TIDMEKF
RNS Number : 4911J
EKF Diagnostics Holdings PLC
12 September 2016
EKF Diagnostics Holdings plc
("EKF", the "Company" or the "Group")
Half-year Report
EKF Diagnostics Holdings plc (AIM: EKF), the AIM listed
point-of-care business, announces its unaudited interim results for
the six months ended 30 June 2016, ahead of market
expectations.
EKF has an installed base of over 90,000 analysers globally and
manufactures over 56 million tests annually.
Financial Highlights
-- Revenue up 18% to GBP17.51m (H1 2015 restated: GBP14.86m)
-- Gross profit up 10% to GBP8.42m (H1 2015 restated: GBP7.67m)
- Gross margins expected to improve in H2 2016
-- Adjusted EBITDA* up 57% to GBP2.02m (H1 2015 restated: GBP1.29m)
-- Cash generated from operations of GBP1.4m (H1 2015 restated: GBP2.1m cash used).
-- Cash at 30 June 2016 of GBP3.24m (30 June 2015: GBP2.08m),
Net debt of GBP4.3m (31 December 2015: net debt GBP8.8m) - with
placing completed in June to repay debt and free up banking
facilities
* Before exceptional items and share based payments
Operational Highlights
-- Organic growth delivered across all 3 Point-of-Care business units and Central Laboratory
-- Cost savings identified and implemented with benefits now beginning to pull through
-- Transfer of STI manufacturing to Stanbio now complete
-- Board restructuring to focus on profitability and organic sales growth
-- Senior management to be incentivised with performance related packages
-- 7,000 analysers and 35.3m tests sold worldwide during the first half of 2016
Commenting on outlook, Christopher Mills, Non-executive Chairman
of EKF, said: "By simplifying the business and providing a clear
focus for the management team to deliver a return to profitable and
cash generative growth, I believe we have established a solid
platform to support high quality sustainable growth. Whilst we
still have much to do and many of the benefits of our restructuring
programme are still to be fully felt by the Group, the early
indications from these first half results provides us with
confidence in hitting the higher end of our performance targets for
2016 and delivering further growth of the business in 2017."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014
EKF Diagnostics Holdings www.ekfdiagnostics.com
plc
Christopher Mills, Non-Executive Tel: 029 2071 0570
Chairman
Julian Baines, CEO
Richard Evans, FD & COO
Panmure Gordon (UK) Limited Tel: 020 7886 2500
Freddy Crossley (Corporate
Finance)
Peter Steel (Corporate Finance)
Walbrook PR Limited Tel: +44 (0) 20 7933 8780
or ekf@walbrookpr.com
Paul McManus Mob: +44 (0) 7980 541 893
Lianne Cawthorne Mob: +44 (0) 7584 391 303
CHAIRMAN'S STATEMENT
I am delighted to report that we have made excellent progress in
the first half of the year, delivering sales and adjusted EBITDA
ahead of our budgets and ahead of market expectations.
At the end of last year we simplified the business,
concentrating our efforts on our core capabilities and focussing on
delivering growth from our Point-of-Care and Central Laboratory
offerings. We re-established the Company on a more sustainable
level by significantly reducing our cost base through centralised
manufacturing and a reduced headcount and our focussed sales team
have worked to deliver organic sales growth across all of our
business units.
By simplifying the business and providing a clear focus for the
management team to deliver a return to profitable and cash
generative growth, I believe we have established a solid platform
to support high quality sustainable growth. Whilst we still have
much to do, and many of the benefits of our restructuring programme
are still to be fully felt by the Group, the early indications
shown in these first half results provides us with confidence in
hitting the higher end of our performance targets for 2016 and
further growth of the business in 2017.
Operational review
The Group's main Point-of-Care business performed well during
the first half. This business is divided into three business units,
reflecting the markets that our various products address, namely:
(1) Hematology, (2) Diabetes, (3) Maternal & Women's Health.
All three units delivered organic growth during the period and
across the Group we sold 7,000 analyser and 35.3m tests
worldwide.
Hematology
Sales from our Hematology business unit increased 21% to
GBP5.18m (H1 2015: GBP4.28m) with sales of our Hemo Control /
HemoPoint H2 up 35% year-on-year and sales of DiaSpect Tm up 31%.
Our local distributor in Turkey has been awarded a tender to supply
haematology instruments to the local Red Crescent, and we are also
benefiting from improved business in Peru and Myanmar, amongst
others.
Diabetes
Diabetes product sales also rose by 21% to GBP4.82m (H1 2015:
GBP3.98m) and in particular benefited from the shipping of 450
Quo-Test instruments and 581,000 cartridges to the Saudi Ministry
of Health under the tender awarded in 2015. We are confident of a
further award covering the period 2016 - 2017, although this will
be at a lower volume. As a result Quo-Test and Quo-Lab sales
increased by 72%. Whilst sales of our STAT-Site M B-HB increased by
68% sales of our Biosen range fell by 11%, although we do hope to
see a revival of Biosen sales in China following
re-registration.
Maternal & Women's Health
Revenues from our products that address aspects of maternal and
women's health increased by 14% to GBP1.39m (H1 2015: GBP1.22m)
driven by a ten-fold increase in Creamatocrit sales and a 19%
uplift in sales from our Lactate Scout+ product. Pregnancy tests
also saw an increase in sales of 7%. We continue to invest in
clinical trials in Bristol to obtain CE marking for our SensPoint
product.
Central Laboratory
Our final business unit, Central Laboratory, sells a range of
clinical chemistry, centrifuges and enzymes, and had a very good
six months, especially through the continued success of our B-HB
Liquicolor reagent, with sales improving by 24% to GBP5.67m (H1
2015: GBP4.61m). Sales of our B-HB rose sharply, up 72%, with a
small increase in sales of clinical chemistry and a similar level
of sales as last year for centrifuges and related consumables.
New product development
At the end of 2015 many of the R&D projects being run were
closed down or mothballed to conserve cash. With the Group's cash
position now easing, the Board are reconsidering these programmes
to provide short to medium term benefits to shareholders. We will
provide an update on these programmes including sTNFR, and
SensPoint in due course.
Restructuring update
The refocusing of the Group has involved a significant reduction
in costs, achieved mainly through reductions in headcount and
through the permanent closure or divestment of sites. In addition
to the restructuring work completed in 2015, the Group's facilities
in Walton-on-Thames and Dublin have shut completely, the STI site
in Sanford, Florida is being closed and the operations integrated
into the Group's facility in Boerne, Texas. The mothballing of the
EKF Molecular business has been completed and all of the former
employees have now left the Group. In addition, it has been
announced to staff that the DiaSpect site in Sailauf, Germany will
close and be integrated into the main German site in Barleben later
in 2016. As a result of these initiatives, headcount has continued
to fall, reaching 304 Effective Full Time employees by the end of
the period, and we are on course to achieve the GBP6.7m of
identified annualised savings.
