TIDMANCR
RNS Number : 5804O
Animalcare Group PLC
10 February 2016
Animalcare Group plc
("Animalcare" or the "Group")
Half Yearly Report
Animalcare Group plc (AIM: ANCR), a leading supplier of
veterinary medicines, announces interim results for the six months
ended 31(st) December 2015. The Board is pleased to report good
progress during the period, achieving top line growth during a
phase of significantly increased investment to execute the Group's
strategy to drive growth from 2017 onwards.
Animalcare is made up of three product groups: Licensed
Veterinary Medicines, Companion Animal Identification and Animal
Welfare Products.
Financial Highlights
6 months to 6 months to
31(st) Dec 31(st) Dec
2015 2014 % change
-------------------------------- ----------- ----------- --------
Revenue GBP7.11m GBP6.93m +2.7%
-------------------------------- ----------- ----------- --------
Underlying* operating profit GBP1.55m GBP1.79m (13.2%)
-------------------------------- ----------- ----------- --------
Profit before tax GBP1.53m GBP1.76m (12.9%)
-------------------------------- ----------- ----------- --------
Basic underlying* earnings per
share 6.2p 6.8p (8.8%)
-------------------------------- ----------- ----------- --------
Interim dividend 1.8p 1.8p -
-------------------------------- ----------- ----------- --------
Product development expenditure GBP0.60m GBP0.20m +207.0%
-------------------------------- ----------- ----------- --------
Cash and cash equivalents GBP6.10m GBP5.04m +21.1%
-------------------------------- ----------- ----------- --------
* Underlying measures are before the effect of exceptional and
other items. These are analysed in note 3.
Operational Highlights
-- Solid revenue growth from our Licensed Veterinary Medicines
group, up 4.2% to GBP4.58m (2014: GBP4.40m) against strong
comparatives which benefited from a circa GBP0.2m non-recurring
benefit from sales of Buprecare as a result of competitor supply
issues.
-- New mini microchip launched in a rapidly changing market.
-- Planned focus on our export business started in the period
and already delivering commercial benefit.
-- Continued focus on investment to support future growth,
reflected in the GBP0.16m increase in overheads and a three-fold
increase in our product development pipeline expenditure to
GBP0.60m.
-- Strong financial position maintained, with Group cash
balances increasing by GBP0.32m to GBP6.10m since 30(th) June
2015.
James Lambert, Chairman of Animalcare Group plc, said: "The
business has continued to perform well during the first six months
of its financial year with sales up by 2.7% to over GBP7.1m which
is particularly pleasing against a very strong first half in FY15.
Given the top line growth during the period and increased levels of
investment for the future success of Animalcare, your Board remains
confident about the prospects and outcome for the full year and
beyond."
Animalcare Group plc Tel: 01904 487 687
Iain Menneer, Chief Executive Officer
Chris Brewster, Chief Financial
Officer
Panmure Gordon (Nominated Adviser Tel: 020 7886 2500
and Broker)
Freddy Crossley/Peter Steel
Walbrook PR Ltd Tel: 020 7933 8780 or animalcare@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
Chairman's Statement
Animalcare continues to focus on three product groups: Licensed
Veterinary Medicines, Companion Animal Identification and Animal
Welfare Products; all sold through veterinary practices. The
business has continued to perform well during the first six months
of its financial year with sales up by 2.7% to over GBP7.1m which
is particularly pleasing against a very strong first half in FY15,
when we benefitted from a competitor supply issue in one of our key
pharmaceutical products.
Sales of Licensed Veterinary Medicines increased by 4.2% and
this was after growth of 10.6% in the first half of FY15. The sales
of our older licensed veterinary products held up well and we
increased our export sales during the period.
Companion Animal Identification fell back by 5.2% to GBP1.2m,
which was in line with our 2013 period sales. This was largely due
to phasing of sales promotional activity during the period. The
companion animal microchipping market has also become significantly
more competitive ahead of compulsory microchipping in England,
Wales and Scotland in April 2016.
Animal Welfare Products showed growth of 5.1%, predominantly due
to increased sales of our Infusion Accessories range. During the
period we upgraded our range of disinfectants in preparation for
the upcoming implementation of the new EU Biocidal Product
Regulations. This will offer an opportunity to grow market share as
these new regulations are effected.
Operating cash flow continued to be strong during the period and
even after much increased levels of capital investment in new
products and a final dividend paid during the half, our cash
position has improved by GBP0.3m to GBP6.1m.
