TIDMIDH
RNS Number : 2395U
Immunodiagnostic Systems Hldgs PLC
22 June 2009
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22 June 2009
IMMUNODIAGNOSTIC SYSTEMS HOLDINGS PLC
Preliminary Results for the year ended 31 March 2009
Immunodiagnostic Systems Holdings plc ("IDS" or the "Company" or the "Group"), a
leading producer of diagnostic testing kits for the clinical and research
markets, announces its preliminary results for the year ended 31 March 2009.
IDS operates in the in-vitro diagnostics ("IVD") market. The Company designs,
manufactures and sells immunoassay kits which are used to measure or detect
particular substances within a sample, thus aiding the diagnosis or monitoring
of a disease or providing information for research studies. In 2007 the
immunoassay sector of the IVD market was estimated to be worth US$ 10bn.
Financial Highlights:
* Revenue up 51.4% to GBP24.94m (2008: GBP16.47m)*
* Gross profit up 61.6% to GBP16.58m (2008: GBP10.26m)*
* Profit from operations up 27.9% to GBP5.37m (2008: GBP4.20m)*
* Pre-tax profit up 27.1% to GBP4.78m (2008: GBP3.76m)*
* Overall Profitability attributable to Ordinary shareholders was up 69.9% to
GBP4.82m (2008: GBP2.8m)
* Fully diluted earnings per share (continuing) up 21.8% to 16.2p (2008: 13.3p)
* Fully diluted earnings per share (including discontinued) up 37.7% to 18.6p
(2008: 13.5p)
* Strong balance sheet with minimal gearing of 18.7% (comprising cash GBP4.5m and
debt of GBP14.0m)
* Dividend up 10% to 1.65p (2008: 1.5p)
Operational Highlights:
* Sales of flagship Vitamin D product up 85.5% compared to same period last year
* Integration of acquisitions and disposal of haematology division
* Launch of IDS iSYS automated Vitamin D assay in February 2009
* Strong pipeline of complementary products for the IDS iSYS
* from continuing operations
David Evans, Chairman said:
"If we continue to deliver against the outlined strategic plan then we will be
on track to be not only the largest independent IVD Company in the UK but its
most profitable and one of the most prized within the niche we operate in.
"The trading for the first two months of the year is in line with management
expectations.
"To date (since acquiring Biocode Hycel) we have placed or sold circa 40
instruments, as we move on throughout the year I anticipate that the rate of
evaluations and placements of the IDS-iSYS will increase and that additional
infrastructure is currently being put in place to ensure that the rate of
placements is increased."
Contacts:
+------------------------------------+------------------------------------+
| Immunodiagnostic Systems Holdings | Tel: 0191 519 0660 |
| Plc | |
+------------------------------------+------------------------------------+
| Roger Duggan, Chief Executive | |
+------------------------------------+------------------------------------+
| Paul Hailes, Finance Director | http://www.idsplc.com |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Brewin Dolphin Investment Banking | Tel: 0845 213 4730 |
+------------------------------------+------------------------------------+
| Andrew Emmott | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Walbrook PR Ltd | Tel: 020 7933 8787 |
+------------------------------------+------------------------------------+
| Paul McManus | Mob: 07980 541 893 |
+------------------------------------+------------------------------------+
| | paul.mcmanus@walbrookpr.com |
+------------------------------------+------------------------------------+
Chairman's Statement
I have pleasure in reporting yet another year of progress at Immunodiagnostic
Systems despite some of the most challenging conditions encountered since the
Company floated in 2004.
The visible progress that we have seen both in top-line turnover growth and
bottom-line profitability has to be viewed against a backcloth of a number of
factors that have influenced the reported result and the financial status of the
Company.
The positive factors
* The continuing slew of studies underlining the importance of Vitamin D as a
measure of overall patient well-being as well as its role specifically in bone
disease per se. This has fed its way into the public consciousness as evidenced
by the columns of print devoted to the subject matter in our national
newspapers. The positive impact of this has resulted in our Vitamin D sales
increasing by 85.5% to GBP12.8m (2008: GBP6.9m)
* The continued progress of the work on the IDS-iSYS culminating in its launch at
the end of February 2009. This was a significant achievement in its own right
but we all recognise the road ahead of us as the instrument is rolled out.
The disposal of the haematology division to Escalon-Drew was achieved on the
last day of December and was the culmination of a long and arduous process by
all concerned.
The negative factors
* During the year we looked to make an acquisition of a North American diagnostic
company that in the Board's view would have strengthened our IP position and
offered significant competitive advantage. Those discussions were as protracted
as the divestment of the haematology division and in the end we had to conclude
that to proceed with the acquisition would have been too dilutive to you as a
shareholder and we had to stare that reality in the face and walk away. It was
undoubtedly a sore one.
* Due to a combination of circumstances in large part driven by the new economic
climate but also in part caused by being distracted by some of the above and
also by the growing recognition that a greater proportion of the IDS-iSYS
instruments will need to be placed this resulted in the necessity to raise
additional working capital to de-leverage our position with our bank. Whilst I
will not argue against the rationale for the fundraising the process itself was
needlessly painful both in terms of the professional hanger-ons that are used
and also the placing process itself. We raised GBP3.1m through a placing of
2,397,268 Ordinary Shares at 130p. The only excuse that I can offer was that
myself and the rest of the Board had no alternative with regard to its timing
and I accept all the criticism with regard to the uneven playing field that is
created for private shareholders. The support of the Directors in the placing
process was actually key to getting the placing away in some of the worst market
conditions I have experienced.
Results
The results and analysis as set out below have differentiated between continuing
and discontinued operations in a manner that should enable you to understand
more fully the economic activity of the Group in the year .
Turnover
+------------+------------+------+--------------+--------------+-----+----------+----------+------+
| Continuing | Continuing | % | Discontinued | Discontinued | % | Total | Total | % |
| | | | | | | | | |
+------------+------------+------+--------------+--------------+-----+----------+----------+------+
| 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 | |
+------------+------------+------+--------------+--------------+-----+----------+----------+------+
| GBP24.9m | GBP16.5m | 50.9 | GBP2.4m | GBP2.2m | 9.1 | GBP27.4m | GBP18.7m | 46.5 |
+------------+------------+------+--------------+--------------+-----+----------+----------+------+
The Group achieved substantial growth in its continuing operations primarily
supported by the growth in Vitamin D but with growth across all product areas
with the exception of sales of third party products which was impacted by the
loss of the distribution rights from Brahm's Diagnostics GmbH - a German based
manufacturer of diagnostic test kits.
Gross Profit
+------------+------------+-------+--------------+--------------+-------+----------+----------+-------+
| Continuing | Continuing | % | Discontinued | Discontinued | % | Total | Total | % |
+------------+------------+-------+--------------+--------------+-------+----------+----------+-------+
| 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 | |
+------------+------------+-------+--------------+--------------+-------+----------+----------+-------+
| GBP16.6m | GBP10.3m | 61.1 | GBP1.3m | GBP1.2m | 8.3 | GBP17.9m | GBP11.5m | 55.7 |
+------------+------------+-------+--------------+--------------+-------+----------+----------+-------+
Gross Profit %
The overall total gross margin percentage increased from 61.5% to 65.3%
reflecting the change in the product mix resulting primarily from the divestment
of the Haematology Division at the end of the third quarter of the Group's
financial year.
Gross margin percentages for the ongoing business increased from 62.4% to 66.7%
reflecting both the sale of higher margin products and the loss of lower margin
third-party products.
Operating Profit
+------------+------------+-------+--------------+--------------+--------+----------+----------+-------+
| Continuing | Continuing | % | Discontinued | Discontinued | % | Total | Total | % |
+------------+------------+-------+--------------+--------------+--------+----------+----------+-------+
| 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 | |
+------------+------------+-------+--------------+--------------+--------+----------+----------+-------+
| GBP5.37m | GBP4.2m | 27.9 | GBP0.03m | GBP0.08m | (62.5) | GBP5.40m | GBP4.28m | 26.2 |
+------------+------------+-------+--------------+--------------+--------+----------+----------+-------+
The overall operating profit was impacted by three material items;
* aborted acquisition costs of GBP428k
* a book loss of GBP547k relating to the foreign exchange change in contingent
consideration of Biocode Hycel
* net exchange gains from on-going trading activity of GBP602k due to the weakness
of the pound
Gain on Sales
The Group recorded a gain on the sale of the Haematology division of GBP642k.
Financing
Overall Financing costs have increased from GBP614k (GBP572k from continuing
operations) to GBP754k (of which GBP703k relates to continuing operations)
reflecting a full year's impact of the borrowing incurred in the prior year.
