Screen Technology gears up for full scale production; sees no need to raise more cash
Large high-resolution screen display maker Screen Technology Group plc (SCT.L) said today that delivery of three high-speed production machines during 2006 will transform its production capacity from a small-scale low-volume operation to a high-speed automated facility.
In a statement released with its maiden results as a listed company for the year to end 2005, non-executive Chairman Peter Smyth said: "We have moved from being a small research and development based company to being a quoted manufacturing company.
"Since our flotation in August of 2005, the workforce has nearly doubled and we have shipped our first products. We are now concentrating on building up our production resources to capitalise on the growing demand for ITrans."
Screen Technology designs and makes revolutionary high-resolution large-screen displays designed for high ambient light environments such as airports and shops. Its technology uses moulded optical fibre tiles to produce seamless large displays using standard production LCD panels. The scaleable modular technology enables screens to be built in a wide variety of shapes and of theoretically unlimited size. Its key product is called ITrans.
The company's pre-tax loss for 2005 widened to £1.9m from £1.1m a year earlier as it geared up for commercial production. It was in line with expectations and the results didn’t move the share price, leaving the company valued at £12.1m.. It reported its first sales, in December, of £115,500. It ended the year with £5.6m in the bank, having raised £7.1m at August's floatation.
Most spending was on production machinery but staff numbers increased from 12 to 23 at year end.
Screen Technology does not expect to need to raise any further cash from external sources before it becomes cash positive.
Mr Smyth said the "commercial display industry has continued to show very strong interest in ITrans. Since the flotation the Group's focus has been to increase production capacity to deliver commercial quantities to satisfy the levels of demand being expressed by the marketplace".
He was at pains to describe the strength of the management team in his statement, presumably to ease any concerns there might have been about the sudden departure this week of CEO Tony Kellett for personal reasons. Major shareholder MTI Partners has supplied a temporary CEO - Tom Jarman, also a non-executive Screen Technology Board member - while the full scale search for a replacement is underway.
Expansion in production capacity
Since the float, when it had one machine capable of low volume production of ITrans tiles, the company has been expanding production capacity. In 2005 it ordered a second low-volume machine - delivered in February this year - and the first of its high-speed production machines - due in mid to late summer this year.
Since the end of 2005, two further orders have been placed for high-speed machines with a total value of almost £2m. These will have a significant impact on production capacity towards the end of 2006 and would enable Screen Tech to meet the expected increase in sales in 2007.
Outlook
Mr Smyth said the Board "is looking forward with considerable confidence to 2006, which promises to be another exciting year."
"The expected delivery of three high-speed production machines during the year will transform the Group's production capacity from a small-scale low-volume operation to a high-speed automated production facility."
This will enable it to accept large orders which it has so far been reluctant to do because of its limited production capacity. It continues to see strong demand from the display industry for ITrans and, has recently received firm orders in excess of £0.5m to start shipment in the second half of the year.
The company is developing relationships with value-added resellers around the world, which it sees as a key route to market. The first products shipped in December 2005 were to resellers and it expects them to be a significant source of orders in 2006.
A key development for 2006 will be the launch of a modular product allowing screens of any size to be shipped easily to the customer and then assembled and installed quickly on site. Screen Technology expects to launch the modular product during the third quarter of 2006.
20th April 2006
