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Remote Monitored Sys - Half Yearly Report to 30 June 2020

RNS Number : 1815A
Remote Monitored Systems PLC
25 September 2020
 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

25 September 2020

Remote Monitored Systems plc ("Remote Monitored Systems", the "Company" or the "Group")

 

Half Yearly Report to 30 June 2020

 

Remote Monitored Systems plc, the AIM quoted survey, inspection and monitoring company, is pleased to present its unaudited half yearly report for the six-month period ended 30 June 2020.

 

OVERVIEW

 

●     During the period the Company raised £334,000 net of costs through the issue of new shares and warrants

●     The loss after tax from continuing operations for the period was £225,224 (30 June 2019: £361,906).

●     The loss per share was 0.041 pence (30 June 2019: loss per share 0.190 pence)

●    Current cash reserves of £360,201

●     Post the period

o      Appointment of John Richardson as Chief Operating Officer and Paul Ryan as Non-Executive Chairman

o      Completed a share placing to raise gross proceeds of £265,000.

o      Entered a binding share purchase agreement for the acquisition of the entire issued share capital of Pharm 2 Farm Limited.  Completion is subject to regulatory and Company shareholder approval.  The acquisition will be satisfied by the issue of 600,000,000 ordinary shares equating to approximately £2,370,000 based on the closing share price at 20 August 2020.

 

Trevor Brown, CEO of Remote Monitored Systems plc, commented "We have recently announced the conditional acquisition of Pharm 2 Farm in a transaction which if completed will be a major step for  RMS.   Since we announced the proposed acquisition, the market for Pharm 2 Farm products, in particular for face masks, has continued to grow exponentially. The successful development of a face mask with anti-viral properties will, we believe, generate substantial revenue for the enlarged group. Proof of Concept for the efficacy of the anti-viral mask is imminent and mask production is anticipated to commence in the first quarter of 2021".

A copy of these interim financial statements is available on the Company's website: www.remotemonitoredsystems.com

 

ENQUIRIES:

 

Remote Monitored Systems plc

 

Trevor Brown (Executive Director)

+41 7941 55384

Paul Ryan (Non-Executive Chairman)

+32 475 754 148

 

 

 

SP Angel Corporate Finance LLP

 

Nominated Adviser and Joint Broker 

 +44 20 3470 0470

Stuart Gledhill

 

Caroline Rowe 

 

 

 

 

Peterhouse Corporate Finance 

 

Joint Broker 

+44 20 7469 0930

Lucy Williams 

 

 

 

 

CHAIRMAN'S STATEMENT

 GyroMetric

GyroMetric Systems Limited ("GyroMetric"), in which the Company owns a 58% interest, continued to make initial sales in its established marine drives market, both taking and fulfilling orders during the lockdown.

 

Although sales into new markets have been hindered somewhat by the pandemic, in response to these conditions, GyroMetric has developed remote demonstration and sales tools which are now being rolled out to its many potential customers.

 

An installation window at Tarmac Limited, a major sustainable manufacturer of cement, has now become available and we anticipate installation of our technology in the near term whereupon a three month trial operation will commence shortly thereafter. Further updates to the market will be made as this proceeds.

 

GyroMetric recently announced that it has successfully demonstrated proof of concept for a new single sensor torsional vibration monitor ("TVM") and is seeking a commercial manufacturing partner capable of world-wide marketing and sales for this ground-breaking instrument. Gyrometric continues to develop products and is close to reaching a milestone on a product with significant market potential.

 

Cloudveil

Cloudveil provides Security and Risk Management consultancy, Intelligence Services and Bespoke Management Information Software. Cloudveil has developed a complete security framework including crisis management, which is managed and delivered through IRIS, Cloudveil's existing bespoke Management Information platform. Policy review, procedural growth, strategy development, improved learning methods, effective recruiting and of course technology solutions are all component parts of Cloudveil's highly innovative approach to security risk management.

Cloudveil has recently won a contract to deliver a governance framework for the security programme of a prominent London based law firm and is now bidding to provide a security testing programme to one of the largest public sector institutions in the UK financial services sector.

The Board continues to expect significant success at Cloudveil once it achieves some scale and establishes itself as a leading brand in the high-end and bespoke security services market.  

