TIDMAGY
RNS Number : 8178A
Allergy Therapeutics PLC
29 March 2017
Manuel Llobet, Chief Executive Officer, and Nick Wykeman,
Finance Director, will host a meeting and call for analysts to
provide an update on the Group, followed by a Q&A session, at
0900 BST today. Dial-in details are: +44 (0) 1452 555566.
Conference ID: 75062637.
Allergy Therapeutics plc
("Allergy Therapeutics" or "the Group")
Interim Results for the six months ended 31 December 2016
29 March 2017 Allergy Therapeutics plc (AIM:AGY), the fully
integrated specialty pharmaceutical group specialising in allergy
vaccines, announces its unaudited interim results for the six
months ended 31 December 2016.
Highlights (including post period end highlights)
Financial highlights
-- Revenue increased by 18% at constant currency to GBP34.2m (H1
2016: GBP29.0m)* while reported revenue increased by 39% to
GBP40.4m (H1 2016: GBP29.0m)
-- R&D expenditure of GBP3.8m (H1 2016: GBP6.5m) following a
higher level of investment in Phase II trials in H1 2016
-- Strong growth in operating profit pre R&D of 40% as a
result of broad investment in the business to GBP11.1m (H1 2016:
GBP7.9m) and the strength of the euro against sterling
-- Cash balance of GBP27.8m (H1 2016: GBP33.2m)
Products and pipeline highlights
-- Increased market share in the Group's main European markets
to 13% (2016: 12%) against a low to flat market
-- Pollinex franchise continues to expand and shape the market as a more convenient treatment
-- First patient recruited in pivotal Pollinex Quattro Birch Phase III study in Europe
-- US Grass MATA MPL programme proceeding as planned with the
safety trial (G104) advancing to a dosing trial in H2 2017
-- CTA approval in Spain for Phase I clinical study
investigating the safety and tolerability of Acarovac MPL
(monophosphoryl lipid A)
-- Positive proof of concept preclinical trial results announced
with Polyvac(R) Peanut, the Group's peanut allergy vaccine
Commenting on the interim results, Manuel Llobet, Chief
Executive Officer, said: "In the first half of this year, we
delivered an increase of 18% in revenue at constant currency,
despite flat or low growth in European markets, driven by the
quality of the Group's highly convenient, ultra-short course,
aluminium-free therapy enabling us to continue to gain market
share. This, linked to the recent announcements on progress with
our pipeline projects, illustrates that the approach of investing
both in the current business as well as the pipeline is working,
paving the way for our long-term strategic international plans for
a world-class allergy vaccines portfolio."
*Constant currency uses prior year weighted average exchange
rates to translate current year foreign currency denominated
revenue to give a year on year comparison excluding the effects of
foreign exchange movements. See table in financial review for an
analysis of revenue.
Conference call
Manuel Llobet, Chief Executive Officer, and Nick Wykeman,
Finance Director, will host a conference call for analysts at 0900
BST today.
UK: +44 1452 555 566
Conference ID: 75062637
A replay of the call will be available for 30 days after the
event and can be accessed through the numbers below.
UK: +44 1452 550 000
USA: +1 866 247 4222
Conference ID: 75062637
The results presentation will be made available on the Investor
section of Allergy Therapeutics' website shortly before the
call.
For further information, please contact:
Allergy Therapeutics
+44 (0) 1903 845 820
Manuel Llobet, Chief Executive Officer
Nick Wykeman, Finance Director
Panmure Gordon
+44 (0) 20 7886 2500
Freddy Crossley / Duncan Monteith, Corporate Finance
Tom Salvesen, Corporate Broking
Consilium Strategic Communications
+44 20 3709 5700
Mary-Jane Elliott / Ivar Milligan
allergytherapeutics@consilium-comms.com
Notes for editors:
About Allergy Therapeutics
Allergy Therapeutics is an international specialty
pharmaceutical company focussed on the treatment and diagnosis of
allergic disorders including immunotherapy vaccines that cure
disease. The Company sells proprietary products and third party
products from its subsidiaries in nine major European countries and
via distribution agreements in an additional ten countries.
