24 August, 2016
Bioquell PLC - 2016 interim results
Bioquell PLC ("Bioquell") (LSE symbol: BQE) - provider of specialist bio-decontamination products and services for
the international Life Sciences markets today announces its interim results for the six month period ended 30 June, 2016.
Highlights:
Financial
§ Bio-decontamination revenues (excluding defence sales) increased by 8% to £11.1 million
(2015: £10.3 million)
§ Overall revenues declined by 3% to £12.1 million (2015: £12.5 million)
§ Non-UK revenues amounted to £9.0 million (2015: £10.0 million) - representing 74%
of total revenues
§ Gross margin increased to 46% (2015: 42%)
§ EBITDA increased 14% to £1.6 million (2015: £1.4 million)
§ Earnings per share were 0.8p (2015: 82.5p, 0.2p excluding the profit on disposal of
TRaC)
§ Following the completion of the June tender offer, £40.8 million of cash was returned to
shareholders via a share buyback, leaving net cash of £7.3 million at 30 June, 2016 (2015: £47.7 million)
Business activities
§ Strategic review concluded; management restructured and focus on further development and
improvement of bio-decontamination business
§ Strong focus on generating recurring revenues from service activities and consumables
sales
§ Launch of new fixed (wall-mounted) bio-decontamination system - the Bioquell
'Flat-screen'
§ US salesforce restructured
Commenting on the 2016 interim results, Ian Johnson, Chairman of Bioquell PLC, said:
"Whilst overall revenues declined slightly as a result of lower defence sales compared with the first half of 2015,
I am pleased to report that our bio-decontamination business grew by 8%. Profitability improved as a result of our cost reduction
programme - and management continues to seek further improvements in the financial performance of the business through greater
focus on the international Life Sciences market and driving up the proportion of recurring revenues.
The Board has now concluded the Strategic Review announced in 2015 and believes that Bioquell shareholders'
interests would best be served by continuing to build a world class bio-decontamination business and focussing on further
improving its financial performance. Accordingly the management of the business will be restructured. I have
become Executive Chairman and the current Chief Executive, Nick Adams, has stepped down. In addition, Jay LeCoque has
joined the board of Bioquell in the new role of Commercial Director.
On behalf of all Bioquell shareholders I would like to thank Nigel Keen for his seven years as Chairman.
I would also like to thank Nick Adams for his substantial contribution as Chief Executive. Under his
leadership Bioquell has changed beyond all recognition from a low technology manufacturer of safety cabinets to a leader in
specialist bio-decontamination.
The Board is confident that the improved financial performance seen in the first half of the year will carry
through to the full year."
Enquiries:
Ian Johnson
Chairman
Bioquell PLC 01264 835900
Michael Roller Finance Director
***********************************************
Notes to Editors:
Bioquell is a UK-headquartered, international technology company (www.bioquell.com) which sells specialist biological contamination control
products and services into the Healthcare & Life Sciences sectors, with most of its revenues generated from overseas
customers.
§ Bioquell's bio-contamination control technology incorporates the use of
hydrogen peroxide vapour (HPV) - which is highly efficacious at eradicating micro-organisms such as bacteria and viruses at room
temperature - and is subsequently broken down at the end of the bio-decontamination process using specialist catalysts to water
vapour and oxygen (hence an extremely 'green' technology). Bioquell has a number of patents associated with this
technology.
§ For the last several years Bioquell has invested substantial sums in
developing new service offerings - comprising rental, service and consumables - which have been designed to increase the
proportion of the Group's recurring revenues rather than those derived from sales of capital equipment.
§ Bioquell has also developed a number of products which complement its
core HPV technology including the novel, modular QUBE aseptic work-station (which incorporates HPV), the fast-to-deploy single
patient occupancy POD (which can also be decontaminated using HPV) as well as a range of biological and chemical
indicators.
§ Bioquell's bio-contamination control technology:
Ø is used by bio-pharmaceutical, biotechnology and research institutions
to provide aseptic equipment and/or aseptic facilities;
Ø eradicates "superbugs" from hospitals including Clostridium difficile and carbapenemase producing Enterobacteriaceae (CPE) - sometimes referred to as
carbapenem-resistant Enterobacteriaceae (CRE). Independent scientific research from, for example, a team at Johns Hopkins, one of
America's top hospitals, has demonstrated that 'bioquelling' hospital equipment and facilities resulted in a 64% reduction in the
rate of hospital acquired infection;
Ø provides tailor-made single patient rooms to hospitals via its POD
product. Currently many hospitals around the world only have open, multi-bed ward structures which have been linked to high rates
of hospital acquired infection. The POD provides hospitals with a rapid and cost effective way of providing single occupancy
rooms on open, multi-bed units. In the UK the PODs are rented to hospitals; and
Ø is sold by wholly-owned Bioquell organisations in the USA, France,
Germany, Ireland, Singapore and China.