Taxation
The charge to taxation is GBP585k compared with GBP954k in the previous year
reflecting the different profits by jurisdiction as well as the utilisation of
carry forward losses in certain territories and the impact of R&D tax credits.
Profit after taxation
Overall profit has increased from GBP2.8m to GBP4.8m reflecting an overall
increase of 71.4% and in essence the same numbers apply for continuing
operations.
EPS
The overall Earnings per Ordinary Share has increased from 14.346p to 19.433p an
increase of 35.5%. Fully diluted the total increase by % is up 37.7% (18.569p vs
13.489p).
Balance Sheet
Current Assets
* Cash at the bank was GBP4.46m (2008:GBP2.97m) reflecting the benefits of the
December 2008 share placing of just over GBP3m gross
* Trade and other receivables increased from GBP4.8m to GBP9.2m, the increase
reflecting in large part the monies due from Escalon Drew in relation to the
divestment of the haematology division
* Inventories have decreased from GBP6.2m to GBP5.7m reflecting in the main the
divestment of the haematology division.
Liabilities
* Bank borrowings have increased from GBP13.0m to GBP13.7m. Due in part to an
additional loan of EUR1.8m entered into for the acquisition of a technology
licence and the fall in the strength of Sterling.
Provisions
The main change in the provision has been to reduce the earn-out liability in
relation to Biocode Hycel reflecting revised assumptions. That aspect of the
provision has been reduced by GBP1.96m.
Direction and Growth
I am extremely pleased with how, despite disparate locations and cultures, the
key aspects of the IDS-iSYS have been brought together to ensure its launch.
This augurs well for the future but we have to be also realistic as to the
challenges in front of us.
The strategic direction as set out in my report of last year and commented on in
other ways in the CEO's report overleaf continues to be the right direction for
the Group as a whole with the minor exception of additional refinement to the
Alliance Concept.
If we continue to deliver against the outlined strategic plan then we will be on
track to be not only the largest independent IVD Company in the UK but its most
profitable and one of the most prized within the niche we operate in. It will be
a challenge to maintain such independence.
The main challenges that I refer to above in terms of executing the plan will be
determined by ; the rate of new product development, the rate of instrument
manufacture and finally our ability to increase the level of traction with
instrument evaluation and placement. To the latter in particular we need to make
a significant investment in high quality and experienced personnel.
Outlook
The trading for the first two months of the year is in line with management
expectations.
To date (since acquiring Biocode Hycel) we have placed or sold circa 40
instruments, as we move on throughout the year I anticipate that the rate of
evaluations and placements of the IDS-iSYS will increase and that additional
infrastructure is currently being put in place to ensure that the rate of
placements is increased.
I look forward to updating you throughout the current financial year on;
* Additional product launches on IDS-iSYS
* Regulatory submission and anticipated approval in key territories primarily the
USA
* Additional expansion of our IP portfolio
Finally the progress that we have made over the past year has only been achieved
through the combination of the unstinting effort by our employees and your
continued support as a Shareholder and I would like to formally record my thanks
to both groups.
David Evans
Non-Executive Chairman
19 June 2009
CHIEF EXECUTIVE'S REVIEW
The year 2008/9 was a year fraught with difficulties for companies the world
over, with the global financial crisis impacting every marketplace. Such stormy
conditions present challenges of varying degrees of severity to every aspect of
business, testing the readiness and robustness of any enterprise. IDS is
certainly not immune from these malevolent forces, and whilst we have been
buffeted and bruised en voyage, I believe that we have come through a demanding
year with a highly creditable performance.
The major challenges facing the company at the outset of the year were two-fold.
First, we sought to further consolidate the IDS Group subsequent to the two
acquisitions of 2007 (namely Nordic Bioscience Diagnostics, NBD, in July and
Biocode Hycel in September). Secondly, we needed to ensure the completion of the
fully automated IDS-iSYS analyser with our flagship Vitamin D technology
on-board, and successfully launch the system to an expectant market.
We have demonstrated excellent progress and achievement in both regards.
Group Integration: The acquisition of NBD brought us valuable intellectual
property (IP) together with products including the prestigious CTX-I and N-Mid
Osteocalcin kits, and also prospects in the R&D pipeline. Product manufacture
has transferred to our Boldon, UK facility, and the pipeline has since delivered
a novel product in the form of an Aggrecan ELISA (aggrecan is a biomarker of
cartilage turnover). As importantly, the IP accompanying the acquisition has
been further exploited in the ongoing development of both N-Mid Osteocalcin and
CTX-I for the IDS-iSYS, both of which will duly launch in 2009 and 2010
respectively, and more 'NBD' products will appear in the not-too-distant future.
The Biocode Hycel acquisition has been a more demanding exercise and integration
is ongoing. In our last Annual Report, we disclosed the intended disposal of the
Haematology Division of Biocode Hycel, located near Rennes and in Paris, having
determined that this was not a core interest of IDS, employing as it does
different technology and servicing a market unaddressed by IDS. The progress of
the sale was sorely impacted by the global financial meltdown, and it was
finally drawn to a successful conclusion on December 31st. The disposal of this
loss-making division on acceptable terms has significantly reduced the
complexity of the business and reduced demands on management resources at a time
when we have such a great deal to achieve. As a consequence we have reorganised
our European operations, minimising duplication of effort and maximising
benefits obtainable from a broader background of collective experience. We are
relocating both the Biocode Hycel and IDS Eurl sales and administration
functions to a new single location in Paris. The distribution of our
Biochemistry products has been transferred from Rennes to Liège, where they are
manufactured. All of the manufacture of products for the IDS-iSYS is currently,
and will be, undertaken in our facility in Liège by dedicated equipment and
staff trained for the purpose. IDS-iSYS analyzers are developed and manufactured
at our facility in Pouilly in Burgundy. The whole of our ELISA manufacturing is
being located in Boldon, where we are able to optimally scale-up and automate
manufacture. We have now fully implemented our existing ERP system in Boldon and
elements of this system will be established at our operating sites during the
current year prior to installing a Group wide solution during the next 2-3
years.
All Group sites are working to establish a common quality system during the
current year.
The IDS-iSYS: The launch of the IDS-iSYS with specialised immunoassay products
has been proclaimed by ourselves, and acknowledged by our shareholders, to be a
major milestone in the development of the company. It heralds the entry of the
company into a higher echelon of activity within the IVD industry. We duly made
our entrance as a player in automated immunoassay at the end of February this
year, a little later than anticipated but with a system truly ready to impress
the most demanding Clinical Biochemist. Our strategy within the automation arena
is as explicit as our long-standing strategy with manual immunoassays: IDS seeks
to become the preferred supplier of specialist automated products in our chosen
areas of application. We do not wish to stray into the fiercely-competitive
automated 'commodity IVD' sector occupied by the Top 5 multi-billion dollar
protagonists.
Vitamin D is an excellent example of that specialisation. Historically a very
difficult analyte to measure in human serum or plasma, only three significant
players (including IDS) are players in this market. Our competitors in the
market, Diasorin and Roche, both have very substantial numbers of automated
analysers placed throughout the world. Diasorin has been largely unchallenged in
the automated Vitamin D market since the demise of Nichols Institute Diagnostics
(April 2006). Enter IDS-iSYS 25 Hydroxy Vitamin D!
IDS has succeeded in marrying its expertise and IP in Vitamin D technology to
the advanced features offered by the IDS-iSYS to solve the analytical problems
presented by this difficult analyte. The result is a product that we believe
offers significant advantages over competing automated methods, particularly
with respect to sensitivity, specificity, precision and reproducibility, and
this will facilitate market penetration and increase our market share. IDS-iSYS
Vitamin D is a fully-optimised and automated 'closed' system offering 'walk
away' ease of use which greatly improves consistency of analysis, attractive
features for the hard-pressed, quality-conscious laboratory manager or
physician.
But one product does not make 'a Specialist'. A key area of differentiation
between IDS and our immediate competitors is that throughout the remainder of
2009 and into 2010/11 and beyond, IDS will be adding highly complementary bone
and skeletal products to the menu of the IDS-iSYS, such as Parathyroid Hormone
(PTH), CTX-I, N-Mid Osteocalcin, PINP, Bone-Specific Alkaline Phosphatase
(BSAP), TRAP 5B, and still more. As with our manual assays, IDS will offer the
most comprehensive range of products in bone and skeletal research and
diagnostics. Additional sector specialisms are being implemented such as growth
factors and hypertension, of which more anon.
