | |
· Motorola Solutions Inc. recommended offer to acquire entire share capital of Psion PLC for 88p per share in cash announced 15 June 2012. Offer expected to complete in fourth quarter subject to regulatory approvals having been obtained |
Outlook
The Motorola Solutions Inc. (Motorola Solutions) offer to acquire Psion is expected to complete in the fourth quarter of 2012. From a product perspective, Psion shipped 8.4% more units than in the same period last year and the Group's new product lines, Omnii and EP10, have continued to gain traction in the first half and are expected to continue to grow as customers increasingly embrace the technology protection and flexibility inherent in these product families. Further product releases based on the Omnii modular platform are expected in the coming year to refresh other elements of the product portfolio. The Group's operating costs have been substantially reduced following the restructuring programme completed in the first half, enabling the Group to weather uncertain conditions in European and other economies and the weakening of the Euro in what will be a challenging second half.
For further enquiries, please contact:
Psion John Conoley - CEO Adrian Colman - CFO | +44 (0) 207 025 6860 |
Buchanan Communications Charles Ryland Louise Hadcocks | +44 (0) 207 466 5000 |
Notes
1. | Psion is a pioneer in quality mobile handheld computers and their application in industrial markets around the world. We've innovated in the field of mobile computing since 1980, starting with the invention of the PDA; through to helping our global customers solve their business problems today. Our clients include Volkswagen, RWE npower, E.ON, BMW, Goodyear, Copenhagen Airports, and many others. Through our open innovation business model, we have the ability to work directly with our customers and partners to co-create new variants of our mobile hardware, software and services that meet the specific needs of the marketplace. This collaboration is made possible by our open innovation community site,www.ingenuityworking.com . Psion PLC is a public company listed on the London Stock Exchange. It is headquartered in London with corporate offices located in Europe, North America, Asia, Latin America, Africa and the Middle East. |
2. | Certain statements in this announcement are forward looking statements. Such statements are based on current expectations and by their nature are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The information does not assume any responsibility or obligation to update publicly or revise any of the forward-looking statements contained herein. | |||||||
3. | Definitions Normalised operating profit is defined as operating profit before exceptional operating costs and share based payment charge and after deducting the net capitalisation of development expenditure. Adjusted EBITDA is calculated as profit before interest, taxation, depreciation, amortisation, profit/loss on disposal of property, plant and equipment, share based payments charge and exceptional items. The reconciliation of operating profit to normalised operating profit/(loss) and adjusted EBITDA from continuing operations is presented below: | |||||||
6 months to 30.6.12 £m | 6 months to 30.6.11 £m | Year ended 31.12.11 £m | ||||||
Operating (loss) / profit from continuing operations | (8.6) | (5.2) | 0.2 | |||||
Add back share based payments charge | 0.5 | 0.1 | 0.6 | |||||
Add back exceptional operating costs | 5.7 | 3.9 | 3.9 | |||||
Add back / (deduct) capitalised development costs net of amortisation | 0.6 | (2.7) | (4.7) | |||||
Normalised operating (loss) / profit | (1.8) | (3.9) | - | |||||
Depreciation and amortisation | 4.7 | 3.3 | 7.2 | |||||
(Deduct)/add back capitalised development costs net of amortisation | (0.6) | 2.7 | 4.7 | |||||
Adjusted EBITDA | 2.3 | 2.1 | 11.9 | |||||
OPERATIONAL REVIEW
Performance
Psion's performance in the first half has been resilient in light of the continuing tough economic trading conditions around the world, largely driven by the uncertain economic climate in Europe. The Group has improved its normalised operating performance by £2.1m from a loss of £3.9m in the first half of 2011 to a loss of £1.8m in the first half of 2012.
The market penetration achieved by Psion products in the half is a principal achievement, as the Group has shipped 8.4% more units than in the same period last year with some 33% (2011: 10%) of these from the newer Omnii and EP10 product ranges. The Group's restructuring plan completed in the first half has substantially reduced the Group's operating cost base and is therefore another key success for the Company. The increase in product shipments has enabled the Group to maintain revenues, in constant currency terms, in a tight market environment where customer decisions have been highly focused towards cost of product. Foreign exchange rates have also impacted the reported revenue and gross margin achieved due to the weaker Euro currency where the Group derives approximately 45% of its revenues compared with the US dollar which represents the primary currency for cost of sales. The Group's previously announced restructuring plan was completed in the first half of 2012, resulting in a charge of £3.6m in the half which will deliver an expected saving of £4m in 2012 and £6m in 2013.