The new product development programme has made good progress
during the half with our in-house team working on several new
licences in line with our core strategy. We expect the benefits of
the increased spending on these projects will start to show in the
2017 financial year.
Overheads increased during the half by GBP0.2m in line with our
strategy of investing in our people, including a larger and better
trained sales force and an increase in marketing spend. This is all
focused in preparation for our new pipeline of Licensed Veterinary
Medicines delivering growth from 2017 onwards.
As a result of the increased investment mentioned above basic
earnings per share reduced from 6.8p to 6.2p, still substantially
above the 5.5p achieved during the first half of FY14. Your Board
proposes to maintain the interim dividend of 1.8p per share.
Given the top line growth during the period and increased levels
of investment for the future success of Animalcare, your Board
remains confident about the prospects and outcome for the full year
and beyond.
James Lambert
Chairman
Business Review
Introduction
The Group continues to make good progress in line with its
strategy, delivering top line growth during a period of
significantly increased investment in both our product development
pipeline and our employee base.
Revenues increased by 2.7% to GBP7.11m (2014: GBP6.93m) with
continued solid growth continuing within our Licensed Veterinary
Medicines group. This was against strong comparatives which
benefitted from a circa GBP0.2m non-recurring benefit from sales of
Buprecare as a result of supply issues with a competitor
product.
Strategically, we continue to focus on making the necessary
investment in our business to support future growth. This has
resulted in operating expenses increasing by GBP0.16m to GBP2.33m,
contributing to the 13.2% decline in underlying operating profit to
GBP1.55m (2014: GBP1.79m).
We have maintained a strong financial position, with Group cash
balances increasing by GBP0.32m since 30(th) June 2015 to GBP6.10m.
This increase in cash has been delivered despite the circa
three-fold rise in our product development expenditure to GBP0.60m,
demonstrating our consistently strong operating cash
generation.
Operating results
6 months to 6 months to
31(st) Dec 31(st) Dec
Revenue GBP'000 2015 2014 % change
-------------------------------- ----------- ----------- --------
Licensed Veterinary Medicines 4,583 4,396 4.2%
-------------------------------- ----------- ----------- --------
Companion Animal Identification 1,196 1,261 (5.2%)
-------------------------------- ----------- ----------- --------
Animal Welfare Products 1,335 1,271 5.0%
-------------------------------- ----------- ----------- --------
TOTAL 7,114 6,928 2.7%
-------------------------------- ----------- ----------- --------
The Licensed Veterinary Medicines group, which represents 64% of
total revenue, again delivered good growth, with sales up 4.2%
versus the prior period to GBP4.58m. This is particularly pleasing
against the very strong comparatives which showed growth of 10.6%
on H1 FY14 due in part to by the circa GBP0.2m non-recurring
benefit from sales of Buprecare as noted above. The overall growth
of 4.2% primarily reflects strong sales growth of products launched
during FY15, notably Synthadon and Pet Remedy.
Companion Animal Identification sales were down 5.2% to
GBP1.20m. The companion animal identification market has become
significantly more competitive ahead of compulsory microchipping in
England, Wales and Scotland in April 2016. This imminent change in
the law has prompted a modest uptake of microchipping however price
competition amongst suppliers has increased. During the last six
months, the market has seen a rapid movement towards smaller
microchips. We have taken active measures to address this market
change with the introduction of our own mini microchip.
The decline was partly offset by an increase in sales of export
equine chips; we noted phasing of orders adversely impacted FY15.
In addition, revenues from our follow on services, in particular
insurance, performed well increasing by 7.2%.
(MORE TO FOLLOW) Dow Jones Newswires
February 10, 2016 02:00 ET (07:00 GMT)
Our Animal Welfare Products group grew by 5.0% to GBP1.34m
driven primarily by increased sales of our Infusion Accessories
range which represent 55% of this product group's total revenues.
We continue to see benefit from the synergies between our IV Fluid
range and these associated products. During the period we upgraded
our range of disinfectants in preparation for the upcoming
implementation of the new EU Biocidal Product Regulations which
will offer an opportunity to grow market share as the new
regulations are implemented.
Gross profit decreased by 1.8% to GBP3.9m (2014: GBP4.0m)
primarily driven by a decline in gross margins to 54.6% (2014:
57.1%). This reflects a number of factors including the prior
period non-recurring Buprecare benefit noted above and increased
export revenues from our Licensed Veterinary Medicines group which
generally, due to the distribution model, attract a lower margin
than UK based sales.
