TIDMHCEG
RNS Number : 1614U
Healthcare Enterprise Group PLC
19 June 2009
Healthcare Enterprise Group plc
Interim results
Healthcare Enterprise Group plc (AIM: HCEG, the "Group", the "Company") the
international healthcare products group, today reports results for the 6 months
ended 31 December 2008.
Interim highlights
- Revenue from continuing operations GBP248,000 (2007: GBP257,000)
- Pre-exceptional net operating expenses reduced to GBP0.7m (2007: GBP1.0m)
- Pre-exceptional operating loss reduced to GBP0.6m (2007: GBP0.9m)
- Net loss for the period was GBP1.3m (2007: GBP16.1m)
- Loss per share 0.3p (2007: Loss 5.2p)
As announced separately today, the Group has reached agreement, subject to
shareholder approval, on a refinancing of the company whereby certain
significant liabilities, including convertible unsecured loan stock, held by
HCEG will be converted into a combination of equity in HCEG, shares in the
company's investment in First Aid Holdings Limited and subsidiaries Ebiox
Limited ("Ebiox") and Reproductive Sciences Limited ("RSL").
In the future the Group expects to function as an investment holding company
with a minimal overhead base which will be funded through a small-fund raising
or further realisation of the Group's investments. Notwithstanding the current
economic climate, we remain convinced that Healthcare Enterprise Group has
valuable investments in exciting niches of the healthcare market.
Enquiries:
Healthcare Enterprise Group PLC 01925 898 201
Lyndon Gaborit, Executive Deputy Chairman
Daniel Stewart & Company plc 020 7776 6550
Graham Webster/Stewart Dick
Chairman's Statement
For the 6 months ended 31 December 2008 (unaudited)
Interim Results
The overall performance of the Group was as expected with turnover in the half
year to 31 December 2008 of GBP248,000 (2007: GBP257,000). The operating
subsidiaries sustained losses and the Group reported an operating loss before
exceptional items of GBP0.6m (2007: loss GBP0.9m), although net operating
expenses, before exceptional items, were reduced 36% to GBP0.66m (2007:
GBP1.03m).
The carrying value of the Group's investment in First Aid Holdings Limited
("FAH") was impaired during the period resulting in a non-cash write off of
GBP0.6m.
The loss before tax and after goodwill impairment and other exceptional
expenses, was GBP1.3m (2007: loss GBP16.1m). The Group's loss per share was 0.3p
(2007: loss per share 5.2p).
Ebiox
Ebiox sales in the period were GBP248,000 (2007: GBP257,000). This resulted in
an operating loss for Ebiox of GBP0.1m (2007: loss GBP0.2m) for the six month
period.
In September 2008 the Company announced that Ebiox had secured the services of
Mr. John Honey, former senior VP with Reckitt Benckiser plc as Executive
Chairman. The Company subsequently announced that it had sold 5% of its equity
in Ebiox to partly repay secured loan stock holders.
On 4 June 2009, the Company announced that Ebiox had witnessed a surge in demand
following the outbreak of swine flu, and that the Ebiox management team, headed
by John Honey, was keen to take advantage of the flow of new orders.
Accordingly, the Ebiox board determined that the best way for Ebiox to raise new
funds (whilst the Company was still finalising its own restructuring) was to
undertake a fundraising exercise directly. Subscriptions for GBP700,000
representing 36.8% of the enlarged share capital of Ebiox were received, of
which GBP100,000 was repaid to the Company in the form of management fees. The
Ebiox board believes that the balance of funds available to it should leave
Ebiox adequately funded for the short and medium term.
It is hoped that, with the injection of new funds (as mentioned above), and the
introduction of Mr. Nigel Wray to its board of Directors, Ebiox will be able to
achieve additional sales such as those which have now been contracted to Great
Ormond Street Hospital under the Ebiox brand and generate further revenue by
distributing additional complimentary non-proprietary products.