Formed in 1999 out of Smith Kline Beecham, Allergy Therapeutics
is headquartered in Worthing, UK with MHRA-approved manufacturing
facilities. The Company employs c.495 employees and is listed on
the London Stock Exchange (AIM:AGY). For more information, please
see www.allergytherapeutics.com.
Joint Statement from the Chairman and Chief Executive
Officer
Operating Review
Overview
During the first six months of the year, the Group's revenues
grew by 18% (at constant currency) compared to 16% on a
like-for-like basis (19% including acquisition) during the year
ended 30 June 2016, despite flat or low growth in European markets.
This continued high level of growth reflects both the quality of
the Group's highly convenient, aluminium-free therapy and the
service levels of the Group's supply chain and customer teams which
has enabled the Group to continue to gain market share. In terms of
markets, Germany, Austria, Spain and The Netherlands have
contributed the most although all markets have shown growth.
Furthermore, the overall performance of the business continued
strongly with operating profit pre R&D growing 40% to GBP11.1m
(H1 2016: GBP7.9m). This performance underpins the investment in
R&D to support the current product portfolio and pipeline and
underscores the long-term ambitions for the Group.
The Market
Allergy Therapeutics continues to gain market share in its core
European markets. In the year to 31 December 2016, market share
grew to 13% compared to 12% in the year ended 30 June 2016 in the
markets in which the Group competes. The revenue figures for the
first half of the financial year show that that the Pollinex
franchise continues to expand and shape the market as a more
convenient treatment. The value of this to patients cannot be
underestimated given that most competitor products have on average
12-14 injections or need daily dosing, requiring additional time
and effort as well as cost. Moreover, the investment made in
commercial infrastructure in the last financial year continues to
benefit the Group. Acarovac Plus(TM) continues to grow well in
Spain and has been launched in Austria while Synbiotics product
sales in Italy and Spain have performed well.
The Group has continued to invest in regulatory, quality
assurance and manufacturing facilities to ensure a robust and high
quality supply chain. This has led to gains in market share when
competitors have had supply chain problems. In an industry where
there is a high level of interaction between the doctor/allergist
and patient, product quality and credibility is critical and this
has benefited the Group.
Regulatory Affairs & Clinical Development
Good progress continues to be made in the German TAV (Therapy
Allergy Ordinance) process. As disclosed in March, the Group has
now recruited the first patient for the pivotal Phase III Pollinex
Quattro Birch study in Europe (B301), which is expected to start in
H2 2017. If successful, and if approved, the next step is expected
to lead to a market authorisation. All ten of the Group's products
which were submitted to the TAV process are still in development.
The data available shows that 30% of the products that were on the
market and submitted for the TAV process have dropped out and are
no longer allowed to be sold in Germany (Dr Vieths, 2016).
On the US Pollinex Quattro Grass MATA MPL studies, the safety
study to evaluate an additional dosing strength is currently being
undertaken in the US (G104). Following the previous Phase II trial
undertaken in the US, an additional Phase II trial for Pollinex
Quattro Grass (G205) using conjunctival provocation testing is
expected to start in H2 2017 in Europe ahead of the planned pivotal
Phase III trial (G306).
As disclosed in February, the Group has received CTA approval to
start a Phase I trial for Acarovac MPL (AM101), a subcutaneous
house dust mite immunotherapy using the Pollinex Quattro technology
platform. This trial is expected to be completed in the second half
of this calendar year.
During the period under review, further patents were granted for
the manufacturing process of the Pollinex platform in both Europe
and the US, adding to the microcrystalline tyrosine (MCT(R) )
patent which runs to 2032.
Bencard Adjuvant Systems
This division of the Group focuses on adjuvants and their
application in fields outside of allergy. Initial work has focused
on MCT and its use as a key part of different adjuvant systems and
to enhance immunogenicity of different vaccines. Further studies
have been undertaken using MCT in combination with 1- Influenza
(Heath et al, in press) and 2- with malaria (Cabral-Miranda et al,
submitted) and 3- malaria, and virus like particles (VLP)
(Cabral-Miranda et al, submitted) all showing enhanced efficacy
improving T and B cell immunogenicity and protection against
P.berghei/vivax.