Motorola Solutions recommended offer to acquire Psion
On 15 June 2012 Motorola Solutions and Psion announced that they have agreed the terms of a recommended cash offer to be made by Motorola Solutions to acquire the entire issued and to be issued share capital of Psion (the Offer). The full terms and conditions of the Offer and the procedures for acceptance were set out in the offer document issued by Motorola Solutions on 12 July 2012 (the Offer Document).
Terms used in this announcement have the meanings given to them in the Offer Document unless stated otherwise. All references to time in this announcement are to London time.
Under the terms of the Offer, Psion Shareholders who accept the Offer will be entitled to receive 88 pence in cash for each Psion Share held. The Offer values the entire issued and to be issued share capital of Psion at approximately £129.3 million and represents a premium of 66.2 per cent. to the six month average price prior to the start of the Offer Period of 52.9 pence per Psion Share.
As of 15 June 2012, Motorola Solutions had contracted to acquire and procured irrevocable undertakings to accept (or procure acceptances of) the Offer (including from Psion Directors) in respect of aggregate holdings of 37,997,640 Psion Shares representing approximately 27.0 per cent of the existing issued share capital of Psion. In addition, as at 1:00pm on 2 August 2012, being the First Closing Date of the Offer, Motorola Solutions had received valid acceptances of the Offer in respect of 98,276,380 Psion Shares (representing approximately 69.4 per cent. of the existing issued share capital of Psion, and approximately 77.1 per cent. of the Psion Shares to which the Offer relates), which Motorola Solutions may count towards the satisfaction of the acceptance condition to the Offer. Accordingly, as at 1.00 p.m. on 2 August 2012, Motorola Solutions either owned or had received valid acceptances of the Offer in respect of a total of 112,353,624 Psion Shares (representing approximately 79.4 per cent. of the existing issued share capital of Psion). The Offer, which remains subject to the terms and conditions set out in the Offer Document, is being extended and will remain open for acceptance until the next closing date which will be 1.00 p.m. on 23 August 2012.
The Offer is subject to the conditions and further terms as set out in the Offer Document and the Form of Acceptance which include, amongst other things:
· Motorola Solutions having acquired not less than 90 per cent. of the Psion Shares to which the Offer relates and of the voting rights attached to those shares; and
· satisfaction of antitrust conditions
in Canada, Germany, Portugal and the UK, which conditions
shall be satisfied only if the clearances are obtained on
terms satisfactory to Motorola Solutions and in accordance
with the terms of the Cooperation Agreement.
People
The Board is grateful for the dedication and loyalty shown by everyone in the Company in delivering the positive operational performance in the first half of the year.
Dividends
Under the terms of the current Offer from Motorola Solutions to acquire Psion, the Board of Directors is not proposing an interim dividend in 2012 (2011: 1.3 pence per share).
FINANCIAL REVIEW
Revenue
Revenue for the first half of 2012 amounted to £80.2m (2011: £81.4m). On a constant currency basis revenues for the first half of 2012 are in line with the comparative figure for the first half of 2011 of £79.9m.
Revenue by geography
Geography |
2012 H1 |
2011 H1 |
Change | % | 2011 H1 Constant Currency £m | Difference in Constant currency £m | % | |
EMEA | 49.2 | 49.9 | (0.7) | -1.4% | 47.6 | 1.6 | 3.4% | |
Americas | 24.3 | 23.7 | 0.6 | 2.5% | 24.2 | 0.1 | 0.4% | |
Asia | 6.7 | 7.8 | (1.1) | -14.1% | 8.1 | (1.4) | -17.3% | |
Total | 80.2 | 81.4 | (1.2) | -1.5% | 79.9 | 0.3 | 0.4% |
Note: Due to changes in the management of the operating segments of the Group in 2011 the results for operations in Dubai have transferred in 2011 from EMEA to Asia. The impact of this change to present the 2011 H1 results on this basis is a transfer of £1.0m of revenue from EMEA to Asia in the comparative results. There was no impact on consolidated revenue as a result of this reclassification.