Launching our proven Vitamin D technology on the IDS-iSYS represents a major
opportunity for the company to capitalise on the burgeoning growth in Vitamin D
testing. Figures released last year by a number of the largest reference
laboratories in the USA, and quoted in USA Today, showed that requests for
Vitamin D testing increased by over 90%, 80% and 74% at LabCorp, Quest
Laboratories and the Mayo Clinic respectively, and more recent data released by
SFRL (the French IVD trade association) indicate that the French market has more
than tripled in less than two years (from EUR3.7m to EUR11.5m between Q2 2007 and Q1
2009).
IDS has enjoyed a remarkable increase in sales of our existing manual Vitamin D
products (+ 86% FY2009 vs FY2008). I believe that we will see our automated
Vitamin D sales take off steeply throughout the remainder of 2009 and take a
significant share of the market from our existing competitors. The IDS-iSYS has
the flexibility to automate not only immunoassay, but also biochemistry and
coagulation tests. This will give us 'an edge' when placing systems in those
busy laboratories needing to determine specific biochemistries such as calcium,
phosphate and creatinine levels simultaneously with Vitamin D and PTH in (for
example) chronic renal failure patient samples.
The IDS Strategy revisited: So, what of our explicit 3-pronged strategy
proclaimed in the previous Annual Reports, namely that of New Product
Development, Geographic Growth and Acquisition?
I am happy to disclose that this remains in place, subject only to
interpretation and implementation in accord with the prevailing business
environment. Automation is now a common theme in delivering on this strategy.
New Product Development: Our development resources in Boldon and Liège are
primarily dedicated to the delivery of automated versions of the excellent
manual products that have supported our decade of consistent sales growth, and
these will appear on the IDS-iSYS in the fullness of time. New analytes,
licensed-in where necessary, are in development as automated and/or manual
products as appropriate. New product development is seen as a core ongoing
activity at IDS, not a luxury, to ensure that we develop and maintain the most
competitive range of biomarker tests in the future.
Geographic growth: In the near- to mid-term our geographic growth will come
from the international roll-out of the IDS-iSYS, through IDS Group companies in
our 'direct' territories (UK, USA, Germany, France, Scandinavia, Austria and
Switzerland) and through our established distributor network in territories such
as Italy, Spain, Canada and Australia. This is a major undertaking. The creation
of the infrastructure required to support a growing number of sophisticated
instruments in each of the major territories, to provide product support,
engineers, training, software and hardware upgrades, is a task not to be
undertaken lightly. Fortunately we have the personnel to do this, with in-depth
knowledge and experience within the 'old' Biocode Hycel organisation and with
the pick of ex-Nichols Institute Diagnostics personnel.
Our subsidiaries continue to perform well. Annual turnover at IDS Inc has
exceeded $10m for the first time, a growth of 82%. In Europe, IDS Eurl and IDS
GmbH have combined revenues exceeding last year's total by 67%, and IDS Nordic
achieved more than EUR1m in revenues in its first full year of operation. Our
export sales through distributors, supported from Boldon, delivered sales of
GBP4.9m, an increase year on year of 49%.
Acquisition Activities: Our appetite for acquisition of IP, product or company
remains tempered and highly selective. In July, we successfully concluded
negotiations to obtain a licence from a European IVD corporation to develop what
we believe will become a major analyte on the IDS-iSYS. This product, and the
deal, will be disclosed at launch in July 2009.
In another aspiration, the financial conditions that came to taint the year did
not work in our favour. An attractive potential acquisition comprising company,
products and IP made good progress but eventually had to be aborted at an
advanced stage. Costs of this activity have been formally accounted for, and
must also be put down to experience.
FY2009 has proven to be a very demanding year which tested us profoundly. I am
pleased to say that we have held our course admirably despite winds of change
and the occasional gale. The continued organic growth of our 'traditional'
products is about to be augmented, and in years to come to be eclipsed, by the
impressive IDS-iSYS with a growing menu of products. All in all, we can consider
this to have been a very satisfactory year during which we have added
significantly to longer term shareholder value.
Roger Duggan, PhD
Chief Executive
19 June 2009
FINANCIAL REVIEW
Financial Highlights
Once again we have seen a significant increase in both sales and profitability.
We have also launched our automated platform the IDS-iSYS which should
contribute significantly towards future growth.
Turnover
Turnover from our continuous business increased by circa 51% to GBP24,937,000
(2008: GBP16,471,000). Direct sales into the USA and mainland Europe experienced
significant growth, helped in the second half of the year by the strengthening
of the US dollar and the Euro.
Gross Margin
Our gross margin increased for the twelve month period to 66.50% (gross profit
GBP16,580,000) from 62.30% in 2008 (gross profit GBP10,261,000). Contributions
behind this increase were the better product mix (more IDS manufactured product)
and the strengthening of the US dollar and Euro during the second half of 2008.
Operating Costs and Profits
Our R&D expenditure for 2009 increased in line with management expectations to
GBP3,805,000 up from GBP2,246,000 in 2008. However, management believes that R&D
expenditure will start to fall post the launch of the IDS-iSYS.
Distribution and Administrative expenses increased by GBP5,157,000 to
GBP11,214,000 compared to GBP6,057,000 in 2008. This increase was expected, as
for the first time we accounted for a full twelve months worth of activities of
the enlarged group.
The charge for depreciation and amortisation of intangibles was GBP1,428,000
compared to GBP933,000 in 2008. As expected this charge has increased due to the
launch of the IDS-iSYS and the commencement of its respective capitalised R&D
being released to the profit and loss account.
EBITDA
The Group reports an increase in earnings before interest, tax, depreciation and
amortisation (EBITDA) from GBP5,245,000 in 2008 to GBP6,991,000, an increase of
33%.
Turnover by Product Area
+----------------------+---------+---------+---------+
| Year ending 31 | 2009 | 2008 | Change |
| March: | | | |
+----------------------+---------+---------+---------+
| | GBP'000 | GBP'000 | % |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Vitamin D | 12,820 | 6,897 | 85.88% |
+----------------------+---------+---------+---------+
| Octeia | 1,971 | 1,378 | 43.03% |
+----------------------+---------+---------+---------+
| Gamma B | 211 | 213 | -0.94% |
+----------------------+---------+---------+---------+
| Other | 657 | 467 | 40.69% |
+----------------------+---------+---------+---------+
| Automation | 475 | 212 | 124.06% |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Total of IDS | 16,134 | 9,167 | 76.00% |
| products | | | |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Distribution of | | | |
+----------------------+---------+---------+---------+
| third party sales | 2,119 | 2,723 | -22.18% |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Nordic Bioscience | 3,431 | 2,614 | 31.25% |
+----------------------+---------+---------+---------+
| Biocode Hycel | 3,253 | 1,967 | 65.38% |
+----------------------+---------+---------+---------+
| | | | |
+----------------------+---------+---------+---------+
| Total turnover | 24,937 | 16,471 | 51.40% |
+----------------------+---------+---------+---------+
Dividend Policy and Dividend
The board is proposing a dividend for the year of 1.65p (2008: 1.5p); subject to
the approval of shareholders in the Annual General Meeting. The dividend per
share will be paid on 21st August 2009 to shareholders on the register at the
close of business on 24th July 2009.
Balance Sheet
The Group's fixed assets at 31 March 2009 were GBP60,768,000 (2008:
GBP50,518,000) which consisted of tangible assets of GBP4,161,000, intangible
assets of GBP56,603,000 and investments of GBP4,000. Intangible assets
principally relate to the patents and goodwill acquired on acquisitions.
Inventories have decreased to GBP5,737,000 (2008: GBP6,222,000) and receivables
have increased to GBP9,158,000 (2008: GBP4,763,000) while current liabilities
have increased to GBP10,124,000 (2008: GBP8,807,000). Liabilities due after one
year have increased to GBP19,282,000 (2008: 18,678,000).
Financial Instruments
This report shows that the Group has had a very good year with record sales and
profitability. A major contributor to this success has been the increase in both
the number of orders received and the number of active customers who purchase
product. As we develop and introduce new products we expect this growth to
continue.
There are of course always risks associated with a business and as the in vitro
diagnostic market develops there is the possibility that increasing competition
from larger companies with greater financial and other resources than those
directly available to the Group will appear. The directors are aware of this and
are looking to work closely with these larger companies in an attempt to make
them customers for the Group's products rather than direct competitors.
Our progress on our strategic objectives is monitored by the Board of Directors
by reference to six key performance indicators applied on a Group-wide basis.