Financial Review
Comparative figures for H1 2015 have been restated to treat the
business of Selah Genomics Inc as discontinued. Selah was sold by
the Group to its management in December 2015.
Revenue for the period was GBP17.5m (H1 2015 restated:
GBP14.9m), an increase of 17.8%, and entirely attributable to
organic growth across all business units. This revenue also
includes GBP946,000 attributable to the contribution of the Saudi
Arabia tender won in 2015.
Unaudited Restated +/-
6 months unaudited %
ended 30 6 months
June 2016 ended
GBP'000 30 June
2015
GBP'000
Hematology 5,182 4,283 +21%
Diabetes 4,816 3,979 +21%
Maternal & Women's
Health 1,390 1,218 +14%
Central Laboratory 5,699 4,609 +24%
Other 420 775
--------------- ---------------
Total revenue 17,507 14,864
--------------- ---------------
Gross profit increased by 10% to GBP8.4m (H1 2015 restated:
GBP7.7m). Whilst as a percentage of revenue Gross Profit is
slightly lower year-on-year at 48% (H1 2015 restated: 52%), this
decrease is largely due to additional inventory provisions
associated with the continuing high levels of inventory being
carried. Excluding these provisions, margins would have been
broadly maintained as revenue grew.
A more meaningful measure of underlying performance is adjusted
EBITDA which increased by 57% in the first half to GBP2.02m (H1
2015 restated: GBP1.29m). This excludes the effects of share-based
payments of GBP0.06m (H1 2015: GBP0.11m) and exceptional losses of
GBP0.4m (H1 2015: exceptional profit of GBP9.7m). On a reported
basis, the Group made an operating loss of GBP0.9m (H1 2015
restated: profit of GBP7.9m).
The unaudited cash position at 30 June 2016 was GBP3.2m (31 Dec
2015: GBP2.0m), and the Group had net debt of GBP4.3m (31 Dec 2015:
GBP8.8m). The net debt has reduced following a placing in June
2016, which raised GBP4.5m net of expenses. GBP3.0m of the proceeds
were utilised in the repayment of a loan from the North Atlantic
Smaller Companies Investment Trust PLC (a company associated with
Christopher Mills).
Cash generated from operations in H1 2016 was GBP1.4m (H1 2015:
cash used GBP2.1m).
Management changes
During 2016, I was appointed as a director and as Non-Executive
Chairman. On 11 July, Carl Contadini, an Operational Adviser to
Harwood Capital LLP, was appointed as a Non-Executive Director.
Carl has already begun to bring his cost management expertise to
the Group. Ron Zwanziger, Lurene Joseph and David Evans left the
Board during the period.
We also plan to put in place performance related incentive
packages for nine of our key senior management team to focus the
team on returning the business to profitable organic growth,
details of which will be outlined in a separate RNS
announcement.
Outlook
At our full year results I made it clear that it was key for us
to set expectations at a level that reflects the core business
without the inclusion of less predictable tender business. In light
of this, the first half has shown the good progress that we have
made and we remain confidently on track to deliver revenues for
2016 (excluding tender wins) of over GBP30 million and we will
achieve the higher end of our targeted range of adjusted EBITDA of
between GBP3.5m and GBP4.0m.
Nevertheless, we still maintain a sensible level of caution over
declaring our achievement of 2016 targets and will update
shareholders as we progress towards the year end. We have entered
one major tender this year through a local distributor, and the
results of this have yet to be finalised. It is also possible that
the Group will be engaged in other expected tenders over the
balance of the year, however the delivery of the targets above will
not be dependent on them.
We continue to make good progress on our restructuring
programme, and as we've stated before, the majority of these
benefits will be seen in 2017, when we are targeting to move the
Company into a debt free position. In addition, following the
recent financing, the Group is now able to review and expedite its
capital expenditure programme, which will generate further cost
savings over the medium term.
I would again like to thank shareholders on behalf of the Board
for their continued patience and support, as we rebuild the Company
and focus on rebuilding value for shareholders over the medium
term, through delivering strong and profitable organic growth.
Christopher Mills
Non-Executive Officer Chairman
12 September 2016
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 30
JUNE 2016
Restated
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3 17,507 14,864 30,045
Cost of sales (9,091) (7,190) (15,376)
-------------- --------------- -----------------
Gross profit 8,416 7,674 14,669
Administrative expenses (9,358) 99 (29,156)
Other income 32 129 139
-------------- --------------- -----------------
Operating (loss)/profit (910) 7,902 (14,348)
----------------------------------- ----------
Depreciation and amortisation (2,487) (3,018) (8,052)
Share based payments (55) (109) (226)
Exceptional items 4 (387) 9,740 (5,722)
EBITDA before exceptional
items and share based
payments 2,019 1,289 (348)
----------------------------------- ---------- -------------- --------------- -----------------
Finance income 22 1 35
Finance costs (304) (1,218) (1,457)
-------------- --------------- -----------------
(Loss)/profit before
income tax (1,192) 6,685 (15,770)
Income tax (charge)/credit 5 (230) 147 2,206
-------------- --------------- -----------------
(Loss)/profit from
continuing operations (1,422) 6,832 (13,564)
-------------- --------------- -----------------
Loss for the period
from discontinued
operations - (1,595) (23,369)
-------------- --------------- -----------------
(Loss)/profit for
the period (1,422) 5,237 (36,933)
-------------- --------------- -----------------
(Loss)/profit attributable
to:
Owners of the parent (1,508) 5,165 (37,123)
Non-controlling interest 86 72 190
(1,422) 5,237 (36,933)
-------------- --------------- -----------------
(Loss)/profit per
ordinary share attributable
to the owners of the
parent during the
period 6
Pence Pence Pence
Basic
From continuing operations (0.35) 1.60 (3.26)
From discontinued operations - (0.38) (5.54)
----------- ----------- -----------
(0.35) 1.22 (8.80)
----------- ----------- -----------
Diluted
From continuing operations (0.35) 1.57 (3.26)
From discontinued operations - (0.37) (5.54)
----------- ----------- -----------
(0.35) 1.20 (8.80)
----------- ----------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 6 MONTHSED
30 JUNE 2016
Restated
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
(Loss)/profit for the
period - continuing (1,422) 6,832 (13,564)
(Loss)/profit for the
period - discontinued - (1,595) (23,369)
-------------- --------------- -----------------
(1,422) 5,237 (36,933)
Other comprehensive income:
Currency translation
differences 6,740 (2,908) 792
Recycling of currency
translations in respect
of previously held interest
in Selah Genomics - - (4,479)
-------------- --------------- -----------------
Other comprehensive loss/gain
for the period 6,740 (2,908) (3,687)
-------------- --------------- -----------------
Total comprehensive (loss)/profit
for the period 5,318 2,329 (40,620)
-------------- --------------- -----------------
Attributable to:
Owners of the parent 5,232 2,238 (40,756)
Non-controlling interests 86 91 136
-------------- --------------- -----------------
Total comprehensive (loss)/profit
for the period 5,318 2,329 (40,620)
-------------- --------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE
2016
Restated
Unaudited Unaudited Audited
as at as at as at 31
30 June 30 June December
2016 2015 2015
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current
assets
Property, plant
and equipment 11,978 10,515 10,680
Intangible
assets 7 46,778 90,679 42,927
Investments 402 1,152 402
Deferred tax
assets 366 340 340
---------------------------- ------------------------------- -------------------------------------
Total
non-current
assets 59,524 102,686 54,349
---------------------------- ------------------------------- -------------------------------------
Current Assets
Inventories 7,915 7,444 8,234
Trade and other
receivables 8,137 13,412 7,242