On a constant currency basis EMEA grew by 3.4% and the Americas showed growth of 0.4%, offsetting the impact of lower revenues from Asia. EMEA performance was driven by a resilient performance in France and strong performance in the UK and Germany, partly tempered by weaker performance from Italy and Spain. In the Americas, growth in North America was largely offset in South and Latin America in part due to tighter import controls in certain jurisdictions and the lack of suitable distribution channels to market. Asia revenues have been impacted by macro-economic pressures which have impacted demand from the steel and ports industries in China where the Group derives a significant proportion of its Asian revenues. Orders booked in the period were £79.0m (2011: £82.0m). The closing order book value at 30 June 2012 was £28.7m (30 June 2011: £34.0m).
Revenues by category
Category (£m) | 2012 H1 | 2011 H1 |
2011 H1 |
Difference in |
Difference in |
Hardware | 58.5 | 59.1 | 58.0 | 0.5 | 0.9% |
Customer Service | 18.0 | 18.0 | 17.8 | 0.2 | 1.1% |
Software & Professional Services | 3.7 | 4.3 | 4.1 | (0.4) | -9.8% |
Total | 80.2 | 81.4 | 79.9 | 0.3 | 0.4% |
Note: Disclosures in table above are provided for additional information purposes only and do not form part of the Group's segmental reporting. The comparative analysis has been re-presented to reflect the change in management's own categorisation of revenues, with Software now reported within Software and Professional Services.
Hardware revenues of £58.5m in the first half of 2012 were £0.5m more than the first half of 2011 on a constant currency basis. Overall unit volumes for hardware increased 8.4% from approximately 52,600 units to 57,000 units however the positive impact on hardware revenue was offset by mix changes in the sales profile towards smaller and cheaper devices and some price pressure on average selling prices driven by tough trading conditions.
Gross Profit
Gross Profit Margin of 35.4% was below the 38.2% achieved in 2011 (36.2% in 2011 on a constant currency basis), impacted by the weaker Euro when compared to the US dollar as most product costs are in US dollars and approximately 45% of the Group's revenues are in Euro. In addition to this, the change in mix of products also contributed to lower margins. The lower gross margin percentage achieved resulted in lower gross profit of £28.4m (2011: £31.1m reported, £28.9m on a constant currency basis).
Operating expenses
Operating expenses (before exceptional operating costs, net capitalisation of development expenditure and share based payments charge) were £30.2m (2011: £35.0m). The decrease is attributable to the impact of the restructuring programme undertaken in the first half and continued tight cost control, together with the additional efforts in launching the new PDA product (EP10) in the first half of 2011 which were not repeated in the first half of 2012. Headcount has reduced from 895 full time equivalents at 31 December 2011 to 824 full time equivalents at 30 June 2012. Operating expenses as reported were £37.0m (2011: £36.3m).
Total research and development expenses (including amounts capitalised) were £6.3m (2011: £8.3m) of which £4.4m (2011: £4.4m) were charged through the income statement in the half. The higher level capitalised in the first half of 2011 reflects the profile of programme expenses on new products principally in relation to EP10 and XT15 in the prior half.
A reconciliation of operating costs from a statutory basis to the basis used in calculating Normalised Operating performance is as set out below.
2012 £m | 2011 £m | |
Reported statutory operating costs | (37.0) | (36.3) |
Motorola Solutions Offer transaction costs | 2.1 | - |
Restructuring costs | 3.6 | - |
Japan settlement | - | 3.9 |
Share based payments charge | 0.5 | 0.1 |
Capitalised development costs | (1.9) | (3.9) |
Amortisation of development costs | 2.5 | 1.2 |
Net capitalisation of development costs | 0.6 | (2.7) |
Normalised operating costs | (30.2) | (35.0) |
Exceptional operating costs in the period of £5.7m reflect transaction costs incurred to date associated with the Motorola Solutions Offer to acquire Psion of £2.1m and the costs of the restructuring programme completed in the first half of 2012 to reduce the cost base of the Group which amounted to £3.6m.
Exceptional operating costs in the prior period of £3.9m reflect the settlement cost and legal fees, net of insurance proceeds, with the major claimant in the Japanese legal actions initiated against the Group in 2008 in relation to unauthorised trades and a guarantee of third party obligations (see Note 9).
