TIDMBQE
RNS Number : 4945V
Bioquell PLC
24 July 2018
24 July 2018
Bioquell PLC - 2018 interim results
Bioquell PLC ("Bioquell") (LSE symbol: BQE) - a leading provider
of bio decontamination solutions and modular isolators for the
Pharmaceutical, Life Science and Healthcare markets today announces
its interim results for the six month period ended 30 June,
2018.
Financial highlights
-- Total revenues including defence sales increased by 9% to
GBP15.7 million (2017: GBP14.3 million), an increase of 13% at
constant currency rates
-- Revenues excluding defence increased by 7% to GBP15.0 million
(2017: GBP14.0 million). Like-for-like revenues, adjusting for the
disposal of the AirFlow Spares and Service business ("AirFlow"),
were up 15% at constant currency rates
-- EBITDA increased 28% to GBP3.3 million (2017: GBP2.5
million)
-- Profit before tax increased by 41% to GBP2.0 million (2017:
GBP1.4 million)
-- Basic earnings per share were up 38% to 7.6p (2017: 5.5p)
-- Cash and cash equivalents of GBP15.0 million at 30 June 2018
(2017: GBP11.8 million)
Operational highlights
-- Disposed of final non-core asset, MDH Defence, for an initial
consideration of GBP0.4 million and a possible future consideration
of GBP0.6 million contingent on financial performance
-- Completed the disposal of AirFlow
-- Repositioned business with focus on bio decontamination
solutions and modular isolators
Commenting on the 2018 interim results, Ian Johnson, Executive
Chairman of Bioquell PLC, said:
"I am pleased to report continued growth in revenues despite
exchange rate headwinds, a strong comparative first half in 2017
and the effect of disposals. Our core business increased by 15% on
like for like sales at constant currency. Profit before tax
increased by 41% with further improvement in gross margins from 52%
to 54%.
The final non-core asset disposal of MDH Defence (which will
cease to generate revenue from the end of 2018) provides the
business with more predictable revenues and higher quality earnings
from bio decontamination solutions and modular isolators. Given the
continued improvements, particularly with respect to profitability,
the Board believes that the Company will exceed current market
expectations for profit for the full year."
Enquiries:
Ian Johnson Executive Chairman Bioquell PLC 01264 835900
Michael Roller Finance Director
Notes to Editors:
Bioquell is a UK-headquartered, international technology company
(www.bioquell.com) which develops, manufactures and markets bio
decontamination solutions and modular isolators into the
Pharmaceutical, Life Sciences, and healthcare sectors, with most of
its revenues generated from overseas customers.
-- Bioquell's bio-decontamination technology uses vaporised
hydrogen peroxide (VH202) which is highly effective at eradicating
micro-organisms such as bacteria and viruses at room temperature -
and is subsequently broken down at the end of the
bio-decontamination process into residue-free water vapour and
oxygen (hence an extremely 'green' technology). Bioquell has a
number of patents associated with this technology.
-- Bioquell has also developed a number of products which
complement its core VH202 technology. The Bioquell-Qube, is a
novel, modular isolator which may be used for a variety of
applications, including Sterility testing, drug compounding and
cell therapy.
-- The Bioquell-POD is a fast-to-deploy semi-permanent single
patient room primarily used in multi-bed units to control
infections in hospitals.
-- Bioquell's products and services are sold by wholly-owned
Bioquell organisations in the UK, USA, France, Germany, Ireland,
Singapore, China and through a network of international
distributors.
Further information for investors can be found at
www.bioquellplc.com.
CHAIRMAN'S STATEMENT
INTRODUCTION
Total revenues for the half year increased by 9% to GBP15.7
million (2017: GBP14.3 million), up 13% at constant currency
rates.
Following the announcement on 25th May 2018 regarding the
disposal of MDH Defence, the business is now exclusively focussed
on developing, manufacturing and marketing two product lines - bio
decontamination solutions (products and services) and modular
isolators as its core business of providing 'risk reduction
solutions' to pharmaceutical, life science and healthcare
customers.
BUSINESS REVIEW
Revenues generated from core business increased 7% over the
prior half year to GBP15.0 million (2017: GBP14.0 million), up 11%
at constant currency rates and an increase of 15% on like-for-like
sales (excluding sales of Airflow products) at constant currency
rates.