The malaria study indicated that MCT is superior in comparison
with aluminium and that MCT offers optimal compatibility and
immunological synergy with other adjuvants and immunomodulators
such as VLPs. Work on VLP, the technology licenced last year, will
continue to focus mainly on peanut allergy.
VLP- Peanut Allergy
As announced in February, positive results were achieved from
preclinical research into its unique therapeutic peanut allergy
vaccine, Polyvac(R) Peanut. Having delivered these positive
preclinical Proof of Concept results, the Group will now progress
the vaccine in accordance with its stated strategic plan when
funding the programme and will proceed to Phase I development
following completion of the pre-clinical studies.
The findings demonstrate that a single dose of the Group's VLP
adjuvant combined with recombinant peanut allergen successfully
protected against anaphylaxis when challenged with peanut.
Additionally, when examining symptom scores in the investigational
model, those vaccinated with the candidate vaccine exhibited no
symptoms compared to placebo when challenged with peanut.
Furthermore, the safety profile of the product was evaluated via an
intravenous challenge and found that the vaccine itself did not
induce anaphylaxis in peanut sensitised subjects (a hypoallergenic
vaccine).
Allergy Therapeutics' innovative peanut vaccine is focussed on a
subcutaneous application of recombinant peanut allergen coupled
with its state-of-the-art VLP adjuvant to increase the safety and
efficacy profile. This approach aims to induce protective immunity,
enabling shorter therapy duration and an enhanced safety profile
and thus has significant implications for peanut allergy therapy
with the potential to redefine the market for food allergy
products. Alternative peanut vaccines in development often require
repeated and long-lasting exposure transdermally or orally, which
may limit patient adherence.
Food allergy represents a significant and strategically
important area for the Group, with peanut allergy treatments alone
being an $8 billion p.a. (The Journal of Allergy and Clinical
Immunology 2016. 1% of US population. EACCI Food Allergy and
Anaphylaxis Guidelines Group 2016 0.2% of Western European
Population. Management assumption of annual treatment of $2k)
addressable market globally. Allergy Therapeutics has the exclusive
rights to develop VLP technology, a carrier system to present
allergens to the immune system, for allergy vaccines.
Financial Review
Reported revenues for the first half of the financial year were
GBP40.4m (H1 2016: GBP29.0m), representing a growth of 18% at
constant currency, despite low to flat markets in Europe. The
growth rate reported after taking into account currency movements
was 39% with the positive impact on revenues from the strengthening
euro being GBP6.2m. This double digit sales growth has been driven
primarily by the Group's investment in infrastructure and
broadening of the product portfolio as it continues to increase its
market share in all of its main markets.
A reconciliation between reported revenues and revenues in
constant currency is provided in the table below:
6 months to 6 months to Increase Increase
31-Dec-16 31-Dec-15
GBPm GBPm GBPm %
Revenue 40.4 29.0 11.4 39%
Adjustment to retranslate to prior year foreign exchange (6.2) -
rate
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Revenue at constant currency 34.2 29.0 5.2 18%
Add rebates at constant currency 3.2 2.4 0.8
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Gross revenue at constant currency 37.4 31.4 6.0 19%
As in previous years, owing to the seasonality of the pollen
allergy market, between 60% to 70% of Allergy Therapeutics'
revenues are generated in the first half of the financial year and,
as a consequence, the Group typically records profits in the first
half of the year and losses in the second half.
Cost of goods sold increased marginally in the period to GBP8.9m
(H1 2016: GBP7.3m), mainly due to higher volumes and currency
effect on Spanish manufacturing. Gross profit improved to GBP31.5m
(H1 2016: GBP21.6m), which represents a gross margin of 78% (H1
2016: 75%), reflecting the currency impact on the revenue line.
Sales, marketing and distribution costs of GBP13.8m (H1 2016:
GBP9.8m) were higher than the previous period reflecting in roughly
equal measures the impact of the strong euro and the investment in
distribution made in the second half of 2016 to help accelerate
revenue growth. Administration expenses of GBP6.6m (H1 2016:
GBP3.9m) rose due to the benefit last year of the stronger dollar
revaluing US dollar deposits favourably by GBP1.1m, investment in
compliance and the current year negative impact of the fair
valuation of euro denominated derivatives (GBP0.4m).