Reproductive Sciences Limited
RSL is currently focussed on Fertiligent's "Evie" product, a high quality, low
cost intra-uterine sperm pump to help assist infertile couples conceive. For a
marginal price increase, Fertiligent offers infertile couples a dramatically
enhanced IUI success rate and the chance of avoiding invasive and costly
artificial reproductive techniques such as in vitro fertilisation.
RSL owns 29% of the issued capital in the Israeli Fertiligent Limited company,
with options to increase that holding to 65% of the fully diluted capital. RSL
also owns the exclusive, worldwide sale & marketing rights to the Israeli
Fertiligent company's products.
A two-centre clinical study already conducted in Germany and Israel demonstrated
that the Fertiligent "Evie" product increases the IUI success rate by a factor
of 2.7, from 6% to 16%. A further clinical trial (supervised by Professor Martha
Dirnfeld an acknowledged world leader in the field) is currently being conducted
at the Carmel Medical Centre, Israel. Professor Dirnfeld is also a medical
consultant to the London Bridge Clinic with, subject to funding, a clinical
trial (also under her supervision) scheduled to commence in London shortly. Data
from these trials will be used to support market entry in Europe, the US and in
selected Asian and Latin American countries.
The Fertiligent "Evie" product is the first and only CE-approved slow release
IUI device. The company received CE Mark clearance in Q2 2007 and has submitted
an application to the US FDA in Q3 2008. FDA approval is expected later this
year.
Once the product has received acceptable results in the second, two-centre
clinical trial (defined as not less than bolus IUI pregnancy rates), RSL and
Fertiligent will initiate a global commercialisation plan, including contract
manufacture in the US, with the aim of commencing sales late in 2009 or early
2010.
As announced on 27 April 2009, RSL raised an additional US$100,000
(approximately GBP70,000) by the sale of a 25% equity stake to persons
associated with Nigel Wray. Those funds were necessary to meet RSL's working
capital requirements and to fund Fertiligent's FDA application.
In order to achieve its commercial objectives, RSL will be required to raise
additional capital, and the Company is currently involved in discussions with
various potential new investors.
Other
The residual investment in FAH is considered non core and is to be realised at
the first available opportunity. Other residual investments have been sold or
mothballed and the Group plans no further investment in these products.
Current trading and outlook
The Company's restructuring and refinancing plans were greatly affected by the
world economic upheaval experienced during the period under review. The
inability to raise new funds, either equity or debt, caused difficulties for the
management and it was only through the financial support of a small group of
investors that the Company has been able to survive.
The Board expects to continue to record a loss for the second half of the year
at the operating level, although it is anticipated that this will be lower than
the first half loss as the benefits of further cost reductions are experienced.
In the future the Group expects to function as an investment holding company
with a minimal overhead base which will be funded through a small-fund raising
or further realisation of the Group's investments. Notwithstanding the current
economic climate, we remain convinced that Healthcare Enterprise Group has
valuable investments in exciting niches of the healthcare market.
Healthcare Enterprise Group plc
Consolidated income statement (unaudited)
for the 6 months ended 31 December 2008
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | 6 months to | 6 months to |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | 30 June | 30 June |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | Notes | 2008 | 2007 |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | GBP'000 | GBP'000 |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Revenue - continuing activities | 2 | 248 | 257 |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Cost of sales | | (168) | (132) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Gross profit | | 80 | 125 |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Net operating expenses - normal | | (656) | (1,027) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Net operating expenses - exceptional | 3 | (571) | (9,720) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Total net operating expenses | | (1,227) | (10,747) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Operating loss | | (1,147) | (10,622) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Finance expense | | (147) | (74) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Loss before taxation | | (1,294) | (10,696) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Income tax expense | | - | - |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Loss from continuing operations | | (1,294) | (10,696) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Discontinued operations - normal | | - | (990) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Discontinued operations -exceptional | 3 | - | (4,452) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Loss from discontinued operations | | - | (5,442) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Loss for the period | | (1,294) | (16,138) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Attributable to: | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Equity holders of the parent | | (1,294) | (16,148) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Minority interest | | - | 10 |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | (1,294) | (16,138) |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | ________ | ________ |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Earnings per share | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| From continuing operations: | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Basic (loss) per share | 4 | (0.3)p | (3.5)p |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Diluted (loss) per share | 4 | (0.3)p | (3.5)p |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| From continuing and discontinued operations: | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Basic (loss) per share | 4 | (0.3)p | (5.2)p |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| Diluted (loss) per share | 4 | (0.3)p | (5.2)p |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