Revenues were driven substantially by a strong performance in
sales of the Bioquell Qube modular isolator, which were up 90%.
This was partially offset by a small decline in revenues from the
Group's other product line, bio decontamination solutions, as a
result of both the disposal of AirFlow and of lower equipment sales
by comparison with strong comparative first half sales in 2017
(which included a large one-off equipment order worth GBP1.1
million).
GBP'000 H1 2018 H1 2017
Bio decontamination solutions (products and
services) 11,506 11,978
-------- --------
Modular isolators 3,510 2,044
-------- --------
Bio decontamination business segment (see note
3 to accounts) 15,016 14,022
-------- --------
Approximately 80% of revenues are generated from direct sales,
with the balance of 20% coming from sales to distributors.
Pharma/Life Science revenues were up 8% to GBP12.3 million
(2017: GBP11.4 million).
Healthcare revenues were up 12% to GBP2.7 million (2017: GBP2.4
million).
Recurring revenues from services and product support sales
(excl. AirFlow) were GBP5.5 million (2017: GBP5.1 million)
representing 37% of total revenues.
Bio decontamination Solutions
Bioquell's patented 'Vapourised Hydrogen Peroxide' (VH202)
technology has been adopted around the world as the 'gold standard'
for bio-decontamination. It provides the highest level of efficacy
and ensures a 6 log kill (99.9999%) of all microorganisms present.
It is used in pharmaceutical manufacturing and life science
research laboratories to eradicate contamination and in critical
care facilities in hospitals to control the spread of infection.
There are a growing number of regulations affecting these markets,
increasing the demand for Bioquell's highly effective bio
decontamination products and services as our clients remain
focussed on attaining - and retaining - regulatory compliance.
Bio decontamination solutions provides equipment, services and
product support globally via direct sales offices and a network of
distributors.
The Company provides a full range of equipment to meet customer
requirements including portable and fixed systems.
Services includes Bioquell's Rapid Bio Decontamination Service
(RBDS), which will carry out bio decontamination for customers on a
standby, emergency or regular basis using specialised equipment and
highly trained staff. The Company is currently investing in
upgrading and extending the fleet of equipment to meet growing
global demand, particularly for pharma customers.
Also included in services is the Bioquell POD which can be
quickly deployed to convert multi-bed, open plan hospital units at
high risk of spreading infections, into single-occupancy rooms and
is available to purchase or rent.
Product support includes recurring revenues from maintenance,
service and spares, supply of consumables (peroxides &
biological/chemical indicators), POD rentals and proactive RBDS
engagements in hospitals.
Revenues from bio decontamination solutions slightly decreased
in the first half of 2018 to GBP11.5 million (2017: GBP11.9
million). This included GBP4.4 million of associated product
support revenues (2017: GBP4.6 million). The disposal of AirFlow in
2017 meant that approximately GBP0.5 million of revenues were not
repeated in the first half of 2018, therefore, like-for-like bio
decontamination revenues were marginally up. The first half of 2017
also included a large 'one-off' equipment sale of GBP1.1 million.
Taking these factors into account, growth was 12%.
Modular Isolators
The Bioquell - QUBE comprises a novel, modular isolator
incorporating VH202 technology. The QUBE is used to provide an
aseptic environment for a range of applications including:
sterility testing; the production of toxic, intravenous oncology
drugs; and the production of small-scale cell-based healthcare
(cell therapy) products. Over time we expect the range of
specialist applications for the QUBE to increase, with an
associated growth in revenues.
Recurring revenues are generated via product support comprising
validation, service contracts and spares, together with supply of
consumables (peroxide & biological/chemical indicators).
Modular Isolator revenues in the first half of 2018 increased by
67% to GBP3.5 million (2017: GBP2.1 million). This included Qube
sales of GBP3.0 million (2017: GBP1.6 million) and associated
product support revenues of GBP0.5 million (2017: GBP0.5
million).
Defence
The Company announced on 25(th) May that it had disposed of its
MDH Defence business. The initial consideration for the sale was
GBP0.4 million, and Bioquell may also benefit from a further GBP0.6
million in additional contingent consideration for the disposal
should MDH be successful in bidding for a specific contract which
was initiated prior to disposal, although none of this possible
additional consideration has been recognised at 30 June 2018.