Deferred tax
assets 53 45 47
Cash and cash
equivalents 3,242 2,083 2,017
Total current
assets 19,347 22,984 17,540
---------------------------- ------------------------------- -------------------------------------
Total assets 78,871 125,670 71,889
============================ =============================== =====================================
Equity
attributable
to owners of the
parent
Share capital 4,643 4,221 4,221
Share premium
account 95,393 91,276 91,276
Other reserve 41 41 41
Foreign currency
reserves 3,033 (3,020) (3,607)
Retained
earnings (46,863) (3,148) (45,438)
---------------------------- ------------------------------- -------------------------------------
56,247 89,370 46,493
Non-controlling
interest 365 319 261
---------------------------- ------------------------------- -------------------------------------
Total equity 56,612 89,689 46,754
---------------------------- ------------------------------- -------------------------------------
Liabilities
Non-current
liabilities
Borrowings 2,122 2,483 1,167
Deferred - 4,224 -
consideration
Deferred tax
liability 3,795 12,347 3,559
---------------------------- ------------------------------- -------------------------------------
Total
non-current
liabilities 5,917 19,054 4,726
---------------------------- ------------------------------- -------------------------------------
Current
liabilities
Trade and other
payables 7,914 6,868 8,331
Deferred
consideration 505 3,374 485
Current income
tax liabilities 1,886 1,423 1,087
Deferred tax
liabilities 642 478 831
Borrowings 5,395 4,784 9,675
---------------------------- ------------------------------- -------------------------------------
Total current
liabilities 16,342 16,927 20,409
---------------------------- ------------------------------- -------------------------------------
Total
liabilities 22,259 35,981 25,135
---------------------------- ------------------------------- -------------------------------------
Total equity and
liabilities 78,871 125,670 71,889
============================ =============================== =====================================
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE 6 MONTHSED 30 JUNE
2016
Restated
Unaudited Unaudited
6 months 6 months Audited
ended ended Year to
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
(Loss)/profit before income
tax (1,192) 6,685 (15,770)
Adjustments for
- Restructuring of operations - (1,595) (2,055)
- Warranty claim (20) (56) 349
- Depreciation 566 784 1,173
- Amortisation and impairment
charges 1,921 2,347 12,827
- Impairment of investment - - 750
- Release of deferred consideration - (9,100) (7,353)
- Bad debt write down - - 5,123
- Fair value adjustment - - (395)
- Loss/(profit) on disposal
of assets 30 2 5
- Share-based payments 55 109 226
- Net finance costs 282 1,217 1,817
Changes in working capital
- Inventories 530 (1,797) (2,607)
- Trade and other receivables (408) 1,543 2,025
- Trade and other payables (206) (940) 971
----------------------------- -------------- -------------------------------------
Cash generated by/(used
in) operations 1,558 (801) (2,914)
Interest paid (284) (159) (370)
Income tax received/(paid) 80 (1,130) (1,001)
----------------------------- -------------- -------------------------------------
Net cash generated by/(used
in) operating activities 1,354 (2,090) (4,285)
Of which discontinued - (1,363) (2,412)
Cash flow from investing
activities
Purchase of investments - -
Purchase of property, plant
and equipment (PPE) (796) (1,181) (2,296)
Purchase of intangibles (399) (2,628) (3,096)
Proceeds from sale of PPE 44 44 -
Acquisition of subsidiaries
(net of cash acquired) - - 42
Interest received 22 1 35
----------------------------- -------------- -------------------------------------
Net cash used in investing
activities (1,129) (3,764) (5,315)
----------------------------- -------------- -------------------------------------
Of which discontinued - - (136)
----------------------------- -------------- -------------------------------------
Cash flow from financing
activities
Proceeds from issuance of 4,539 - -
ordinary shares (net of
costs)
New borrowings - 1,829 7,922
Repayment of borrowings (3,749) (730) (3,000)
Dividends paid to non-controlling
interests (54) (125) (228)
Payment of deferred consideration - (1,425) (1,425)
----------------------------- -------------- -------------------------------------
Net cash generated by/(used
in) financing activities 736 (451) 3,269
----------------------------- -------------- -------------------------------------
Of which discontinued - 1,320 2,426
----------------------------- -------------- -------------------------------------
Net increase/(decrease)
in cash and cash equivalents 961 (6,305) (6,331)
Cash and cash equivalents
at beginning of period 2,017 8,346 8,346
Exchange gains on cash and
cash equivalents 264 42 2
----------------------------- -------------- -------------------------------------
Cash and cash equivalents
at end of period 3,242 2,083 2,017
============================= ============== =====================================
STATEMENT OF CHANGES IN
EQUITY
FOR THE 6 MONTHSED
30 JUNE 2016
Share Share Other Foreign Retained Total Non-controlling Total
Capital Premium Reserve Currency earnings interest equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2015 4,221 91,276 41 26 (8,541) 87,023 353 87,376
Comprehensive
income
Profit for the
period -
continued - - - - 6,760 6,760 72 6,832
Loss for the
period -
discontinued - - - - (1,595) (1,595) - (1,595)
Other
comprehensive
income
Currency
translation
differences - - - (3,046) 119 (2,927) 19 (2,908)
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Total
comprehensive
income - - - (3,046) 5,284 2,238 91 2,329
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Transactions
with owners
Dividends to
non-controlling
interest - - - - - - (125) (125)
Share based
payments - - - - 109 109 - 109
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Total
contributions
by and
distributions
to owners - - - - 109 109 (125) (16)
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
At 30 June 2015 4,221 91,276 41 (3,020) (3,148) 89,370 319 89,689
Comprehensive
income
(Loss)/profit
for the period
- continued - - - - (18,919) (18,919) 118 (18,801)
(Loss)/profit
for the period
- discontinued - - - - (23,369) (23,369) (23,369)
Other
comprehensive
income
Recycling of
currency
translations
in respect of
previously held
interest in
Selah Genomics
Inc - - - (4,479) - (4,479) - (4,479)
Currency
translation
differences - - - 3,892 (119) 3,773 (73) 3,700
Total
comprehensive
income - - - (587) (42,407) (42,994) 45 (42,949)
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Transactions
with owners
Dividends to
non-controlling
interest - - - - (103) (103)
Share based
payments - - - - 117 117 - 117
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Total
contributions
by and
distributions
to owners - - - - 117 117 (103) 14
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
At 31 December
2015 4,221 91,276 41 (3,607) (45,438) 46,493 261 46,754
Comprehensive
income
Profit for the
period - - - - (1,508) (1,508) 86 (1,422)
Other
comprehensive
income
Currency
translation
differences - - - 6,640 28 6,668 72 6,740
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Total
comprehensive
income - - - 6,640 (1,480) 5,160 158 5,318
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Transactions
with owners
Proceeds from
shares issued 422 4,117 - - - 4,539 - 4,539
Dividends to
non-controlling
interest - - - - - - (54) (54)
Share based
payments - - - - 55 55 - 55
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
Total
contributions
by and
distributions
to owners 422 4,117 - - 55 4,594 (54) 4,540
------------ -------------- ------------ --------------- -------------- --------------- -------------------- -------------
At 30 June 2016 4,643 95,393 41 3,033 (46,863) 56,247 365 56,612
============ ============== ============ =============== ============== =============== ==================== =============
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
EKF Diagnostics Holdings plc is a public limited company
incorporated in the United Kingdom (Registration Number 04347937).
