(DSN.L) Densitron Technologies PLC Buy/Sell

Financial Highlights on continuing operations

6 months to 6 months to
30th June 2009 30th June 2008
Unaudited Unaudited
Revenue £7.25m £8.29m
(Loss)/profit from operations £(0.14)m £0.16m
(Loss)/profit before taxation £(0.19)m £0.08m
(Loss)/earnings per share (0.28)p 0.01p
Gearing 17% 32%
Orderbook £8.50m £9.00m

Enquiries:

Densitron

Grahame Falconer / Tim Pearson

Tel: 0207 648 4200

Hanson Westhouse Limited

Tim Metcalfe / Martin Davison

Tel: 020 7601 6100

Chairman's Statement

With the current recession in mind we knew that it was going to be a difficult year. We saw signs in the latter part of 2008 that the US business was slowing down but little evidence through the remainder of the group. However, we have seen a reduction in orders received through the first half of the year across the Group as customers have been holding surplus inventory and have not therefore needed to place new orders. We have also seen customers with "call off" orders deferring "call off" until later in the year and other customers trying to delay previously confirmed orders. Against this background it was inevitable that the results for the first half were going to suffer and we have seen a reduction in revenue from £8.3m for the same period in 2008 to £7.3m in 2009. This has led to a reduction in gross profit from £2.6m in 2008 to £2.5m in 2009. We believe that we have turned the corner and June was the Company's best month in terms of orders booked since November 2008.

Administrative expenses have increased from £2.5m for the same period in 2008 to £2.7m in 2009. It should be noted that converting the administrative expenses incurred in 2008 at the exchange rates used in 2009 they would have been £2.9m. In view of the reduced level of orders received in the first half a number of cost saving measures have been undertaken and the full extent of these will be seen in the second half of the year.

We have further reduced the level of net debt within the Group from £1.9m at 31 December 2008 to £1.2m at 30 June 2009 with a consequential reduction in the level of gearing from 24% at the end of 2008 to 17% at the end of June 2009.

Operational review

The Group's operations are primarily the design, development, marketing and selling of electronic displays, the electronics that drive them and the plastics that house them.

European business - The European business has had mixed fortunes during the first half of 2009. The UK and Nordic regions have been significantly adversely affected by the recession while France has managed to achieve a significant growth in order input compared with the same period in 2008 and Germany has achieved increasing sales revenues. It has been necessary to reduce the level of administrative expenses in the UK and delay the planned expansion into certain geographical locations that are currently served by distributors. The cost savings will be seen in the second half of the year.

Overall, the European businesses achieved orders of £3.8m in the first half of 2009 compared with £6.1m in the same period in 2008. Sales revenue was £3.8m compared with £4.5m in the first half of 2008 and gross profit was £1.3m compared with £1.4m in 2008.

The European subsidiaries continue to have a significant order pipeline which will underpin the recovery in the second half of the year.

US business - The US business began to see a slowdown in order input during the final quarter of 2008 which has continued into 2009. It was clear that despite a good first quarter, revenues would not be able to be sustained for the remainder of the year and consequently steps were taken to make significant cost savings. As a result of these actions we are confident that the US business will be able to generate a return to the Group for the year, albeit on reduced revenues.

In the US, orders for the first six months were £1.6m compared with £3.4m in 2008, a reduction of 53%. Sales in 2009 were £2.7m compared with £3.0m for the same period in 2008. Gross profit was £0.7m compared with £0.8m in 2008.

Asian business - The Asian business is made up of Densitron Asia and Densitron Corporation of Japan. In the six months to 30 June 2009 orders were £0.7m compared with £0.5m in 2008, an increase of 40%. Sales were the same at £0.8m and gross profit was £0.5m compared with £0.3m in 2008, an increase of 67%.

Both the Asian subsidiaries have performed well in the first half of the year. While Densitron Asia's primary function is to support the rest of the Group by providing the link to Taiwanese and Chinese factories, Densitron Japan has continued to perform well in a very competitive market and has some significant opportunities in its pipeline.

Evervision Electronics Corporation

Evervision is the Group's 24.48% investment in a Taiwanese display manufacturing company.

Evervision continues to be modestly loss making, due partly to the level of depreciation being recognised in the accounts. It remains significantly cash rich and we are continuing to work with the Board of Evervision to provide a return to its shareholders.

Land at Blackheath

This is a 1.25 acre strip of land in Blackheath, London, which the Company has owned for a number of years.

I reported in the Chairman's statement in the 2008 Annual Report that planning consultants had been appointed to manage the planning process. A report has been produced detailing the strategy that would give the best chance of obtaining planning permission. However, it has recently come to our attention that the timescales for the Local Development Framework (LDF), the body that has been set up to review all areas of undeveloped land, have been extended and they now expect to conclude the review process in the first half of 2012 although there is no guarantee of this. Consequently we are in the process of reviewing the options of how to proceed.