The Groups performance for 2009 and 2008 is shown below:
+-----------------------------------+-------------+-------------+-------------+
| Financial KPI | 2009 | 2008 | Variance |
+-----------------------------------+-------------+-------------+-------------+
| Annual increase in sales | 47% | 88% | (41%) |
+-----------------------------------+-------------+-------------+-------------+
| Number of net invoices issued | 21,172 | 10,399 | 10,773 |
+-----------------------------------+-------------+-------------+-------------+
| Gross margin | 66.50% | 62.30% | 4.20% |
+-----------------------------------+-------------+-------------+-------------+
| Profit after tax | 19.33% | 17.22% | 2.11% |
+-----------------------------------+-------------+-------------+-------------+
| Basic earnings per share | 19.433p | 14.346p | 5.087p |
+-----------------------------------+-------------+-------------+-------------+
| Diluted earnings per share | 18.569p | 13.489p | 5.080p |
+-----------------------------------+-------------+-------------+-------------+
Other Business
Changes to Goodwill
A period end review of the "earn out provision" relating to the acquisition of
Biocode Hycell resulted in an adjustment to Goodwill, Provisions and our Income
Statement. The number of IDS-iSYS included in the "earn out provision" now
reflects managements thoughts on how many can be placed and or sold during the
earn out period.
As a result of this review Goodwill was reduced by GBP2,509,000, Provisions was
reduced by GBP1,962,000 and the Income Statement was debited with GBP547,000.
The charge to the Income Statement resulted from the movement in the exchange
rate between Sterling and the Euro at the time of the acquisition to 31 March
2009, being 1.4734 and 1.0763 respectively multiplied by the number of
instruments and discounted by 8.9%.
Haematology Consideration
The table below shows the time frame of the consideration to be received by the
Company from the disposal of the Haematology business to EMC which completed on
31 December 2008:
+----------------------------+---------------+
| Payment upon completion | EUR 25,000 |
+----------------------------+---------------+
| Payment after 18 months | EUR 800,000 |
+----------------------------+---------------+
| Payment after 30 months | EUR 1,000,000 |
+----------------------------+---------------+
| Payment after 36 months | EUR 1,000,000 |
+----------------------------+---------------+
| Payment after 48 months | EUR 1,375,000 |
+----------------------------+---------------+
IDS-iSYS Amortisation
Post launch of the IDS-iSYS automated analyser the Company now has to amortise
the costs of development. After review the Board agreed to write these costs
over the remaining patent life of the instrument (18 years).
Paul Hailes
Finance Director
19 June 2009
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March 2009
+------------------------------------------------+------+-------------+-------------+
| | 2009 | 2008 |
+-------------------------------------------------------+-------------+-------------+
| | GBP | GBP |
+-------------------------------------------------------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
| REVENUE | | 24,936,906 | 16,471,340 |
+------------------------------------------------+------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| Cost of sales | (8,356,580) | (6,210,537) |
+-------------------------------------------------------+-------------+-------------+
| Gross profit | 16,580,326 | 10,260,803 |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| Distribution costs | (4,600,918) | (2,603,290) |
+-------------------------------------------------------+-------------+-------------+
| Administrative expenses | (6,612,592) | (3,453,537) |
+-------------------------------------------------------+-------------+-------------+
| PROFIT FROM OPERATIONS | | 5,366,816 | 4,203,976 |
+------------------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
| Finance income | | 117,553 | 124,319 |
+------------------------------------------------+------+-------------+-------------+
| | 5,484,369 | 4,328,295 |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| Finance costs | | (702,849) | (571,707) |
+------------------------------------------------+------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| PROFIT BEFORE TAX | 4,781,520 | 3,756,588 |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| Income tax expense | | (585,343) | (953,942) |
+------------------------------------------------+------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| PROFIT FOR THE YEAR FROM CONTINUING ACTIVITIES | | 4,196,177 | 2,802,646 |
+------------------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
| Profit for the year from discontinued | | 623,780 | 34,046 |
| activities | | | |
+------------------------------------------------+------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| PROFIT FOR THE YEAR ATTRIBUTABLE | 4,819,957 | 2,836,692 |
| TO EQUITY HOLDERS OF PARENT | | |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------------+-------------+-------------+
| EARNINGS PER SHARE | | | |
+------------------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
| From continuing operations | | | |
+------------------------------------------------+------+-------------+-------------+
| Basic | | 16.918p | 14.174p |
+------------------------------------------------+------+-------------+-------------+
| Diluted | | 16.166p | 13.327p |
+------------------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
| From continuing and discontinued operations | | | |
+------------------------------------------------+------+-------------+-------------+
| Basic | | 19.433p | 14.346p |
+------------------------------------------------+------+-------------+-------------+
| Diluted | | 18.569p | 13.489p |
+------------------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------------------+------+-------------+-------------+
CONSOLIDATED BALANCE SHEET
As at 31 March 2009
+--------------------------------------------------+----+------------+------------+
| | 2009 | 2008 |
+-------------------------------------------------------+------------+------------+
| | GBP | GBP |
+-------------------------------------------------------+------------+------------+
| ASSETS | | |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| NON-CURRENT ASSETS | | |
+-------------------------------------------------------+------------+------------+
| Property, plant and equipment | | 4,161,154 | 3,066,410 |
+--------------------------------------------------+----+------------+------------+
| Goodwill | | 19,463,756 | 18,837,818 |
+--------------------------------------------------+----+------------+------------+
| Other intangible assets | | 37,139,180 | 28,609,885 |
+--------------------------------------------------+----+------------+------------+
| Investments | | 3,696 | 3,696 |
+--------------------------------------------------+----+------------+------------+
| | 60,767,786 | 50,517,809 |
+-------------------------------------------------------+------------+------------+
| CURRENT ASSETS | | | |
+--------------------------------------------------+----+------------+------------+
| Inventories | | 5,737,202 | 6,221,897 |
+--------------------------------------------------+----+------------+------------+
| Trade and other receivables | | 8,598,131 | 4,763,136 |
+--------------------------------------------------+----+------------+------------+
| Income tax assets | | 559,740 | - |
+--------------------------------------------------+----+------------+------------+
| Cash and cash equivalents | | 4,455,920 | 2,973,452 |
+--------------------------------------------------+----+------------+------------+
| | 19,350,993 | 13,958,485 |
+-------------------------------------------------------+------------+------------+
| TOTAL ASSETS | 80,118,779 | 64,476,294 |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| LIABILITIES | | |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| CURRENT LIABILITIES | | |
+-------------------------------------------------------+------------+------------+
| Short term portion of long term borrowings | | 2,634,240 | 3,370,313 |
+--------------------------------------------------+----+------------+------------+
| Trade and other payables | | 6,240,156 | 5,426,707 |
+--------------------------------------------------+----+------------+------------+
| Income tax liabilities | | 1,249,663 | 10,062 |
+--------------------------------------------------+----+------------+------------+
| | | 10,124,059 | 8,807,082 |
+--------------------------------------------------+----+------------+------------+
| NET CURRENT ASSETS | 9,226,934 | 5,151,403 |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| NON-CURRENT LIABILITIES | | |
+-------------------------------------------------------+------------+------------+
| Long term borrowings | | 11,291,523 | 9,840,897 |
+--------------------------------------------------+----+------------+------------+
| Provisions | | 3,165,425 | 5,127,823 |
+--------------------------------------------------+----+------------+------------+
| Deferred tax liabilities | | 4,446,964 | 3,115,531 |
+--------------------------------------------------+----+------------+------------+
| Deferred income | | 377,866 | 593,368 |
+--------------------------------------------------+----+------------+------------+
| | 19,281,778 | 18,677,619 |
+-------------------------------------------------------+------------+------------+
| TOTAL LIABILITIES | 29,405,837 | 27,484,701 |
+-------------------------------------------------------+------------+------------+
| NET ASSETS | 50,712,942 | 36,991,593 |
+-------------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------------+------------+------------+
| TOTAL EQUITY | | |
+-------------------------------------------------------+------------+------------+
| Called up share capital | | 528,316 | 479,453 |
+--------------------------------------------------+----+------------+------------+
| Share premium account | | 28,499,692 | 25,543,742 |
+--------------------------------------------------+----+------------+------------+
| Other reserves | | 12,165,927 | 5,909,070 |
+--------------------------------------------------+----+------------+------------+
| Retained earnings | | 9,525,542 | 5,065,863 |
+--------------------------------------------------+----+------------+------------+
| | | 50,719,477 | 36,998,128 |
+--------------------------------------------------+----+------------+------------+
| Treasury shares | | (6,535) | (6,535) |
+--------------------------------------------------+----+------------+------------+