Research and development costs of GBP3.8m (H1 2016: GBP6.5m),
reflected the higher level of activity in H1 2016 due to Phase II
work in Europe and US last year.
The tax charge in the period of GBP0.4m (H1 2016: GBP0.2m)
relates to overseas subsidiaries and the increase reflects the
growing profitability of the subsidiaries.
Property, plant and equipment was unchanged in the period but
increased by GBP0.9m to GBP9.7m compared to the year before, mainly
as a result of investment in new plant to increase capacity and
efficiency and improvements to the Worthing offices. The
depreciation charge increased GBP0.1m reflecting this investment in
the plant. Goodwill increased to GBP3.4m reflecting the currency
impact of the goodwill in Spain (H1 2016: GBP3.1m), whilst other
intangible assets have risen by GBP0.1m.
Total current assets excluding cash have increased by GBP3.7m to
GBP17.7m (H1 2016: GBP14.0m). This is mainly due to an increase in
debtors reflecting the higher sales and the different sales channel
used for Synbiotics.
Retirement benefit obligations, which relate solely to the
German pension scheme, increased to GBP9.6m (H1 2016: GBP7.5m) as a
result of the movement in the sterling-euro exchange rate as well
as the reduction in the discount rate.
Net cash generated by operations was strongly positive, due to
significantly lower R&D spending in H1 2017 as well as the
strong trading result, with a reported inflow of GBP5.4m (H1 2016:
GBP0.6m).
Financing
The Group had debt on its balance sheet at the close of the
financial year relating to loans held in the Spanish subsidiary of
GBP3.4m (H1 2016 GBP1.6m). The seasonal overdraft was not used
during the calendar year 2016 but the Group expects to renew its
banking facilities when they are due for review in April 2017. The
Group drew down GBP0.1m of debt from its facility in Spain during
the period.
The Directors believe that the Group will have adequate
facilities for the foreseeable future and accordingly they have
applied the going concern principle in preparing these interim
financial statements.
Movements in the currency markets between the respective values
of the euro and sterling have an effect on the Group's operations.
The Group manages its cash exposure in this respect by foreign
currency hedges. Over 90% of our gross sales are denominated in
euros whereas approximately 50% of costs are incurred in the United
Kingdom and denominated in sterling.
Other Matters
As disclosed in Note 4 (Contingent liabilities), on 23 February
2015, the Group received notification that The Federal Office for
Economics and Export ("BAFA") had made a decision to reverse their
preliminary exemption to the increased manufacturers rebate in
Germany for the period July to December 2012. After taking legal
advice, the Group has lodged an appeal against this decision and
our advice gives us confidence that the exemption will be
re-instated. Therefore, as at 31 December 2016, no provision has
been recognised for the repayment of the rebate refund. This
position will be kept under review. The potential liability is
EUR1.4m (GBP1.1m).
The European Commission has concluded its investigation into
whether the exemption of pharmaceutical manufacturers from the
increase in rebates in Germany constitutes state aid. The European
Commission has determined that the exemptions do not constitute
state aid but an appeal has been lodged at the EU Court against
this decision. If successful, this would lead to a repayment of
approximately GBP5m (including the GBP1.1m referred to above);
however, following advice that this is an unlikely outcome, the
Group has not disclosed any contingent liability.
The Group is in discussion with one of its suppliers and their
lawyers over potential cost overruns on one of its clinical trials
which may lead to additional expense for the Group.
Outlook
The Board and management team expect that growth in net sales
will continue in the second half of the year and have great
confidence in the future of the business. As planned, research and
development costs are expected to rise significantly in the second
half of the year compared to the first half, reflecting the
exciting preparation for the expected start of two major trials (US
Grass MATA MPL Phase II and PQ Birch Phase III) as well as
investment in infrastructure to progress the important TAV process.
Other costs are expected to be similar to H1 2017.