Bioquell also sells environmental control equipment into the defence industry, including chemical,
biological, radiological and nuclear filtration systems.
Further information for investors can be found at www.bioquellplc.com.
BIOQUELL PLC - CHAIRMAN'S STATEMENT
INTRODUCTION
I am delighted to be writing to shareholders for the first time as Chairman of Bioquell PLC.
Bioquell currently generates the majority of its revenues from customers in the Life Sciences and Healthcare
sectors. A relatively small and historically unpredictable amount is derived from the Defence sector. By way of further
information, for the six months ended 30 June, 2016, the split of revenues between these sectors was:
§ Life Sciences: £8.7 million (2015: £8.2 million) - 72% of H1
revenues and a 6% increase over prior year Life Sciences H1 revenues;
§ Healthcare: £2.4 million (2015: £2.1 million) - 20% of H1
revenues and a 14% increase over prior year; and
§ Defence: £1.0 million (2015: £2.2 million) - 8% of H1 revenues
and a 55% decrease over prior year.
It is becoming increasingly difficult to allocate revenues with absolute precision to either the Life Sciences or
Healthcare sectors. For example, a large university-affiliated teaching hospital may use Bioquell equipment, services and/or
consumables within its:
i. research laboratories;
ii. hospital pharmacy clean-rooms;
iii. intensive care or high dependency units; and
iv. pan-hospital decontamination team.
Moreover, we are seeing increasing demand for Bioquell technology within hospitals working with cell-based
healthcare products - sometimes referred to as 'cell therapy drugs'. Accordingly the demarcation of our business between Life
Sciences and Healthcare is becoming increasingly blurred.
Given the trends summarised above, the Board will henceforth report the financial performance of the business by
reference to the bio-decontamination business without providing a separate analysis of revenues between Life Sciences and
Healthcare. We will instead provide shareholders with an analysis of the bio-decontamination business' revenues split between
equipment, service & consumable revenues. We will report the performance of the wholly-unrelated (in terms of customer base)
and 'lumpy' defence business separately.
The Company's strategy is focussed on increasing our revenues generated from customers in the bio-decontamination
business and we would anticipate that, over the medium term, defence revenues will decline as a proportion of total revenues.
FINANCIAL RESULTS
In the six months ended 30 June 2016, total revenues decreased 3% to £12.1 million (2015: £12.5 million). However,
bio-decontamination revenues increased by 8% to £11.1 million (2015: £ 10.3 million).
|
|
2016 H1 £m
|
|
2015 H1 £m
|
|
Growth %
|
|
Constant currency growth %
|
|
Bio-decontamination
|
11.1
|
|
10.3
|
|
+8%
|
|
+4%
|
|
Defence
|
1.0
|
|
2.2
|
|
-55%
|
|
-55%
|
|
TOTAL
|
12.1
|
|
12.5
|
|
-3%
|
|
-6%
|
Service-related revenues - which all relate to the bio-decontamination business activities and include consumable
revenues - increased 7% to £6.9 million (2015: £6.4 million), representing some 57% of revenues (2015: 51%). In general terms, we
believe that it is reasonable to characterise Bioquell's service & consumable revenues as representing recurring, or
quasi-recurring, revenues. Equipment-related revenues excluding defence sales increased by 8% to £4.2 million (2015: £3.9
million).
Revenues from non-UK sales in the period amounted to £9.0 million (2015: £10.0 million), amounting to 74% of total
revenues. The equivalent data for the bio-decontamination business shows that non-UK revenues were £8.0 million (2015: £7.8
million), representing approximately 72% of this business' revenues. Sterling has weakened significantly against the US dollar
since the Brexit vote and we estimate that approximately 46% of bio-decontamination revenues were denominated in US dollars in
the first half, with a further 26% denominated in Euros. Constant currency revenue growth in the bio-decontamination business in
the first half was 4%.
Gross margin in the period was up 4% in the first half to 46% (2015: 42%). This meaningful increase in gross margin
reflects a number of factors including: (i) the results of targeted cost-reduction programmes associated with our products; (ii)
price increases for certain products; and (iii) a reallocation of certain costs from cost of sales to overheads.