Underlying operating profit decreased by 13.2% to GBP1.55m
(2014: GBP1.79m) and our operating margin reduced by 400 basis
points to 21.8% however the latter is in line with that achieved
during FY14, a more comparable period which excludes the
non-recurring Buprecare sales benefit. The maintenance of
normalised operating margins highlights that whilst overheads
increased by GBP0.2m to GBP2.3m, as we continue to make the
necessary investment in particular in our employee base, the
increase in investment is controlled and measured.
Cash flow
The Group cash position increased by GBP0.32m to GBP6.10m
compared to GBP5.78m at 30(th) June 2015. Cash generated by
operations continues to be strong at GBP1.96m (2014: GBP2.55m) as
we maintain robust control over our working capital. As expected
our stock position has increased modestly versus FY15 year end,
reflecting the growth in sales and contingency stocking in relation
to a new supply arrangement for one of our key product ranges.
The increase in cash has been delivered in a period which saw a
significant increase in our product development expenditure as
shown in the following chart, which can be viewed using the link
below:
http://www.rns-pdf.londonstockexchange.com/rns/5804O_-2016-2-9.pdf
The three-fold increase in capital expenditure vs 2014
highlights that this important activity for the Group is
progressing well and has benefitted from the additions made to the
Technical and Business Development teams during FY14. We expect
overall FY16 expenditure on our product development pipeline to be
in the range of GBP1.0m to GBP1.5m.
Earnings per share ("EPS")
Basic underlying EPS decreased by 8.8% to 6.2 pence (2014: 6.8
pence). The statutory basic EPS decreased by 7.6% to 6.1 pence
(2014: 6.6 pence) reflecting the lower cost of exceptional items in
the period.
Dividend
The Board is pleased to announce a maintained interim dividend
of 1.8 pence per share (2014: 1.8 pence per share) reflecting the
continued confidence in the medium to long-term growth prospects of
the Group. This follows the 11% increase in the total dividend for
FY15. The interim dividend will be paid on 6(th) May 2016 to
shareholders on the register on 8(th) April 2016. The Ordinary
shares will become ex-dividend on 7(th) April 2016.
The Board will continue to monitor the Group's cash position to
ensure an appropriate balance between investment for future growth
and dividend flow to deliver overall value for our
shareholders.
Product pipeline
In line with our strategy of product development and investment,
good progress has been made in our product development pipeline, as
evidenced by the significant increase in capital expenditure noted
above. Development work has continued to focus on identifying new
product opportunities and also ways to deliver significant
commercial benefit from our existing pharmaceutical products.
The table below highlights the overall position of our pipeline
compared to the previous period:
Identification Feasibility Development Regulatory Commercial
----- --------------- ------------ ------------ --------------- -----------------
2015 26 Projects 12 Projects 7 Projects 4 NPD & 3 Product launches
EPD Projects (H2 FY16) - 1
----- --------------- ------------ ------------ --------------- -----------------
2014 34 Projects 9 Projects 7 Projects 3 NPD Projects Product launches
- nil
----- --------------- ------------ ------------ --------------- -----------------
One Existing Product Development product will be commercialised
early in H2 delivering significant commercial benefit. Three other
in-house product development projects are expected to receive
regulatory approval during H2, with commercialisation soon
thereafter.
In addition, we continue to seek distribution opportunities to
complement our in-house pipeline and one new product will be
launched on distribution in H2.
Summary and outlook
We have continued to make strong progress in executing our
strategy to drive growth from 2017 onwards. The primary focus
remains on reinvesting the Group's free cash in our business to
support future growth, with the estimated rate of expenditure on
our product development pipeline circa GBP1.0m to GBP1.5m per
annum.
Export revenues have improved in the period and the new Head of
Export Development has made good progress in evaluating existing
and new territories and partners to increase our geographic
footprint.
The UK veterinary market has consolidated further during the
period, presenting revenue growth opportunities albeit at reduced
margins.
The introduction of compulsory microchipping in England, Wales
and Scotland in April 2016 has presented certain challenges as we
highlighted earlier, however as we move past this legislation
change, Animalcare has plans in place to maximise the value from
this segment beyond the current financial year.
Overall, the Group remains well positioned and remains confident
in delivering our near and medium term targets.
