Unaudited loss before tax of £2.2m (2002: £2.0m)
Loss per share of 2.1p (2002: 2.0p)
Cash at year end of £183,329
€ 1.25m raised in November 2003 through convertible loan note
Commercial
Discussions with both auto-makers and Tier 1 gearbox manufacturers has confirmed that the Company’s AAD automatic gearbox is a serious and realistic alternative to manual gearboxes in mass-produced small cars
Launch of Antonov’s new six speed transmission
Significant interest in the four-speed AAD from the Asian market
Internal reorganisation to switch the focus of the Company’s resources from R&D to the commercialisation of the AAD has been successfully completed
Developments Since the Year End
Initial series production of the four-speed AAD expected to commence in late 2004
Heads of Agreement signed with tier 1 manufacturer to develop six-speed AAD for small car series production beginning in 2005
€ 1.425m raised through convertible loan note issue and exercise of warrants - combined with November fundraising this is expected to cover working capital requirements until September 2004
Board restructured and strengthened:
Chief executive duties shared by Armand Dahi, chief operations officer, and David Bovell, finance director
Christopher Ross, an experienced automotive industry executive, appointed as a non-executive director
Roumen Antonov, chairman, said:
"Following a year of transition in 2003, Antonov is now focused on the commercialisation of its AAD technology and this process will be supported by the recent board appointments which bring valuable industry experience to the Company. The successful fundraising announced since the year end will underpin our efforts to bring both the four and six-speed versions of the AAD to commercial production."
Chairman’s Statement:
The 2003 financial year was a period of change and transition for the Company. Having made further significant technological progress, with the new fifth generation six-speed AAD setting new standards for lightness and compactness, Antonov’s focus has changed from that of a R&D centred organisation to one concentrating on commercialising and selling its technology.
From a technology point of view the fifth generation six-speed AAD development was completed just before year-end. This development addresses the main requirements demanded by potential licensees for Antonov’s small car gearbox technology. Together with this programme further work was begun to addresses the other needs of different segments of the automotive sector, and in a new departure for the Company, to look at non-automotive sector applications for the first time. We expect to be in a position to report further details about these new developments in the first half of 2004.
From a commercialisation point of view it has become apparent that the Company’s potential customers require not only access to new gearbox technology, but also production development expertise. In order to provide this, Antonov decided that the commercialisation process should be undertaken in conjunction with an industrial partner. The search for the right industrial partner was not completed by year-end, but the Company was able to announce in February 2004 that it had signed heads of agreement with a tier 1 manufacturer. Further details about this will be announced in due course.
Management changes announced since the year-end will benefit the Company as we focus on the commercialisation of the AAD technology. Martin Schinzig has stepped down from the Board having successfully led the company through the recent transition process. Chief executive duties will now be the responsibility of Armand Dahi, chief operations officer, and David Bovell, finance director, who combine a wealth of financial and sector experience. The Board is further strengthened by the appointment of Christopher Ross, an experienced industry executive with a successful track record of managing development teams for new technology launches. I would like to take this opportunity to thank Martin for his contribution to the Company and to welcome Armand and Christopher to the Board.OutlookThe Company’s technology is being evaluated in depth by a larger number of OEMs than ever before. The Board believes that the OEMs now recognise the AAD as a commercially viable automatic alternative to mass-produced small-car manual transmissions. Furthermore, interest is being driven by regulatory demands, whereby all OEMs will be required by 2008 to begin adhering to ever more stringent CO2emission regulations. We expect that initial series production of the four-speed AAD to begin before the end of 2004, followed by the six-speed AAD in 2005. The € 1.425m raised through a convertible loan note issue and exercise of warrants in 2004, combined with the November fundraising is expected to cover working capital requirements until September 2004. I look forward to updating shareholders in due course.
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31st December
2003
2002
£’000
£’000
Turnover and other revenue
0
139
Cost of sales
0
0
Gross profit
0
139
Development costs and administration expenses
(2,143)
(2,134)
Operating loss
(2,143)
(1,995)
Interest receivable (payable)
9
18
loss on ordinary activities before taxation
(2,134)
(1,977)
Taxation on loss on ordinary activities
(28)
(30)
Loss on ordinary activities after taxation
(2,162)
(2,007)
Loss per ordinary share basic and diluted (in pence)
2.1p
2.0p
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