| | | | |
+-----------------------------------------------+----------+---------------------------------------------------------------+---------------+
Healthcare Enterprise Group plc
Consolidated balance sheet (unaudited)
As at 31 December 2008
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | As | As |
| | | at | at |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | Notes | 31 Dec | 30 June |
| | | 2008 | 2008 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | GBP'000 | GBP'000 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Non-current assets | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Property, plant & equipment | | 38 | 41 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Goodwill | | 3,300 | 3,300 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Other intangible assets | | 504 | 534 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Available for sale investments | 6 | 1,370 | 2,164 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | 5,212 | 6,039 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Current assets | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Inventories | | 43 | 36 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Trade receivables | | 103 | 111 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Other current assets | | 263 | 246 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Cash and cash equivalents | | 41 | 47 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | 450 | 440 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Total assets | | 5,662 | 6,479 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Current liabilities | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Financial liabilities - borrowings | 7 | (668) | (549) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Trade and other payables | | (1,651) | (1,706) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | (2,319) | (2,255) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Non-current liabilities | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Financial liabilities - borrowings | 7 | (2,028) | (1,900) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Other payables | | (14) | (14) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | (2,042) | (1,914) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Total liabilities | | (4,361) | (4,169) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Net assets | | 1,301 | 2,310 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Equity attributable to the | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| equity holders of the parent | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Ordinary shares | | 439 | 339 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Share premium | | 42,273 | 42,088 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Deferred shares | | 8,371 | 8,371 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Retained earnings | | (49,030) | (47,736) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Translation reserve | | (68) | (68) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Other reserves | | (684) | (684) |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| Total equity | | 1,301 | 2,310 |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | ________ | ________ |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
| | | | |
+----------------------------------------------+---------+--------------------------------------------------------------------+--------------------------------------------------------------------+
Healthcare Enterprise Group plc
Consolidated cash flow statement (unaudited)
for the 6 months ended 31 December 2008
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | 6 months to | 6 months to |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | 30 June | 30 June |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | 2008 | 2007 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash flows from operating activities | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Operating loss | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - continuing operations | (1,147) | (10,622) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - discontinued operations | - | (5,410) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - exceptional operating costs charged | 571 | 14,172 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Total group operating loss before exceptional | (576) | (1,860) |
| items | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash payments in respect of exceptional | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Costs and provisions | - | (705) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Depreciation and amortisation | 35 | 101 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| (Increase)/decrease in working capital | (129) | 1,541 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Other | - | 10 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net cash from operations | (670) | (913) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Interest paid | - | (105) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net cash from operating activities | (670) | (1,018) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash flows from investing activities | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Purchase of plant and equipment | (1) | (34) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Development costs capitalised | - | (18) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Proceeds from sale of business | - | 462 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Purchase of other investments | (26) | - |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Proceeds from sale of other investments | 306 | 44 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net cash from investing activities | 279 | 454 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash flows from financing activities | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net proceeds from issue of ordinary share capital | 285 | - |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Debt due within one year | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - repayment of sterling borrowings | - | (1,637) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - issue of sterling borrowings | 100 | 500 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Debt due after more than one year | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| - net movements on long term facilities | - | 1,500 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net cash from financing activities | 385 | 363 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Net decrease in cash and cash equivalents | (6) | (201) |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash and cash equivalents at 1 July | 47 | 592 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| Cash and cash equivalents at 31 December | 41 | 391 |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | ________ | ________ |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