Pharm 2 Farm

On 21 August 2020 the Company announced that it has signed a binding share purchase agreement for the acquisition of the entire issued share capital of Pharm 2 Farm Limited. Completion is subject to regulatory and Company shareholder approval which is currently being progressed. The acquisition will be satisfied by the issue of 600,000,000 ordinary shares equating to approximately £2,370,000 based on the closing share price at 20 August 2020. The Board is extremely excited by the prospects for Pharm 2 Farm.

Pharm 2 Farm uses a patented process for producing and functionalising nanoparticles for various applications including human, animal and crop health: 

Crop nutrition: Pharm 2 Farm has already received orders from key distributors in the UK and South Korea for its unique crop nutrition products. Pharm 2 Farm is specifically targeting the growing global hydroponics market where its water-soluble nutrients with high bioavailability have a clear competitive advantage. A number of trials are underway to explore further applications of Pharm 2 Farm formulations.

Anti-viral Face Mask: Pharm 2 Farm is developing a nanotechnology enabled anti-viral face mask. Proof of concept and the design of a prototype is currently underway and expected to be completed imminently.  Pharm 2 Farm has now purchased a mask manufacturing production line and delivery is expected during November. This production plant can produce monthly, four million nanoparticle coated face masks. The production facility will be UK based. Purchase enquiries have already commenced.

Geocurve

The disposal of the Geocurve business announced in the previous financial years was approved by Shareholders and completed on 9 January 2020.

Financial Overview

During the period, the Group recorded revenues from continuing operations of £57,685 compared with £17,679 for the six months to 30 June 2019.  The operating loss from continuing operations for the six months to 30 June 2020 was £250,092 (30 June 2019: £380,076).  The loss after tax from continuing operations for the period was £225,224 (30 June 2019: £361,906). The loss per share was 0.041 pence (30 June 2019: loss per share 0.190 pence).

 

●     Consolidated net assets at 30 June 2020 amounted to £131,689 (31 December 2019: deficit £19,250).

●     Cash balances at the period end amounted to £254,523 (31 December 2019: £74,770).

●     During the period the Company raised £334,000 net of costs through the issue of new shares and warrants.

 

Acknowledgments

On behalf of the Board, I would like to extend our thanks to our business partners, customers, employees and shareholders for their continued support throughout the period. 

 

Paul Ryan

Non-Executive Chairman

 

 

 

 

REMOTE MONITORED SYSTEMS PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

For the six month period ended 30 June 2020

 

 

 

 

 

Notes

Unaudited 6 months ended

 30 June

 2020

 

£

Unaudited 6 months ended

 30 June

 2019

(restated)

£

 

Revenue

 

57,685

17,679

 

Cost of sales

 

(24,750)

-

 

Gross (loss)/profit

 

32,935

17,679

 

Other operating income

 

10,000

-

 

Administration expenses

 

(267,944)

(334,063)

 

Loss on foreign exchange

 

(14,994)

(4)

 

Depreciation

 

(2,789)

(2,251)

 

Impairment and amortisation

 

(7,300)

(61,437)

 

Operating Loss

 

(250,092)

(380,076)

 

Finance income

 

69

3

 

Finance costs

 

(3,177)

(949)

 

Loss before income tax

 

(253,200)

(381,022)

 

Income tax credit

 

27,976

19,116

 

Loss for the year from continuing operations

 

(225,224)

(361,906)

 

Loss for the year from discontinued operations

 

(11,837)

(362,048)

 

Loss for the year

 

(237,061)

(723,954)

 

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

Items that may be subsequently be reclassified to profit or loss:

 

 

 

 

Currency translation differences

 

-

(1,800)

 

Total comprehensive income for the period, net of tax

 

(237,061)

(725,754)

 

Loss attributable to:

 

 

 

Equity holders of the parent

 

(230,705)

(674,172)

Earnings per ordinary share attributable to owners of the parent during the period (expressed in pence per share)

 

5

 

 

 

Basic and diluted - continuing operations

 

(0.039)

(0.095)

 

Basic and diluted - discontinued operations

 

(0.002)

(0.095)

 

Basic and diluted - total

 

(0.041)

(0.190)

 

           
 

 

REMOTE MONITORED SYSTEMS PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

 

Unaudited

30 June

2020

Audited

31 December

2019

Unaudited

30 June

2019

Restated

 

Note

   £

£

   £

Non-current assets

 

 

 

 

Intangible assets

 

371,045

378,345

641,039

Property, plant and equipment

 