Iain Menneer Chris Brewster
Chief Executive Officer Chief Financial Officer
Condensed Consolidated Statement of Comprehensive Income -
Unaudited
Six months ended 31(st) December 2015
6 months ended 31(st) December 6 months ended 31(st) December
2015 2014
------------------------- ---- --------------------------------------- --------------------------------------
Exceptional
and other Underlying Exceptional and
Underlying items (i) Total results other items (i) Total
Note results GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ==== ---------------- ----------- -------- ========== ================ ========
Revenue 7,114 - 7,114 6,928 - 6,928
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Cost of sales (3,230) (3,230) (2,971) - (2,971)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Gross profit 3,884 - 3,884 3,957 - 3,957
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Distribution
costs (121) - (121) (135) - (135)
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Administrative
expenses (2,140) (59) (2,199) (1,948) (49) (1,997)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Research &
development
expenses (70) - (70) (84) - (84)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Operating profit/loss 1,553 (59) 1,494 1,790 (49) 1,741
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Finance income/(expense) 13 21 34 13 1 14
========================= ==== ---------------- ----------- -------- ========== ================ ========
Profit/(loss)
before tax 1,566 (38) 1,528 1,803 (48) 1,755
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Income tax
(expense)/credit (257) 7 (250) (374) 10 (364)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Total comprehensive
income/(loss)
for the period 1,309 (31) 1,278 1,429 (38) 1,391
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Basic earnings
per share 6 6.2p 6.1p 6.8p 6.6p
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Fully diluted
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earnings per
share 6 6.1p 6.0p 6.8p 6.6p
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Total comprehensive income/(loss) for the period is attributable
to the equity holders of the parent.
(i) In order to aid understanding of underlying business
performance, the Directors have presented underlying results before
the effect of exceptional and other items. These items are analysed
in note 3.
Condensed Consolidated Statement of Comprehensive Income -
Audited
Year ended 30(th) June 2015
Exceptional
Underlying and other items
results (i) Total
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------------- --------
Revenue 13,536 - 13,536
----------------------------------- ---- ---------- ---------------- --------
Cost of sales (5,963) - (5,963)
----------------------------------- ---- ---------- ---------------- --------
Gross profit 7,573 - 7,573
----------------------------------- ---- ---------- ---------------- --------
Distribution costs (279) - (279)
----------------------------------- ---- ---------- ---------------- --------
Administrative expenses (4,041) (110) (4,151)
----------------------------------- ---- ---------- ---------------- --------
Research & development expenditure (143) - (143)
----------------------------------- ---- ---------- ---------------- --------
Operating profit/(loss) 3,110 (110) 3,000
----------------------------------- ---- ---------- ---------------- --------
Finance income 27 27
----------------------------------- ---- ---------- ---------------- --------
Finance expense - (17) (17)
----------------------------------- ---- ---------- ---------------- --------
Profit/(loss) before tax 3,137 (127) 3,010
----------------------------------- ---- ---------- ---------------- --------
Income tax (expense)/credit (502) 26 (476)
----------------------------------- ---- ---------- ---------------- --------
Total comprehensive income/(loss)
for the year 2,635 (101) 2,534
----------------------------------- ---- ---------- ---------------- --------
Basic earnings per share 6 12.6p 12.1p
----------------------------------- ---- ---------- ---------------- --------
Fully diluted earnings per
share 6 12.5p 12.0p
----------------------------------- ---- ---------- ---------------- --------
Total comprehensive income/(loss) for the year is attributable
to the equity holders of the parent.
(i) In order to aid understanding of underlying business
performance, the directors have presented underlying results before
the effect of exceptional costs and other items. These items are
analysed in note 3.