| | | |
+-----------------------------------------------------+----------------------------------------------------+------------------------------------------------------------+
Healthcare Enterprise Group plc
Statements of changes in equity
for the 6 months ended 31 December 2008
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | Shares | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Group | Issued | to be | Share | Deferred | Other | Translation | Retainted | Total | Minority | Total |
| | capital | issued | premium | shares | reserves | reserve | earnings | | interest | equity |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| At 1 July 2007 | 7,601 | 271 | 42,065 | 746 | (905) | (88) | (28,825) | 20,865 | 57 | 20,922 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Equity element of | - | - | - | - | 126 | - | - | 126 | - | 126 |
| convertible debt | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Exchange losses offset in | - | - | - | - | - | (11) | - | (11) | - | (11) |
| reserves | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Disposal | - | - | - | - | - | - | - | - | 10 | 10 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Net income recognised | - | - | - | - | 126 | (11) | - | 115 | 10 | 125 |
| directly in equity | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Loss for the period | - | - | - | - | - | - | (16,138) | (16,138) | (10) | (16,148) |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Total recognised expense | - | - | - | - | 126 | (11) | (16,138) | (16,023) | - | (16,023) |
| for the year | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Issue of shares | 312 | (271) | - | - | - | - | - | 41 | - | 41 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Share based payments | - | - | (51) | - | 75 | - | - | 24 | - | 24 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| At 31 December 2007 | 7,913 | - | 42,014 | 746 | (704) | (99) | (44,963) | 4,907 | 57 | 4,964 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| At 1 July 2008 | 339 | - | 42,088 | 8,371 | (684) | (68) | (47,736) | 2,310 | - | 2,310 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Loss for the period | - | - | - | - | - | - | (1,294) | (1,294) | - | (1,294) |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Total recognised expense | - | - | - | - | - | - | (1,294) | (1,294) | - | (1,294) |
| for the year | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| Issue of shares | 100 | - | 185 | - | - | - | - | 285 | - | 285 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| At 31 December 2008 | 439 | - | 42,273 | 8,371 | (684) | (68) | (49,030) | 1,301 | - | 1,301 |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
| | | | | | | | | | | |
| | | | | | | | | | | |
+----------------------------+----------+-----------+---------+----------+----------+-------------+-----------+----------+----------+----------+
Healthcare Enterprise Group plc
Notes to the Group financial information
for the 6 months ended 31 December 2008
1. Basis of preparation and accounting policies
This condensed consolidated interim financial information for the 6 months ended
31 December 2008 has been prepared in accordance with International Accounting
Standard 34 "Interim Financial Reporting" ("IAS 34"), as adopted by the European
Union. This condensed consolidated interim financial information should be read
in conjunction with the financial statements for the 16 months ended 30 June
2008, which have been prepared in accordance with IFRSs as adopted by the
European Union.
This condensed consolidated interim financial information does not constitute
statutory accounts within the meaning of Section 435 of the Companies Act 2006.
The statutory accounts for the 16 months period ended 30 June 2008 were approved
by the Board of directors on 28 May 2009 and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement made under Section 498 of the Companies Act 2006 but did contain an
emphasis of matter paragraph highlighting the significant uncertainty inherent
in the going concern basis of preparation given the Group's ongoing funding
requirements. The emphasis of matter paragraph stated:
"Emphasis of matter - going concern
In forming our opinion on the financial statements, which is not qualified, we
have considered the adequacy of the disclosures made in note 1 to the financial
statements concerning the group's and company's ability to continue as a going
concern. The group and company are dependent on continuing support of
shareholders and the disposal of selective investments and assets in order to
satisfy their liabilities and to provide funding to meet their ongoing costs.
The group and company are currently engaged in a re-financing of debt which will
require shareholder approval. The directors believe that shareholders will
approve the proposals and will continue to support the group and company but
this is not guaranteed. If the shareholders did not approve the proposals, the
directors would have to seek alternative funding which is only likely to be
through further disposals of investments, which if insufficient to satisfy its
liabilities would mean the group and company would be unable to continue as a
going concern. Along with the matters disclosed in note 1 to the financial
statements these conditions indicate the existence of a material uncertainty
which may cast significant doubt about the group's and company's ability to
continue as a going concern. The financial statements do not include the
adjustments that would result if the group and company were unable to continue
as a going concern."