Defence revenues in the first half of 2018 were GBP0.6 million
(2017: GBP0.3 million) and we anticipate a further GBP0.7 million
in the second half as a result of pre-existing commitments for
Bioquell to complete current contracts which were not transferred
to the purchaser as part of the sale.
FINANCIAL RESULTS
The Group has direct sales operations in the UK, Ireland,
France, Germany, USA, China and Singapore and a network of
distributors around the world.
Revenues from non-UK sales
The average US Dollar rate in H1 2018 was $1.376, compared to
$1.259 in H1 2017, providing something of a currency headwind for
much of the first half, although the dollar rate at the end of June
2018 was very similar to the rate at the end of June 2017. The
average Euro rates in H1 2018 and H1 2017 were similar. We estimate
that approximately 48% of revenues were denominated in US dollars
in the first half, with a further 29% denominated in Euros.
Gross margin in the period increased from 52% to 54% as a result
of strong activity levels.
Research & development and engineering costs
As is set out in the table below, the accounting charge for
Research & Development ("R&D") costs in the period
increased by 3% to GBP1.2 million (2017: GBP1.1 million). Cash
R&D costs were GBP775k in the first half (2017: GBP808k),
representing a 4% decrease.
R&D costs (GBP000) H1 2018 H1 2017
Amount of R&D expensed in period (637) (690)
Amortisation & impairment of previously
capitalised development costs (539) (449)
------------------------------------------ -------- --------
Total R&D charge under IFRS (1,176) (1,139)
------------------------------------------ -------- --------
Total R&D cash expenditure (775) (808)
Amount of development costs capitalised (138) (118)
------------------------------------------ -------- --------
Sales and marketing costs and administrative expenses increased
respectively by 8% and 11%.
EBITDA (Earnings before interest, tax, depreciation and
amortisation) increased by 28% in the period to GBP3.3 million
(2017: GBP2.5 million). Operating profit was GBP2.0 million
compared to a GBP1.4 million profit in H1 2017.
Pre-tax profit increased 41% to GBP2.0 million (H1 2017:
GBP1.4m). There was an aggregate GBP0.1 million (H1 2017: nil) gain
on the disposal of the AirFlow and Defence businesses in the
period.
Basic earnings per share increased 38% to 7.6p (H1 2017:
5.5p)
Capital expenditure was GBP0.5 million (H1 2017: GBP0.4
million)
Balance sheet
The Group continues to have a very strong balance sheet. Cash
and cash equivalents at 30 June 2018 was GBP15.0 million (30 June
2017: GBP11.8 million).
During the period the Group repurchased 285,000 shares at a cash
cost of GBP0.84 million and paid corporation tax of GBP0.5 million
(H1 2017: GBP nil) as a result of its tax losses in the UK and US
becoming fully utilised.
SUMMARY & OUTLOOK
The Company has made good progress in the first half of the year
with revenues increasing despite currency headwinds, disposals and
difficult comparisons with the first half of 2017. Gross margins
continue to improve and pre-tax profits together with earnings per
share have increased significantly.
The defence business was the final non-core disposal which means
Bioquell can now exclusively focus on developing, manufacturing and
marketing bio decontamination solutions and modular isolators for
pharmaceutical, life science and healthcare customers
worldwide.
Going forward our objective is to grow the core business
globally through organic growth and to increase Bioquell's presence
in key strategic markets. Investment in upgrading equipment and
strengthening our sales and marketing effort is ongoing together
with continuous improvements in operational efficiency. The absence
of the defence business, which historically has been unpredictable
with lower margins, should have a positive impact on future
financial performance.
The Board anticipates broadly similar financial performance in
the second half of the year and that the Company's full year
pre-tax profit will exceed market expectations.