8,190

10,978

511,141

Total non-current assets

 

379,235

389,323

1,152,180

Current Assets

 

 

 

 

Inventories

 

15,017

14,589

10,854

Trade and other receivables

 

25,360

66,090

210,282

Assets classified as held for sale

 

-

160,275

-

Cash and cash equivalents

 

254,523

74,770

17,707

Total current assets

 

294,900

315,724

238,843

TOTAL ASSETS

 

674,135

705,047

1,391,023

Equity attributable to owners of the parent

 

 

 

 

Share capital

3

5,448,924

5,128,124

4,899,438

Share premium

 

6,876,182

6,822,694

6,562,937

Convertible loan stock

 

106,000

103,000

-

Other reserves

 

(464,441)

(475,153)

(298,453)

Translation reserve

 

92,181

92,181

90,381

Retained loss

 

(11,872,756)

(11,642,051)

(10,920,366)

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

 

186,090

28,795

333,937

Non-controlling interests

 

(54,401)

(48,045)

(29,354)

TOTAL  EQUITY

 

131,689

(19,250)

304,583

Current liabilities

 

 

 

 

Trade and other payables

 

477,821

576,597

793,354

Lease liabilities

 

29,500

29,500

29,500

Obligations under finance leases

 

-

60,825

72,279

Total current liabilities

 

507,321

666,922

895,133

Non-current liabilities

 

 

 

 

Lease liabilities

 

22,125

36,875

51,625

Other payables

 

-

-

31,311

Provisions

 

13,000

20,500

-

Deferred tax liabilities

 

-

-

108,371

Total non-current liabilities

 

35,125

57,375

191,307

TOTAL LIABILITIES

 

542,446

724,297

1,086,440

TOTAL EQUITY AND LIABILITIES

 

674,135

705,047

1,391,023

 

REMOTE MONITORED SYSTEMS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

For the six month period ended 30 June 2020

 

 

 

Attributable to owners of the parent

 

Share

capital

Share premium

Convertible loan stock

Other reserves

Translation reserve

Retained

Loss

Minority Interests

Total      

 

 

£

£

£

£

£

£

£

£

 

As at 1 January 2019

4,791,746

6,330,629

-

(298,453)

92,181

(10,247,994)

22,228

690,337

 

Loss for the period

-

-

-

-

-

(672,372)

(51,582)

(723,954)

 

Other comprehensive income for the period

 

 

 

 

 

 

 

 

 

Currency translation difference

-

-

-

-

(1,800)

-

-

(1,800)

 

Total comprehensive income for the period

-

-

-

-

(1,800)

(672,372)

(51,582)

(725,754)

 

Proceeds from shares issued

(net of costs)

107,692

232,308

-

-

-

-

-

340,000

 

Transactions with owners, recognised directly in equity

107,692

232,308

-

-

-

-

-

340,000

 

As at 30 June 2019

4,899,438

6,562,937

-

(298,453)

90,381

(10,920,366)

(29,354)

304,583

 

 

 

 

 

 

 

 

 

 

 

As at 1 January 2020

5,128,124

6,822,694

103,000

(475,153)

92,181

(11,642,051)

(48,045)

(19,250)

 

Loss for the period

-

-

-

-

-

(230,705)

(6,356)

(237,061)

 

Other comprehensive income for the period

-

-

-

-

-

-

-

-

 

Total comprehensive income for the period

-

-

-

-

-

(230,705)

(6,356)

(237,061)

 

Proceeds from shares and warrants issued (net of costs)

320,800

53,488

-

10,712

-

-

-

385,000

 

Cumulative interest on loan stock

-

-

3,000

-

-

-

-

3,000

 

Transactions with owners, recognised directly in equity

320,800

53,488

3,000

10,712

-

-

-

388,000

 

As at 30 June 2020

5,448,924

6,876,182

106,000

(464,441)

92,181

(11,872,756)

(54,401)

131,689

 

                         
 

 

REMOTE MONITORED SYSTEMS PLC

CONSOLIDATED STATEMENT OF CASH FLOW

 

 

For the six month period ended 30 June 2019

 

 

 

 

 

Unaudited

6 months ended

30 June

2020

 

Unaudited

6 months ended

  30 June

 2019

 (restated)

Cash Flows from Operating Activities

 

 

 

 

 

Loss for the period on continuing activities

 

 

(253,200)

