TIDMAKT
RNS Number : 9686N
Ark Therapeutics Group PLC
01 August 2014
Ark Therapeutics Group plc
Interim Results for the First Half of 2014 and Change of
Registered Office
London, UK, 1 August 2014 - Ark Therapeutics Group plc ("Ark" or
the "Company") today announces its interim results for the six
months ended 30 June 2014.
The Company also announces that it has changed its registered
office to 11 Staple Inn, London WC1V 7QH with immediate effect.
For further information please contact:
Ark Therapeutics Group plc Tel: +44 (0)203 755 5160
Iain G Ross, Non-Executive Chairman
David Venables, Non-Executive
Director
INTERIM MANAGEMENT REPORT
To the members of Ark Therapeutics Group plc
Cautionary statement
This Interim Management Report ("IMR") has been prepared to
provide additional information to shareholders to assess the
Company's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
The IMR contains certain forward-looking statements. These
statements are made by the Directors in good faith based on the
information available to them up to the time of their approval of
this report, but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying such forward-looking information.
Business overview
Following the disposal of its trading subsidiaries on 15 March
2013 (the "Disposal") the Company had received approaches from a
number of third parties interested in possible transactions with
the Company. Each of these discussions involved a considerable
amount of analysis and consideration by the Board and its advisers.
As a result, on 28 March 2014 the Company announced that it had
signed heads of terms in connection with the possible acquisition
of a revenue-generating and profitable UK-based private company in
the healthcare support services sector ("Target").
The transaction would be structured by way of an acquisition of
the Target by Ark in consideration for the issue of new Ark shares
to the shareholders of the Target. Due to its size in relation to
Ark, the proposed acquisition of the Target would constitute a
'reverse takeover' for the purposes of the Listing Rules.
In response to a request by the Company, the UK Listing
Authority suspended the listing of Ark's Premium listed shares on
the Main Market of the London Stock Exchange on 28 March 2014
pending publication of the required shareholder documents.
Shareholder approval would be required to approve the acquisition
of the Target which would be sought at a general meeting to be
convened in due course, after which the Company would also expect
to seek a lifting of the trading suspension.
Board and Management
Post-period on 1 July 2014 the Company announced the retirement
of Charles Spicer as a Non-Executive Director with effect from its
annual general meeting held on 30 June 2014. The Board of Ark once
again offers its thanks to Mr Spicer for the contribution he made
to the Company and wishes him success in his other continuing
business interests. At the same time, the Company was also pleased
to announce the appointment of Sue Steven as a Non-Executive
Director of the Company with effect from 30 June 2014. Mrs Steven
has worked with Ark for over 10 years, having been an employee of
the Company prior to the Disposal, and consequently has an in-depth
knowledge of the Company. Mrs Steven also acts as Ark's Company
Secretary alongside her directorship.
Financial and non-financial key performance indicators
("KPIs")
As set out in our most recent annual report, the Board considers
cash to be the Company's sole financial KPI. Following the
Disposal, the Company has no non-financial key performance
indicators.
Financial Review
The Company's loss after tax for the six months ended 30 June
2014 was GBP0.5m (six months ended 30 June 2013: a profit after tax
of GBP1.4m and for the year ended 31 December 2013: a profit of
GBP1.1m). The loss during the period under review largely related
to the costs incurred as a result of the progression of the
proposed reverse takeover.
Other administrative expenses for the period totalled GBP0.5m
(six months ended 30 June 2013: GBP0.9m and GBP1.0m for year ended
31 December 2013).
The share-based compensation charge for the period was GBP0.03m
(six months ended 30 June 2013: GBP0.04m and GBP0.06m for the year
ended 31 December 2013).
Net assets were GBP0.5m at 30 June 2014 (at 30 June 2013:
GBP1.2m and GBP0.9m at 31 December 2013).
Cash and short-term deposits were GBP0.7m as at 30 June 2014 (at
30 June 2013: GBP0.8m and GBP0.8m at 31 December 2013).
Net cash outflow from operating activities for the period was
GBP0.1m (six months ended 30 June 2013: GBP1.4m and year ended 31
December 2013: GBP1.6m). Net cash inflow from investing activities
was GBPnil (six months ended 30 June 2013: GBP0.5m and year ended
31 December 2013: GBP0.7m).
The financial statements do not include any provision for the
future cost of terminating the business of the Company except to
the extent that such costs were committed at the balance sheet
date. No material adjustments arose as a result of ceasing to apply
the going concern basis.
