Microsoft Word - Interims 2014 RNS FINAL Scientific Digital Imaging plc ("SDI", the "Company" or the Group) (AIM: SDI) UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2014

The Board of Scientific Digital Imaging plc, the AIM quoted group focused on the application of digital imaging technology for use in life sciences, healthcare, astronomy, and art conservation, is pleased to announce its unaudited interim results for the six months ended 31 October 2014.

Highlights

Opus Instruments contributed sales revenue and profitable trading

Adjusted operating loss of £20,000 (2013: loss £45,000)

The Board expects trading improvements in the second half of the year with the reorganisation of Synoptics completed in 2014

Artemis CCD continuing to report sales and profitability above budget

" Adjusted operating loss is operating loss before aborted transaction costs, reorganisation costs and share based payments"
Ken Ford, Chairman of SDI, commented:
"The Board anticipates that Opus Instruments and Artemis CCD will continue to make positive contributions to SDI. The new Synoptics products released in the last quarter of 2014, together with our other Group subsidiaries are expected to provide a sound base to make further acquisitions in due course."

Enquiries Scientific Digital Imaging plc 01223 727144

Ken Ford, Chairman Mike Creedon, CEO www.scientificdigitalimaging.com

finnCap Ltd 020 7220 0500

Ed Frisby/Simon Hicks - Corporate Finance
Mia Gardner- Corporate Broking
Copies of the interim report are being sent to shareholders and can also be viewed on the Company's website: www.scientificdigitalimaging.com
About SDI:
Scientific Digital Imaging plc designs and manufactures digital imaging technology for use in the life sciences, healthcare, astronomy, and art conservation through Synoptics brands (Syngene, Synoptics Health, Synbiosis and Syncroscopy), the Artemis CCD company brands (Atik Cameras and Artemis CCD Cameras) and the Opus Instruments brand (Osiris).
SDI plans to grow through its own technology advancements as well as strategic, complementary acquisitions.

Interim highlights

Operating loss £20,000 (2013: loss £45,000) before aborted transaction costs, reorganisation costs and share based payments.

The Board expects trading improvements in the second half of the year with the reorganisation of Synoptics completed in 2014, which provides a significant reduction in the cost base

New acquisition, Opus Instruments contributed sales revenue and profitable trading

Syngene launched a mid-range gel documentation system, T:Genius featuring an integrated tablet PC

Synbiosis launch ProtoCOL 3 Chromogenic ID software for the Rapid Microbiology Market in

October 2014

Artemis CCD continuing to report sales and profitability above budget

Synoptics

Synoptics designs and manufactures special-purpose, innovative instruments and systems for use in the life science industry. The Company exploits digital imaging technologies for a range of disciplines and offers its products through four brands:

Syngene - produces equipment for life scientists to image and analyse electrophoresis gels used for DNA and protein analysis

Synbiosis - produces equipment for microbiologists to automate microbial colony counting

Syncroscopy - provides systems that apply digital imaging techniques to microscopy applications, such as life and material sciences

Synoptics Health - focuses on imaging techniques within the hospital and clinical environments using their ProReveal product

Artemis CCD

Artemis designs and manufactures high sensitivity cameras for deep-sky astronomical and life science imaging under the Atik and Artemis CCD brands.

Opus Instruments

Opus designs and manufactures an infrared camera, Osiris, which is used to examine works of art, utilising infrared camera technology with other potential digital imaging applications.

Chairman's statement OVERVIEW

In the six month period ended 31 October 2014 the new acquisition, Opus Instruments, made a positive impact on trading alongside our established Artemis CCD Division which reported increased sales revenue.
During the period, we were also involved in reverse acquisition negotiations that were ultimately unsuccessful.

SDI revenue was £3.2m in the six months to 31 October 2014 (reduction of £349,000, relative to revenue £3.5m for the six months to 31 October 2013). The reduction in SDI revenue arose from Synoptics, whose revenue reduced due to falling sales in North and South America. We have addressed this by introducing a new mid-range competitive unit, T:Genius. Additionally we have invested in Synoptics US by recruiting a new VP for Sales and Marketing in November 2014.
The effect of the shortfall in revenue has meant that SDI reported an operating loss of £20,000 before aborted transaction costs, reorganisation costs and share based payments (2013: loss £45,000).
Basic and fully diluted losses per share were both 0.82p (2013: basic and fully diluted loss 0.33p)
The Group's cash position reduced by £271,000 to £316,000 over the period, mainly due to reduced sales revenue from the Synoptics Group during the financial period.