Research & development costs
As is set out in the table below, the accounting charge for Research & Development ("R&D") costs in the
period increased by 14% to £807k (2015: £706k). Cash R&D costs were £673k in the first half (2015: £727k), representing a 7%
decrease.
|
R&D costs (£000)
|
|
H1 2016
|
H1 2015
|
|
Amount of R&D expensed in period
|
|
(308)
|
(238)
|
|
Amortisation of previously capitalised development costs
|
|
(499)
|
(468)
|
|
Total R&D charge under IFRS
|
|
(807)
|
(706)
|
|
|
|
|
|
|
Total R&D cash expenditure
|
|
(673)
|
(727)
|
|
Amount of development costs capitalised
|
|
(365)
|
(489)
|
In the short to medium term we anticipate that R&D costs will continue at the lower level of cash spend
reflecting the completion of the current Bioquell product range; however, we are working on appropriate product line extensions
to complement the existing product portfolio.
Overheads
Overheads increased marginally to £5.3 million (2015: £5.2 million). However, these overhead costs include the net
cost of foreign exchange movements which, largely due to the significant decline in the value of Sterling post the Brexit vote,
resulted in a charge in the period of £177,000 (2015: profit of £84,000).
The underlying cash-based overhead costs - adjusted to reflect the cash cost of R&D as well as removing the net
FX cost - were £5.0 million in the period (2015: £5.3 million), representing a decline of 6%.
EBITDA (Earnings before interest, tax, depreciation and amortisation) increased by 14% in the period to £1.6 million
(2015: £1.4 million). Operating profit was £0.3 million compared to a profit in H1 2015 of £0.2 million (and a loss of £1.6
million in H1 2014).
Pre-tax profit totalled £0.4 million in the first half (2015: £0.1 million).
Basic earnings per share were 0.8 pence (2015: 82.5 pence, 0.2 pence excluding the effect of the profit on disposal
of TRaC).
Capital expenditure continues to run significantly below the depreciation charge, reflecting the Board's belief that
the substantial investments needed to support the growth of the business in the short to medium term have been made over recent
years.
In the first half, purchases of tangible fixed assets totalled £0.5 million (2015: £0.5 million). Depreciation in
the period was £0.8 million (2015: £0.8 million).
Balance sheet
Following the return of £40.8 million of cash to shareholders as a result of the Tender Offer which was announced on
29 April, 2016, the Group has a strong balance sheet. At 30 June, 2016 net assets were £24.9 million (2015: £64.7 million). Net
cash was £7.3 million (2015: £47.7 million).
BUSINESS ACTIVITIES
Bio-decontamination business with the majority of sales to Life Sciences customers
We continue to see a number of evolving drivers of growth for Bioquell's bio-decontamination business,
including:
§ an increasingly complex, onerous and rapidly expanding international regulatory
environment relating to the safe production of biologically-sensitive therapeutic products;
§ demand for cost effective, fast-to-deploy aseptic environments;
§ improved methods and technology for the swift and aseptic transfer of heat-sensitive
materials into clean-rooms;
§ demand for effective after-sales service and support, in part driven by regulatory
requirements;
§ increasing pressure from customers on costs, including interest by customers in the use
of technology to achieve cost reductions;
§ growth in research activities and small-scale production associated with cell-based
healthcare products; and
§ demand for the mitigation of risks and liabilities associated with complex, and often
biologically-sensitive, therapies historically prepared in hospital pharmacies.
Not all these trends or drivers of growth apply equally in all territories. For example, in the first half we saw
continuing strong demand in Asia Pacific for the purchase of equipment - and significant demand for service-based contamination
control solutions in Europe and the USA.
Bioquell is proactively positioning itself within the market to be more than just a provider of HPV decontamination
technologies. For example:
§ the Bioquell QUBE comprises a novel, modular aseptic work-station which incorporates HPV
technology but is also manufactured using unique processes at our facilities in the UK. The QUBE is used to provide an aseptic
environment for a range of applications including: sterility testing; the production of toxic, intravenous oncology drugs; and
the production of small-scale cell-based healthcare products. Over time we expect the range of specialist applications for the
QUBE to increase; and
§ the Bioquell POD enables hospitals to convert multi-bed, open-plan units at high risk of
the spread of hospital acquired infection into single-occupancy rooms. PODs can be decontaminated using Bioquell's HPV
technology.
We are also proactively working to maximise the level of recurring revenues generated from service activities and/or
consumable sales.