Post-retirement benefits
Prior to the Disposal the Company made contributions to
employees' personal pension plans which were defined contribution
schemes. The amount charged to the income statement in respect of
pension costs is the contribution payable in the year ended 31
December 2013. Differences between contributions payable in the
year and contributions actually paid are shown either as accruals
or prepayments in the balance sheet
Events after balance sheet date
There have been no events after the balance sheet date which
require adjustment or disclosure in these interim financial
statements.
Related party transactions
There have been no material changes in the related party
transactions described in the last annual report.
Risks and uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on the Company's performance over the
remaining six months of the financial year and could cause actual
results to differ materially from expected and historical results.
The Directors do not consider that the principal risks and
uncertainties have changed since the publication of the annual
report for the year ended 31 December 2013. A detailed explanation
of the risks summarised below, and how the Company seeks to
mitigate the risks, may be found on page 4 of the annual report
which is available at www.arktherapeutics.com.
Prior to the Disposal, the principal risks and uncertainties
facing the Company and its trading subsidiaries related to
industry, clinical, regulatory, competition, intellectual property,
economic and counterparty factors associated with the provision of
contract development and manufacturing services to the
pharmaceutical and biotech industry, and the generation of
additional funding to take the Company through to
profitability.
The principal risks currently facing the Company concern:
-- capital and liquidity management; and
-- the non-completion of the proposed reverse takeover as this
would impact on the Company's ability to continue in operational
existence.
In the event that the proposed reverse takeover cannot for any
reason be put to shareholders, or shareholders reject the proposed
transaction, the Board intends to return the remaining funds to
shareholders through a solvent liquidation process as soon as
practicable.
The Company's risk management objectives and exposure to various
risks are as above and detailed in note 16 of the annual
report.
Going concern
Following the Disposal the Company ceased its principal
activity. Ark Therapeutics Group plc will continue in operational
existence for the foreseeable future for the purpose of entering
into a reverse transaction or, if that transaction were to be
unsuccessful, to distribute funds back to shareholders. As required
by IAS 1 Presentation of Financial Statements, the Directors have
prepared the financial statements on a basis other than that of a
going concern given that its principal activity has ceased. The
financial statements do not include any provision for the future
cost of terminating the business of the Company except to the
extent that such were committed at the balance sheet date. No
material adjustments arose as a result of ceasing to apply the
going concern basis.
Future outlook
As stated in the RNS announcement issued on 1 July 2014, we can
confirm that all matters in connection with the proposed reverse
takeover are progressing well and the Board will send further
information to shareholders in due course.
Registered office Registered number
11 Staple Inn 04313987
London
WC1V 7QH
By order of the Board
Iain Ross Dr David Venables
Non-Executive Chairman Non-Executive Director
31 July 2014 31 July 2014
Responsibility statement
We confirm to the best of our knowledge:
(a) the set financial statements has been prepared in accordance
with IAS 34 "Interim Financial Reporting";
(b) 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 description of principal risks and
uncertainties for the remaining six months of the year); and
(c) 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).
A list of current Directors is maintained on the Company's
website: www.arktherapeutics.com.
By order of the Board
Iain Ross Dr David Venables
Non-Executive Chairman Non-Executive Director
31 July 2014 31 July 2014
Condensed income statement
For the six months ended 30 June 2014 (unaudited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Note GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Selling, marketing and distribution
costs - (2) -
--------------------------------------- ------- ------------- ------------- -------------
Other administrative expenses (454) (859) (1,031)
Share-based compensation
charge (29) (38) (64)
------------------------------------------------ ------------- ------------- -------------
Administrative expenses (483) (897) (1,095)
------------------------------------------------ ------------- ------------- -------------
Profit on disposal of subsidiaries - 1,146 -
Other income - 1,149 -
--------------------------------------- ------- ------------- ------------- -------------
Operating (loss)/profit (483) 1,396 (1,095)
Investment income 1 1 3
------------------------------------------------ ------------- ------------- -------------
(Loss)/profit on ordinary
activities before taxation (482) 1,397 (1,092)
Taxation - - -
--------------------------------------- ------- ------------- ------------- -------------
(Loss)/profit on ordinary
activities after taxation (482) 1,397 (1,092)
------------------------------------------------ ------------- ------------- -------------
Discontinued operations
Profit from discontinued
operations after taxation - - 2,193
------------------------------------------------ ------------- ------------- -------------
(Loss)/profit on ordinary
activities after taxation,
being retained (loss)/profit
for the year and total comprehensive
(expense)/income (482) 1,397 1,101
------------------------------------------------ ------------- ------------- -------------
(Loss)/profit per share
(basic and diluted)
Basic 4 (0.2 pence) 0.7 pence 0.5 pence
Diluted (0.2 pence) 0.6 pence 0.5 pence
All results for the six months ended 30 June 2014 relate wholly
to continuing activities.
