TIDMAOR
RNS Number : 0839O
AorTech International PLC
16 August 2017
AorTech International plc
("AorTech", "the Company" or "the Group")
Audited results for the year ended 31 March 2017
AorTech International plc (AIM: AOR), the biomaterials and
medical device IP company, today announces its results for the year
ended 31 March 2017.
Financial summary
-- Trading Profit Achieved: Adding back amortisation of
goodwill, an operating profit of $55k was achieved compared to a
loss of $263k in the previous year.
-- Loss for year down 65%: Loss from continuing operations reduced from $604k to $237k.
-- Costs Reduced: Administrative expenses before exceptional
items and bad debt provisions reduced from US$715k in previous year
to US$523k in 2017.
-- High quality of Revenues: Despite a reduction in income, the
revenues recognised in the current year are recurring and supported
by contracts.
For further information contact:
AorTech International plc
Bill Brown, Chairman & Chief Executive Tel: +44 (0)7730
718296
finnCap Limited
Giles Rolls / Jonny Franklin-Adams Tel: +44 20 7220 0500
A copy of this announcement will be available at
www.aortech.net/investor-relations/rns-and-insider-information/.
The content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement.
About AorTech:
AorTech has developed biostable, implantable polymers, including
Elast-Eon(TM) and ECSil(TM) the world's leading long-term
implantable co-polymers, now manufactured on their behalf by
Biomerics LLC in Utah, USA. With several million implants and seven
years of successful clinical use, AorTech polymers are being
developed and used in cardiology and urological applications,
including pacing leads, cardiac cannulae, stents and neuro
stimulation devices. Devices manufactured from AorTech polymers
have numerous US FDA PMA approvals, 510k's, CE Marks, Australian
TGA and Japanese Ministry of Health approvals.
Elast-Eon(TM) and ECSil(TM)'s biostability is comparable to
silicone while exhibiting excellent mechanical, blood contacting
and flex-fatigue properties. These polymers can be processed using
conventional thermoplastic extrusion and moulding techniques. A
range of materials in a variety of application-specific
formulations for use in medical devices and components are
available.
CHAIRMAN'S STATEMENT
In the year to 31 March 2017, AorTech's revenues were reduced to
$614,000 (2016: $901,000) over the full year; however the second
half year witnessed sales which were approximately 50% higher than
those achieved at the interim stage. AorTech generated a profit of
$55,000 before the amortisation of intangible assets (2016: loss of
$263,000). After amortisation of intangible assets (depreciation of
Intellectual Property) of $292,000, the Company incurred an
operating loss of $237,000 - less than half that incurred during
the previous year (2016: $575,000). The Board continued to maintain
a close control over costs with administration expenses for the
year being less than half those incurred during the previous year,
although the change in the Sterling/US Dollar exchange rate
contributed to that reduction.
The net current assets (total current assets less total current
liabilities) remained relatively stable at $404,000 compared to
$392,000 last year. Within this figure however there was a fall of
$200,000 in the cash position which stood at $114,000 at the year
end. The fall in cash was mostly offset by an increase in
receivables and as expected, the cash position has increased since
the year end.
Licensees
Over the years, AorTech has signed a number of licences to allow
AorTech polymer intellectual property to be incorporated into
medical devices. A number of devices are marketed which utilise the
benefits of Elast-Eon(TM) polymers; these include cardiac rhythm
management pacing leads, coronary artery stents, neuro stimulation
devices, catheters and urology stents. In all applications, the
material is performing well and delivering the bio-stability of
silicone together with the mechanical properties of urethane. Our
manufacturing licensee, Biomerics concluded a licence for
Elast-Eon(TM) earlier this year together with a long term supply
agreement. There are currently a number of companies evaluating
Elast-Eon(TM) which if succesful may lead to other licences.
Biomerics adopts a different approach to licensing to that which
AorTech has historically pursued. AorTech signed a number of
licences with very small/development companies long before products
were ready for market launch. As a result, other than annual
maintenance fees, the revenues from those licences depended upon
future product launches. By contrast, Biomerics is focussed on
volume supply and near term success.
Some historic licences signed by the Company have not generated
value for AorTech and have only resulted in the Elast-Eon(TM)
material not being exploited in the field of the licence. An
example of this was the licence for breast implants signed in 2011.