Prior to publication, the information contained within this
announcement was deemed to constitute inside information under the
Market Abuse Regulations (EU) No. 596/2104 ("MAR")
Ian Johnson
Executive Chairman
Bioquell PLC
24 July 2018
Consolidated income statement
Unaudited results for the six months ended 30 June 2018
12
6 6 months
months months to
to to 31
30 June 30 June December
2018 2017 2017
Continuing operations Notes GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Revenue 1 15,660 14,336 29,190
Cost of sales (7,263) (6,940) (13,986)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Gross profit 8,397 7,396 15,204
Gross profit margin 54% 52% 52%
Operating expenses:
Sales and marketing costs (3,072) (2,842) (5,654)
Administration costs (2,268) (2,036) (4,459)
R&D and engineering costs (1,176) (1,139) (2,168)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit from operations before adjusted
items 1,881 1,379 2,923
Profit on sale of Airflow and Defence businesses 2 76 - 315
Profit from operations 1,957 1,379 3,238
Investment revenues 121 111 53
Finance costs (119) (97) (8)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit before tax 1,959 1,393 3,283
Tax charge on profit on ordinary activities (254) (169) (591)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit for the period attributable to equity
holders of the parent 1,705 1,224 2,692
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Earnings per share attributable to the
owners of the parent - basic 7.6p 5.5p 11.6p
-
diluted 7.1p 5.0p 10.8p
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Supplementary notes 1. The financial information for the six
months ended 30 June 2018 and the comparative figures for the six
months ended 30 June 2017 have not been reviewed or audited by the
Group's auditors and have been prepared on the basis of the
accounting policies adopted by the Group under IFRS. The same
accounting policies and methods of computation are followed in the
interim financial report as were published by the Company on 7
March 2018 in its annual financial statements, which are available
on the Company's website at www.bioquellplc.com. The Group has
adopted IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from
Contracts with Customers) in 2018, neither have resulted in a
change to the reported accounts.
2. The comparative figures for the twelve months to 31 December
2017 have been prepared under IFRS. They do not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The unqualified audited accounts for the twelve
months ended 31 December 2017 have been filed with the Registrar of
Companies and they did not contain a statement under section 498(2)
or (3) of the Companies Act 2006.
3. The tax charge shown on the income statement represents a
combined corporation tax charge and deferred tax credit. The charge
is based on the Group's anticipated effective tax rate for the full
year of 13.0% (2017: 18.0%), the reduced rate being mainly due to
the movement in deferred tax.
4. Earnings per share for the half year have been calculated on
the profit on ordinary activities on continuing operations after
taxation and the total earnings attributable to the owners of the
parent divided by the weighted average number of ordinary shares in
issue during the period. The Group's diluted earnings per share are
calculated by including dilutive share options in the
denominator.
5. There have been no related party transactions during the
first six months of the financial year that have materially
affected the financial position or performance of the Group during
that period and there have been no changes in the related party
transactions described in the last Annual Report that could do
so.
6. Copies of this statement will be available to members of the
public at the Company's registered office: 52 Royce Close, West
Portway, Andover, Hampshire SP10 3TS and on the Group's website at
www.bioquellplc.com.
Principal risks and uncertainties
The Board believes that the principal risks and uncertainties
facing the Group have not changed materially from those described
in the 2017 Annual Report, including the summary of risks and
uncertainties set out on pages 5 and 6 therein. The Group provides
complex equipment and specialist services to a large number of
clients in the UK and internationally. Accordingly the Group is
subject to a broad range of strategic, operational and financial
risks and uncertainties, including the following principal
risks:
-- Regulatory Risk
The Group operates in a number of countries and sectors which
are highly regulated. These regulations affect both the Group's
customers and the Group's products. There is a risk that the
relevant regulations could be changed and such changes could
significantly adversely affect the Group's business in a specific
country or sector.
-- Technological Risk
The Group is dependent on its technology, and on its products
and services, continuing to be efficacious, cost effective and
attractive to the marketplace. There is the risk that new
technologies, products or services are developed by competitors
which perform better, are easier to use or are more cost effective
than those of the Group
-- Financial Risk
The Group has a number of international subsidiaries and trades
with companies located throughout the world. The international
nature of many of its business activities results in elevated
financial risk, including, but not limited to: foreign exchange
exposure, credit risk and cash collections/retention/management
(together "Key Financial Risks").
Going concern
The Group has sufficient financial resources to cover budgeted
future cash flows, together with contracts with a number of
customers and suppliers across different geographic areas and
industries. As a consequence, the Directors believe that the Group
is well placed to manage its business risks successfully despite
the current uncertain economic outlook. The Directors confirm that
they have a reasonable expectation that the Group has adequate
financial resources to continue to trade for the foreseeable
future. Thus, they continue to adopt the going concern basis in
preparing the financial statements.