PRODUCT PORTFOLIO

Syngene remains the largest of the Synoptics brands. Over the past year, Syngene has experienced aggressive pricing competition in the DNA imaging sector, especially in North America, the largest life sciences market. This issue is being addressed by Syngene with the introduction of a number of new products.
In the period, the new ProtoCOL 3 Chromogenic ID software for identification of colonies on CHROMagar was launched. This new software is stimulating interest in ProtoCOL 3 within the rapid microbiology identification market, especially in the food microbiology sector and Synbiosis believes this will translate into sales growth in 2015.
In the past six months, Synoptics Health has continued to develop ProReveal, a fluorescence test to detect proteins on surgical instruments for the cleaning validation market and has appointed a new dealer in North America. In October, ProReveal was reviewed by the UK Government's Rapid Review Panel (RRP) and recommended for use in NHS England for optimising cleaning protocols, endorsing the technology as a validation tool. With 30 ProReveal systems demonstrated in the UK and internationally, the test continues to be purchased by companies and institutes in the decontamination equipment sector. ProReveal is not yet being adopted by the larger hospital sterile service departments due to statutory decontamination standards not yet being in place. SDI has revised its investment and promotional strategy for this product in 2015 with further emphasis being placed on bringing down the price point of the hardware in order to widen the immediate addressable market.
Since acquiring Opus Instruments in 2014 and introducing a touch screen version of the Osiris camera, sales growth for the division has been positive. With interest in this new camera growing, the Board believes Opus Instruments will continue to achieve sales forecasts, making a positive contribution to SDI's trading in 2015.
Artemis CCD introduced a new scanning camera in the period. Artemis is maintaining its strategy of selling cameras to OEM customers. This is helping Artemis CCD to make an increasing contribution to the SDI Group thanks to both intra-group revenues from Synoptics and growth in its OEM sales.

BUSINESS OPERATIONS

We have actively reduced our cost base. Administrative costs in the period were £1.8m, down 13% compared to £2.1m in the same period last year. We have further reviewed costs in the last three months and additional cost savings will be realised in the second half of the financial year.
The North American life science market is recovering and to capitalise on this, SDI is investing in the Synoptics US group with the appointment of a new US VP Sales and Marketing, as well as increased sales and product training to ensure that our Syngene and Synbiosis US dealer representative network is being fully utilised in this large market. This will result in a better coverage of the US, where Syngene and Synbiosis products have previously sold well. The Synoptics Health Division has also appointed a North American distributor, which is actively promoting the product and means it will be easier for many decontamination equipment suppliers to assess the technology in this major market.

Investing in our US operations and focusing our promotional efforts on the established Syngene and
Synbiosis brands means SDI is well placed to increase sales revenue in its Synoptics Division in
2015.

ACQUISITIONS

SDI is actively seeking profitable scientific and technology based companies. Acquisitions in the £1m to £10m range would be appropriate and are currently being sought.

OUTLOOK

Renewed commercial efforts in North America and the introduction of new systems to appeal to this market are expected to help the Synoptics division return to sales growth in 2015. The Board anticipates that Opus Instruments and Artemis CCD will continue to make positive contributions to SDI. The new Synoptics products released in the last quarter of 2014, together with a focused sales strategy are expected to result in sales and profit growth in 2015. Profitable stable current subsidiaries should then provide a sound base to make further acquisitions in due course.
Ken Ford, Chairman
15 January 2015

Consolidated income statement

Unaudited for the six months ended 31 October 2014

Note

6 months to 31 October 2014 Unaudited £'000

6 months to
31 October
2013
Unaudited
£'000
12 months to
30 April
2014
Audited
£'000
Revenue 3,188 3,537 7,037
Costs of sales (1,353) (1,436) (3,021)

Gross profit 1,835 2,101 4,016


Currency exchange loss (12) (22) (66) Administrative expenses (1,843) (2,124) (3,893) Share based payments (5) (5) (6) Acquisition costs - - (28) Aborted transaction costs (131) - - Reorganisation costs (51) - (22) Total administrative expenses (2,042) (2,151) (4,015) Operating (loss)/profit (207) (50) 1
Financial income - - -
Financial expenses (20) (24) (39) (Loss)/Profit before taxation (227) (74) (38) Income tax expense - - - (Loss)/profit for the period (227) (74) (38) Earnings per share
Basic (loss)/earnings per share 2 (0.82p) (0.33p) (0.16p)
Diluted (loss)/earnings per share (0.82p) (0.33p) (0.16p)

Consolidated statement of comprehensive income

Unaudited for the six months ended 31 October 2014

6 months to 31 October 2014 Unaudited £'000

6 months to
31 October
2013
Unaudited
£'000
12 months to
30 April
2014
Audited
£'000

(Loss)/profit for the period (227) (74) (38) Other comprehensive income Items that will be reclassified subsequently to profit and loss

Exchange differences on translating foreign operations 38 (30) (75)