New product launch - the Bioquell FS-1 or 'Flatscreen'
On 7 June, 2016 we launched a new fixed, wall-mounted HPV decontamination system - the Bioquell 'Flatscreen'
(formally the FS-1) - which incorporates the use of Bioquell's proprietary hydrogen peroxide consumable cartridges.
Prior to the launch of the Flat-screen, our HPV decontamination product range included our RBDS and BQ Local
decontamination services; and the Z and L range of mobile decontamination units. However, our product range did not include a
fixed HPV decontamination system. Over recent years a number of customers have requested fixed decontamination systems, with
increasing demand for such systems linked, in part, to evolving regulatory requirements.
Given that space is typically at a premium in our customers' premises, the Flat-screen has been designed to occupy a
minimal footprint. It is also fast to install and validate.
Initial signs of market demand for the Flat-screen are encouraging. Our first Flat-screen order comprised an order
for 16 units, due for delivery in the second half of the year, for a substantial French Life Sciences company.
Changes to regulations
There are an increasing number of regulations affecting the markets into which we sell. Such regulations can cover
the HPV decontamination equipment and/or the associated consumables. Typically we find more onerous regulation tends to help
increase demand for Bioquell's high quality decontamination technology as our clients remain focussed on attaining - and
retaining - regulatory compliance. It would be inappropriate and disproportionate to list all the regulations currently forcing
changes in our markets; however, set out below are two examples of regulatory changes which we believe positively affected our
market position in the first half of 2016.
§ In Europe the new EU NF T 72-281 (2014) regulation, which was originally a French
national standard, comes into force from February 2017. This European standard requires companies selling airborne disinfection
systems to pass specific, demanding microbial inactivation tests, including the inactivation of hard-to-kill fungal spores.
Low-concentration hydrogen peroxide nebulisers / aerosolisers struggle to pass these microbial tests and we anticipate that, as
was the case in France, a number of nebuliser systems will be removed from the European market when the new 72-281 standard comes
into force.
§ In February 2016 the new ISO standard 18362 came into force. This ISO standard relates to
the "Manufacture of cell-based healthcare products - control of microbial risks during processing". The
standard specifically highlights the challenges associated with viral vectors used in the production of certain cell-based
healthcare products as well as the advantages of using closed systems such as the QUBE over more common biological safety
cabinets.
International activities
We experienced significant differences in trading performance by geographical region in the first half of the year.
For example, our Asia Pacific business was strong and showed good growth over prior year. European activity levels were, in
aggregate, steady. The US had a weak Q1 but an appreciably stronger Q2.
In the first half we undertook a major restructuring of our US business. We had been dissatisfied with the sales
performance of our US business for some time and made a number of changes to the sales-force in the first half. We have, among
other things, removed the generalist, externally-based salesforce and increased our investment in digital marketing, office-based
sales people as well as the judicious use of experts. This approach has resulted in materially lower sales-related costs and
early signs are encouraging regarding increased revenues. We are now in the process of expanding this model in the USA and are
also considering how best it can be applied, as appropriate, elsewhere within the business.
Defence
As described above, we are continuing to support our customers in the defence sector; however, it remains extremely
difficult to forecast future defence-related orders.
Chemical warfare agents such as Sarin continue to be a threat in conflicts in the Middle East. Accordingly there
continues to be demand for Bioquell's expertise in specialist Chemical, Biological, Radiological and Nuclear ("CBRN") filtration
equipment from a number of customers in this region. Notwithstanding the poor visibility of future orders, we remain alert to
opportunities to increase our defence-related order book.
OUTLOOK AND PROSPECTS
The Board has now concluded the Strategic Review announced in 2015 and believes that Bioquell shareholders'
interests would best be served by continuing to build a world class bio-decontamination business and focussing on further
improving its financial performance. Accordingly the management of the business will be restructured. I have
become Executive Chairman and the current Chief Executive, Nick Adams has stepped down. In addition, Jay LeCoque has been
appointed to the board of Bioquell in the new role of Commercial Director. Jay was formerly CEO of Celsis International PLC and
has extensive experience sales and marketing in the Life Sciences industry.
There are no further matters relating to the appointment of Jay LeCoque requiring disclosure under Listing Rule
9.6.13.
Furthermore, the TRaC business was developed from very modest beginnings into a world class testing business which
was sold for £44m last year.
The financial performance of our bio-decontamination business is beginning to improve as can be seen in the
financial information set out above. There are a number of different drivers of growth which are positively affecting our
business, including the need for customers to achieve regulatory compliance and continuing growth in research and small scale
production associated with cell-based healthcare products.