Operating result
The operating result for the half, after exceptional items, was a loss of £8.6m (2011: Operating loss of £5.2m). Adjusted EBITDA for the period increased by 10% to £2.3m from £2.1m in 2011. The Group believes that a normalised operating profit figure and adjusted EBITDA (as previously defined) are appropriate measures of underlying operating performance. The Group reported a reduced normalised operating loss of £1.8m in the half (2011: normalised operating loss of £3.9m; constant currency basis £5.3m normalised operating loss). A reconciliation from normalised operating profit to operating profit from continuing operations is set out below:
6 months to 30.6.12 £m | 6 months to 30.6.11 £m | |||
Normalised operating loss | (1.8) | (3.9) | ||
Development costs capitalised in year | 1.9 | 3.9 | ||
Amortisation of capitalised development costs | (2.5) | (1.2) | ||
Net capitalisation of development costs | (0.6) | 2.7 | ||
Japan litigation settlement | - | (3.9) | ||
Restructuring | (3.6) | - | ||
Motorola Solutions Offer transaction costs | (2.1) | - | ||
Share based payments charge | (0.5) | (0.1) | ||
Operating loss from continuing operations | (8.6) | (5.2) |
The reconciliation of loss from continuing operations to adjusted EBITDA is presented below:
6 months to 30.6.12 £m | 6 months to 30.6.11 £m | ||
Loss from continuing operations | (9.0) | (4.0) | |
Tax charge / (credit) | 0.3 | (1.3) | |
Net finance costs | 0.1 | 0.1 | |
Share based payments charge | 0.5 | 0.1 | |
Depreciation and amortisation | 4.7 | 3.3 | |
Exceptional operating costs | 5.7 | 3.9 | |
Adjusted EBITDA | 2.3 | 2.1 |
Interest and Taxation
Finance costs net of investment income in the half amounted to £0.1m (2011: £0.1m).
The tax charge for the first half of £0.3m arises from those geographies where the Group generates profits which cannot be relieved by tax losses elsewhere in the Group.
Cash
Gross cash balances at 30 June 2012 amounted to £18.5m (Dec 2011: £25.2m). Net cash from operations (pre cash exceptional costs) amounted to £4.8m (2011: £4.3m) with working capital improvements of £3.0m (2011: £2.5m) mitigating the trading loss for the period.
Intangible asset purchases relating to capitalised product development expenses (primarily in relation to new variants of VMT, OMNII family and EP10), as well as other intangibles such as software and patents amounted to £2.0m (2011: £4.7m); and tangible asset purchases amounted to £0.4m (2011: £0.8m).
Payment in 2012 of the final dividend from 2011 of £3.8m (2010 final dividend paid in 2011: £3.8m) accounted for the majority of the remaining movement in cash balances from the position at 31 December 2011.
The Group had net obligations under finance leases at 30 June 2012 of £1.7m (31 December 2011: £2.0m) and loan balance of £0.7m (31 December 2011: £0.7m) as part of its participation in a Spanish Government grant funded project into RFID development. Net of these obligations the Group's net cash position at 30 June 2012 was £16.1m (31 December 2011: £22.5m).
Foreign Exchange rates
Foreign exchange rate movements relative to the Group's GBP reporting currency are shown below. The Group's financial transactions are heavily weighted towards Euro denominated revenues with USD and CAD denominated expenses constituting the majority of the cost structure. In the half the weakening Euro has impacted the EUR:GBP and EUR:USD rates as below which has had a negative impact on reported revenues and gross margin achieved.
H1 2012 |
H1 2011 |
Change |
H1 2012 |
H1 2011 |
Change | |
EUR:GBP | 1.21 | 1.15 | 5% | 1.24 | 1.11 | 12% |
CAD:GBP | 1.59 | 1.58 | 1% | 1.60 | 1.55 | 3% |
USD:GBP | 1.58 | 1.62 | -2% | 1.57 | 1.61 | -2% |
EUR:USD | 0.77 | 0.71 | 8% | 0.79 | 0.69 | 14% |
Principal risks and uncertainties
Psion's business and share price may be affected by a number of risks, not all of which are in our control. The principal risks which were identified at the time of the last Annual Report and Accounts and relevant mitigating factors have not changed since the year end and detailed explanations can be found in the Annual Report and Accounts 2011 on pages 16 and 17. A summary of the key risk areas is provided below.