(381,022)

 

Loss for the period from discontinued operations

 

 

(11,837)

(440,290)

 

Depreciation of property, plant and equipment

 

 

2,789

67,773

 

Profit on business disposal

6

 

(1)

-

 

Impairments and amortisation

 

 

7,300

196,478

 

Finance costs

 

 

3,177

4,031

 

Finance income

 

 

(69)

(3)

 

Taxation receipts

 

 

27,976

-

 

(Increase)/decrease in inventories

 

 

(428)

7,236

 

Decrease in trade and other receivables

 

 

40,730

45,928

 

(Decrease) in provisions

 

 

(7,500)

-

 

(Decrease)/increase in trade and other payables

 

 

(47,776)

178,469

 

Cash used in operations

 

 

(238,839)

(321,400)

 

Interest expense

 

 

(177)

(4,031)

 

Net cash used in operating activities

 

 

(239,016)

(325,431)

 

Cash Flows from Investing Activities

 

 

 

 

 

Purchases of property, plant and equipment

 

 

-

(15,776)

 

Proceeds from disposal of property, plant and equipment

 

 

160,274

18,667

 

Proceeds from disposal of goodwill

 

 

1

-

 

Interest income

 

 

69

3

 

Net cash generated from investing activities

 

 

160,344

2,894

 

Cash Flows from Financing Activities

 

 

 

 

 

(Repayments of)/net proceeds from borrowings

 

 

(60,825)

(94,387)

 

Repayments of lease liabilities

 

 

(14,750)

(14,750)

 

Issue of shares and warrants, net of issue costs

 

 

334,000

340,000

 

Net cash generated from financing activities

 

 

258,425

230,863

 

Net increase/(decrease) in cash and cash equivalents

 

 

179,753

(91,674)

 

Cash and cash equivalents at beginning of period

 

 

74,770

109,381

 

Cash and cash equivalents at end of period

 

 

254,523

17,707

 

             
 

 

NOTES TO THE INTERIM RESULTS:

 

1.   General information and accounting policies

The principal activity of Remote Monitored Systems plc ("the Company") and its subsidiaries (together "the Group") is the provision in the GyroMetric division of next generation digital monitoring and safeguarding technology and services for rotating shafts and in the Cloudveil division of intelligence services and security risk management  

 

The Company is a public limited company, incorporated and domiciled in the United Kingdom, with its shares traded on the London Stock Exchange's AIM.  Its registered office is: 27-28 Eastcastle Street, London W1W 8DH.

 

This announcement is for the unaudited interim results for the period ended 30 June 2020.

 

The Directors approved these unaudited interim results on25th September 2020.

 

2.   Basis of preparation

The condensed consolidated interim financial information (the "Financial Information") has been prepared in accordance with the requirements of the AIM Rules for Companies.  As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this Financial Information. The Financial Information should be read in conjunction with the annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. In the opinion of the Directors the Financial Information for the period represents fairly the financial position, results from operations and cash flows for the period in conformity with generally accepted accounting principles consistently applied. 

 

The Financial Information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. The Financial Information has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union.  Statutory financial statements for the period ended 31 December 2019 were approved by the Board of Directors on 27 June 2020 and subsequently delivered to the Registrar of Companies and are also available on the Group's website: www.remotemonitoredsystems.com. The independent auditor's report on those financial statements disclosed a material uncertainty in relation to going concern.

 

The 2020 Financial Information of the Group has not been audited.

 

These interim results are presented in Sterling rounded to the nearest pound.

 

Going concern basis

The interim financial information has been prepared assuming that the Group will continue as a going concern.  As at 21 September 2020, the group had cash and cash equivalents totalling £360,201.

 

The operational requirements of the Group comprise of maintaining Head Office operations in the UK alongside its UK divisions. The Directors have reviewed the Group's working capital forecasts and it is likely that its UK divisions will require additional funding to achieve sales growth in those divisions.

 

The Company's cash reserves of £360,201 compare favourably with c.£47,000 at the same time in the previous year. The ability of the Company to raise additional funds, if required, is dependent upon investor appetite and, if necessary, the Directors' ability to obtain alternative sources of funding.

 

The Directors have a reasonable expectation that the Company will be able to raise sufficient funding to allow it to cover its working capital for a period of twelve months from the date of approval of the interim financial information.  It is for this reason they continue to adopt the going concern basis of accounting.