Total comprehensive (loss)/profit for the period (189) (104) (113) Consolidated balance sheet

Unaudited at 31 October 2014

Assets Non-current assets

Note

31 October 2014 Unaudited £'000

31 October
2013
Unaudited
£'000
30 April
2014
Audited
£'000
Property, plant and equipment 379 392 419
Intangible assets 2,064 884 2,085

Deferred tax asset 99 125 99

2,542 1,401 2,603 Current assets

Inventories 1,059 1,061 1,117
Trade and other receivables 1,344 1,327 1,286
Current tax assets - - 16
Cash and cash equivalents 316 541 539

2,719 2,929 2,958 Total assets 5,261 4,330 5,561 Liabilities Current liabilities

Trade and other payables 1,527 1,213 1,427
Provisions for warranty 17 17 17
Borrowings 3 143 115 199
Current tax payable - - 35

1,687 1,345 1,678 Non-current liabilities

Borrowings 3 198 35 272
Trade and other payables 138 - 189
Deferred tax liability 169 164 169

505 199 630 Total liabilities 2,192 1,544 2.308 Net assets 3,069 2,786 3,253 Equity

Share capital 278 250 278
Merger reserve 3,030 2,606 3,030
Share premium account 1,063 1,040 1,063
Foreign exchange reserve (71) (64) (109)
Own shares held by Employee Benefit
Trust

(85) (85) (85)

Other reserves 70 105 65

Retained earnings (1,216) (1,066) (989)

Total equity 3,069 2,786 3,253 Consolidated statement of cash flows

Unaudited for the six months ended 31 October 2014

Operating activities 6 months to 31 October 2014 Unaudited £'000

6 months to
31 October
2013
Unaudited
£'000
12 months to
30 April
2014
Audited
£'000

(Loss)/profit for the period (227) (74) (38) Depreciation and amortisation 282 252 595
Finance costs and income 20 24 39
Taxation expense in the income statement - - - Exchange difference - (38) - Employee share based payments 5 5 6

Operating cash flow before movement in working capital

80 169
602
Increase in inventories 58 (114) (88) Changes in trade and other receivables (52) 140 199
Changes in trade and other payables 103 (210) (190)

Cash (used in)/generated from operations 189 (15) 523

Interest paid (20) (24) (26) Income taxes (received)/paid (35) - 7

Cash (used in)/generated from operating activities Cash flows from investing activities

134 (39)
504
Capital expenditure on fixed assets (62) (96) (257) Expenditure on development and other intangibles (159) (121) (540) Acquisition of subsidiaries, net of cash - - (273) Proceeds from sale of property, plant and
equipment - - 64

Net cash used in investing activities (221) (217) (1,006) Cash flows from financing activities

Movement in finance leases (12) 17 (34) Loan stock repayment - (243) (204) Issue of shares net of costs - 635 636
Repayment of borrowings (118) - (27) Proceeds from bank borrowings - 8 300
Net cash (used in)/from financing activities (130) 417 671

Net changes in cash and cash equivalents (217) 161 169 Cash and cash equivalents, beginning of period 539 388 388 Foreign currency movements on cash balances (6) (8) (18) Cash and cash equivalents, end of period 316 541 539 Consolidated statement of changes in equity

Unaudited for the six months ended 31 October 2014

6 months to 31 October 2014 - unaudited Share capital

£'000

Merger reserve

£'000

Share premium

£'000

Own shares held by EBT

£'000

Other reserves

£'000

Foreign exchange

£'000

Retained earnings

£'000

Total

£'000

Balance at 1 May 2014 278 3,030 1,063 (85) 65 (109) (989) 3,253

Share based payments - - - - 5 - - 5

Transactions with owners - - - - 5 - - 5

Profit for the period - - - - - - (227) (227) Foreign exchange on consolidation of subsidiary - - - - - 38 - 38

Total comprehensive income for the period - - - - - 38 (227) (189) Balance at 31 October 2014 278 3,030 1,063 (85) 70 (71) (1,216) 3,069 6 months to 31 October 2013 - unaudited Share capital

£'000

Merger reserve

£'000

Share premium

£'000

Own shares held by EBT

£'000

Other reserves

£'000

Foreign exchange

£'000

Retained earnings

£'000

Total

£'000

Balance at 1 May 2013 194 2,606 335 (85) 100 (34) (992) 2,124

Share based payments - - - - 5 - - 5

Shares issue 56 - 705 - - - - 761

Transactions with owners 56 - 705 - - - - 766

Profit for the period - - - - - - (74) (74) Foreign exchange on consolidation of subsidiary - - - - - (30) - (30) Total comprehensive income for the period - - - - - (30) (74) (104)

Balance at 31 October 2013 250 2,606 1,040 (85) 105 (64) (1,086) 2,786 12 months to 30 April 2014 - audited Share capital