Outlook

I remain confident that the Company will return to profitability in the second half of the year and that the Company will return a small profit for the year as a whole. There are signs that the economies in which our subsidiaries operate are slowly recovering and exiting recession. I believe that full recovery will take time but that the Company is well positioned to take advantage of opportunities as they arise.

Jan Holmstrom

7 September 2009

Unaudited Condensed Consolidated Income statement

For the six months ended 30th June 2009

6 months to 6 months to30th June Year to 31st
30thJune2009 £000 2008 £000 December
2008Audited£000

Continuing operations
Revenue 7,252 8,289 18,287
Cost of sales (4,760) (5,717) (12,783)
Gross profit 2,492 2,572 5,504
Other operating income 103 59 281
Distribution costs (25) (19) (49)
Administrative expenses (2,710) (2,455) (5,268)
(Loss)/profit from operations (140) 157 468
Financial income 20 26 43
Financial expenses (69) (103) (194)
(Loss)/profit before tax (189) 80 317
Income tax expense (9) (63) (123)
(Loss)/profit for the period (198) 17 194

Attributable to:
Equity holders of the parent (196) 4 175
Minority interests (2) 13 19

Basic and diluted earnings per share
(Loss)/earnings per share from (0.28)p 0.01p 0.25p

continuing and discontinued operations
(Loss)/earnings per share on (0.28)p 0.01p 0.25p

continuing operations

Unaudited Condensed Statement of comprehensive income

For the six months to 30th June 2009

6 months to30th 6 months to30th June Year to 31st
June2009 £000 2008 £000 December
2008Audited£000

(Loss)/profit for the period (198) 17 194

Other comprehensive income:
Foreign currency translation (325) (72) 509

differences for foreign operations
Totalcomprehensive income (523) (55) 703

forthe period Attributable to:
Equity holders of the parent (521) (68) 684
Minority interests (2) 13 19

Unaudited Condensed Consolidated Balance Sheet

As at 30th June 2009

30th June 30th June 31st December

Audited
£000

£000 £000

Non-current assets
Property, plant and equipment 201 211 246
Goodwill 143 143 143
Financial assets 6,185 6,331 6,393
Deferred tax assets 63 23 60
6,592 6,708 6,842

Current assets
Inventories 1,084 799 1,432
Trade and other receivables 2,396 3,959 5,296
Financial assets 391 589 495
Income tax recoverable 95 60 76
Cash and cash equivalents 1,450 1,446 1,812
5,416 6,853 9,111

Total assets 12,008 13,561 15,953

Current liabilities
Borrowings 2,432 3,374 3,362
Trade and other payables 1,851 2,607 4,194
Current tax payable 31 3 55
Provisions 84 - 84
4,398 5,984 7,695

Non-current liabilities
Borrowings 240 271 312
Provisions 154 283 188
Deferred tax liabilities 4 8 5

Total liabilities 4,796 6,546 8,200

7,212 7,015 7,753

Equity
Share Capital 3,483 3,483 3,483
Retained earnings 3,281 3,305 3,428
Special reserve 340 367 390
Translation reserve 56 (200) 381
Equity attributable to 7,160 6,955 7,682

shareholders of Densitron
Minority interests 52 60 71

Total equity 7,212 7,015 7,753
Unaudited Condensed Statement of Changes in Shareholders Equity

For the 6 months to 30th June 2009

Share capital Translation reserve Special Retained earnings Total
£000 £000 reserve £000 equity
£000 £000

Balance at 1 January 2008 3,483 (128) 478 3,190 7,023

Total comprehensive income for
the period - (72) - 4 (68)
Transfer from special reserve - - (111) 111 -
Balance at 30 June 2008 3,483 (200) 367 3,305 6,955

Total comprehensive income for
the period - 581 - 146 727
Transfer to special reserve - - 23 (23) -
Balance at 31 December 2008 3,483 381 390 3,428 7,682

Total comprehensive income for
the period - (325) - (197) (522)
Transfer from special reserve - - (50) 50 -
Balance at 30 June 2009 3,483 56 340 3,281 7,160

Unaudited Condensed Consolidated Cash flow Statement

For the 6 months ended 30th June 2009

6 months to 6 months to 30th Year to 31st December
30th June June 2008
2009 2008 Audited
£000

£000 £000

Cash flows from operating activities
(Loss)/profit before taxation (189) 80 317

Adjustments for:
Depreciation 30 23 51
Net finance expense 49 77 151
Exchange adjustments (138) (69) (119)