The disclosures made in note 1 referred to above related to the going concern
basis of preparation of the financial statements and stated:
"The financial statements have been prepared on the going concern basis which
assumes that the Group will be able to meet its liabilities as they fall due.
The Group's portfolio of products include some at early stage and not yet in the
marketplace and Ebiox which has lacked the investment required to be
self-sustaining. Given the Group's continuing losses further funding will be
required to meet the Group's continuing operating costs and liabilities.
Since the period end the Group has been funded by loans from supportive
shareholders and selective sale of investments, most significantly those in
First Aid Holdings Limited ("FAH"). The Group is currently engaged in a process
of refinancing whereby it is proposed that certain significant liabilities,
including convertible unsecured loan stock, held by Healthcare Enterprise Group
plc ("HCEG") will be converted into a combination of equity in HCEG, Ebiox
Limited, Reproductive Sciences Limited and FAH. The proposed refinancing will
require shareholder approval and the directors believe that shareholders will
approve the proposals.
In the future the Group expects to function as an investment holding company
with a minimal overhead base which will be funded through a small fund-raising
exercise or the further realisation of the Group's investments. The directors
believe that the Group's plans are achievable given the continued support of
significant shareholders and the ability to achieve piecemeal investment sales
already evidenced in the period since the 30 June 2008. However these conditions
constitute a material uncertainty that may cast significant doubt about the
group's and company's ability to continue as a going concern. After making
enquiries, and considering the uncertainties surrounding the potential
refinancing and future operations described above, the directors have a
reasonable expectation that the Group and the Company have adequate resources,
or the expectation of access to adequate resources, to continue trading for the
foreseeable future. It is therefore appropriate to prepare the financial
statements on a going concern basis."
The basis of preparation described above for the period ended 30 June 2008 is
the same basis used to prepare these interim financial statements.
This condensed consolidated interim financial information has neither
been reviewed or audited.
Except as described below, the accounting policies applied are consistent with
those of the annual financial statements for the 16 month period ended 30 June
2008, as described in those financial statements.
As required by IAS 34 and consistent with prior years, taxes on income in the
interim periods are accrued using the tax rate that would be applicable to
expected total annual earnings.
The implementation of the standards and interpretations listed in the 2008
financial statements with an effective date for accounting periods beginning on
1 January 2008 have not had a material impact on the interim financial
information for the six months ended 31 December 2008.
2. Segmental reporting
Primary reporting format - business segments
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | Ebiox | Fertiligent | Other and | Total |
| | | | corporate | |
+-----------------------------------------------+-------------------+-------------------+--------------------+--------------------+
| Continuing operations | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Segment revenue | 248 | 257 | - | - | - | - | 248 | 257 |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Operating loss before exceptional items | (101) | (188) | (64) | - | (411) | (714) | (576) | (902) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Exceptional operating costs | - | - | - | - | (571) | (9,720) | (571) | (9,720) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Segment result | (101) | (188) | (64) | - | (982) | (10,434) | (1,147) | (10,622) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Interest payable | | | | | | | (147) | (74) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Loss before taxation | | | | | | | (1,294) | (10,696) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Taxation | | | | | | | - | - |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| Loss for the period | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| from continuing operations | | | | | | | (1,294) | (10,696) |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
| | | | | | | | | |
+-----------------------------------------------+---------+---------+---------+---------+---------+----------+---------+----------+
All revenue for the period comes from the sale of disinfectant products,
originating in the United Kingdom. Revenue for Ebiox is not significantly
seasonal.
3. Exceptional items
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | 2008 | 2007 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Exceptional items relating to continuing operations | | |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Reorganisation costs | - | 219 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Impairment of other assets | 571 | 85 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Disposals of investments | - | (215) |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Impairment of goodwill | - | 9,631 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | _______ | _______ |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | | |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | 571 | 9,720 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | _______ | _______ |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | | |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Exceptional items relating to discontinued operations | | |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Reorganisation costs | - | 534 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| Impairment of Goodwill | - | 3,918 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | _______ | _______ |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | | |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | - | 4,452 |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
| | _______ | _______ |
+-----------------------------------------------------------------+-------------------------------+--------------------------------+
2008 Exceptional items
In December 2008 the directors reviewed the carrying value of its available for
sale investments for impairment. In light of this review the directors decided
to impair the Group's investment in First Aid Holdings Limited. The remaining
holding is valued at GBP1.25 per share (30 June 2008: GBP2.00 per share).