Historically we have tended to experience a stronger second half of the year and we see no reason for this to be
different this year.
We remain extremely focussed on seeking to reduce the Company's cost base wherever possible - but without damaging
our ability to grow revenues or react to new opportunities.
Overall the business is on track to meet the Board's expectations for the full year.
Prior to publication, the information contained within this announcement was deemed to constitute inside information
under the Market Abuse Regulations (EU) No. 596/2104 ("MAR")
Ian Johnson
Chairman
Bioquell PLC
24 August, 2016
Consolidated income statement
Unaudited results for the six months ended 30 June 2016
|
Continuing operations
|
Notes
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Revenue
|
1
|
12,063
|
12,525
|
26,877
|
|
Cost of sales
|
|
(6,473)
|
(7,215)
|
(15,466)
|
|
Gross profit
|
|
5,590
|
5,310
|
11,411
|
|
Gross profit margin
|
|
46%
|
42%
|
42%
|
|
Operating expenses:
|
|
|
|
|
|
Sales and marketing costs
|
|
(2,367)
|
(2,784)
|
(5,485)
|
|
Administration costs
|
|
(2,129)
|
(1,713)
|
(3,648)
|
|
R&D and engineering costs
|
|
(807)
|
(706)
|
(1,507)
|
|
Profit from continuing operations before exceptional items
|
|
287
|
107
|
771
|
|
Costs associated with reorganisation
|
|
-
|
-
|
(220)
|
|
Profit from continuing operations
|
|
287
|
107
|
551
|
|
Investment revenues
|
|
118
|
-
|
150
|
|
Finance costs
|
|
(27)
|
(38)
|
(69)
|
|
Profit before tax
|
|
378
|
69
|
632
|
|
Tax (charge)/credit on profit on ordinary activities
|
|
(47)
|
(3)
|
5
|
|
Profit for the period from continuing operations
|
|
331
|
66
|
637
|
|
Discontinued operations
|
|
|
|
|
|
Profit for the period from discontinued operations and disposal
|
2
|
-
|
35,068
|
34,501
|
|
Profit for the period
|
|
|
|
|
|
Profit for the period attributable to equity holders of the parent
|
|
331
|
35,134
|
35,138
|
|
Earnings per share from continued operations
excluding profit on
disposal
- basic
|
|
0.8p
|
0.2p
|
1.5p
|
|
- diluted
|
|
0.8p
|
0.2p
|
1.5p
|
|
Earnings per share attributable to the owners of the parent -
basic
|
|
0.8p
|
82.5p
|
82.5p
|
|
- diluted
|
|
0.8p
|
81.6p
|
81.8p
|
Supplementary notes
1. The financial information for the six months ended 30 June 2016 and the comparative figures for
the six months ended 30 June 2015 have not been reviewed or audited by the Group's auditors and have been
prepared on the basis of the accounting policies adopted by the Group under IFRS. The same accounting policies and methods of
computation are followed in the interim financial report as were published by the Company on 29 April 2016 in its
annual financial statements, which are available on the Company's website at www.bioquellplc.com.
2. The comparative figures for the twelve months to 31 December 2015 have been prepared under
IFRS. They do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The unqualified
audited accounts for the twelve months ended 31 December 2015 have been filed with the Registrar of Companies and they did not
contain a statement under section 498(2) or (3) of the Companies Act 2006.
3. The tax charge shown on the income statement represents a combined corporation tax charge and
deferred tax credit. The charge is based on the Group's anticipated effective tax rate for the full year of 12.5% (2015:
4.3%).
4. Earnings per share for the half year have been calculated on the profit on ordinary activities
on continuing operations after taxation and the total earnings attributable to the owners of the parent divided by the
weighted average number of ordinary shares in issue during the period. The Group's diluted earnings per share are calculated by
including dilutive share options in the denominator.
5. There have been no related party transactions during the first six months of the financial year
that have materially affected the financial position or performance of the Group during that period and there
have been no changes in the related party transactions described in the last Annual Report that could do so.
6. Copies of this statement will be available to members of the public at the Company's registered
office: 52 Royce Close, West Portway, Andover, Hampshire SP10 3TS and on the Group's website at www.bioquellplc.com.