Condensed Consolidated Statement of Changes in Shareholders'
Equity
Six months ended 31(st) December 2015
Year ended
6 months ended 6 months ended 30(th) June
31(st) December 31(st) December 2015
2015 Unaudited 2014 Unaudited Audited
Note GBP'000 GBP'000 GBP'000
---------------------------- ---- ---------------- ---------------- ------------
Balance at beginning
of period 20,991 19,453 19,453
---------------------------- ---- ---------------- ---------------- ------------
Total comprehensive
income for the period 1,278 1,391 2,534
---------------------------- ---- ---------------- ---------------- ------------
Transactions with owners
of the Company, recognised
in equity:
---------------------------- ---- ---------------- ---------------- ------------
Dividends paid 5 (904) (838) (1,217)
---------------------------- ---- ---------------- ---------------- ------------
Issue of share capital 46 11 82
---------------------------- ---- ---------------- ---------------- ------------
Share-based payments 60 73 139
---------------------------- ---- ---------------- ---------------- ------------
Balance at end of period 21,471 20,090 20,991
---------------------------- ---- ---------------- ---------------- ------------
Condensed Consolidated Balance Sheets
31(st) December 2015
31(st) December 31(st) December
2015 2014 30(th) June 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------ --------------- --------------- ----------------
Non-current assets
------------------------------ --------------- --------------- ----------------
Goodwill 12,711 12,711 12,711
------------------------------ --------------- --------------- ----------------
Other intangible assets 2,257 1,395 1,780
------------------------------ --------------- --------------- ----------------
Property, plant and equipment 271 330 306
------------------------------ --------------- --------------- ----------------
15,239 14,436 14,797
------------------------------ --------------- --------------- ----------------
Current assets
------------------------------ --------------- --------------- ----------------
Inventories 1,700 1,938 1,653
------------------------------ --------------- --------------- ----------------
Trade and other receivables 1,909 2,165 2,247
------------------------------ --------------- --------------- ----------------
Cash and cash equivalents 6,098 5,037 5,777
------------------------------ --------------- --------------- ----------------
9,707 9,140 9,677
------------------------------ --------------- --------------- ----------------
Total assets 24,946 23,576 24,474
------------------------------ --------------- --------------- ----------------
Current liabilities
------------------------------ --------------- --------------- ----------------
Trade and other payables (2,090) (1,976) (2,186)
------------------------------ --------------- --------------- ----------------
Current tax liabilities (301) (481) (212)
------------------------------ --------------- --------------- ----------------
Deferred income (233) (242) (234)
------------------------------ --------------- --------------- ----------------
(2,624) (2,699) (2,632)
------------------------------ --------------- --------------- ----------------
Net current assets 7,057 6,441 7,045
------------------------------ --------------- --------------- ----------------
Non-current liabilities
------------------------------ --------------- --------------- ----------------
Deferred income (724) (703) (724)
------------------------------ --------------- --------------- ----------------
Deferred tax liabilities (127) (84) (127)
------------------------------ --------------- --------------- ----------------
(851) (787) (851)
------------------------------ --------------- --------------- ----------------
Total liabilities (3,475) (3,486) (3,483)
------------------------------ --------------- --------------- ----------------
Net assets 21,471 20,090 20,991
------------------------------ --------------- --------------- ----------------
Capital and reserves
------------------------------ --------------- --------------- ----------------
Called up share capital 4,211 4,194 4,204
------------------------------ --------------- --------------- ----------------
Share premium account 6,500 6,400 6,461
------------------------------ --------------- --------------- ----------------
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February 10, 2016 02:00 ET (07:00 GMT)
Retained earnings 10,760 9,496 10,326
------------------------------ --------------- --------------- ----------------
Equity attributable to
equity holders of the parent 21,471 20,090 20,991
------------------------------ --------------- --------------- ----------------
Cash Flow Statements
Six months ended 31(st) December 2015
6 months ended 6 months ended Year ended
31(st) December 31(st) December 30(th) June
2015 Unaudited 2014 Unaudited 2015 Audited
GBP'000 GBP'000 GBP'000
----------------------------------- ---------------- ---------------- -------------
Comprehensive income for
the period before tax 1,528 1,755 3,010
----------------------------------- ---------------- ---------------- -------------
Adjustments for:
----------------------------------- ---------------- ---------------- -------------
Depreciation of property,
plant and equipment 61 55 73
----------------------------------- ---------------- ---------------- -------------
Amortisation of intangible
assets 129 141 359
----------------------------------- ---------------- ---------------- -------------
Finance income (13) (13) (27)
----------------------------------- ---------------- ---------------- -------------
Share-based payment award 60 73 139
----------------------------------- ---------------- ---------------- -------------
Release of deferred income - (26) (14)
----------------------------------- ---------------- ---------------- -------------
Operating cash flows before
movements in working capital 1,765 1,985 3,540
----------------------------------- ---------------- ---------------- -------------
(Increase)/decrease in inventories (47) 482 767