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE | | 50,712,942 | 36,991,593 |
| PARENT | | | |
+--------------------------------------------------+----+------------+------------+
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2009
+-----------------------------------------------+--------+-------------+--------------+
| | 2009 | 2008 |
+--------------------------------------------------------+-------------+--------------+
| | GBP | GBP |
+--------------------------------------------------------+-------------+--------------+
| OPERATING ACTIVITIES | | | |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| Cash generated from operations | | 6,367,085 | 845,828 |
+-----------------------------------------------+--------+-------------+--------------+
| Income taxes paid | | (302,478) | (676,748) |
+-----------------------------------------------+--------+-------------+--------------+
| Interest paid | | (754,220) | (614,340) |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| NET CASH FROM/(USED BY) OPERATING ACTIVITIES | | 5,310,387 | (445,260) |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| INVESTING ACTIVITIES | | |
+--------------------------------------------------------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| Acquisition of subsidiaries, net of cash | | (52,305) | (17,453,285) |
| acquired | | | |
+-----------------------------------------------+--------+-------------+--------------+
| Acquisition of investments in associates | | - | (696) |
+-----------------------------------------------+--------+-------------+--------------+
| Purchases of other intangible assets | | (4,326,248) | (2,371,176) |
+-----------------------------------------------+--------+-------------+--------------+
| Purchases of property, plant and equipment | | (1,423,450) | (765,550) |
+-----------------------------------------------+--------+-------------+--------------+
| Interest received | | 117,553 | 124,319 |
+-----------------------------------------------+--------+-------------+--------------+
| | | |
+--------------------------------------------------------+-------------+--------------+
| NET CASH USED BY INVESTING ACTIVITIES | (5,684,450) | (20,466,388) |
+--------------------------------------------------------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| FINANCING ACTIVITIES | | | |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| Proceeds from issue of shares for cash | | 3,004,813 | 12,002,550 |
+-----------------------------------------------+--------+-------------+--------------+
| Proceeds of new borrowings | | 1,404,720 | 13,727,935 |
+-----------------------------------------------+--------+-------------+--------------+
| Repayments of borrowings | | (2,613,241) | (532,246) |
+-----------------------------------------------+--------+-------------+--------------+
| Repayments of hire-purchase obligations | | (85,351) | (69,283) |
+-----------------------------------------------+--------+-------------+--------------+
| Dividends paid | | (360,278) | (201,600) |
+-----------------------------------------------+--------+-------------+--------------+
| | | |
+--------------------------------------------------------+-------------+--------------+
| NET CASH FROM FINANCING ACTIVITIES | 1,350,663 | 24,927,356 |
+--------------------------------------------------------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| EFFECT OF EXCHANGE RATE DIFFERENCES | | 505,868 | (2,002,098) |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| NET INCREASE IN CASH AND CASH EQUIVALENTS | | 1,482,468 | 2,013,610 |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| CASH AND CASH EQUIVALENTS AT BEGINNING OF | | 2,973,452 | 959,842 |
| YEAR | | | |
+-----------------------------------------------+--------+-------------+--------------+
| | | | |
+-----------------------------------------------+--------+-------------+--------------+
| CASH AND CASH EQUIVALENTS AT END OF YEAR | | 4,455,920 | 2,973,452 |
+-----------------------------------------------+--------+-------------+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2009
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | Called | Share | Merger | Share | Currency | Retained | Treasury | Total |
| | up | premium | reserve | based | translation | earnings | shares | |
| | share | account | | payments | reserve | | | |
| | capital | | | reserve | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| At 1 April 2007 | 266,893 | 935,701 | 582,999 | 231,359 | (11,421) | 2,430,771 | (6,535) | 4,429,767 |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Profit for the | | | | | | 2,836,692 | | 2,836,692 |
| year | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Foreign | | | | | 4,606,116 | | | 4,606,116 |
| exchange | | | | | | | | |
| translation | | | | | | | | |
| differences on | | | | | | | | |
| foreign | | | | | | | | |
| currency net | | | | | | | | |
| investment in | | | | | | | | |
| subsidiaries | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Tax effect of | | | | | 430,610 | | | 430,610 |
| treatment of | | | | | | | | |
| foreign | | | | | | | | |
| currency | | | | | | | | |
| translation | | | | | | | | |
| differences | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Share based | | | | 69,407 | | | | 69,407 |
| payments | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Dividends paid | | | | | | (201,600) | | (201,600) |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Shares issued | 212,560 | 24,608,041 | | | | | | 24,820,601 |
| in the period | | | | | | | | |
| (net of | | | | | | | | |
| expenses) | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| At 31 March/1 | 479,453 | 25,543,742 | 582,999 | 300,766 | 5,025,305 | 5,065,863 | (6,535) | 36,991,593 |
| April 2008 | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Profit for the | | | | | | 4,819,957 | | 4,819,957 |
| year | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Foreign | | | | | 5,573,258 | | | 5,573,258 |
| exchange | | | | | | | | |
| translation | | | | | | | | |
| differences on | | | | | | | | |
| foreign | | | | | | | | |
| currency net | | | | | | | | |
| investment in | | | | | | | | |
| subsidiaries | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Tax effect of | | | | | 465,922 | | | 465,922 |
| treatment of | | | | | | | | |
| foreign | | | | | | | | |
| currency | | | | | | | | |
| translation | | | | | | | | |
| differences | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Share based | | | | 217,677 | | | | 217,677 |
| payments | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Dividends paid | | | | | | (360,278) | | (360,278) |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| Shares issued | 48,863 | 2,955,950 | | | | | | 3,004,813 |
| in the period | | | | | | | | |
| (net of | | | | | | | | |
| expenses) | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
| At 31 March | 528,316 | 28,499,692 | 582,999 | 518,443 | 11,064,485 | 9,525,542 | (6,535) | 50,712,942 |
| 2009 | | | | | | | | |
+-----------------+---------+------------+---------+----------+-------------+-----------+----------+------------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 March 2009
1. ACCOUNTING POLICIES
a) BASIS OF ACCOUNTING
The consolidated financial statements are prepared under the historical cost
convention in accordance with applicable International Financial Reporting
Standards (IFRS) as adopted by the European Union and issued by the
International Accounting Standards Board (IASB). IFRS includes all IFRS, IAS,
ISCs and IFRICs and the financial statements have been prepared in accordance
with those parts of the Companies Act 1985 applicable to companies reporting
under IFRS. The measurement basis and principal accounting policies are
unchanged from the previous year and are set out below.
b) BASIS OF PREPARATION
The financial statements are prepared on the historical cost basis except for
certain financial assets which are stated at their fair values.
The preparation of financial statements in conformity with IFRS requires the
directors to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expense. The estimates and judgements are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying amounts of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates. The accounting
policies set out below have, unless otherwise stated, been applied consistently
to all periods presented in these financial statements.
c) FOREIGN CURRENCIES
The results and financial position of the Group are expressed in pounds
sterling, its functional currency. Transactions in currencies other than pounds
sterling are recorded at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated to sterling at the foreign exchange
rate ruling at that date. Exchange differences arising on translation are
recognised in the consolidated income statement for the period.
Non-monetary assets and liabilities denominated in foreign currencies that are
stated at fair value are translated at the rates prevailing at the dates when
the fair value was determined. Non-monetary assets and liabilities that are
measured at historical cost in a foreign currency (eg property, plant and
equipment purchased in a foreign currency) are translated using the exchange
rate prevailing at the date of the transaction. Exchange differences arising on
the translation of net assets are effected through the statement of recognised
income and expense.
Where a non-monetary foreign currency loan forms part of the net investment in a
foreign subsidiary, on consolidation the exchange differences are recognised
directly in equity to the extent the loan qualifies as an effective hedge.
d) BUSINESS COMBINATIONS
The financial statements incorporate the financial statements of the Company and
all its subsidiaries. Unrealised gains on transactions between the Group and its
subsidiaries are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group since date of transition. The cost of an acquisition
is measured as the fair value of the assets given, equity instruments issued and
liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date. The excess of the cost of the acquisition over the fair value
of assets and liabilities is recorded as goodwill. If the cost of the
acquisition is less than the fair value of the net assets of the subsidiary
acquired the difference is recognised directly in the income statement.
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the
Company has the power, directly or indirectly (but normally through voting
rights granted through the Company's shareholdings), to govern the financial and
operating policies of an entity to obtain benefits from its activities. The
financial statements of subsidiaries are included in the consolidated financial
statements.