Since that time, AorTech's technology has not been incorporated
into any new device nor generated any revenue for AorTech despite
maintaining an IP portfolio in this arena. Your Board still
believes there to be substantial benefits in utilising
Elast-Eon(TM) technology in cosmetic and reconstructive surgery and
as a result recently terminated this licence in order to pursue
other opportunities in the field.
In a similar manner, we have sought to withdraw from
non-performing licences. We recently served notice of termination
on CardioSolutions, Inc which had licenced polymer for use in heart
valve repair, as two annual minimum payments had been missed.
Ongoing Litigation
As shareholders are aware, AorTech has been embroiled in
long-running litigation against its former CEO and related parties.
The Court recently heard four motions for partial summary
judgement. One of these motions was brought by AorTech against Mr
Frank Maguire seeking judgement on Mr Maguire's breach of his
service agreement. The other three motions for partial summary
judgement were brought by defendants after the AorTech motion was
briefed. These motions included a cross motion seeking denial of
AorTech's motion on Mr Maguire's breach of contract; a motion
seeking summary judgement on an alleged breach by AorTech of a
consulting agreement with Mr Maguire, and a motion seeking summary
judgement on alleged non-payment of travel expenses incurred by Mr
Maguire a number of years prior to his resignation. At the time of
writing, the Court has still to issue its rulings on these motions
together with two other motions for partial summary judgement heard
nearly two years ago.
A significant amount of work has been undertaken, yet due to the
confidentiality of the process and the materials shared with the
Court, very little detail can be reported to shareholders.
AorTech remains confident in its position and is committed to
pursuing justice on behalf of shareholders.
Board Changes
Mr Eddie McDaid retired as Chief Executive Officer and a
Director last October. Your Board wishes to express its gratitude
to Mr McDaid for his dedication and hard work and to wish him a
long and happy retirement.
The vacancy on the Board created by Eddie's retirement was
filled by the appointment of John McKenna as a Non-executive
Director.
Conclusion
Despite the fall in revenue over the year, the overall quality
and maintainability of sales is much better year on year. A new
revenue-generating licence has been signed and enquiries have
increased markedly. We have taken back control of our breast
implant IP and are actively pursuing opportunities to exploit this
alongside our other intellectual property, including heart valves
and polymers.
W Brown
Chairman and Chief Executive Officer
15 August 2017
Consolidated income statement
Year ended 31 March Year ended 31 March
2017 2016
Pre-exceptional Pre-exceptional
items Exceptional items Exceptional
items Total items Total
Notes US$000 US$000 US$000 US$000 US$000 US$000
Revenue 3 614 - 614 751 - 751
Other income - - - 150 - 150
Administrative
expenses (571) 12 (559) (1,084) (80) (1,164)
Other expenses
- amortisation
of intangible
assets 11 (292) - (292) (312) - (312)
--------------
Operating loss 3 (249) 12 (237) (495) (80) (575)
Finance (expense)
/ income 8 - - - - (29) (29)
---------------- -------------- --------- ---------------- -------------- ----------
Loss from
continuing
operations
attributable
to owners of
the parent
company 5 (249) 12 (237) (495) (109) (604)
Loss attributable
to owners of
the parent
company (249) 12 (237) (495) (109) (604)
Loss per share
Basic and diluted
(US cents per
share) 10 (4.27) (12.00)
Consolidated statement of comprehensive income
Year
ended Year
31 ended
March 31 March
2017 2016
US$000 US$000
Loss for the year (237) (604)
Other comprehensive income:
I Items that will not be reclassified
subsequently to profit and loss
Exchange differences (2,329) (586)
Items that will be reclassified
subsequently to profit and loss
Exchange differences 2,125 551
-------- ----------
Other comprehensive income for
the year, net of tax (204) (35)
-------- ----------
Total comprehensive income for
the year, attributable
to owners of the parent company (441) (639)
Consolidated balance sheet
31 March 31 March
2017 2016
US$000 US$000
Notes
Assets
Non current assets
Intangible assets 11 914 1,367
Total non current assets 914 1,367
---------- ---------------------
Current assets
Trade and other receivables 13 392 243
Cash and cash equivalents 14 114 314
Total current assets 506 557
---------- ---------------------
Total assets 1,420 1,924
---------- ---------------------
Liabilities
Current liabilities
Trade and other payables 15 (102) (165)
Total current liabilities (102) (165)
---------- ---------------------
Total liabilities (102) (165)
Net assets 1,318 1,759
========== =====================
Equity
Issued capital 17 15,189 17,426
Share premium 17 3,133 3,595
Other reserve (2,511) (2,881)
Foreign exchange reserve 8,752 6,627
Profit and loss account (23,245) (23,008)