----------------------------------- ---------------- ---------------- -------------
Decrease/(increase) in receivables 337 (282) (392)
----------------------------------- ---------------- ---------------- -------------
Increase/(decrease) in payables (96) 368 608
----------------------------------- ---------------- ---------------- -------------
Cash generated by operations 1,959 2,553 4,523
----------------------------------- ---------------- ---------------- -------------
Income taxes paid (161) (293) (631)
----------------------------------- ---------------- ---------------- -------------
Net cash flow from operating
activities 1,798 2,260 3,892
----------------------------------- ---------------- ---------------- -------------
Investing activities:
----------------------------------- ---------------- ---------------- -------------
Payments to acquire intangible
assets (598) (195) (812)
----------------------------------- ---------------- ---------------- -------------
Payments to acquire property,
plant and equipment (34) (26) (7)
----------------------------------- ---------------- ---------------- -------------
Interest received 13 13 27
----------------------------------- ---------------- ---------------- -------------
Net cash used in investing
activities (619) (208) (792)
----------------------------------- ---------------- ---------------- -------------
Financing:
----------------------------------- ---------------- ---------------- -------------
Receipts from issue of share
capital 46 11 82
----------------------------------- ---------------- ---------------- -------------
Equity dividends paid (904) (838) (1,217)
----------------------------------- ---------------- ---------------- -------------
Net cash used in financing
activities (858) (827) (1,135)
----------------------------------- ---------------- ---------------- -------------
Net increase in cash and
cash equivalents 321 1,225 1,965
----------------------------------- ---------------- ---------------- -------------
Cash and cash equivalents
at start of period 5,777 3,812 3,812
----------------------------------- ---------------- ---------------- -------------
Cash and cash equivalents
at end of period 6,098 5,037 5,777
----------------------------------- ---------------- ---------------- -------------
Comprising:
----------------------------------- ---------------- ---------------- -------------
Cash and cash equivalents 6,098 5,037 5,777
----------------------------------- ---------------- ---------------- -------------
Condensed Notes to the Financial Statements
31(st) December 2015
1. GENERAL INFORMATION
Animalcare Group plc ("the Company") is a company incorporated
in England and Wales under the Companies Act 2006 and is domiciled
in the United Kingdom. The condensed set of financial statements as
at, and for, the six months ended 31(st) December 2015 comprises
the Company and its subsidiary, Animalcare Ltd (together referred
to as the "Group"). The nature of the Group's operations and its
principal activities are set out in the latest Annual Report.
This Interim Report does not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006. The information
contained herein has not been reviewed by the Group's auditor.
The prior year comparatives are derived from the audited
financial information as set out in the Group's Annual Report for
the year ended 30(th) June 2015 and the unaudited financial
information in the Group's Interim Report for the six months ended
31(st) December 2014. The comparative figures for the financial
year ended 30(th) June 2015 are not the Group's statutory accounts.
Those accounts have been reported on by the Group's auditor and
delivered to the Registrar of Companies. The report of the auditor
was (i) unqualified, (ii) did not include any reference to matters
to which the auditors drew attention without qualifying their
report and (iii) did not contain a statement under section 498(2)
or (3) of the Companies Act 2006.
The Interim Report for the six months ended 31(st) December 2015
was approved by the Board of Directors and authorised for issue on
10(th) February 2016.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation and accounting policies
Except as described below, the condensed consolidated interim
financial information for the six months ended 31(st) December 2015
has been prepared using accounting policies consistent with those
of the Company's annual accounts for the year ended 30(th) June
2015, which were prepared in accordance with IFRSs as adopted by
the European Union.
Taxes on income in the interim periods are accrued using the
estimated tax rate that would be applicable for the full financial
year.
The following new standards and interpretations are mandatory
for the first time for the financial period beginning 1(st) July
2015:
Annual Improvements to IFRSs 2010-2012 Cycle
Annual Improvements to IFRSs 2011-2013 Cycle
Adoption where applicable has not had a material effect on the
Group's financial information.
Going concern
The principal risks and uncertainties facing the Group remain
those set out in the latest Annual Report.
For the purposes of their assessment of the appropriateness of
the preparation of the interim financial information on a going
concern basis, the Directors have considered the current cash
position and forecasts of future trading including working capital
and investment requirements.
During the period the Group met its day-to-day general corporate
and working capital requirements through existing cash resources.
At 31(st) December 2015 the Group had cash on hand of GBP6.1
million (30(th) June 2015: GBP5.8 million).
The Group's forecasts and projections, taking account of
reasonable possible changes in trading performance, show that the
Group should have sufficient cash resources to meet its
requirements for at least the next 12 months. Accordingly, the
adoption of the going concern basis in preparing the interim
financial information remains appropriate.
3. EXCEPTIONAL AND OTHER ITEMS
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