Principal risks and uncertainties
The Board believes that the principal risks and uncertainties facing the Group have not changed
materially from those described in the 2015 Annual Report, including the summary of risks and uncertainties set out on pages 9 to
11 therein. The Group provides complex equipment and specialist services to a large number of clients in
the UK and internationally. Accordingly the Group is subject to a broad range of strategic, operational and financial risks and
uncertainties, including the following principal risks:
· Regulatory Risk
The Group operates in a number of countries and sectors which are highly regulated. There is
a risk that the relevant authorities or their interpretation could be changed and such change could significantly adversely
affect the Group's business in that country or sector
· Technological Risk
The Group is dependent on its technology, and on its products and services, continuing to be
efficacious, cost effective and attractive to the marketplace. There is the risk that new technologies, products or
services are developed by competitors which perform better, are easier to use or are more cost effective than those of the
Group
· Uncertain adoption rate of new products
or services
The Group is constantly developing new products and services. There is inherent uncertainty
as to how quickly new products or services will be adopted by the market.
Going concern
The Group has sufficient financial resources to cover budgeted future cash flows, together with
contracts with a number of customers and suppliers across different geographic areas and
industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully
despite the current uncertain economic outlook. The Directors confirm that they have a reasonable expectation that the
Group has adequate financial resources to continue to trade for the foreseeable future. Thus, they continue to adopt the going
concern basis in preparing the financial statements.
Responsibility statement
We confirm that to the best of our knowledge: (i) the condensed set of financial statements has
been prepared in accordance with IAS 34 Interim Financial Reporting; (ii) the financial statements give a
true and fair view of the assets, liabilities, financial position and profit of the undertakings included in the consolidation as
a whole as required by DTR 4.2.4R; (iii) the Interim Management Report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six months and a description of
principal risks and uncertainties for the remaining six months of the year); and (iv) the interim management report
includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes
therein).
IAN
JOHNSON
MICHAEL ROLLER
Executive Chairman
Group Finance Director
24 August 2016
Consolidated statement of comprehensive income
Unaudited results for the six months ended 30 June 2016
|
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Profit for the period
|
331
|
35,134
|
35,138
|
|
Exchange differences on translation of foreign operations *
|
422
|
(256)
|
(120)
|
|
Total recognised income for the period
|
753
|
34,878
|
35,018
|
|
|
|
|
|
* May be reclassified subsequently to profit or loss in accordance with IFRS
Consolidated statement of changes in equity
Unaudited results for the six months ended 30 June 2016
|
|
Notes
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Profit for the period
|
|
331
|
35,134
|
35,138
|
|
Exchange differences
|
|
422
|
(256)
|
(120)
|
|
Total comprehensive income in the period
|
|
753
|
34,878
|
35,018
|
|
Other movements in the period:
|
|
|
|
|
|
Issued share capital
|
|
68
|
10
|
12
|
|
Issued share premium
|
|
574
|
93
|
118
|
|
Acquisition of own shares for cancellation
|
6
|
(41,336)
|
-
|
-
|
|
(Charge)/credit to equity reserve for share-based payments
|
|
(23)
|
84
|
119
|
|
Charge to equity on exercise of share options under the SARS scheme
|
|
(20)
|
(1)
|
-
|
|
Final dividend for year ended 31 December 2014
|
|
-
|
(1,406)
|
(1,406)
|
|
Net (decrease)/increase in equity shareholders' funds
|
|
(39,984)
|
33,658
|
33,861
|
|
Equity shareholders' funds at beginning of period
|
|
64,918
|
31,057
|
31,057
|
|
Equity shareholders' funds at end of period
|
|
24,934
|
64,715
|
64,918
|
Consolidated balance sheet
Unaudited results at 30 June 2016
|
|
30 June 2016 £'000
|
30 June 2015 £'000
|
31 December 2015
£'000