Total equity attributable
to equity holders of the
parent 1,318 1,759
========== =====================
The Consolidated financial statements were approved by the Board
on 15 August 2017 and were signed on its behalf by W Brown,
Chairman and CEO, and G Wright, Director
Company number SC170071
Consolidated cash flow statement
Year
ended Year ended
31 March 31 March
2017 2016
US$000 US$000
Cash flows from operating activities
Group loss after tax (237) (604)
Adjustments for:
Amortisation of intangible assets 292 312
Finance expense / (income) - 29
(Increase) / decrease in trade
and other receivables (149) 494
Decrease in trade and other
payables (106) (109)
----------- -----------------------
Net cash flow from continuing
operations (200) 122
Net cash flow from operating
activities (200) 122
Cash flows from investing activities
Purchase of intangible assets - (168)
----------- -----------------------
Net cash flow from continuing
operations - (168)
Net cash flow from investing
activities - (168)
----------- -----------------------
Net cash flow from financing
activities - -
----------- -----------------------
Net decrease in cash and cash
equivalents (200) (46)
Cash and cash equivalents at
beginning of year 314 360
Cash and cash equivalents at
end of year 114 314
=========== =======================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The Consolidated financial statements are for the year ended 31
March 2017. They have been prepared in compliance with
International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRIC) interpretations as adopted by the
European Union as at 31 March 2017.
The Consolidated financial statements have been prepared under
the historical cost convention.
The accounting policies remain unchanged from the previous
year.
2. Going concern
After considering the year end cash position, making appropriate
enquiries and reviewing budgets and profit and cash flow forecasts
to 31 March 2023, the Directors have formed a judgement at the time
of approving the financial statements that there is a reasonable
expectation that the Group has sufficient resources to continue in
operational existence for the foreseeable future. For this reason
the Directors consider the adoption of the going concern basis in
preparing the Consolidated financial statements is appropriate.
3. Preliminary announcement
The summary accounts set out above do not constitute statutory
accounts as defined by Section 434 of the UK Companies Act 2006.
The summarised consolidated balance sheet at 31 March 2017, the
summarised consolidated income statement, the summarised
consolidated statement of comprehensive income, the summarised
consolidated statement of changes in equity and the summarised
consolidated cash flow statement for the year then ended have been
extracted from the Group's statutory financial statements for the
year ended 31 March 2017 upon which the auditor's opinion is
unqualified and did not contain a statement under either sections
498(2) or 498(3) of the Companies Act 2006. The audit report for
the year ended 31 March 2016 did not contain statements under
Section 498(2) or Section 498(3) of the Companies Act 2006. The
statutory financial statements for the year ended 31 March 2016
have been delivered to the Registrar of Companies. The 31 March
2017 accounts were approved by the Directors on 15 August 2017, but
have not yet been delivered to the Registrar of Companies.
4. Earnings per share
The basic loss per ordinary share of 4.27 US cents (2016: loss
of 12.00 US cents) is calculated on the loss of the Group of
US$237,000 (2016: loss of US$604,000) and on 5,557,695 (2016:
5,032,823) equity shares, being the weighted average number of
shares in issue during the year.
The diluted loss per share does not differ from the basic loss
per share as the exercise of share options would have the effect of
reducing the loss per share and is therefore not dilutive under the
terms of IAS 33.
5. Current operations
On 1 October 2013, the Group signed an agreement with Biomerics
LLC for the manufacture and distribution of our patented materials,
including to our existing licensees. In the opinion of the
Directors, the Biomerics transaction transformed the Group into a
pure intellectual property company.
Notice of Annual General Meeting
Notice of the twentieth Annual General Meeting of AorTech
International Plc will be posted with the Annual
Report and Accounts and will be held in the offices of Kergan
Stewart LLP, 163 Bath Street, Glasgow G2 4SQ
on Wednesday, 27 September 2017 at 11:00am.
Posting and availability of accounts
The annual report and accounts for the year ended 31 March 2017
will be sent by post or electronically to all registered
shareholders on 1 September 2017. Additional copies will be
available for a month thereafter from the Company's Weybridge
office. Alternatively, the document may be viewed on, or downloaded
from, the Company's website: www.aortech.net.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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