The address of the registered office is Avon House, 19 Stanwell
Road, Penarth, CF64 2EZ.
The Group's principal activity continues to be that of a
business focused within the In-Vitro Diagnostics devices ("IVD")
market place.
The financial information in these interim results is that of
the holding company and all of its subsidiaries. It has been
prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs). The accounting policies applied
by the Group in this financial information are the same as those
applied by the Group in its financial statements for the year ended
31 December 2015 and which will form the basis of the 2016
financial statements except for a number of new and amended
standards which have become effective since the beginning of the
previous financial year. These new and amended standards are not
expected to materially affect the Group.
The financial information presented herein does not constitute
full statutory accounts under Section 434 of the Companies Act 2006
and was not subject to a formal review by the auditors. The
financial information in respect of the year ended 31 December 2015
has been extracted from the statutory accounts which have been
delivered to the Registrar of Companies. The Group's Independent
Auditor's report on those accounts was unqualified, did not include
references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or 498(3) of the Companies Act
2006. The financial information for the half years ended 30 June
2016 and 30 June 2015 is unaudited and the twelve months to 31
December 2015 is audited.
These interim accounts have not been prepared in accordance with
IAS 34.
2. Significant accounting policies
Going concern
The Group meets its day-to-day working capital requirements
through the use of cash reserves and existing bank facilities. The
Group has maintained its liquidity profile through the year.
The Directors have considered the applicability of the going
concern basis in the preparation of these financial statements.
This included the review of internal budgets and financial results
which show, taking into account reasonably probable changes in
financial performance, that the Group should be able to operate
within the level of its current funding arrangements, and the
directors have therefore prepared the financials on a going concern
basis.
Foreign currency translation
(a) Functional and presentational currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the functional
currency). The consolidated financial statements are presented in
British Pounds Sterling, which is the Company's functional and
presentational currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions where items are re-measured. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in
the income statement within 'administrative expenses'.
(c) Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentational
currency are translated into the presentational currency as
follows:
-- assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
-- income and expenses for each income statement are translated at average exchange rates; and
-- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations are taken
to other comprehensive income. When a foreign operation is
partially disposed of or sold, exchange differences that were
recorded in equity are recognised in the income statement as part
of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
Government grants
Government grants receivable in connection with expenditure on
property, plant and equipment are accounted for as deferred income,
which is credited to the income statement over the expected useful
economic life of the related assets, on a basis consistent with the
depreciation policy. Revenue grants for the reimbursement of costs
charged to the income statement are credited to the Income
Statement in the year in which the costs are incurred.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation and any provision for impairment.
Historical cost includes expenditure that is directly attributable
to the acquisition of the asset and bringing the asset to its
working condition for its intended use.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only where it is
probable that future economic benefits associated with the asset
will flow to the Group and the cost of the asset can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Any borrowing costs associated with qualifying property plant and
equipment are capitalised and depreciated at the rate applicable to
that asset category.
Land is not depreciated. Depreciation on other assets is
calculated using the straight-line method or reducing balances
method to allocate their cost to its residual values over their
estimated useful lives, as follows:
Buildings 2%-2.5%
Fixtures and
fittings 20%-25%
Plant and machinery 20%-33.3%
Motor vehicles 25%
The assets' residual values and useful economic lives are
reviewed regularly, and adjusted if appropriate, at the end of each
reporting period.
An asset's carrying value is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on the disposal of assets are determined by
comparing the proceeds with the carrying amount and are recognised
in administration expenses in the income statement.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group's share of the net identifiable
assets of the acquired subsidiary at the date of the acquisition.
Goodwill on acquisitions of subsidiaries is included in 'intangible
assets'. Goodwill has an infinite useful life and is tested
annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed.
Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are
expected to benefit from the business combination in which the
goodwill arose, identified according to operating segment.
(b) Trademarks, trade names and licences
Separately acquired trademarks and licences are shown at
historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date.
Trademarks and licences have a finite useful life and are carried
at cost less accumulated amortisation. Amortisation is calculated
using the straight-line method to allocate the cost of trademarks
and licences over their estimated useful lives of between 8 and 12
years and is charged to administrative expenses in the income
statement.
(c) Customer relationships
Contractual customer relationships acquired in a business
combination are recognised at fair value at the acquisition date.
The contractual customer relationships have a finite useful life
and are carried at cost less accumulated amortisation. Amortisation
is calculated using the straight-line method over the expected life
of the customer relationship of between 6 and 15 years and is
charged to administrative expenses in the income statement.
(d) Trade secrets
Trade secrets, including technical know-how, operating
procedures, methods and processes, acquired in a business
combination are recognised at fair value at the acquisition date.
Trade secrets have a finite useful life and are carried at cost
less accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of trade secrets over
their estimated useful lives of between 6 and 15 years and is
charged to administrative expenses in the income statement.
(e) Development costs
Development costs acquired in a business combination are
recognised at fair value at the acquisition date. Development costs
have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line
method over their estimated useful lives of 15 years and is charged
to administrative expenses in the income statement.