Condensed balance sheet
As at 30 June 2014 (unaudited)
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Current assets
Trade and other receivables 90 518 225
Cash and cash equivalents 660 790 758
------------------------------ ------------- ------------- ------------
750 1,308 983
------------------------------ ------------- ------------- ------------
TOTAL ASSETS 750 1,308 983
------------------------------ ------------- ------------- ------------
Current liabilities
Trade creditors and accruals 284 119 64
TOTAL LIABILITIES 284 119 64
------------------------------ ------------- ------------- ------------
Equity
Share capital 2,092 2,092 2,092
Share premium 118,937 118,937 118,937
Merger reserve 1,521 1,521 1,521
Share-based compensation 494 439 465
Retained loss (122,578) (121,800) (122,096)
------------------------------ ------------- ------------- ------------
TOTAL EQUITY 466 1,189 919
------------------------------ ------------- ------------- ------------
TOTAL LIABILITIES AND
EQUITY 750 1,308 983
------------------------------ ------------- ------------- ------------
Condensed statement of changes in equity
For the six months ended 30 June 2014 (unaudited)
Share Share Merger Share-based Retained Total
capital premium reserve compensation loss
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31
December 2012 2,092 118,937 1,521 401 (123,197) (246)
Total comprehensive
income for the period - - - - 1,397 1,397
Share-based compensation - - - 38 - 38
Balance as at 30
June 2013 2,092 118,937 1,521 439 (121,800) 1,189
Total comprehensive
income for the period - - - 26 - 26
Share-based compensation - - - - (296) (296)
Balance as at 31
December 2013 2,092 118,937 1,521 465 (122,096) 919
Total comprehensive
income for the period - - - - (482) (482)
Share-based compensation - - - 29 - 29
Balance as at 30
June 2014 2,092 118,937 1,521 494 (122,578) 466
-------------------------- --------- --------- --------- -------------- ---------- ---------
Condensed cash flow statement
For the six months ended 30 June 2014 (unaudited)
Six months Year ended
Six months ended
ended 30 June 31 December
30 June 2013 2013
2014 GBP'000 GBP'000
GBP'000 (unaudited)
(unaudited) (audited)
Operating loss (483) 1,397 (1,095)
Adjustment for non-cash items
Share-based compensation 29 38 64
Loan forgiveness - (882) -
Gain on disposal of subsidiaries - (1,146) -
Changes in working capital
Decrease/(increase) in receivables 135 (469) (176)
Increase/(decrease) in payables 220 (329) (383)
------------------------------------------- ------------- ------------- -------------
Net cash used in operating activities (99) (1,391) (1,590)
------------------------------------------- ------------- ------------- -------------
Investing activities
Interest received 1 1 3
Proceeds on sale of subsidiaries
(net of disposal costs) - 1,335 1,385
Funding of subsidiary companies - (810) (695)
Net cash generated from investing
activities 1 526 693
------------------------------------------- ------------- ------------- -------------
Net decrease in cash and cash equivalents (98) (865) (897)
Cash and cash equivalents at beginning
of period 758 1,655 1,655
------------------------------------------- ------------- ------------- -------------
Cash and cash equivalents at end
of period 660 790 758
------------------------------------------- ------------- ------------- -------------
Notes to the financial information
1 General information
This interim financial information was authorised for issue on
31 July 2014. The information for the year ended 31 December 2013
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. A copy of the statutory accounts for the
year ended 31 December 2013 has been delivered to the Registrar of
Companies. Although the Auditor's report on those accounts was not
qualified, it drew attention to a matter by way of emphasis
relating to the preparation of those financial statements other
than on a going concern basis and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
A copy of the interim results for the six months ended 30 June
2014 can be found on the Company's website at
www.arktherapeutics.com.