Acquisitions
On acquisition, the assets and liabilities of a subsidiary, including
identifiable intangible assets, are measured at their fair value at the date of
acquisition. Any excess of the cost of acquisition over the fair value of the
identifiable net assets acquired is recorded as goodwill. Goodwill is reviewed
for impairment annually and any impairment is recognised immediately in the
income statement. Any excess of fair value of the identifiable net assets
acquired over the cost of acquisition is credited to the income statement on
acquisition. Goodwill recorded on business combinations prior to IFRS transition
has not been restated and has either been written off to reserves or capitalised
according to the UK GAAP accounting standards then in force. On disposal or
closure of a previously acquired business, the attributable goodwill previously
written off to reserves is not included in determining the profit or loss on
disposal.
The results and cash flows relating to the business are included in the
consolidated accounts from the date of combination.
e) REVENUE RECOGNITION
Revenue is measured by reference to the fair value of consideration received or
receivable for goods and services provided in the normal course of business,
excluding VAT. Revenue is recognised upon the performance of services or the
sales of goods when risk is transferred to the customer. Where services are
based on performance or specific deliverables the income is accounted for as the
right to consideration for performance is earned.
f) SEGMENTAL REPORTING
Segmental reporting is based on geographic segments. A geographic segment is a
group of assets and operations that provide a product or service within a
particular economic environment and that is subject to risks and returns that
are different from segments operating in different economic environments.
g) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill is measured at cost less any accumulated impairment losses. Goodwill is
reviewed for impairment annually.
All research costs, which consist predominantly of salaries, are charged to the
income statement as incurred.
Development costs, which consist predominantly of salaries and third party
direct costs, are capitalised as an intangible asset when recognition criteria
are met and, in particular, it is clear that the development expenditure will
generate future economic benefit. Otherwise development costs are charged to the
income statement as incurred. Capitalised costs are amortised over 5 years from
the date the product commences commercial production.
All development expenditure incurred on automation of IDS products on the
IDS-iSYS will be capitalised and amortised over 18 years from the date the
product commences commercial production. Development expenditure on research use
only products will be expensed as incurred as there is uncertainty as to the
magnitude of future revenues being sufficient to cover the development costs.
Research and development of clinical products - all expenditure incurred up to
feasibility stage is expensed off - all expenditure post feasibility will be
capitalised and amortised post product launch over 5 years.
Other intangible assets, including product technology, acquired as part of a
business acquisition are capitalised at fair value at the date of acquisition.
Purchased intangible assets acquired separately are capitalised at cost. After
initial recognition, all intangible fixed assets are measured at cost less
accumulated amortisation and any accumulated impairment losses.
The TRAP patent was recognised at fair value on the acquisition of a subsidiary.
The amount capitalised is the consideration in excess of the book values of the
assets and liabilities at the date of acquisition. The directors consider 20
years as a reasonable period of estimated useful life.
Where an intangible asset has been assigned an indefinite useful life, it is not
amortised and is reviewed for impairment either annually or more frequently if
events or changes in circumstances indicate a possible decline in the carrying
value.
Intangible assets which have been assigned a finite life are amortised on a
straight line basis over the assets' useful life of up to 20 years and are
tested for impairment if events or changes in circumstances indicate that the
carrying value may have declined. Useful lives are examined every year and
adjustments are made, where applicable, on a prospective basis. Amortisation of
intangible assets is charged in the income statement under administrative
expenses.
h) TANGIBLE ASSETS
Property, plant and equipment
Property, plant and equipment is shown at cost, net of depreciation and any
provision for impairment. Depreciation is provided on all property, plant and
equipment at varying rates calculated to write off cost to the expected current
residual value by equal annual instalments over their estimated useful economic
lives.
The principal rates employed are:
+-----------------------------------------+-----------------------------------------+
| Property | - over the life of the lease |
+-----------------------------------------+-----------------------------------------+
| Fixtures, Fittings & Equipment | - over 5-7 years |
+-----------------------------------------+-----------------------------------------+
| Motor Vehicles | - over 4 years |
+-----------------------------------------+-----------------------------------------+
Disposal of assets
The gain or loss arising on the disposal of an asset is determined as the
difference between the disposal proceeds and the carrying amount of the asset
and is recognised in the income statement. The gain or loss arising from the
sale is included in administrative expense in the income statement.
i) INVESTMENTS
Fixed asset investments are stated at cost after making provision for any
impairment in their value.
j) IMPAIRMENT
Impairment is determined by comparing the recoverable amount of the
cash-generating unit or Group of cash-generating units ("CGU") which are
expected to benefit from the asset to its carrying value. The recoverable amount
is the greater of an asset's value in use and its fair value less costs to sell.
Value in use is calculated by discounting the future cash flows expected to be
derived from the asset or Group of assets in a CGU at an appropriate pre tax
discount rate. Where the recoverable amount is less than the carrying value, the
asset is considered impaired and is written down through the income statement to
its recoverable amount.
k) INVENTORIES
Inventories are valued at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items. For inventories that
are ordinarily interchangeable, cost is calculated using the weighted average
method. Net realisable value is based on estimated selling price less estimated
cost of disposal.
Work in progress is valued on the basis of direct costs plus attributable
overheads based on normal level of activity. Provision is made for any
foreseeable losses where appropriate. No element of profit is included in the
valuation of the work in progress.
l) LEASE AND HIRE PURCHASE COMMITMENTS
Assets held under hire purchase agreements are capitalised in the balance sheet
at the fair value of the assets and are depreciated over their useful lives. The
capital element of future obligations under the contract is included in
liabilities in the balance sheet.
The interest element of the rental obligations is charged to the income
statement over the period of the lease and represents a constant proportion of
the balance of capital repayments outstanding.
All other leases are classified as operating leases and rentals are charged to
the income statement on a straight line basis over the lease term.
m) PENSIONS
Trading companies operate defined contribution pension schemes for employees.
The assets of the schemes are held separately from those of the Company. The
annual contributions payable are charged to the income statement.
n) FINANCIAL ASSETS
Trade receivables
Trade receivables are initially recognised at fair value and thereafter at
amortised cost using the effective interest rate. A provision for impairment of
trade receivables is established when there is objective evidence that the
Company will not be able to collect all amounts due according to the original
terms of these receivables. The amount of the provision is recognised in the
income statement. Trade receivables do not carry any interest charge.
Cash
Cash includes cash in hand, deposits held at call with banks, and bank
overdrafts. Bank overdrafts are shown within current liabilities on the balance
sheet.
o) FINANCIAL LIABILITIES
Trade payables
Trade payables are non-interest-bearing and are initially measured at fair value
and thereafter at amortised cost using the effective interest rate.
Borrowings
Interest-bearing loans and bank overdrafts are initially carried at the fair
value. Finance charges, including premia payable on settlement or redemption and
direct issue costs, are accounted for on an accruals basis to the income
statement using the effective interest method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period
in which they arise.
p) GOVERNMENT GRANTS
Government grants in respect of capital expenditure are treated as deferred
income and are credited to the income statement over the estimated useful life
of the assets to which they relate. Revenue grants are credited to the income
statement in the period to which they relate.
q) PROVISIONS
Provisions for liabilities are recognised where the Group has a present
commitment at the balance sheet date arising from a past event and where the
extent of the commitment can be estimated reliably.
r) SHARE-BASED PAYMENTS
All goods and services received in exchange for the grant of any share-based
payment are measured at their fair values. The Group issues equity-settled and
cash-settled share-based payments to certain employees. Equity-settled
share-based payments are measured at fair value at the date of grant. The fair
value determined at the grant date of equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest.
The fair value is measured by the use of the Black-Scholes option pricing model.
The expected life used in the model has been adjusted, based on management's
best estimate, for the effect of non-transferability, exercise restrictions, and
behavioural considerations.
A liability equal to the portion of the goods or services received is recognised
at the current fair value determined at each balance sheet date for cash-settled
share-based payments. Changes in fair value are recognised through the profit
and loss account.
All equity-settled share-based payments are ultimately recognised as an expense
in the income statement with a corresponding credit to reserves.
If vesting periods or other non-market vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest. Estimates are subsequently revised if
there is any indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised are different
to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable
transaction costs are credited to share capital and, where appropriate, share
premium.
s) TAXATION
Current tax is the tax currently payable based on taxable results for the year.
Deferred income taxes are calculated using the liability method on temporary
differences. However, deferred tax is not provided on the initial recognition of
an asset or a liability unless the related transaction is a business combination
or affects tax or accounting profit. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities and their tax
bases. In addition, tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax
assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance
sheet date.
t) FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of that
instrument.