|
|
Non-current assets
|
|
|
|
|
Other intangible assets
|
8,645
|
8,928
|
8,785
|
|
Property, plant and equipment
|
5,023
|
5,759
|
5,349
|
|
Deferred tax assets
|
175
|
175
|
175
|
|
|
13,843
|
14,862
|
14,309
|
|
Current assets
|
|
|
|
|
Inventories
|
3,765
|
3,830
|
3,547
|
|
Trade and other receivables
|
5,772
|
5,734
|
5,429
|
|
Derivative financial instruments
|
-
|
112
|
-
|
|
Cash and cash equivalents
|
7,324
|
48,506
|
47,573
|
|
|
16,861
|
58,182
|
56,549
|
|
Total assets
|
30,704
|
73,044
|
70,858
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
(3,961)
|
(5,387)
|
(4,282)
|
|
Derivative financial instruments
|
(182)
|
-
|
(68)
|
|
Borrowings
|
-
|
(105)
|
-
|
|
Current tax liabilities
|
(226)
|
(42)
|
(152)
|
|
Provisions
|
(74)
|
(100)
|
(84)
|
|
Net current assets
|
12,418
|
52,548
|
51,963
|
|
Non-current liabilities
|
|
|
|
|
Deferred tax liabilities
|
(1,327)
|
(1,989)
|
(1,354)
|
|
Other non-current liabilities
|
-
|
(706)
|
-
|
|
Total liabilities
|
(5,770)
|
(8,329)
|
(5,940)
|
|
Net assets
|
24,934
|
64,715
|
64,918
|
|
Equity
|
|
|
|
|
Share capital
|
2,294
|
4,264
|
4,266
|
|
Share premium account
|
1,493
|
894
|
919
|
|
Equity reserve
|
1,767
|
2,050
|
2,079
|
|
Capital reserve
|
255
|
255
|
255
|
|
Translation reserve
|
185
|
(373)
|
(237)
|
|
Retained earnings
|
18,940
|
57,625
|
57,636
|
|
Equity attributable to equity holders of the parent
|
24,934
|
64,715
|
64,918
|
Consolidated cash flow statement
Unaudited results for the six months ended 30 June 2016
|
|
Notes
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Net cash from operating activities
|
|
1,270
|
4,494
|
5.326
|
|
Investing activities
|
|
|
|
|
|
Proceeds on disposal of TRaC Global Ltd net of cash transferred & costs of
disposal
|
|
-
|
42,535
|
43.423
|
|
Purchases of property, plant and equipment
|
|
(495)
|
(819)
|
(1,030)
|
|
Purchases of intangible assets
|
|
(30)
|
(22)
|
(125)
|
|
Expenditure on product development
|
|
(364)
|
(490)
|
(733)
|
|
Net cash (used)/generated from investing activities
|
|
(889)
|
41,204
|
41,535
|
|
Financing activities
|
|
|
|
|
|
Proceeds on issue of ordinary shares
|
|
642
|
103
|
130
|
|
Acquisition of own shares for cancellation
|
6
|
(41,336)
|
-
|
-
|
|
Dividends paid on ordinary shares
|
3
|
-
|
-
|
(1,406)
|
|
Repayment of borrowings
|
|
-
|
(116)
|
(863)
|
|
Net cash (used)/generated from financing activities
|
|
(40,694)
|
(13)
|
(2,139)
|
|
(Decrease)/increase in cash and cash equivalents
|
|
(40,313)
|
45,685
|
44,722
|
|
Cash and cash equivalents at beginning of period
|
|
47,573
|
2,840
|
2,840
|
|
Effect of foreign exchange rate changes
|
|
64
|
(19)
|
11
|
|
Cash and cash equivalents at end of period
|
|
7,324
|
48,506
|
47,573
|
Notes to the cash flow statement
Unaudited results for the six months ended 30 June 2016
|
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Profit for the period
|
331
|
35,134
|
35,138
|
|
Adjustments for:
|
|
|
|
|
Profit on disposal of discontinued operations
|
-
|
(34,243)
|
(34,741)
|
|
Tax charge/(credit) on continuing operations
|
47
|
216
|
240
|
|
Investment revenues
|
(118)
|
(25)
|
(150)
|
|
Finance costs
|
27
|
63
|
69
|
|
Depreciation of property, plant and equipment
|
821
|
1,196
|
1,645
|
|
Amortisation of intangible assets
|
534
|
508
|
971
|
|
Impairment of goodwill
|
-
|
169
|
-
|
|
Share-based payments (credit)/charge
|
(23)
|
84
|
119
|
|
Loss on disposal of fixed assets
|
-
|
-
|
105
|
|
(Decrease)/increase in provisions
|
(10)
|
12
|
(4)
|
|
Operating cash flows before movements in working capital
|
1,609
|
3,114
|
3,392
|
|
Increase in inventories
|
(218)
|
(603)
|
(295)
|
|
(Increase)/decrease in receivables
|
(343)
|
1,900
|
2,324
|
|
Increase/(decrease) in payables
|
131
|
121
|
(176)
|
|
Cash generated by operations
|
1,179
|
4,532
|
5,245
|
|
Investment revenues
|
118
|
25
|
150
|
|
Interest paid
|
(27)
|
(63)
|
(69)
|
|
Net cash from operating activities
|
1,270
|
4,494
|
5,326
|
Notes to the interim results
1. Geographical analysis
Revenue and profit before taxation in respect of continuing operations arise from the principal
activity of the Group. Following the disposal of TRaC Global Ltd on 7 May 2015 this represents a single class of business, being
the provision of bio-decontamination control technologies to the international healthcare, life sciences and defence
markets.