Expenditure incurred on the development of new or substantially
improved products or processes is capitalised, provided that the
related project satisfies the criteria for capitalisation,
including the project's technical feasibility and likely commercial
benefit. All other research and development costs are expensed as
incurred.
Development costs are amortised over the estimated useful life
of the products with which they are associated. Amortisation
commences when a new product is in commercial production. The
amortisation is charged to administrative expenses in the income
statement. The estimated remaining useful lives of development
costs are reviewed at least on an annual basis.
The carrying value of capitalised development costs is reviewed
for potential impairment at least annually and if a product becomes
unviable and an impairment is identified the deferred development
costs are immediately charged to the income statement.
(f) Non-compete agreements
Non-compete agreements arising from a business combination are
recognised at fair value at the acquisition date. Non-compete
agreements have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of non-compete agreements
over their estimated useful lives of three years and is charged to
administrative expenses in the income statement.
Impairment of non-financial assets
Assets that have an indefinite life such as goodwill are not
subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the carrying amount exceeds its
recoverable amount.
The recoverable amount is the higher of an asset's fair value
less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of the money and the risks specific
to the asset for which the estimates of future cash flows have not
been adjusted.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows. Impairment losses recognised for cash-generating units, to
which goodwill has been allocated, are credited initially to the
carrying amount of goodwill. Any remaining impairment loss is
charged pro rata to the other assets in the cash-generating
unit.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in the prior period. A
reversal of an impairment loss is recognised in the income
statement immediately. If goodwill is impaired however, no reversal
of the impairment is recognised in the financial statements.
Investments
Investments where the Group does not have a controlling interest
are initially recognised at cost. The carrying value is tested
annually for impairment and an impairment loss is recognised for
the amount by which the carrying amount exceeds its recoverable
amount.
Financial assets
Classification
The Company classifies its financial assets in the following
categories: loans and receivables and available-for-sale financial
assets. The classification depends on the purpose for which the
financial assets were acquired and management determines the
classification of its financial assets at initial recognition.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are
classified as non-current assets. The Company's loans and
receivables comprise 'trade and other receivables' and cash and
cash equivalents in the balance sheet.
(b) Available-for-sale financial assets
Available-for-sale assets are non-derivatives that are either
designated in this category or not classified as loans and
receivables. They are included in non-current assets unless the
investment matures or management intends to dispose of it within 12
months of the end of the reporting period.
Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the trade date - the date on which the Company commits to
purchase the asset. Assets are initially recognised at fair value
plus transaction costs. Financial assets are derecognised when the
risk and rewards of ownership have been transferred.
Loans and receivables are subsequently carried at amortised cost
using the effective interest rate method.
Available-for-sale financial assets are subsequently carried at
fair value. Gains and losses arising from changes in fair value are
recognised in other comprehensive income until the asset is
disposed at which time the cumulative gain or loss previously
recognised in equity is included in the consolidated income
statement for the period. If an available-for-sale investment is
determined to be impaired, the cumulative loss previously
recognised in equity is included in the income statement for the
period.
Inventories
Inventories and work in progress are stated at the lower of cost
and net realisable value. Cost is calculated on a first in and
first out basis and includes raw materials, direct labour, other
direct costs and attributable production overheads, where
appropriate. Net realisable value represents the estimated selling
price less all estimated costs of completion and applicable selling
costs. Where necessary, provision is made for slow-moving and
obsolete inventory. Inventory on consignment and their related
obligations are recognised in current assets and payables
respectively.
Trade and other receivables
Trade receivables are initially recognised at fair value, being
the original invoice amount, and subsequently measured at amortised
cost less provision for impairment. A provision for impairment is
established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original
terms of the receivable. Trade receivables that are less than three
months past due are not considered impaired unless there are
specific financial or commercial reasons that lead management to
conclude that the customer will default. Older debts are considered
to be impaired unless there is sufficient evidence to the contrary
that they will be settled. The amount of the provision is the
difference between the asset's carrying value and the present value
of the estimated future cash flows. The carrying amount of the
asset is reduced through the use of an allowance account, and the
amount of the loss is recognised in the income statement within
administrative expenses. When a trade receivable is uncollectible
it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against
administrative expenses in the income statement.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash
at bank and in hand and short-term deposits with an original
maturity of less than three months, reduced by overdrafts to the
extent that there is a right of offset against other cash
balances.
For the purposes of the consolidated cash flow statement, cash
and cash equivalents consist of cash and short-term deposits as
defined above net of outstanding bank overdrafts where there is a
right of offset.
Share capital
Ordinary Shares are classified as equity. Proceeds in excess of
the nominal value of shares issued are allocated to the share
premium account and are also classified as equity. Incremental
costs directly attributable to the issue of new Ordinary Shares or
options are deducted from the share premium account.
Financial liabilities
Debt is measured at fair value, being net proceeds after
deduction of directly attributable issue costs, with subsequent
measurement at amortised cost with the exception of deferred equity
consideration which is categorised as a financial liability at fair
value through profit and loss. Debt issue costs are recognised in
the income statement over the expected term of such instruments at
a constant rate on the carrying amount.
Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Borrowings
Borrowings are recognised initially at the fair value of
proceeds received, net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost. Borrowings are
classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at
least 12 months after the balance sheet date.
Borrowing costs are expensed in the consolidated Group income
statement under the heading 'finance costs'. Arrangement and
facility fees together with bank charges are charged to the income
statement under the heading 'administrative expenses'.
Current and deferred income tax
The tax expense comprises current and deferred tax. Tax is
recognised in the income statement, except to the extent that it
relates to items recognised in other comprehensive income where the
associated tax is also recognised in other comprehensive
income.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the balance sheet date
in the countries where the Company and its subsidiaries operate and
generate taxable income. Management evaluates positions taken in
tax returns with respect to situations in which applicable tax
regulation is subject to interpretation and establishes provisions
where appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred tax is recognised, using the liability method, on all
temporary differences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred tax liabilities are
recognised in respect of all temporary differences except where the
deferred tax liability arises from the initial recognition of
goodwill in business combinations.
Deferred tax assets are recognised for all deductible temporary
differences, carry-forward of unused tax assets and tax losses, to
the extent that they are regarded as recoverable. They are regarded
as recoverable where, on the basis of available evidence, there
will be sufficient taxable profits against which the future
reversal of the underlying temporary differences can be
deducted.
The carrying value of the amount of deferred tax assets is
reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be
available to allow all, or part, of the tax asset to be
utilised.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on the tax rates (and
tax laws) that have been substantively enacted at the balance sheet
date.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Provisions
Provisions for legal claims are recognised when the Group has a
present legal or constructive obligation as a result of a past
event and it is probable that an outflow of resources will be
required to settle the obligation and the amount can be reliably
measured.