· Competitive threats
· Intellectual property and patent infringement
· Supply chain
· Market environment
· Foreign currency
From the above risk factors those of particular relevance to the financial outcome for the second half of 2012 are;
· Differentiation risks - New product releases gaining market traction, in particular in North America
· Economic environment risks - Dependence on the resilience of our customers' capital expenditure plans
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2012 - unaudited
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year ended 31.12.11 £m | |||||
CONTINUING OPERATIONS | |||||||
Revenue | 2 | 80.2 | 81.4 | 176.0 | |||
Cost of sales | (51.8) | (50.3) | (108.8) | ||||
GROSS PROFIT | 28.4 | 31.1 | 67.2 | ||||
Distribution costs | (17.7) | (17.7) | (36.3) | ||||
Administrative expenses | (13.6) | (14.7) | (26.8) | ||||
Exceptional operating costs | 3 | (5.7) | (3.9) | (3.9) | |||
Total administrative expenses | (19.3) | (18.6) | (30.7) | ||||
OPERATING (LOSS) / PROFIT | 2 | (8.6) | (5.2) | 0.2 | |||
Condensed Consolidated Balance Sheet
As at 30 June 2012 - unaudited
30.6.12 £m | 30.6.11 £m | 31.12.11 £m | ||||
NON-CURRENT ASSETS | ||||||
Goodwill | 102.4 | 100.2 | 103.5 | |||
Other intangible assets | 19.3 | 18.5 | 20.4 | |||
Property, plant and equipment | 10.6 | 10.9 | 11.9 | |||
Prepayments | 0.5 | 0.7 | 0.6 | |||
Deferred tax assets | 3.2 | 5.4 | 3.3 | |||
136.0 | 135.7 | 139.7 | ||||
CURRENT ASSETS | ||||||
Inventories | 15.6 | 18.9 | 18.2 | |||
Trade and other receivables | 43.4 | 41.6 | 48.5 | |||
Current tax assets | 0.9 | - | 0.4 | |||
Derivative financial instruments | 0.2 | - | 0.5 | |||
Cash and cash equivalents | 18.5 | 26.8 | 25.2 | |||
78.6 | 87.3 | 92.8 | ||||
TOTAL ASSETS | 214.6 | 223.0 | 232.5 | |||
CURRENT LIABILITIES | ||||||
Trade and other payables | 51.3 | 49.5 | 53.8 | |||
Tax liabilities | 0.8 | 0.4 | 1.3 | |||
Obligations under finance leases | 0.7 | 1.2 | 0.7 | |||
Derivative financial instruments | - | 0.2 | - | |||
Provisions | 1.4 | 1.5 | 1.4 | |||
54.2 | 52.8 | 57.2 | ||||
NON-CURRENT LIABILITIES | ||||||
Other loans | 0.7 | - | 0.7 | |||
Obligations under finance leases | 1.0 | 0.6 | 1.3 | |||
Provisions | 1.0 | 1.7 | 1.5 | |||
2.7 | 2.3 | 3.5 | ||||
TOTAL LIABILITIES | 56.9 | 55.1 | 60.7 | |||
NET ASSETS | 157.7 | 167.9 | 171.8 | |||
EQUITY | ||||||
Share capital | 21.2 | 21.1 | 21.1 | |||
Share premium | 16.1 | 15.7 | 15.7 | |||
Capital reserve | 98.7 | 98.7 | 98.7 | |||
Translation reserve | 20.4 | 19.7 | 22.7 | |||
Retained earnings | 1.3 | 12.7 | 13.6 | |||
TOTAL EQUITY | 157.7 | 167.9 | 171.8 |
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2012 - unaudited
6 months ended 30.6.12 | 6 months ended 30.6.11 | Year ended 31.12.11 | |||||
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June 2012 - unaudited
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year ended 31.12.11 £m | |||||
OPERATING (LOSS)/PROFIT FOR THE PERIOD | (8.6) | (5.2) | 0.2 | ||||
Adjustments for: | |||||||
Depreciation of property, plant and equipment | 1.6 | 1.5 | 3.0 | ||||
Amortisation of other intangible assets | 3.1 | 1.8 | 4.2 | ||||
Share-based payments charge | 0.5 | 0.1 | 0.6 | ||||
Decrease in provisions | (0.5) | (0.3) | (0.3) | ||||
Operating cash flows before movements in working capital | (3.9) | (2.1) | 7.7 | ||||
Decrease/(increase) in inventories | 2.4 | (0.6) | (0.4) | ||||
Decrease/(increase) in receivables | 4.8 | 6.6 | (1.5) | ||||
(Decrease)/increase in payables | (1.6) | (3.5) | 1.5 | ||||
Cash generated by operations | 1.7 | 0.4 | 7.3 | ||||
Tax received | 0.2 | 0.2 | 0.2 | ||||
Tax paid | (1.4) | (1.0) | (1.7) | ||||
Interest paid | (0.1) | (0.1) | (0.2) | ||||
NET CASH FROM/(USED IN)OPERATING ACTIVITIES | 0.4 | (0.5) | 5.6 | ||||
INVESTING ACTIVITIES | |||||||
Interest received | - | - | 0.1 | ||||
Purchases of intangible assets | (2.0) | (4.7) | (8.9) | ||||
Purchases of property, plant and equipment | (0.4) | (0.8) | (2.3) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (2.4) | (5.5) | (11.1) | ||||
FINANCING ACTIVITIES | |||||||
Dividends paid (note 6) | (3.8) | (3.8) | (5.6) | ||||
Loans received | - | - | 0.7 | ||||
Repayment of obligations under finance leases | (0.3) | (0.3) | (0.7) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (4.1) | (4.1) | (5.6) | ||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (6.1) | (10.1) | (11.1) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 25.2 | 36.9 | 36.9 | ||||