Responsibility statement
We confirm that to the best of our knowledge: (i) the condensed
set of financial statements has been prepared in accordance with
IAS 34 Interim Financial Reporting; (ii) the financial statements
give a true and fair view of the assets, liabilities, financial
position and profit of the undertakings included in the
consolidation as a whole as required by DTR 4.2.4R; (iii) the
Interim Management Report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the
first six months and a description of principal risks and
uncertainties for the remaining six months of the year); and (iv)
the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
IAN JOHNSON MICHAEL ROLLER
Executive Chairman Group Finance Director
24 July 2018
Consolidated statement of comprehensive income
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
----------------------------------------------- ------------- ------------- ------------
Profit for the period 1,705 1,224 2,692
Exchange differences on translation of foreign
operations * 24 (111) (68)
----------------------------------------------- ------------- ------------- ------------
Total recognised income for the period 1,729 1,113 2,624
----------------------------------------------- ------------- ------------- ------------
* May be reclassified subsequently to profit or loss in
accordance with IFRS
Consolidated statement of changes in equity
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
Notes 2018 GBP'000 2017 GBP'000 GBP'000
---------------------------------------------- ----- ------------- ------------- ------------
Profit for the period 1,705 1,224 2,692
Exchange differences on the translation
of foreign operations 24 (111) (68)
---------------------------------------------- ----- ------------- ------------- ------------
Total comprehensive income in the period 1,729 1,113 2,624
Other movements in the period:
Issued share capital 12 26 33
Issued share premium 44 187 237
Acquisition of own shares for cancellation 6 (842) - -
Acquisition of own shares to be held in
Treasury - (304) (304)
Credit to equity reserve for share-based
payments 89 78 223
Deferred tax credit to equity for share-based
payments 56 94 -
Charge to equity for deferred tax - - 115
Charge to equity on exercise of share options
under the SARS scheme (6) - (2)
Net increase in equity shareholders' funds 1,082 1,194 2,926
---------------------------------------------- ----- ------------- ------------- ------------
Equity shareholders' funds at beginning
of period 26,760 23,834 23,834
Equity shareholders' funds at end of period 27,842 25,028 26,760
---------------------------------------------- ----- ------------- ------------- ------------
Consolidated balance sheet
Unaudited results at 30 June 2018
31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
--------------------------------------------- ------------- -------------- -----------
Non-current assets
Other intangible assets 6,112 7,228 6,817
Property, plant and equipment 3,745 4,248 3,910
Deferred tax assets 468 90 422
--------------------------------------------- ------------- -------------- -----------
10,325 11,566 11,149
--------------------------------------------- ------------- -------------- -----------
Current assets
Inventories 3,578 3,140 3,204
Trade and other receivables 6,451 5,355 5,822
Derivative financial instruments 5 86 88
Cash and cash equivalents 15,011 11,771 14,586
--------------------------------------------- ------------- -------------- -----------
25,045 20,352 23,700
--------------------------------------------- ------------- -------------- -----------
Total assets 35,370 31,918 34,849
--------------------------------------------- ------------- -------------- -----------
Current liabilities
Trade and other payables (5,414) (5,467) (5,508)
Derivative financial instruments (80) (62) (30)
Current tax liabilities (553) (483) (768)
Provisions (295) (186) (594)
--------------------------------------------- ------------- -------------- -----------
Net current assets 18,703 14,154 16,800
--------------------------------------------- ------------- -------------- -----------
Non-current liabilities
Cash settled share based payments (115) - (49)
Deferred tax liabilities (1,071) (692) (1,140)
Total liabilities (7,528) (6,890) (8,089)
--------------------------------------------- ------------- -------------- -----------
Net assets 27,842 25,028 26,760
--------------------------------------------- ------------- -------------- -----------
Equity
Share capital 2,310 2,320 2,327
Share premium account 1,777 1,683 1,733
Equity reserve 2,167 1,909 2,069
Capital reserve 255 255 255
Translation reserve 229 162 205
Retained earnings 21,104 18,699 20,171
--------------------------------------------- ------------- -------------- -----------
Equity attributable to equity holders of the
parent 27,842 25,028 26,760