The Group continues to strive for excellence in its products,
the supply chain and convenience for patients leading to increased
medical compliance which are key factors in the continuing growth
and success of the business.
We look forward to the future with confidence.
Peter Jensen
Chairman
Manuel Llobet
Chief Executive Officer
28 March 2017
ALLERGY THERAPEUTICS PLC
Consolidated income statement
Note 6 months 6 months 12 months
to to to
31 Dec 31 Dec 30 Jun
2016 2015 2016
2 GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Revenue 40,427 28,959 48,509
Cost of sales (8,924) (7,328) (14,070)
---------- ---------- -------------
Gross profit 31,503 21,631 34,439
Sales, marketing and distribution
costs (13,842) (9,842) (20,223)
Administration expenses
- other (6,611) (3,879) (10,094)
Research and development
costs (3,820) (6,537) (16,223)
---------- ---------- -------------
Administration expenses (10,431) (10,416) (26,317)
Other income - - 150
Operating profit/(loss) 7,230 1,373 (11,951)
Finance income 90 84 180
Finance expense (112) (154) (293)
---------- ---------- -------------
Profit/(loss) before tax 7,208 1,303 (12,064)
Income tax (367) (249) (1,008)
---------- ---------- -------------
Profit/(loss) for the period 6,841 1,054 (13,072)
========== ========== =============
Earnings/(loss) per share 3
Basic (pence per share) 1.16p 0.19p (2.29p)
Diluted (pence per share) 1.10p 0.18p (2.29p)
Consolidated statement of
comprehensive income
6 months 6 months 12 months
to to to
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Profit/(loss) for the period 6,841 1,054 (13,072)
Items that will not be reclassified
subsequently to profit or
loss:
Remeasurement of net defined
benefit liability 1,105 (255) (1,688)
Remeasurement of investments-retirement
benefit
assets (78) (51) (16)
Deferred tax- freehold land
and buildings - - (43)
Revaluation gains - freehold
land and buildings
Items that may be reclassified
subsequently to profit or
loss: - - 119
Exchange differences on
translation of foreign operations (81) 366 (744)
Total comprehensive income/
(loss) 7,787 1,114 (15,444)
========== ========== ==========
Consolidated balance sheet
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Assets
Non-current assets
Property, plant and equipment 9,708 8,787 9,667
Intangible assets - goodwill 3,382 3,053 3,271
Intangible assets - other 2,038 1,925 2,084
Investment - retirement benefit asset 4,291 3,451 4,045
Total non-current assets 19,419 17,216 19,067
Current assets
Inventories 7,025 6,826 7,692
Trade and other receivables 10,653 7,141 6,514
Cash and cash equivalents 27,763 33,206 23,406
- 3 -
Derivative financial instruments
Total current assets 45,441 47,176 37,612
Total assets 64,860 64,392 56,679
---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (12,375) (7,906) (11,045)
Current borrowings (306) (262) (295)
Derivative financial instruments (486) - (1,180)
Total current liabilities (13,167) (8,168) (12,520)
Net current assets 32,274 39,008 25,092
---------- ---------- ----------
Non-current liabilities
Retirement benefit obligations (9,553) (7,465) (10,174)
Deferred taxation liability (315) (296) (334)
Non-current provisions (291) (252) (257)
Other non-current liabilities - (113) -
Long term borrowings (3,071) (1,378) (3,070)
---------- ---------- ----------
Total non-current liabilities (13,230) (9,504) (13,835)
Total liabilities (26,397) (17,672) (26,355)
Net assets 38,463 46,720 30,324
========== ========== ==========
Equity
Capital and reserves
Issued share capital 603 597 599
Share premium 102,420 102,389 102,392
Merger reserve - shares issued by subsidiary 40,128 40,128 40,128
Reserve - shares held by EBT - 67 -
Reserve - share based payments 1,061 761 741
Revaluation reserve 1,254 1,178 1,254
Foreign exchange reserve (965) 226 (884)
Retained earnings (106,038) (98,626) (113,906)
---------- ---------- ----------
Total equity 38,463 46,720 30,324
========== ========== ==========
Consolidated statement of changes in equity
Issued Share Merger Reserve Reserve Foreign Retained Total
Capital premium reserve - - share Revaluation exchange earnings equity
- shares shares based reserve reserve
issued held payment
by in
subsidiary EBT