2 Basis of preparation
The annual financial statements of Ark Therapeutics Group plc
were prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The condensed
set of financial statements included in this half-yearly report has
been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting', as adopted by the European
Union.
Following the Disposal the Company ceased its principal
activity. Ark Therapeutics Group plc will continue in operational
existence for the foreseeable future for the purpose of entering
into a reverse transaction or, if that transaction were to be
unsuccessful, to distribute funds back to shareholders. As required
by IAS 1 Presentation of Financial Statements, the Directors have
prepared the financial statements on a basis other than that of a
going concern given that its principal activity has ceased. The
financial statements do not include any provision for the future
cost of terminating the business of the Company except to the
extent that such were committed at the balance sheet date. No
material adjustments arose as a result of ceasing to apply the
going concern basis.
At 30 June 2014, the Company had net assets of GBP0.5m (31
December 2013: GBP0.9m) and cash and cash equivalents of GBP0.7m
(31 December 2013: GBP0.8m).
The same accounting policies, presentation and methods of
computation have been followed in the condensed set of financial
statements as applied in the Company's latest annual audited
financial statements for the year ended 31 December 2013. Seasonal
changes to the Company's operations are not material.
3 Subsidiaries
The Company controls the operations of the Ark Therapeutics
Family Benefit Trust ("FBT") and, therefore, it has been accounted
for as if it were a subsidiary.
4 (Loss)/profit per share
International Accounting Standards require presentation of
diluted earnings per share when a company could be called upon to
issue shares that would decrease net profit or increase net loss
per share.
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings Six months Year ended
Six months ended
ended 30 June 31 December
30 June 2013 2013
2014 GBP'000 GBP'000
GBP'000 (unaudited) (audited)
(unaudited)
Earnings for the basis
of basic and diluted earnings
per share (482) 1,397 1,101
-------------------------------- -------------- -------------- --------------
Number of shares
Weighted average number
of ordinary shares of
the purposes of basic
earnings per share 209,276,676 209,276,676 209,276,676
Effect of dilutive potential
ordinary shares from share
options - 11,874,572 11,099,999
-------------------------------- -------------- -------------- --------------
Weighted average number
of ordinary shares for
the purposes of diluted
earnings per share 209,276,676 221,151,248 220,376,675
-------------------------------- -------------- -------------- --------------
5 Related party transactions
The Company provided loans to the Ark Therapeutics Family
Benefit Trust ("FBT") for the purchase of shares in the Company. No
interest was charged on these loans. Details of interest income for
the year and outstanding balances at year end are shown below:
Interest income for the Amounts due from subsidiaries
period (before doubtful debts provision)
---------------------------------------
Six months Six months Year 30 June 30 June 31 December
ended ended ended 2014 2013 2013
30 June 30 June 31 December GBP'000 GBP'000 GBP'000
2014 2013 2013
GBP'000 GBP'000 GBP'000
FBT - - - 1,049 1,049 1,049
----- ---------- ---------- ------------ ----------- ---------- --------------
The following transactions with Company Directors took place
during the period at arm's length:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Consultancy fees earned in
period
Iain Ross 46 - 62
Dr David Venables 14 - 29
S Ylä-Herttuala - 13 -
----------------------------- ----------- ----------- -------------
60 13 91
----------------------------- ----------- ----------- -------------
Consultancy fees owed as at
period end
Iain Ross 8 - 11
Dr David Venables - - 4
S Ylä-Herttuala - - -
----------------------------- ----------- ----------- -------------
8 - 15
----------------------------- ----------- ----------- -------------
6 Commitments and liabilities
On 28 March 2014 the Company announced that it had signed heads
of terms in connection with the possible acquisition of a
revenue-generating and profitable UK-based private company. On
completion of the transaction the Company expects to pay additional
professional fees of GBP123,000 in relation to work expected to be
completed post period end.
Independent review report to Ark Therapeutics Group plc
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2014 which comprises the condensed income
statement, the condensed statement of changes in equity, the
condensed balance sheet, the condensed cash flow statement and
related notes 1 to 6. We have read the other information contained
in the half-yearly financial report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Company are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Emphasis of matter - interim financial statements prepared other
than on a going concern basis
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the financial statements, which explains that the
financial statements have been prepared on a basis other than that
of a going concern.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2014 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Cambridge, United Kingdom
31 July 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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