4. Loss per share
(a) Basic loss per share
+------------------------------------------------------------+------------------+-------------------------+
| | 2008 | 2007 |
+------------------------------------------------------------+------------------+-------------------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+------------------+-------------------------+
| | | |
+------------------------------------------------------------+------------------+-------------------------+
| Loss attributable to equity holders of the Company | (1,294) | (16,148) |
+------------------------------------------------------------+------------------+-------------------------+
| Discontinued operations | - | 5,442 |
| | | |
+------------------------------------------------------------+------------------+-------------------------+
| | | |
+------------------------------------------------------------+------------------+-------------------------+
| | ________ | ________ |
+------------------------------------------------------------+------------------+-------------------------+
| Loss attributable to equity holders | | |
+------------------------------------------------------------+------------------+-------------------------+
| of the Company from continuing operations | (1,294) | (10,706) |
+------------------------------------------------------------+------------------+-------------------------+
| | ________ | ________ |
+------------------------------------------------------------+------------------+-------------------------+
| | | |
+------------------------------------------------------------+------------------+-------------------------+
The weighted average number of ordinary shares in issue during the period was
413,918,463 (2007: 308,680,503).
(b) Diluted loss per share
Because the inclusion of potential ordinary shares would decrease the basic loss
per ordinary share they are not deemed to be dilutive and accordingly the basic
and diluted loss per ordinary share are identical.
5. Related party transactions
HJM Tompkins is the Managing Director of Thurloe Capital Partners Limited and
controls this related company. The Group purchased and accrued management
services, including directors fees, from Thurloe Capital Partners Limited
totalling GBP6,250 (2007: GBP20,000) in the period. As at 31 December 2008 the
Group owed Thurloe Capital Partners Limited GBP6,463 (30 June 2008: GBP12,338).
HJM Tompkins resigned as Non-Executive Chairman of the Group on the 2 December
2008.
LJ Gaborit is the Executive Chairman of Industrial Management and Equity Limited
('IME') and controls this company. The Group purchased strategic consultancy
services from IME totalling GBP90,000 (2007: GBP114,000) in the period. As at 31
December 2008 the Group owed IME for services invoiced GBPnil (30 June 2008:
GBPnil) and total accruals for services provided but not invoiced under the
terms of the contract of GBP244,000 (30 June 2008: GBP244,000).
JH Gunn is a Director of Wengen Limited and controls this company. The Group
purchased advisory services, including directors fees, from Wengen Limited
totalling GBP12,500 (2007: GBP8,333). As at 31 December 2008 the Group owed
Wengen Limited GBP14,688 (30 June 2008: GBP3,646). JH Gunn is also an Executive
Deputy Chairman of Ludgate Investments Limited ('Ludgate') an early stage
venture capital provider for high growth companies. Ludgate have performed
occasional corporate finance advisory project related work for the Group,
services purchased from Ludgate totalled GBPnil (2007: GBP70,250).
Crest Medical Limited ('Crest') was sold by the Group to First Aid Holdings
Limited ('FAH') on 4 April 2008 in return for shares in FAH. The Group still
shares premises with Crest and has purchased services related to these premises
in the period to 31 December 2008 amounting to GBP126,719 in the period since
its sale. The Group's Ebiox business also trades with Crest and made sales of
GBP12,633 in the period since its sale. At 31 December 2008 the Group owed Crest
GBP313,879 (30 June 2008: GBP408,036) and was due from Crest GBP14,449 (30 June
2008: GBP116,409). As part of its obligations under the sale agreement, the
Group has also made an unsecured loan to Crest of GBP196,318 (30 June 2008:
GBP196,318) which was repaid in February 2009.