Change in financial asset (98) - (102)
Change in inventories 180 (139) (600)
Change in trade and other 2,531 (1,431) (2,153)

receivables
Change in trade and other (1,928) 664 1,858

payables
Change in provisions (34) 5 34

Income tax paid (59) (110) (187)
Net cash from/(used in) 344 (900) (750)

operating activities Cash flows from investing activities
Interest received 3 26 43
Proceeds from sale of plant, - - 17

property and equipment
Disposal of discontinued 410 434 568

operation
Acquisition of plant, property (3) (22) (68)

and equipment

Cash flows from financing activities
Purchase of own shares - - (25)
Inception of new loans - 250 345
Repayment of borrowings (57) (394) (693)
Interest paid (52) (132) (196)
Payment of finance leases (5) (10) (21)
Change in trade finance (567) 154 354

creditor
Change in letters of credit (316) 80 131
Dividends paid to minorities (9) (10) (17)
Net cash used in financing (1,006) (62) (122)

activities
Net decrease in cash and cash (252) (524) (312)

equivalents
Cash and cash equivalents at 1,202 872 872

1st January
Effect of exchange rate (238) 49 642

fluctuation on cash held
Cash and cash equivalents at 712 397 1,202

the end of the period

Notes to the Unaudited Condensed Financial Statements

For the six months ended 30th June 2009

1. General information

Densitron Technologies plc is a public limited company ("the Company") incorporated in the United Kingdom under the Companies Act 1985 (registration number 1962726).

The Company is domiciled in the United Kingdom and its registered address is 5th Floor, 145 Cannon Street, London, EC4N 5BP. The Company's Ordinary Shares are traded on the Alternative Investment Market ("AIM"). The Group's principal activities are the design, development and delivery of electronic display and display related technologies.

2. Basis of preparation

This unaudited consolidated interim financial information has 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 IFRSs). The principal accounting policies used in preparing the interim results are those it expects to apply in its financial statement for the year ended 31 December 2009 and are unchanged from those disclosed in the group's Annual Report for the year ended 31 December 2008.

The financial information for the six months ended 30 June 2009 and 30 June 2008 is unreviewed and unaudited and does not constitute the group's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2008 has, however, been derived from the audited statutory financial statement for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2)-(3) of the Companies Act 1985. The financial information in the Interim Report is presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

3. Revenue

6 months to 30th 6 months to 30th June Year to 31st December
June 2008 2008
2009 Unaudited Audited
Unaudited £000 £000
£000

Revenue by location of reporting entity
Europe 3,797 4,503 9,878
USA 2,681 3,006 6,891
Asia 774 780 1,518
7,252 8,289 18,287

Gross profit by location of reporting entity
Europe 1,294 1,428 3,021
USA 747 802 1,732
Asia 451 342 751
2,492 2,572 5,504
4. Segmental analysis
Displays division Head office Total
6 months to 30th 6 months to 30th June 6 months to 30th June
June 2009 2009
2009 Unaudited Unaudited
Unaudited £000 £000
£000

Revenue
Total 10,002 - 10,002
Intercompany (2,750) - (2,750)
External 7,252 - 7,252

(Loss) before tax
Continuing operations (68) (121) (189)
6 months to 30th 6 months to 30th June 6 months to 30th June
June 2008 2008
2008 Unaudited Unaudited
Unaudited £000 £000
£000

Revenue
Total 10,447 - 10,447
Intercompany (2,158) - (2,158)
External 8,289 - 8,289

Profit/(loss) before tax
Continuing operations 371 (291) 80
Year to 31st Year to 31st December Year to 31st December
December 2008 2008
2008 Audited Audited
Audited £000 £000
£000

Revenue
Total 23,480 - 23,480
Intercompany (5,193) - (5,193)
External 18,287 - 18,287

Profit/(loss) before tax
Continuing operations 683 (366) 317

5. Taxation

Taxation for the 6 months ended 30th June 2009 has been calculated by applying the estimated tax rate for the current financial year ending 31st December 2009.

6. Dividend

No dividend is to be paid in the period (2008: Nil).

7. Earnings per share

6 months to30th 6 months to 30th Year to 31st
June2009Unaudited£00 June2008Unaudited£00 December2008Audited£

(Loss)/profit attributable to ordinary shareholders
Continuing operations (196) 4 175

Weighted average number of ordinary shares
Issued at 1 January 2009 69,669,106 69,669,106 64,669,106
Effect of purchase of Treasury (500,000) - (94,521)

shares on 23rdOctober 2008
Weighted average number of 69,169,106 69,669,106 69,574,585

ordinary shares at30thJune

8. Copies of Interim report

The Interim report is available to view and download from the Company's website at www.densitron.com. If shareholders would like a hardcopy of the interim report they should contact the Company Secretary, Tim Pearson.

This information is provided by RNS The company news service from the London Stock Exchange

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