£'000

Merger reserve

£'000

Share premium

£'000

Own shares held by EBT

£'000

Other reserves

£'000

Foreign exchange

£'000

Retained earnings

£'000

Total

£'000

Balance at 1 May 2013 194 2,606 335 (85) 100 (34) (992) 2,124

Shares issued 84 424 728 - - - - 1,236

Share based payments - - - - 6 - - 6

Transfer of equity on consolidation of shares - - - - (41) - 41 -

Transactions with owners 84 424 728 - (35) - 41 1,242


Loss for the year - - - - - - (38) (38) Foreign exchange on consolidation of subsidiaries - - - - - (75) - (75) Total comprehensive income - - - - - (75) (38) (113) Balance at 30 April 2014 278 3,030 1,063 (85) 65 (109) (989) 3,253

Notes to the interim financial statements

Unaudited for the six months ended 31 October 2014
The accompanying accounting policies and notes form an integral part of these interim financial statements.

Reporting entity

Scientific Digital Imaging plc (the "Company"), a public limited company, is the Group's ultimate parent. It is registered in England and Wales. The consolidated interim financial statements of the Company for the period ended 31 October 2014 comprise the Company and its subsidiaries (together referred to as the "Group").

Basis of preparation

The unaudited consolidated interim financial statements are for the six months ended 31 October 2014. These interim financial statements have been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRS). The financial information for the year ended 30 April 2014 is based upon the audited statutory accounts for that year.
The consolidated interim financial information has been prepared on the historical cost basis.
The consolidated interim financial statements are presented in British pounds (£), which is also the functional currency of the ultimate parent company.
The consolidated interim financial information was approved by the Board of Directors on 15 January
2015.
The financial information set out in this interim report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The figures for the year ended 30 April 2014 have been extracted from the statutory financial statements of Scientific Digital Imaging plc which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, but did contain an emphasis of matter paragraph outlining the existence of a material uncertainty which may cast significant doubt over the group's ability to continue as a going concern. The financial information for the six months ended 31 October 2014 and for the six months ended 31 October 2013 has not been audited.

1. Principal accounting policies

The principal accounting policies adopted in the preparation of the condensed consolidated interim information are consistent with those followed in the preparation of the Group's financial statements for the year ended 30 April 2014.
The accounting policies have been applied consistently throughout the Group the purposes of preparation of these interim financial statements.

2. Earnings per share

The calculation of the basic (loss)/earnings per share is based on the (losses)/profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, excluding shares held by the Synoptics Employee Benefit Trust. All (loss)/profit per share calculations relate to continuing operations of the Group.
(Loss)/Profit attributable to shareholders
Weighted average number of
Basic (loss)/earnings per share amount in

£'000 shares pence

Period ended 31 October 2014 (227) 27,777,308 (0.82)


Period ended 31 October 2013 (74) 22,098,744 (0.33) Year ended 30 April 2014 (38) 24,471,226 (0.16)
The calculation of diluted earnings per share is based on the profits attributable to the shareholders of Scientific Digital Imaging plc divided by the weighted average number of shares in issue during the year, as adjusted for dilutive share options, dilutive deferred consideration and shares held by the Synoptics Employee Benefit Trust.
Diluted (loss)/earnings per share amount in pence

Period ended 31 October 2014 (0.82) Period ended 31 October 2013 (0.33) Year ended 30 April 2014 (0.16)


The reconciliation of average number of ordinary shares used for basic and diluted earnings is as below:
Weighted average number of ordinary shares used

31 October 2014

30 October
2013
30 April
2014
for basic earnings per share 27,777,308 22,098,744 24,471,226
Weighted average number of ordinary shares

under option 933,000 1,004,233 993,000
Weighted average number of ordinary shares used
for diluted earnings per share 28,710,308 23,102,977 25,464,226

Due to the loss generated in the period ended 31 October 2014, the diluted loss per share for that period is based on the undiluted loss per share.

3. Borrowings Within one year: 31 October 2014 £'000

31 October
2013
£'000
30 April
2014
£'000
Bank finance 100 84 168

Finance leases 43 31 31

143 115 199 After one year and within five years:

Bank finance 133 - 183
Other loan 50 - 50

Finance leases 15 35 39

198 35 272

Total borrowings 341 150 471

The Group utilises short-term facilities to finance its operation. The Group has one principal banker with an invoice discounting facility of up to £500,000. At the end of the period the Group had utilised £80,668 of this facility.

Scientific Digital Imaging plc

Beacon House Nuffield Road Cambridge CB4 1TF
UK
Telephone: +44 (0)1223 727144
Fax: +44 (0)1223 727101
Email: info@scientificdigitalimaging.com

distributed by