Leases
Leases which transfer substantially all the risks and rewards of
ownership of an asset are treated as a finance lease. Assets held
under finance leases are capitalised at their fair value at the
inception of the lease and depreciated over the estimated useful
economic life of the asset or lease term if shorter. The finance
charges are allocated to the income statement in proportion to the
capital amount outstanding.
All other leases are classified as operating leases. Operating
lease rentals are charged to the income statement in equal annual
amounts over the lease term.
Deferred consideration
Deferred consideration is recognised at fair value. Where the
value of deferred consideration is based on a future event,
management estimate the likelihood of the consideration becoming
payable. Deferred consideration is discounted to take account of
the time value of money at rates based on those used for the
valuation of related intangible assets.
Employee benefits
(a) Pension obligations
Group companies operate various pension schemes all of which are
defined contribution plans. A defined contribution plan is a
pension plan under which the Group pays fixed contributions into a
separate entity with the pension cost charged to the income
statement as incurred. The Group has no further obligations once
the contributions have been paid.
The Group no longer has any defined benefit schemes.
The service cost of providing retirement benefits to employees
during the year is charged to operating profit. Past service costs
are recognised immediately in income, unless the changes to the
pension plan are conditional on the employees remaining in service
for a specified period of time (the vesting period). In this case,
the past service costs are amortised on a straight-line basis over
the average vesting period.
(b) Share-based compensation
The Group operates a number of equity-settled, share-based
compensation plans, under which the Group receives services from
employees and others as consideration for equity instruments of the
Group. Equity-settled share-based payments are measured at fair
value at the date of grant and are expensed over the vesting period
based on the number of instruments that are expected to vest. For
plans where vesting conditions are based on share price targets,
the fair value at the date of grant reflects these conditions.
Where applicable the Group recognises the impact of revisions to
original estimates in the income statement, with a corresponding
adjustment to equity for equity-settled schemes. Fair values are
measured using appropriate valuation models, taking into account
the terms and conditions of the awards.
When the share-based payment awards are exercised, the Company
issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital
(nominal value) and share premium.
National insurance on share options
To the extent that the share price at the balance sheet date is
greater than the exercise price on options granted under unapproved
share-based payment compensation schemes, provision for any
National Insurance Contributions has been based on the prevailing
rate of National Insurance. The provision is accrued over the
performance period attaching to the award.
Revenue recognition
(a) Sale of goods
Revenue for the sale of medical diagnostic instruments and
reagents is measured at the fair value of the consideration
received or receivable and represents the invoiced value for the
sale of the goods net of sales taxes, rebates and discounts.
Revenue from the sale of goods is recognised when a Group Company
has delivered products to the customer, the customer has accepted
delivery of the products and collectability of the related
receivables is reasonably assured.
(b) Sale of services
Revenue for the sale of services is measured at the fair value
of the consideration received or receivable and represents the
invoiced value for the sale of the services net of sales taxes,
rebates and discounts. Revenue from the sale of services is
recognised when a Group Company has completed the services and
collectability of the related receivables is reasonably
assured.
(c) Interest income
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset's net carrying amount.
(d) Royalty and licence income
Royalty and licence income is recognised on an accruals basis in
accordance with the substance of the relevant agreements.
Dividend distribution
Dividend distributions to the Company's shareholders are
recognised as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders. Interim dividends are recognised when paid.
Other income
Other income includes grant income and R & D tax credits
passed through income where this is permitted by the relevant
jurisdiction.
Exceptional items
These are items of an unusual or non-recurring nature incurred
by the Group and include transactional costs and one off items
relating to business combinations, such as acquisition
expenses.
3. Segmental reporting
Management has determined the Group's operating segments based
on the monthly management reports presented to the Chief Operating
Decision Maker ('CODM'). The CODM is the Executive Directors and
the monthly management reports are used by the Group to make
strategic decisions and allocate resources.
The principal activity of the Group is the design, development,
manufacture and selling of diagnostic instruments, reagents and
certain ancillary. This activity takes place across various
countries, such as the USA, Germany, Poland, Russia, United Kingdom
and Ireland, and as such the Board considers the business primarily
from a geographic perspective. Although not all the segments meet
the quantitative thresholds required by IFRS 8, management has
concluded that all segments should be maintained and reported,
given potential future growth of the segments.
The reportable segments derive their revenue primarily from the
manufacture and sale of medical diagnostic equipment. Other
services include the servicing and distribution of third party
company products under separate distribution agreements.
Currently the key operating performance measures used by the
CODM are Revenue and adjusted EBITDA.
The segment information provided to the Board for the reportable
geographic segments is as follows:
Period ended 30 June 2016 unaudited
Germany UK USA Ireland Poland Russia Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Income
statement
Revenue 7,327 9,385 22 695 1,174 1,069 19,672
Inter segment (1,920) 3 (22) (14) - (212) (2,165)
External
revenue 5,407 9,388 - 681 1,174 857 17,507
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Adjusted
EBITDA 389 28 2,413 (162) 391 274 (1,314) 2,019
Share based
payment - - - - - (55) (55)
Exceptional
items 20 (331) (69) (7) - - - (387)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
EBITDA 409 (303) 2,344 (169) 391 274 (1,369) 1,577
Depreciation (261) (208) - (16) (12) (68) (565)
Amortisation (587) (94) (526) - (56) (13) (646) (1,922)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Operating