Effect of foreign exchange rate changes | (0.6) | - | (0.6) | ||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 18.5 | 26.8 | 25.2 |
Notes to the Interim Financial Statements
Six months ended 30 June 2012 - unaudited
1. | General information |
Reporting entity Psion PLC ("the Company") is a company incorporated in Great Britain under the Companies Act 2006 ("the Act"). The principal activities of the Group are providing enterprise mobile computing solutions, integration services and product support and maintenance to customers worldwide. The Company's registered office address is 22 Soho Square, London, W1D 4NS, United Kingdom. The condensed set of consolidated financial statements of the Group as at, and for the six months ended, 30 June 2012 comprises those of the Company and all its subsidiaries. The condensed set of consolidated financial statements has neither been audited nor reviewed by the auditors, and neither were the comparative figures for the six months ended 30 June 2011. The information for the year ended 31 December 2011 does not constitute statutory accounts as defined in s434 of the Act. A copy of the statutory accounts for that year has been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified. The auditor's report did not contain a statement under section 498 (2) or 498 (3) of the Act. Statement of compliance The condensed set of consolidated financial statements has been prepared in accordance with IAS 34 - "Interim Financial Reporting" as adopted by the European Union. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at, and for the year ended 31 December 2011. Significant accounting policies The accounting policies applied and presentation and methods of computation followed by the Group in the condensed set of consolidated financial statements are the same as those applied in the Group's consolidated financial statements for the year ended 31 December 2011, which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union. Copies of the December 2011 Annual Report and Accounts are available from the Secretary at the registered office. Basis of preparation The condensed set of consolidated financial statements has been prepared on the going concern basis. The Directors have taken into account cash flow projections, the current strength of the Balance Sheet (in particular the cash resources of the Group) in reaching their conclusion that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Estimates The preparation of the condensed set of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, income and expense. The estimates are made taking account of all relevant information available but there can be no certainty that actual future results will match the estimates. The critical judgement areas in preparing this condensed set of consolidated financial statements are the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2011, i.e. the valuation of goodwill (after reviewing the assumptions in our value in use model, consistent with prior periods), the calculation of the deferred tax asset and the assessment of third party claims in Japan as further described in note 9. The further areas where significant estimates have to be made are in the provisions for warranty costs, bad debts, slow moving inventory and onerous lease costs. | |
2. | Segmental Analysis | ||||
The Group is managed on a geographical basis using a regional structure. The geographical segments are the basis on which the Group reports its results within its internal reporting to the Chief Executive Officer (the chief decision maker) and the Board for the purposes of resource allocation and assessment of segmental performance. Inter-segment revenues are eliminated in such internal reporting prior to reporting the regional performance. Segment balance sheet information is not included in the Group's internal reporting. | |||||
The Psion corporate activity segment comprises the Group's development centre to which goodwill is attributed, together with expensed development costs, amortisation of capitalised development costs and associated staff costs, together with costs of Group functions. The June 2011 analysis has been re-presented to conform with the December 2011 and continuing presentation. The Dubai market has been moved from EMEA to Asia, reallocating £1.0m revenue and £0.4m operating profit. | |||||