The Group uses foreign currency loans to hedge its overseas exposure and fixed
rate interest swaps to hedge its term loan interest rate exposure. The Group
does not use derivative financial instruments for speculative purposes.
Interest rate swaps are initially recognised at cost and are subsequently
re-measured to fair value at each balance sheet date. Changes in the fair value
of derivative financial instruments that do not qualify for hedge accounting are
recognised in the income statement as they arise. These valuations are provided
by the issuing financial institution.
Derivatives embedded in other financial instruments or other host contracts are
treated as separate derivatives when their risks and characteristics are not
closely related to those of the host contracts and the host contracts are not
carried at fair value with unrealised gains or losses reported in the income
statement.
u) EQUITY
Equity comprises the following:
* share capital represents the nominal value of equity shares.
* share premium represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the share issue.
* retained earnings include all current and prior period results as disclosed in
the income statement.
* Merger reserve represents the share premium and capital redemption reserve in
existence in the subsidiary at the date of merger.
* Share based payment reserve is the corresponding entry to the expense arising
from equity-settled share-based payments.
v) CRITICAL JUDGEMENTS IN APPLYING THE GROUP'S ACCOUNTING POLICIES
In the process of applying the Group's accounting policies, management has made
the following judgements that have the most significant effect on the amounts
recognised in the financial statements.
Research and development
Research and development expenditure is capitalised as an intangible asset when
recognition criteria are met and, in particular, it is clear that the
development expenditure will generate future economic benefit. The development
of the IDS-iSYS instrument and a range of tests to be run on it are seen as
development expenditure so relevant costs are capitalised and amortised over 18
years from the date the product commences commercial production.
Identification and valuation of intangible assets on acquisition
The directors use their judgement to identify the separate intangible assets and
then determine a fair value for each based upon the consideration paid, the
nature of the asset, industry statistics, future potential and other relevant
factors. These fair values will be reviewed for impairment annually.
Segmental analysis
The Group's principal activity consists of manufacturing and distributing
medical diagnostic products. The directors believe that these activities
comprise one business unit and consequently segmental analysis by business
segment is not considered necessary.
Contingent consideration
The acquisition of Biocode Hycel SA included a contingent consideration clause
in the form of a commitment to pay the former shareholders of the acquired
company for each IDS-iSYS instrument placed by the group as per the Sales and
Purchase Agreement. In determining the fair value attributable to this
commitment, the directors considered current sales forecasts and discounted,
applying a discount factor of 8.9%, being the Group's weighted average cost of
capital.
w) KEY SOURCES OF ESTIMATION UNCERTAINTY
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are discussed below.
Useful lives
The Group uses forecast cash flow information and estimates of future growth to
assess whether goodwill and other intangible fixed assets are impaired, and to
determine the useful economic lives of its goodwill and intangible assets. If
the results of operations in a future period are adverse to the estimates used a
reduction in useful economic life may be required.
x) Standards not yet effective
The directors do not expect any of the standards below which are issued but not
yet effective to have a material impact on the financial information.
IFRS 8 'Operating Segments' (effective for periods commencing on or after 1
January 2009).
IFRS 8 introduces new disclosure requirements for segmental information and
supersedes IAS 14 'Segmental Reporting'.
The directors do not believe that the impact of the change in disclosure arising
from the following standards will be significant.
IAS 1 (amended) Presentation of Financial Statements (effective for periods
commencing on or after 1 January 2009).
IAS 1 introduces a Statement of Comprehensive Income for all non-owner changes
in equity. In addition Balance Sheet and Cash Flow Statement will be renamed the
Statement of Financial Position and Statement of Cash Flows. The directors will
reflect the changes in the appropriate financial statements.
IFRS 2 (amended) Share based payments (effective for periods commencing on or
after 1 January 2009)
The changes to IFRS 2 clarifies the treatment of non-vesting conditions and the
definitions of 'vest' and 'vesting conditions'.
2. SEGMENTAL INFORMATION
For management purposes, the Group is currently organised into three
geographical operating regions, UK, Europe and USA. These regions are the basis
on which the Group reports, by origin, its primary segment information.
The main activity of the Group is the manufacturing and distributing of medical
diagnostic products. No separate business segments have been identified for
management purposes.
Inter-segment sales are priced based on the market selling price for the
individual item obtainable by the purchasing segment, reduced by a margin
equivalent to the gross margin that would be expected to have been achieved by
purchasing the item on the local wholesale market.
Year ended 31 March 2009:
REVENUE
+--------------------------+----------+----------+--------+------+-------------+--------------+
| | UK | Europe | USA | Adjustments | Consolidated |
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| External sales | 7,789 | 13,421 | 6,176 | - | 27,386 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Inter-segment sales | 8,136 | 5,105 | - | (13,241) | - |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Total revenue | 15,925 | 18,526 | 6,176 | (13,241) | 27,386 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Discontinued operations | - | 2,449 | - | - | 2,449 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Revenue from continuing | 15,925 | 16,077 | 6,176 | (13,241) | 24,937 |
| operations | | | | | |
+--------------------------+----------+----------+--------+------+-------------+--------------+
RESULT
+--------------------------+---------+----------+--------+----------+----------+
| Profit from operations | 4,984 | 432 | 1,062 | (95) | 6,383 |
+--------------------------+---------+----------+--------+----------+----------+
| Investment income | 88 | 375 | 2 | (347) | 118 |
+--------------------------+---------+----------+--------+----------+----------+
| Finance costs | (2,511) | (234) | - | 1,991 | (754) |
+--------------------------+---------+----------+--------+----------+----------+
| Profit before tax | 2,561 | 573 | 1,064 | 1,549 | 5,747 |
+--------------------------+---------+----------+--------+----------+----------+
| Income tax expense | (567) | 525 | (425) | (460) | (927) |
+--------------------------+---------+----------+--------+----------+----------+
| Profit after tax | 1,994 | 1,098 | 639 | 1089 | 4,820 |
+--------------------------+---------+----------+--------+----------+----------+
| Discontinued operations | - | (18) | - | - | (18) |
+--------------------------+---------+----------+--------+----------+----------+
| Profit after tax from | 1,994 | 1,116 | 639 | 1,089 | 4,838 |
| continuing operations | | | | | |
+--------------------------+---------+----------+--------+----------+----------+
BALANCE SHEET
+--------------------------+----------+----------+--------+------+----------+----------+
| Segment assets | 62,728 | 48,329 | 1,859 | (32,797) | 80,119 |
+--------------------------+----------+----------+---------------+----------+----------+
| Segment liabilities | (26,839) | (22,735) | (494) | 20,662 | (29,406) |
+--------------------------+----------+----------+---------------+----------+----------+
| | 35,889 | 25,594 | 1,365 | (12,135) | 50,713 |
+--------------------------+----------+----------+--------+------+----------+----------+
+--------------------------+----------+----------+--------+----------+----------+
| Capital additions | 3,183 | 2,620 | 34 | - | 5,837 |
+--------------------------+----------+----------+--------+----------+----------+
| Depreciation and | 362 | 1,055 | 11 | - | 1,428 |
| amortisation | | | | | |
+--------------------------+----------+----------+--------+----------+----------+
Year ended 31 March 2008:
REVENUE
+--------------------------+----------+----------+--------+------+-------------+--------------+
| | UK | Europe | USA | Adjustments | Consolidated |
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| External sales | 6,932 | 8,866 | 2,862 | - | 18,660 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Inter-segment sales | 3,770 | 1,894 | - | (5,664) | - |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Total revenue | 10,702 | 10,760 | 2,862 | (5,664) | 18,660 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Discontinued operations | - | 2,189 | - | - | 2,189 |
+--------------------------+----------+----------+---------------+-------------+--------------+
| Revenue from continuing | 10,702 | 8,571 | 2,862 | (5,664) | 16,471 |
| operations | | | | | |
+--------------------------+----------+----------+--------+------+-------------+--------------+
RESULT
+--------------------------+---------+----------+--------+----------+----------+
| Profit from operations | 3,467 | 552 | 432 | (170) | 4,281 |
+--------------------------+---------+----------+--------+----------+----------+
| Investment income | 82 | 328 | 4 | (290) | 124 |
+--------------------------+---------+----------+--------+----------+----------+
| Finance costs | (2,085) | (344) | - | 1,815 | (614) |
+--------------------------+---------+----------+--------+----------+----------+
| Profit before tax | 1,464 | 536 | 436 | 1,355 | 3,791 |
+--------------------------+---------+----------+--------+----------+----------+
| Income tax expense | (319) | (42) | (166) | (427) | (954) |
+--------------------------+---------+----------+--------+----------+----------+
| Profit after tax | 1,145 | 494 | 270 | 928 | 2,837 |
+--------------------------+---------+----------+--------+----------+----------+
| Discontinued operations | - | 34 | - | - | 34 |