--------------------------------------------- ------------- -------------- -----------
Consolidated cash flow statement
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
Notes 30 June 2018 30 June 2017
GBP'000 2017 GBP'000 GBP'000
----------------------------------------------- -------- ------------- ------------- ------------
Net cash from operating activities 1,296 3,772 6,949
--------------------------------------------------------- ------------- ------------- ------------
Investing activities
Purchases of property, plant and equipment (480) (379) (757)
Purchases of intangible assets - - (52)
Expenditure on capitalised product development (138) (124) (132)
Proceeds on sale of businesses 494 - -
--------------------------------------------------------- ------------- ------------- ------------
Net cash used in investing activities (124) (503) (941)
--------------------------------------------------------- ------------- ------------- ------------
Financing activities
Proceeds on issue of ordinary shares 56 213 270
Acquisition of own shares for cancellation (842) - -
Acquisition of own shares to be held in
Treasury - (304) (304)
Net cash used in financing activities (786) (91) (34)
--------------------------------------------------------- ------------- ------------- ------------
Increase in cash and cash equivalents 386 3,178 5,974
--------------------------------------------------------- ------------- ------------- ------------
Cash and cash equivalents at beginning
of period 14,586 8,756 8,756
Effect of foreign exchange rate changes 39 (163) (144)
Cash and cash equivalents at end of period 15,011 11,771 14,586
--------------------------------------------------------- ------------- ------------- ------------
Note to the cash flow statement
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
------------------------------------------------- ------------- ------------- ------------
Profit before tax 1,959 1,393 3,283
Adjustments for:
Investment revenues (121) (111) (53)
Finance costs 119 97 8
Depreciation of property, plant and equipment 645 703 1,393
Amortisation and impairment losses of intangible
assets 539 464 936
Share-based payments charge 149 78 272
Profit from sale of AirFlow & Defence businesses (76) - -
(Decrease)/increase in provisions (299) (54) 354
------------------------------------------------- ------------- ------------- ------------
Operating cash flows before movements in working
capital 2,915 2,570 6,193
Increase in inventories (419) (367) (515)
(Increase)/decrease in receivables (629) 1,492 717
(Decrease)/increase in payables (45) 63 509
------------------------------------------------- ------------- ------------- ------------
Cash generated by operations 1,822 3,758 6,904
Income tax expense (528) - -
Investment revenues 121 111 53
Interest paid (119) (97) (8)
Net cash from operating activities 1,296 3,772 6,949
------------------------------------------------- ------------- ------------- ------------
Notes to the interim results
1. Revenue
The Group's bio-decontamination equipment is manufactured within
the UK and sold into the UK, Europe, US and Rest of World
markets.
The following table provides an analysis of the Group's sales by
geographical market, irrespective of the origination of the goods
or services.
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
------ ------------- ------------- ------------
UK 3,469 3,056 5,780
EU 4,595 3,872 8,800
US 4,127 4,300 9,060
ROW 3,469 3,108 5,550
------ ------------- ------------- ------------
Total 15,660 14,336 29,190
------ ------------- ------------- ------------
The majority of revenue is recognised at a point in time.
Revenue that is recognised over the term of a contract amounted to
GBP1.7 million in the period (2017 H1: GBP1.9 million) and is
typically that which is spread evenly over the contract period as
services are provided, for instance preventative maintenance
contracts and regular decontamination services.
2. Disposal of AirFlow and MDH Defence
The Group completed the disposal of the AirFlow business and
sold its subsidiary MDH Defence in the period.
6 months
to
30 June
2018 GBP'000
------------------------------------------------- -------------
Consideration 494
Intangible assets (303)
Inventory (45)
Trade and other receivables (59)
Fees (11)
------------------------------------------------- -------------
Profit on sale of AirFlow and Defence businesses 76
------------------------------------------------- -------------
3. Business and geographical segments
For management purposes, the Group is currently organised into
two divisions - Bio-decontamination ("BIO", which includes the two
product lines; Bio-decontamination Products & Services and
Modular Isolators) and Defence. These divisions are consistent with
the internal reporting as reviewed by the Executive Chairman.