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2015 597 102,389 40,128 67 761 1,178 226 (98,626) 46,720
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Exchange
differences
on
translation
of foreign
operations - - - - - - (1,110) - (1,110)
Remeasurement
of net
defined
benefit
liability - - - - - - - (1,433) (1,433)
Remeasurement
of
investments
- retirement
benefit
assets - - - - - - - 35 35
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total other
comprehensive
income - - - - - - (1,110) (1,398) (2,508)
Loss for
the period
after tax - - - - - - - (14,126) (14,126)
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total
comprehensive
income - - - - - - (1,110) (15,524) (16,634)
Deferred
tax (Land
buildings) - - - - - (43) - - (43)
Valuation
gain taken
to equity
(Land and
Buildings) - - - - - 119 - - 119
Share based
payments - - - - 157 - - - 157
Shares
issued 2 3 - - - - - - 5
Transfer
of EBT
reserve
to retained
earnings - - - (67) - - - 67 -
Transfer
of lapsed
options
to retained
earnings - - - - (177) - - 177 -
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
At 30 June
2016 599 102,392 40,128 - 741 1,254 (884) (113,906) 30,324
Exchange
differences
on
translation
of foreign
operations - - - - - - (81) - (81)
Remeasurement
of net
defined
benefit
liability - - - - - - - 1,105 1,105
Remeasurement
of
investments
- retirement
benefit
assets - - - - - - - (78) (78)
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total other
comprehensive
income - - - - - - (81) 1,027 946
Profit for
the period
after tax - - - - - - - 6,841 6,841
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total
comprehensive
income - - - - - - (81) 7,868 7,787
Share based
payments - - - - 320 - - - 320
Shares issued 4 28 - - - - - - 32
At 31 December
2016 603 102,420 40,128 - 1,061 1,254 (965) (106,038) 38,463
========= ======== =========== ======== ======== ============= ========= ================= =========
Condensed consolidated cash
flow statement
6 months 6 months 12 months
to to to
31Dec 31Dec 30Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Cash flows from operating
activities
Profit/(loss) before tax 7,208 1,303 (12,064)
Adjustments for:
Finance income (90) (84) (180)
Finance expense 112 154 293
Non cash movements on defined
benefit pension plan 122 148 295
Depreciation and amortisation 955 782 1,666
Charge for share based payments 320 170 327
Movement in fair value of
derivative financial instruments (694) 781 1,963
Foreign exchange revaluation
on US dollar cash deposits (296) (1,087) (2,394)
(Increase) in trade and other
receivables (4,202) (2,112) (368)
Decrease/(increase) in inventories 743 2 (585)
Increase/(decrease) in trade
and other payables 1,263 550 (497)
---------- ---------- ----------
Net cash generated/(used)
by operations 5,441 607 (11,544)
Bank loan fees and Interest
paid (112) (154) (388)
Income tax (paid)/received (6) 44 93
Net cash generated/(used)
by operating activities 5,323 497 (11,839)
Cash flows from investing
activities
Interest received 90 11 -
Investments (148) (128) (260)
Payments for intangible assets (22) (142) -
Payments for property plant
and equipment (1,341) (335) (1,232)
Net cash used in investing
activities (1,421) (594) (1,492)
Cash flows from financing
activities
Proceeds from issue of equity
shares (net of share issue
costs) - 10,967 10,967
Share options exercised 32 - -
Repayment of borrowings (161) (120) (86)
Proceeds from borrowings 77 - 1,658
Net cash (used)/generated
by financing activities (52) 10,847 12,539
---------- ---------- ----------
Net increase/(decrease) in
cash and cash equivalents 3,850 10,750 (792)
Effects of exchange rates
on cash and cash equivalents 507 1,257 2,999
Cash and cash equivalents
at the start of the period 23,406 21,199 21,199
---------- ---------- ----------
Cash and cash equivalents
at the end of the period 27,763 33,206 23,406
---------- ---------- ----------
1. Interim financial information
The unaudited consolidated interim financial information is for
the six month period ended 31 December 2016. The financial
information does not include all the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 30 June 2016, which were prepared under International
Financial Reporting Standards (IFRS) as adopted by the European
Union (EU).