+--------------------------+---------+----------+--------+----------+----------+
| Profit after tax from | 1,145 | 460 | 270 | 928 | 2,803 |
| continuing operations | | | | | |
+--------------------------+---------+----------+--------+----------+----------+
BALANCE SHEET
+--------------------------+----------+----------+--------+------+----------+----------+
| Segment assets | 57,702 | 30,795 | 681 | (24,702) | 64,476 |
+--------------------------+----------+----------+---------------+----------+----------+
| Segment liabilities | (26,689) | (18,810) | (244) | 18,259 | (27,484) |
+--------------------------+----------+----------+---------------+----------+----------+
| | 31,013 | 11,985 | 437 | (6,443) | 36,992 |
+--------------------------+----------+----------+--------+------+----------+----------+
+--------------------------+----------+----------+--------+----------+----------+
| Capital additions | 1,190 | 25,332 | 10 | - | 26,532 |
+--------------------------+----------+----------+--------+----------+----------+
| Depreciation and | 285 | 643 | 5 | - | 933 |
| amortisation | | | | | |
+--------------------------+----------+----------+--------+----------+----------+
3. PROFIT FROM OPERATIONS
Profit from operations is stated after charging/(crediting):
+--------------------------------------------------+------------+-----------+
| | | |
+--------------------------------------------------+------------+-----------+
| | 2009 | 2008 |
+--------------------------------------------------+------------+-----------+
| | GBP | GBP |
+--------------------------------------------------+------------+-----------+
| Amortisation of government grants re fixed | (284,733) | (179,724) |
| assets | | |
+--------------------------------------------------+------------+-----------+
| Amortisation of other intangible assets | 693,034 | 426,474 |
+--------------------------------------------------+------------+-----------+
| Depreciation of owned plant, property and | 678,157 | 451,500 |
| equipment | | |
+--------------------------------------------------+------------+-----------+
| Depreciation of assets held under hire purchase | 56,678 | 54,633 |
| agreements | | |
+--------------------------------------------------+------------+-----------+
| Operating lease costs | 441,692 | 204,745 |
+--------------------------------------------------+------------+-----------+
| Share-based payments | 217,677 | 69,407 |
+--------------------------------------------------+------------+-----------+
| Net (gain) / loss on foreign currency | (602,368) | (17,877) |
| translation of trading items | | |
+--------------------------------------------------+------------+-----------+
| Loss on foreign currency translation of | 546,770 | - |
| contingent consideration | | |
+--------------------------------------------------+------------+-----------+
| Costs relating to an abortive acquisition | 427,741 | - |
+--------------------------------------------------+------------+-----------+
| Research and development | 243,995 | 364,474 |
+--------------------------------------------------+------------+-----------+
| Staff costs (note 5) | 10,734,303 | 6,769,666 |
+--------------------------------------------------+------------+-----------+
| Auditor's remuneration (see below) | 243,682 | 108,765 |
+--------------------------------------------------+------------+-----------+
Amounts payable to Baker Tilly UK Audit LLP and their associates in respect of
both audit and non-audit services:
+--------------------------------------------------------------+----------+
| 2009 | 2008 |
+--------------------------------------------------------------+----------+
| GBP | GBP |
+--------------------------------------------------------------+----------+
Audit services
+--------------------------------------------------+-----------+----------+
| - statutory audit of parent and consolidated | 113,850 | 108,765 |
| accounts | | |
+--------------------------------------------------+-----------+----------+
| | | |
+--------------------------------------------------+-----------+----------+
| Other services relating to taxation | 14,550 | 1,754 |
| - compliance services | | |
+--------------------------------------------------+-----------+----------+
| | | |
+--------------------------------------------------+-----------+----------+
| Work performed by associates of Baker Tilly in | 16,257 | 850 |
| respect of consolidation returns or local | | |
| legislative requirements | | |
+--------------------------------------------------+-----------+----------+
| | | |
+--------------------------------------------------+-----------+----------+
| Services relating to corporate finance | 99,025 | - |
| transactions entered into or proposed to be | | |
| entered into by or on behalf of the company | | |
+--------------------------------------------------+-----------+----------+
| | 243,682 | 111,369 |
+--------------------------------------------------+-----------+----------+
4. DISCONTINUED OPERATIONS
Discontinued operations refer to the disposal of the Haematology Division of
Biocode Hycel. IDS determined that this was not a core interest of the Group,
employing as it does different technology and servicing a market unaddressed by
IDS. The sale was completed on 31 December 2009. The disposal of this division
on acceptable terms has significantly reduced the complexity of the business and
reduced demands on management resources.
The profit after tax from discontinued operations is made up as follows:
+-------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+-------------------------------------------------+------------+------------+
| | GBP | GBP |
+-------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------+------------+------------+
| Gain on disposal | 641,588 | - |
+-------------------------------------------------+------------+------------+
| Trading result | (17,808) | 34,046 |
+-------------------------------------------------+------------+------------+
| | 623,780 | 34,046 |
+-------------------------------------------------+------------+------------+
The results of the haematology business for the period from 1 April to 31
December 2008, which have been included in the consolidated financial
statements, are as follows:
+-------------------------------------------------+-------------+-------------+
| | 2009 | 2008 |
+-------------------------------------------------+-------------+-------------+
| | GBP | GBP |
+-------------------------------------------------+-------------+-------------+
| | | |
+-------------------------------------------------+-------------+-------------+
| Revenue | 2,449,192 | 2,188,672 |
+-------------------------------------------------+-------------+-------------+
| Cost of sales | (1,138,852) | (1,018,537) |
+-------------------------------------------------+-------------+-------------+
| Gross profit | 1,310,340 | 1,170,135 |
+-------------------------------------------------+-------------+-------------+
| Distribution costs | (735,075) | (724,571) |
+-------------------------------------------------+-------------+-------------+
| Administrative expenses | (541,702) | (368,885) |
+-------------------------------------------------+-------------+-------------+
| Profit from operations | 33,563 | 76,679 |
+-------------------------------------------------+-------------+-------------+
| Finance costs | (51,371) | (42,633) |
+-------------------------------------------------+-------------+-------------+
| Loss/profit after tax | (17,808) | 34,046 |
+-------------------------------------------------+-------------+-------------+
Cash flows from discontinued operations are as follows:
+-------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+-------------------------------------------------+------------+------------+
| | GBP | GBP |
+-------------------------------------------------+------------+------------+
| | | |
+-------------------------------------------------+------------+------------+
| Operating cash flows | 33,563 | 76,679 |
+-------------------------------------------------+------------+------------+
| Investing cash flows | - | - |
+-------------------------------------------------+------------+------------+
| Financing cash flows | (51,371) | (42,633) |
+-------------------------------------------------+------------+------------+
| | (17,808) | 34,046 |
+-------------------------------------------------+------------+------------+
The gain on disposal is calculated as follows:
+-------------------------------------------------------------+-------------+
| | 2009 |
+-------------------------------------------------------------+-------------+
| | GBP |
+-------------------------------------------------------------+-------------+
| | |
+-------------------------------------------------------------+-------------+
| Net proceeds | 3,741,549 |
+-------------------------------------------------------------+-------------+
| Net assets disposed of | (2,758,633) |
+-------------------------------------------------------------+-------------+
| Gain on disposal before tax | 982,916 |
+-------------------------------------------------------------+-------------+
| Tax on gain on disposal | (341,328) |
+-------------------------------------------------------------+-------------+
| | 641,588 |
+-------------------------------------------------------------+-------------+
The net proceeds of the disposal are calculated as follows:
+-------------------------------------------------------------+------------+
| Gross consideration | 4,088,785 |
+-------------------------------------------------------------+------------+
| Transaction costs incurred | (347,236) |
+-------------------------------------------------------------+------------+
| | 3,741,549 |
+-------------------------------------------------------------+------------+
The net assets disposed of are as follows:
+-------------------------------------------------------------+------------+
| Property, plant and equipment | 42,571 |
+-------------------------------------------------------------+------------+
| Other intangible assets | 244,415 |
+-------------------------------------------------------------+------------+
| Inventories | 1,530,423 |
+-------------------------------------------------------------+------------+
| Trade and other receivables | 941,224 |
+-------------------------------------------------------------+------------+
| | 2,758,633 |
+-------------------------------------------------------------+------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEIEFFSUSESM
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