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year Ended 31.12.11 £m | |||||||||||
Revenue by geographical market | |||||||||||||
Americas | 24.3 | 23.7 | 53.2 | ||||||||||
EMEA | 49.2 | 49.9 | 106.1 | ||||||||||
Asia | 6.7 | 7.8 | 16.7 | ||||||||||
Total revenue from continuing operations | 80.2 | 81.4 | 176.0 | ||||||||||
Results | |||||||||||||
Operating profit / (loss) before exceptional items | |||||||||||||
Americas | 3.5 | 3.8 | 9.3 | ||||||||||
EMEA | 10.6 | 12.8 | 28.2 | ||||||||||
Asia | 1.5 | 2.4 | 5.4 | ||||||||||
15.6 | 19.0 | 42.9 | |||||||||||
Corporate costs | (18.5) | (20.3) | (38.8) | ||||||||||
Exceptional operating costs | (5.7) | (3.9) | (3.9) | ||||||||||
Operating (loss) / profit from continuing operations | (8.6) | (5.2) | 0.2 | ||||||||||
Investment income | - | - | 0.1 | ||||||||||
Finance costs | (0.1) | (0.1) | (0.2) | ||||||||||
(Loss) / profit before tax | (8.7) | (5.3) | 0.1 | ||||||||||
Tax credit / (charge) | (0.3) | 1.3 | (2.1) | ||||||||||
(Loss) / profit for the period from continuing operations | (9.0) | (4.0) | |||||||||||
The accounting policies of the reportable segments are the same as the Group's accounting policies which are described in the Group's 2011 Annual Report and Accounts. |
3. | Exceptional operating costs | |||||||
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year ended 31.12.11 £m | ||||||
Restructuring costs (a) | 3.6 | - | - | |||||
Japanese costs (b) | - | 3.9 | 3.9 | |||||
Transaction costs (c ) | 2.1 | - | - | |||||
5.7 | 3.9 | 3.9 | ||||||
(a) A restructuring programme in various countries undertaken to realign costs in light of uncertain economic conditions. | ||||||||
(b) Settlement costs relating to unauthorised trade in the Japanese business in 2008, offset by insurance proceeds received (See Note 9). | ||||||||
(c) The financial advisory, legal and accounting costs incurred in the first half of the year in relation to the Motorola Solutions Offer to acquire Psion PLC. Total costs expected to be incurred if the transaction completes are estimated at approximately £3.0m (see Note 8). | ||||||||
4. | Taxation | |||||||
The tax charge for the first half of £0.3m arises from those geographies where the Group generates taxable profits which cannot be relieved by tax losses elsewhere in the Group. | ||||||||
5. | Discontinued operations | ||||||||||||||
The results for the period from the discontinued operations are analysed as follows: | |||||||||||||||
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year ended 31.12.11 £m | |||||||||||||
Finance costs | |||||||||||||||
Release of onerous lease provision | - | - | 0.2 | ||||||||||||
Unwinding of discount on provisions | - | (0.1) | (0.1) | ||||||||||||
- | (0.1) | 0.1 | |||||||||||||
6. | Dividends | ||||||||||||||||||
6 months ended 30.6.12 £m | 6 months ended 30.6.11 £m | Year ended 31.12.11 £m | |||||||||||||||||
Amounts recognised as distributions to equity holders in the period: Paid final dividend for the year ended 31 December 2011 of 2.7p (2011-final dividend for 2010 - 2.7p) per share | 3.8 | 3.8 | 3.8 | ||||||||||||||||
Paid interim dividend for 2011 of 1.3p per share | - | - | 1.8 | ||||||||||||||||
3.8 | 3.8 | 5.6 | |||||||||||||||||
Proposed interim dividend for the year ended 31 December 2012 of nil (2011 - 1.3 p) per share | - | 1.8 | |||||||||||||||||
Final dividend declared for the year ended 31 December 2011 of 2.7p per share | 3.8 | ||||||||||||||||||
The proposed dividends are not included in liabilities in the Balance Sheet at 30 June 2011 or 31 December 2011. | |||||||||||||||||||
7. | Loss per share | ||||||||||||||||||
6 months ended 30.6.12 Number | 6 months ended 30.6.11 Number | Year ended 31.12.11 Number | |||||||||||||||||
Number of shares | |||||||||||||||||||
Weighted average number of ordinary shares for the purposes of basic earnings per share | 140,785,053 | 140,757,048 | 140,764,815 | ||||||||||||||||
Dilutive effect of potential ordinary shares: | |||||||||||||||||||
Share options | 29,177 | 77,460 | 119,123 | ||||||||||||||||
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
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|
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The denominators above are used for the purposes of calculating basic and diluted earnings per share. | |||||||||||||||||||