 

Risks and uncertainties

The Board continuously assesses and monitors the key risks facing the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's 2019 Annual Report and Financial Statements.  The Group is exposed to market risks (including foreign exchange risk and price risk), credit risk and to a limited extent, interest rate risk and liquidity risk.

 

 

Critical accounting estimates and judgements

The preparation of Financial Information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period.  It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Information, are disclosed in Note 4 of the Group's 2019 Annual Report and Financial Statements.

 

Accounting Policies

There have been no changes to the Group's accounting policies, presentation and methods of computation in this Financial Information compared to those which were applied in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2019.

 

The comparative information for the six months ended 30 June 2020 has been restated to reflect the Geocurve operation that was discontinued in 2019 and the implementation of IFRS16 - Leases, details of both of which can be found in the Group's Annual Financial Statements for the year ended 31 December 2019.

 

3.   Share capital

On 9 April 2020 the Company issued 140,000,000 ordinary shares and 140,000,000 warrants to subscribe for shares at a price of 0.25 pence per share and warrant raising £350,000 in order to support the continuing growth of the GyroMetric and Cloudveil divisions and to provide additional working capital.

 

On 15 April 2020 the Company issued 20,400,000 ordinary shares and 20,400,000 warrants to subscribe for shares at a price of 0.25 pence per share and warrant in settlement of an advisor fees.

 

4. Directors' transactions

Trevor Brown and Paul Ryan each subscribed £25,000 for 10,000,000 shares and 10,000,000 warrants in the placing announced on 9 April 2020.

 

5. Earnings per share

Basic earnings per share have been calculated by dividing the loss attributable to equity holders of the Company after taxation by the weighted average number of shares in issue during the period. There is no difference between the basic and diluted earnings per share as the effect on the exercise of options and warrants would be to decrease the earnings per share.

 

6 months ended
30 June

2020

 

    6 months ended 30 June

2019

(restated)

Basic and Diluted

£

£

Loss after taxation on continuing operations

(225,240)

(361,906)

Loss after taxation on discontinued operation

(11,821)

(362,048)

Total loss after taxation

(237,061)

(723,954)

Weighted average number of shares

573,133,713

383,338,924

Earnings per share (pence)

 

 

On continuing operations

(0.039)

(0.095)

On discontinued operations

(0.002)

(0.095)

On total operations

(0.041)

(0.19)

 

6. Disposal of business

On 9 January 2020 following approval by the shareholders at a general meeting, the sale of the Geocurve business was completed.  Full details of the disposal are included within the Group's 2019 Annual Report and Financial Statements.

 7.  Dividends

 

No dividend has been declared or paid by the Company during the six months ended 30 June 2020 (2019: nil).

 

8.  Events after the reporting period

On 10 July 2020 Nigel Burton retired from the board to pursue other activities and Paul Ryan an existing non-executive director, became Non-Executive Chairman.  In addition, John Richardson was appointed as Chief Operating Officer.

 

On 13 July 2020 the Company raised £265,000 in a placing of 106,000,000 shares at a price of 0.25 pence per share.  In addition 6,950,000 further shares were issued at a price of 0.25 pence per share in settlement of professional fees. As part of the Placing, Braveheart Investment Group plc ("Braveheart") subscribed £200,000 for 80,000,000   shares. Following the issue of the Placing Shares, Braveheart have a beneficial interest in 199,637,590  Shares representing approximately 25.79% of the enlarged issued share capital and total voting rights of the Company. Braveheart, as a substantial shareholder of the Company, is considered to be a "related party" as defined under the AIM Rules and accordingly, its participation in the Placing constituted a related party transaction for the purposes of Rule 13 of the AIM Rules.

 

On 27 July 2020 each existing ordinary share of 0.2 pence each was subdivided into 1 new share of 0.01 pence each and 1 deferred share of 0.19 pence each.  The deferred shares have limited rights and will effectively carry no value.

 

On 21 August 2020 the Company signed a binding share purchase agreement for the acquisition of the entire issued share capital of Pharm 2 Farm Limited.  Completion is subject to regulatory and Company shareholder approval.  The acquisition will be satisfied by the issue of 600,000,000 ordinary shares equating to approximately £2,370,000 based on the closing share price at 20 August 2020.

 

9. Approval of the interim financial information

The condensed Financial Information was approved by the Board of Directors on 25th September 2020.

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