(loss)/profit (439) (397) 1,610 (169) 319 249 (2,083) (910)
Net finance
costs (25) (15) (53) - - 12 (201) (282)
Income
tax 104 22 (159) - (64) (56) (77) (230)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
(Loss)/profit
for the
period (360) (390) 1,398 (169) 255 205 (2,361) (1,422)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Segment
assets
Operating
assets 28,129 11,093 47,901 1,069 1,263 633 55,998 146,086
Inter segment
assets (635) (5,614) (27) (51) (180) - (63,950) (70,457)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
External
operating
assets 27,494 5,479 47,874 1,018 1,083 633 (7,952) 75,629
Cash and
cash
equivalents 210 1 1,304 5 38 563 1,121 3,242
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Total assets 27,704 5,480 49,178 1,023 1,121 1,196 (6,831) 78,871
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Segment
liabilities
Operating
liabilities 13,881 9,750 23,835 5,503 106 137 9,839 63,051
Inter segment
liabilities (10,656) (9,300) (20,636) (5,213) - - (2,504) (48,309)
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
External
operating
liabilities 3,225 450 3,199 290 106 137 7,335 14,742
Borrowings 1,371 187 2,023 - - - 3,936 7,517
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Total
liabilities 4,596 637 5,222 290 106 137 11,271 22,259
------------------- ------------- ------------ ------------- ------------ ------------ ------------ ------------- -------------
Other
segmental
information
Non-current
assets
- PPE 5,778 - 4,373 - 118 72 1,637 11,978
Non-current
assets
- Intangibles 12,266 5,467 15,044 713 322 148 12,818 46,778
Intangible
assets
-additions - - - - - 399 399
PPE -
additions 708 - 67 - - 1 21 797
Year ended December 2015 audited
Germany UK USA Ireland Poland Russia Discont. Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Income
statement
Revenue 12,931 5 16,399 88 1,228 2,243 - 2,175 35,069
Inter segment (4,075) (2) (40) (58) (20) - - (829) (5,024)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
External
revenue 8,856 3 16,359 30 1,208 2,243 - 1,346 30,045
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Adjusted
EBITDA* 1,870 (1,968) 2,879 (904) 544 598 - (3,367) (348)
Share based
payment - - - - - - - (226) (226)
Exceptional
items (351) (449) (2,413) (16) - - - (2,493) (5,722)
EBITDA 1,519 (2,417) 466 (920) 544 598 - (6,086) (6,296)
Depreciation (523) (99) (367) (5) (32) (20) - (127) (1,173)
Amortisation (1,855) (681) (2,378) (37) (102) (20) - (1,806) (6,879)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Operating
(loss)/profit (859) (3,197) (2,279) (962) 410 558 - (8,019) (14,348)
Net finance
costs (101) (1,054) (124) - 10 12 - (165) (1,422)
Income tax 75 739 1,672 18 (70) (113) - (115) 2,206
Discontinued
operations - - - - - - (23,369) - (23,369)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
(Loss)/profit
for the
year (885) (3,512) (731) (944) 350 457 (23,369) (8,299) (36,933)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Segment
assets
Operating
assets 25,977 10,717 43,472 969 1,250 470 - 50,456 133,311
Inter-segment
assets (454) (4,957) (19) (59) (446) (4) - (57,500) (63,439)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
External
operating
assets 25,523 5,760 43,453 910 804 466 - (7,044) 69,872
Cash and
cash
equivalents 1,239 2 83 86 154 398 - 55 2,017
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Total assets 26,762 5,762 43,536 996 958 864 - (6,989) 71,889
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Segment
liabilities
Operating
liabilities 12,306 9,707 18,401 4,760 96 91 - 10,181 55,542
Inter-segment
liabilities (9,065) (8,884) (16,053) (4,420) - (4) - (2,823) (41,249)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
External
operating
liabilities 3,241 823 2,348 340 96 87 - 7,358 14,293
Borrowings 2,408 182 2,070 - - 1 - 6,181 10,842
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Total
liabilities 5,649 1,005 4,418 340 96 88 - 13,539 25,135
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Other
segmental
information
Non-current
assets -
PPE 4,724 53 4,066 - 127 68 - 1,642 10,680
Non-current
assets -
Intangibles 11,372 5,561 13,978 619 348 125 - 10,924 42,927
Intangible
assets
-additions 1,225 558 576 697 - - - 40 3,096
PPE -
additions 1,768 18 427 - 2 41 - 40 2,296
Period ended 30 June 2015 unaudited
Germany UK USA Ireland Poland Russia Discont. Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Income
statement
Revenue 7,245 5 8,062 51 491 1,008 - 1,073 17,935
Inter segment (2,844) (2) (8) - (11) - - (206) (3,071)
External
revenue 4,401 3 8,054 51 480 1,008 - 867 14,864
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Adjusted
EBITDA 1,557 (878) 978 (250) 227 234 - (579) 1,289
Share based
payment - - - - - - - (109) (109)
Exceptional
items (18) - - (105) - - - 9,863 9,740
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
EBITDA 1,539 (878) 978 (355) 227 234 - 9,175 10,920
Depreciation (264) (38) (181) (1) (16) (10) - (162) (672)
Amortisation (503) (321) (443) (14) (49) (13) - (1,003) (2,346)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Operating
profit/(loss) 772 (1,237) 354 (370) 162 211 - 8,016 7,902
Net finance
costs (49) (423) (54) - - - - (691) (1,217)
Income
tax (269) 46 216 1 (15) (43) - 211 147
Discontinued
ops - - - - - - (1,595) - (1,595)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Profit/(loss)
for the
period 454 (1,614) 516 (369) 147 168 (1,595) 7,530 5,237
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Segment
assets
Operating
assets 25,149 20,218 90,577 1,908 878 594 - 19,522 158,846
Inter segment
assets (2,416) (4,701) - - - - - (28,142) (35,259)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
External
operating
assets 22,733 15,517 90,577 1,908 878 594 - (8,620) 123,587
Cash and
cash
equivalents 433 66 505 6 101 495 - 477 2,083
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Total assets 23,166 15,583 91,082 1,914 979 1,089 - (8,143) 125,670
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Segment
liabilities
Operating
liabilities 11,897 11,874 27,054 4,163 (105) 125 - 15,069 70,077
Inter segment
liabilities (9,395) (7,246) (21,052) (3,809) 139 - - - (41,363)
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
External
operating
liabilities 2,502 4,628 6,002 354 34 125 - 15,069 28,714
Borrowings 559 178 2,066 - - - - 4,464 7,267
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Total
liabilities 3,061 4,806 8,068 354 34 125 - 19,533 35,981
------------------- ------------ ------------ ------------- ------------ ------------ ------------ ------------- ------------- -------------
Other
segmental
information
Non current
assets
- PPE 3,941 115 4,546 9 140 70 - 1,694 10,515
Non current
assets
- Intangibles 11,492 11,039 54,038 1,276 392 169 - 12,273 90,679
Intangible
assets
-additions 28 219 - 599 - - - 1,782 2,628
PPE -
additions 894 17 110 0 0 20 - 140 1,181
*- Adjusted EBITDA excludes exceptional items and share based
payments
'Other' primarily relates to the holding company and head office
costs.