6 months ended 30.6.12 | 6 months ended 30.6.11 | Year ended 31.12.11 | |||||||||||||||||
FROM CONTINUING OPERATIONS | |||||||||||||||||||
£m | £m | £m | |||||||||||||||||
Loss for the purposes of basic and diluted earnings per share from continuing operations | (9.0) | (4.0) | (2.0) | ||||||||||||||||
Loss per share from continuing operations | Pence | Pence | Pence | ||||||||||||||||
Basic loss per share | (6.39) | (2.84) | (1.42) | ||||||||||||||||
Diluted loss earnings per share | (6.39) | (2.84) | (1.42) | ||||||||||||||||
FROM CONTINUING AND DISCONTINUED OPERATIONS | |||||||||||||||||||
£m | £m | £m | |||||||||||||||||
Loss for the purposes of basic and diluted earnings per share being net loss attributable to equity holders of the parent | (9.0) | (4.1) | (1.9) | ||||||||||||||||
Loss per share from continuing and discontinued operations | Pence | Pence | Pence | ||||||||||||||||
Basic loss per share | (6.39) | (2.92) | (1.35) | ||||||||||||||||
Diluted loss per share | (6.39) | (2.92) | (1.35) | ||||||||||||||||
8. | Contingent liabilities | ||||||||
From time to time the Group is exposed to claims of alleged infringement of agreements and patents which, where believed to be invalid, the Group vigorously defends. Provision for costs is made when the likelihood of a case proceeding is adjudged as probable unless such costs cannot be reasonably estimated. Disclosure is made of potentially material matters where, on the basis of legal advice, an adverse outcome cannot currently be judged as remote. The Group may continue to incur costs defending claims and pursuing actions in connection with receivable and alleged payable amounts in Japan. It is not possible to quantify the costs at present and they will continue to be expensed as incurred. (See Note 9) In relation to the Motorola Solutions Offer the Group has contingent fee arrangements with its advisers such that a further £0.9m of fees become payable if the Motorola Solutions Offer completes. This would bring the total transaction costs for the Offer to approximately £3.0m. | |||||||||
9. | Japan | ||||||||
On June 2, 2011, the Group reached agreement to settle the largest of the Japanese legal actions initiated against the Group in 2008 in relation to unauthorised trades and a guarantee of third party obligations. The net cost in 2011 to the Group of this settlement, including legal costs, was £3.9m (after insurance proceeds of £1.5m). This net cost was reported as exceptional operating costs in the Condensed Consolidated Statement of Comprehensive Income (Note 3). After this settlement the remaining contingent liability is estimated at £1.9m (JPY 0.23bn at 30 June 2012 exchange rates). The status of these remaining claims and actions against the Group has not changed since last reported in the 2011 Annual Report. | |||||||||
10. | Related party transactions | ||||||||
Transactions between companies within the Group, which are related parties, have been eliminated on consolidation and are not disclosed in this note. | |||||||||
Other than remuneration and dividends on their shareholdings there were no material transactions with the directors. | |||||||||
11. | Motorola Solutions Offer to acquire Psion | ||||||||
On 15 June 2012 Motorola Solutions and Psion announced they had agreed the terms of a recommended cash offer to be made by Motorola Solutions for the entire issued and to be issued share capital of Psion. Under the terms of the Offer, Psion Shareholders who accept the Offer will be entitled to receive 88 pence in cash for each Psion Share held. The Offer values the entire issued and to be issued share capital of Psion at approximately £129.3 million. The Offer is subject to, amongst other things, shareholder and regulatory approvals. | |||||||||
Responsibility statement | ||||||||||||||||||||||||||||||
The Directors confirm that to the best of their knowledge: | ||||||||||||||||||||||||||||||
Share
© Publicnow - 2012
Psion Holdings Limited is an investment holding company. The Company's subsidiaries include Psion Inc., Psion services Limited, Psion Shared services Limited, Psion EMEA SAS, Psion de Argentina S.A., Psion (Australia) Pty Ltd, Psion NV, Psion Systems Inc. The Company's ultimate parent company and controlling party is Motorola Solutions Inc.
Sector
Computer Hardware
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