Segment information is available only within the Income Statement,
the Group does not split out the balance sheet for the Defence
business. Segment information about these businesses is presented
below:
BIO Defence Consolidated
Six months ended 30 June 2018 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- ------------
Revenue
Total revenue 15,016 644 15,660
Result
Segment result before exceptional item 2,354 92 2,446
Sale of AirFlow and Defence businesses 76 - 76
--------------------------------------- -------- -------- ------------
Segment result 2,430 92 2,522
--------------------------------------- -------- -------- ------------
Unallocated head office costs (565)
--------------------------------------- -------- -------- ------------
Profit from operations 1,957
--------------------------------------- -------- -------- ------------
Finance costs and investment revenue 2
--------------------------------------- -------- -------- ------------
Profit before tax 1,959
--------------------------------------- -------- -------- ------------
Tax (254)
--------------------------------------- -------- -------- ------------
Profit for the period 1,705
--------------------------------------- -------- -------- ------------
BIO Defence Consolidated
Six months ended 30 June 2017 GBP'000 GBP'000 GBP'000
------------------------------------- -------- -------- ------------
Revenue
Total revenue 14,022 314 14,336
Result
Segment result 1,932 (21) 1,911
------------------------------------- -------- -------- ------------
Unallocated head office costs (532)
------------------------------------- -------- -------- ------------
Profit from operations 1,379
------------------------------------- -------- -------- ------------
Finance costs and investment revenue 14
------------------------------------- -------- -------- ------------
Profit before tax 1,393
------------------------------------- -------- -------- ------------
Tax (169)
------------------------------------- -------- -------- ------------
Profit for the period 1,224
------------------------------------- -------- -------- ------------
BIO Defence Consolidated
Year ended 31 December 2017 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- ------------
Revenue
Total revenue 28,466 724 29,190
Result
Segment result before exceptional item 4,036 (35) 4,001
Sale of Airflow business 315 - 315
--------------------------------------- -------- -------- ------------
Segment result 4,351 (35) 4,316
Unallocated head office costs (1,078)
--------------------------------------- -------- -------- ------------
Profit from operations 3,238
--------------------------------------- -------- -------- ------------
Finance costs and investment revenue 45
--------------------------------------- -------- -------- ------------
Profit before tax 3,283
--------------------------------------- -------- -------- ------------
Tax (591)
--------------------------------------- -------- -------- ------------
Profit for the year 2,692
--------------------------------------- -------- -------- ------------
4. Financial Instruments
It is the policy of the Group to enter into forward foreign
exchange contracts to cover specific foreign currency payments and
receipts within 70 to 80% of the exposure generated. The Group also
enters into forward foreign contracts to manage the risk associated
with anticipated sales and purchase transactions out to six months
(2017: nine months) within 40 to 50% of the exposure generated.
Forward exchange contracts are carried at fair value through profit
and loss.
At the balance sheet date the total notional amount of
outstanding forward foreign exchange contracts to which the Group
has committed are as below:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
----------------------------------- --------- --------- -------------
Forward foreign exchange contracts 3,586 6,571 5,856
----------------------------------- --------- --------- -------------
At 30 June 2018, the fair value of the Group's forward foreign
exchange contracts is estimated to be approximately GBP(75,000) (30
June 2017: GBP24,000). The fair value has been calculated as the
present value of future expected cash flows at market related
rates, which are current at the balance sheet date. The value is
calculated using readily available market data and represents a
level 2 measurement in the fair value hierarchy under IFRS 7.
Other financial (liabilities)/assets
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- --------- -------------
Financial (liabilities)/assets carried at fair value
through profit and loss (75) 24 58
----------------------------------------------------- --------- --------- -------------
5. Alternative performance measures
The Group uses constant currency revenue growth and Earnings
before Interest, Tax, Depreciation and Amortisation ("EBITDA") as
its alternative performance measures as it believes these give its
investors a more realistic view of progress within the
business.
Constant currency growth is recalculated by reference to the
comparable period foreign exchange rates as follows:
GBP'000
--------------------------------------------------- ---------
Revenue 15,660
Impact of foreign exchange movements 558
--------------------------------------------------- ---------
Constant currency revenue - H1 2017 exchange rates 16,218
--------------------------------------------------- ---------
EBITDA calculations for the reported period are as follows:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- -------------
Profit from operations("EBIT") 1,957 1,379 3,238
Depreciation 645 703 1,393
Amortisation 659 464 936
EBITDA 3,261 2,546 5,567
------------------------------- --------- --------- -------------
6. Acquisition of own shares for cancellation
In the six months to 30 June 2018 285,000 ordinary shares of 10p
each were repurchased at a cost of GBP842,000 and cancelled.
During the first half of 2017 the company acquired 190,000
shares in the market for GBP304,000. These shares were transferred
into Treasury.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PGUCWMUPRGAW
(END) Dow Jones Newswires
July 24, 2018 02:00 ET (06:00 GMT)
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