The Group's bio-decontamination equipment is manufactured within the UK and sold into the UK,
Europe and Rest of World markets.
The following table provides an analysis of the Group's sales by geographical market, irrespective
of the origination of the goods or services.
|
|
|
|
|
|
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
UK
|
3,054
|
2,693
|
5,501
|
|
EU
|
3,172
|
3,274
|
7,375
|
|
US
|
2,643
|
2,990
|
6,320
|
|
ROW
|
3,194
|
3,568
|
7,681
|
|
Total
|
12,063
|
12,525
|
26,877
|
2. Discontinued operations
On 12 March 2015 the Group entered into a sale agreement to dispose of TRaC Global Limited, which
carried out all of the Group's Testing, Regulatory and Compliance work. The disposal was made to simplify the Group and allow
focus on the core decontamination business and to release value for shareholders. The sale was completed on 7 May 2015, on which
date control of TRaC Global Limited passed to the acquirer.
The results of the discontinued operations which have been included in the consolidated income
statement, were as follows:
|
|
|
Period to
7 May 2015
£'000
|
12 months to
31 December 2015
£'000
|
|
Revenue
|
|
6,175
|
6,175
|
|
Expenses
|
|
(5,137)
|
(5,040)
|
|
Profit before tax
|
|
1,038
|
1,135
|
|
Attributable tax expense
|
|
(213)
|
(240)
|
|
Gain on disposal
|
|
34,243
|
33,606
|
|
Profit attributable to discontinued operations
|
|
35,068
|
34,501
|
During the period ended 7 May 2015, TRaC Global Ltd contributed £0.6m to the Group's net operating
cash flows, paid £0.3m in respect of investing activities and paid £2.0m in respect of financing activities.
A profit of £33.6m arose on the disposal of TRaC Global Ltd, being the net proceeds of disposal
less the carrying amount of the subsidiary's net assets and attributable goodwill.
3. Dividends
|
|
6 months to
30 June 2016 £'000
|
6 months to
30 June 2015 £'000
|
12 months to
31 December 2015
£'000
|
|
Amounts recognised as distributions to equity holders in the period:
|
|
|
|
|
Final dividend for the year ended 31 December 2014 of 3.30 pence
per ordinary share
|
-
|
1,406
|
1,406
|
4. Financial Instruments
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific
foreign currency payments and receipts within 70 to 80% of the exposure generated. The Group also enters into forward foreign
contracts to manage the risk associated with anticipated sales and purchase transactions out to six months within 40 to 50% of
the exposure generated. Forward exchange contracts are carried at fair value through profit and loss.
At the balance sheet date the total notional amount of outstanding forward foreign exchange
contracts to which the Group has committed are as below:
|
|
30 June
2016
£'000
|
30 June
2015
£'000
|
31 December 2015
£'000
|
|
Forward foreign exchange contracts
|
3,377
|
2,660
|
3,478
|
At 30 June 2016, the fair value of the Group's forward foreign exchange contracts is estimated to
be approximately £(182,000) (2015: £112,000). The fair value has been calculated as the present value of
future expected cash flows at market related rates, which are current at the balance sheet date. The value is calculated using
readily available market data and represents a level 2 measurement in the fair value hierarchy under IFRS 7.
Other financial assets
|
|
30 June
2016
£'000
|
30 June
2015
£'000
|
31 December 2015
£'000
|
|
Financial assets carried at fair value through profit and loss
|
(182)
|
112
|
(68)
|
5. Analysis of net cash
|
|
30 June
2016
£'000
|
30 June
2015
£'000
|
31 December 2015
£'000
|
|
Cash
|
7,324
|
48,506
|
47,573
|
|
Mortgage & loans - due within one year
|
-
|
(105)
|
-
|
|
- due after one year
|
-
|
(706)
|
-
|
|
Net cash
|
7,324
|
47,695
|
47,573
|
6. Acquisition of own shares for cancellation
During the year 20,405,814 ordinary shares of 10p each were repurchased under the tender offer to
purchase own shares announced on 2 June 2016 and repurchased shares have been cancelled. The total consideration for the
purchase of the shares was £41,396,375 which includes stamp duty of £204,060 and professional fees of £232,563.
Of this amount £2.04m was treated as a reduction of share capital, £0.06m as a charge to the
income statement and the remaining charge of £39.3m included in retained earnings.