Disclosure of Group revenues by geographic location
Unaudited Restated Audited
6 months Unaudited Year ended
ended 6 months 31 December
30 ended 2015
June 2016 30
June 2015
GBP000 GBP000 GBP000
Americas
United States of America 6,642 5,490 10,857
Mexico 483 400 1,004
Rest of Americas 1,302 1,165 2,390
Europe, Middles East
and Africa (EMEA)
Germany 2,668 2,427 5,057
United Kingdom 126 116 238
Rest of Europe 1,357 1,297 2,637
Russia 1,184 1,014 2,259
Middle East 1,322 284 1,676
Africa 467 543 916
Rest of World
China 486 900 677
Rest of Asia 1,422 1,187 2,242
New Zealand/Australia 48 41 92
--------------- --------------- -----------------
Total Revenue 17,507 14,864 30,045
=============== =============== =================
4. Exceptional items
Included within administration expenses (and cost of sales) are
exceptional items as shown below:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Note GBP000 GBP000 GBP000
Exceptional items
includes:
- Transaction costs
relating to business
combinations a - (191) (178)
- Business reorganisation
costs b (407) (122) (727)
- Warranty claim c 20 56 (349)
- Exceptional bad
debt provision d - - (5,123)
- Impairment charges e - - (5,948)
- Release of deferred
consideration provisions f - 9,997 7,353
- Impairment of
investment g - - (750)
Exceptional items (387) 9,740 (5,722)
-------------- -------------- -----------------
(a) Transaction run-on costs in 2015 relating to acquisitions in
previous years
(b) Costs associated with the closure of STI, the transfer of
production of Quo-Test and Quo-Lab from the UK to Germany, the
mothballing of EKF Molecular, and with the closure of the Group's
Dublin facility
(c) Warranty claim in relation to the acquisition of
EKF-diagnostic GmbH
(d) Write off of bad debts associated with certain customers in
Mexico
(e) Impairment of EKF Molecular Diagnostics Limited, EKF
Diagnostics Limited, Ireland, and capitalised R&D.
(f) Release of deferred consideration provision associated with
EKF Molecular and Stanbio
(g) Impairment of investment in Dx Economix Inc.
5. Income tax
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 30 2015
June June
2016 2015
GBP000 GBP000 GBP000
Current tax
Current tax on profit/loss
for the period (681) (383) (220)
Adjustments for prior
periods - - 76
-------------- -------------- -----------------
Total current tax (681) (383) (144)
-------------- -------------- -----------------
Deferred tax
Origination and reversal
of temporary differences 451 530 2,350
Total deferred tax 451 530 2,350
-------------- -------------- -----------------
Income tax charge (230) 147 2,206
============== ============== =================
6. (Loss)/profit per share
Basic (loss)/profit per share is calculated by dividing the loss
or profit attributable to equity holders of the parent by the
weighted average number of ordinary shares in issue during the
period.
Diluted (loss)/profit per share is calculated by adjusting the
weighted average number of ordinary shares outstanding assuming
conversion of all dilutive potential ordinary shares. The Company
has two categories of dilutive potential ordinary share: equity
based long term incentive plans, and share options. The potential
shares are not dilutive in either H1 2016 or in FY 2015 as the
Group made a loss per share.
Unaudited Unaudited Audited
year
ended
31 December
2015
6 months 6 months
ended ended
30 June 30 June
2016 2015
GBP'000 GBP'000 GBP'000
(Loss)/profit attributable
to owners of the parent (1,508) 5,165 (37,123)
(Loss)/profit from continuing
operations attributable
to equity holders of
the parent (1,508) 6,760 (13,754)
(Loss)/profit from discontinued
operations attributable
to equity holders of
the parent - (1,595) (23,369)
Weighted average number
of ordinary shares in
issue 428,782,159 422,057,074 422,057,074
Effect of dilutive potential
ordinary shares 4,043,940 9,869,346 8,316,759
-----------------
Weighted average number
of ordinary shares -
diluted 432,826,099 431,926,420 430,373,833
---------------- -----------------
Pence Pence Pence
Basic
From continuing operations (0.35) 1.60 (3.26)
From discontinued operations - (0.38) (5.54)
---------------- ---------------- -----------------
Profit/(loss) per share (0.35) 1.22 (8.80)
---------------- ---------------- -----------------
Pence Pence Pence
Diluted
From continuing operations (0.35) 1.57 (3.26)
From discontinued operations - (0.37) (5.54)
---------------- ---------------- -----------------
Profit/(loss) per share (0.35) 1.20 (8.80)
---------------- ---------------- -----------------
7. Intangible Fixed Assets
Group
Trademarks
trade
names & Customer Trade Develop-ment
Goodwill licences Non-compete relationships secrets costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
Cost
At 1 January
2015 46,420 4,007 70 18,518 30,897 4,829 104,741
Additions - 28 - - - 2,600 2,628
Exchange
differences (1,382) (131) - (523) (1,445) (230) (3,711)
At 30 June
2015 45,038 3,904 70 17,995 29,452 7,199 103,658
Additions 2 - - - 466 468
Disposal (23,541) (1,355) - (5,142) (14,282) - (44,320)
Exchange
differences 2,221 (58) - 962 1,708 117 4,950
At 31
December
2015 23,718 2,493 70 13,815 16,878 7,782 64,756
Additions - 36 - - - 363 399
Exchange
differences 2,456 997 - 1,672 1,417 390 6,932
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
At 30 June
2016 26,174 3,526 70 15,487 18,295 8,535 72,087
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
Amortisation
At 1 January
2015 954 702 41 3,344 4,977 1,201 11,219
Exchange
differences (85) (29) - (94) (305) (74) (587)
Charge for
the period - 192 12 756 1,255 132 2,347
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
At 30 June
2015 869 865 53 4,006 5,927 1,259 12,979
Exchange
differences 35 27 - 144 173 43 422
Impairment
charge 1,178 - 6 53 3,225 1,486 5,948
Disposal - (194) - (492) (1,366) - (2,052)
Charge for
the period - 680 11 844 907 2,090 4,532
At 31
December
2015 2,082 1,378 70 4,555 8,866 4,878 21,829
Exchange
differences 122 234 - 542 531 130 1,559
Charge for
the period - 437 - 695 469 320 1,921
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
At 30 June
2016 2,204 2,049 70 5,792 9,866 5,328 25,309
------------- ---------------- ---------------- ------------------ ------------- ------------------ -------------
Net book value
30 June 2016 23,970 1,477 - 9,695 8,429 3,207 46,778
----------- ---------- ------- ----------- ----------- ---------- -----------
31 December 2015 21,636 1,115 - 9,260 8,012 2,904 42,927
----------- ---------- ------- ----------- ----------- ---------- -----------
30 June 2015 44,169 3,039 17 13,989 23,525 5,940 90,679
----------- ---------- ------- ----------- ----------- ---------- -----------
8. Dividends
No dividends to shareholders of the holding company were
provided or paid during the six months to 30 June 2016 (to 30 June
2015 and 31 December 2015: GBPnil).
9. Press
A copy of this announcement is available from the Company's
website, being www.ekfdiagnostics.com. If you would like to receive
a hard copy of the interim report please contact the EKF
Diagnostics Holdings plc offices on +44 (0) 29 2071 0570 to request
a copy.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BGGDCBUBBGLG
(END) Dow Jones Newswires
September 12, 2016 02:00 ET (06:00 GMT)
Ekf Diagnostics (LSE:EKF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ekf Diagnostics (LSE:EKF)
Historical Stock Chart
From Apr 2023 to Apr 2024