The interim financial information has not been audited nor has
it been reviewed under ISRE 2410 of the Auditing Practices Board.
The financial information set out in this interim report does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Company's statutory financial statements
for the year ended 30 June 2016 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with applicable accounting standards and under the
historical cost convention except for land and buildings and
derivative financial instruments which have been measured at fair
value. The accounting policies adopted in this report are
consistent with those of the annual financial statements for the
year to 30 June 2016 as described in those financial statements.
There are no accounting standards that have become effective in the
current period that would have a material impact upon the financial
statements.
Going Concern
The Group has been profit making in the six months to 31
December 2016, as it was in the corresponding period ending 31
December 2015.
Detailed budgets have been prepared, including cash flow
projections for the periods ending 30 June 2017 and 30 June 2018.
These projections include assumptions on the trading performance of
the operating business and the continued availability of the
existing bank facilities. The Group had a cash balance of GBP27.8m
at 31 December 2016 and expects to renew its banking facilities
when they are due for renewal in April 2017. After making
appropriate enquiries, which included a review of the annual budget
and latest forecast, by considering the cash flow requirements for
the foreseeable future and the effects of sales and other
sensitivities on the Group's funding plans, the Directors continue
to believe that the Group will have adequate resources to continue
in operational existence for the foreseeable future and accordingly
have applied the going concern principle in preparing these interim
financial statements.
3. Earnings per share
6 months 6 months 12 months
to 31 to 31 to 30
Dec 2016 Dec 2015 Jun 2016
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Profit/(loss) after tax attributable
to equity shareholders 6,841 1,054 (13,072)
Shares Shares Shares
'000 '000 '000
Issued ordinary shares at start
of the period 589,159 545,848 545,848
Ordinary shares issued in the
period 4,285 41,005 43,311
---------- ---------- ----------
Issued ordinary shares at end
of the period 593,444 586,853 589,159
Weighted average number of
shares in issue for the period 591,415 559,516 570,344
========== ========== ==========
Weighted average number of
shares for diluted earnings
per share 624,470 581,827 570,344
========== ========== ==========
Basic earnings per ordinary
share/(loss) (pence) 1.16p 0.19p (2.29p)
========== ========== ==========
Diluted earnings per ordinary
share/(loss) (pence) 1.10p 0.18p (2.29p)
====================================== ========== ========== ==========
4. Contingent liabilities
On 23 February 2015, the Company received notification that The
Federal Office for Economics and Export ("BAFA") had made a
decision to reverse its preliminary exemption to the increased
manufacturers rebate in Germany for the period July to December
2012. The Company was granted a preliminary exemption to the
increased rebate for this period by BAFA in 2013. The Company
recognised revenue of EUR1.4m (GBP1.1m) against this exemption in
the year ended 30 June 2013. All other preliminary exemptions
(granted for periods up to 30 June 2012) have previously been
ratified as final by BAFA. After taking legal advice, the Company
has lodged an appeal against this decision and is confident that
the exemption will be re-instated. Therefore, as at 31 December
2016, no provision has been recognised for the repayment of the
rebate refund. This position will be kept under review.
The European Commission has concluded its investigation into
whether the exemption of pharmaceutical manufacturers from the
increase in rebates in Germany constitutes state aid. The European
Commission has determined that the exemptions do not constitute
state aid. Subsequent to this announcement, the Group has been
advised that an appeal has been lodged at the EU Court against this
decision. If successful, and the exemptions are determined to be
illegal state aid, then the exemption refunds may have to be
repaid. The maximum sum to be repaid would be approximately GBP5m
(including the GBP1.1m referred to above); however, the Group
considers this to be an unlikely outcome and consequently has not
recognised any contingent liability.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUPGWUPMPGR
(END) Dow Jones Newswires
March 29, 2017 02:01 ET (06:01 GMT)
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