6. Available for sale investments
+------------------------------------------------------------+-----------------+--------------------+
| | 6 months to | 16 months to |
+------------------------------------------------------------+-----------------+--------------------+
| | 31 December | 30 June |
+------------------------------------------------------------+-----------------+--------------------+
| | 2008 | 2008 |
+------------------------------------------------------------+-----------------+--------------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+-----------------+--------------------+
| | | |
+------------------------------------------------------------+-----------------+--------------------+
| Beginning of the period | 2,164 | 682 |
+------------------------------------------------------------+-----------------+--------------------+
| | | |
+------------------------------------------------------------+-----------------+--------------------+
| Additions | 82 | 2,561 |
+------------------------------------------------------------+-----------------+--------------------+
| Disposed | (305) | (258) |
+------------------------------------------------------------+-----------------+--------------------+
| Impairment | (571) | (821) |
+------------------------------------------------------------+-----------------+--------------------+
| | ________ | ________ |
+------------------------------------------------------------+-----------------+--------------------+
| | | |
+------------------------------------------------------------+-----------------+--------------------+
| End of the period | 1,370 | 2,164 |
+------------------------------------------------------------+-----------------+--------------------+
| | ________ | ________ |
+------------------------------------------------------------+-----------------+--------------------+
| | | |
+------------------------------------------------------------+-----------------+--------------------+
Available for sale investments comprise:
761,250 shares in First Aid Holdings ("FAH") Limited. In July 2008, 128,750
shares in FAH were sold for GBP257,000. During December 2008 the remaining
shares were reviewed for impairment by the directors and subsequently written
down by GBP571,000 (see note 3) to give a closing investment of GBP952,000 or
GBP1.25 a share (30 June 2008: GBP2.00 per share). As at 31 December 2008 the
Group owned 29% (30 June 2008: 34%) of the issued share capital of FAH. FAH has
not been treated as an associate because it is independently managed and there
is no intention to engage or participate in the business on an ongoing basis.
The shares are held for disposal and will be disposed of by management at the
first available opportunity to realise appropriate shareholder value and are
being actively marketed. Sales of FAH shares post-period end have brought the
level of investment in FAH below the level where the assumption of associate
status must be rebutted.
A GBP52,000 (30 June 2008: GBP100,000) investment in shares and warrants in two
entities ValiRX plc and Cancer Therapeutics Incorporated. During the period
shares in ValiRX plc were sold for GBP48,000.
A GBP69,000 (30 June 2008: GBP69,000) investment in Medilator Limited
representing a 3% interest in the share capital of an Israeli company developing
reproductive health products.
A GBP297,000 (30 June 2008: GBP215,000) investment in Fertiligent Limited
representing a 29% interest in the share capital of an Israeli company
developing reproductive health medical devices. Despite its 29% interest
Healthcare Enterprise Group plc does not consider it has a significant interest
in Fertiligent Limited as the company is independently run by a strong local
management team from a separate legal jurisdiction in which the Group has no day
to day representation.
The relatively early stage of development of the products of Medilator Limited
and Fertiligent Limited means that it is difficult to determine the fair value
of the investments, which are currently held at cost, being the directors' best
estimate of fair value as at 31 December 2008 and 30 June 2008.
The write down of available for sale investments in the year was shown in the
income statement as a permanent impairment in the value of the investment rather
than a change in fair value that would be recognised in equity.
7. Financial liabilities - borrowings
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | As at | As at |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | 31 December | 30 June |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | 2008 | 2008 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | | |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| GBP0.5m 8% secured loan notes 2008 | 500 | 490 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| GBP1.75m 8% convertible unsecured loan notes 2012 | 1,628 | 1,600 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| GBP0.4m other unsecured loans | 400 | 300 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| Other (including accrued interest) | 168 | 59 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | _____ | _____ |
| | | |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | | |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| Total | 2,696 | 2,449 |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | _____ | _____ |
| | | |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
| | | |
+------------------------------------------------------------+-----------------------------------------------+------------------------------------------+
The GBP0.5m secured loan notes were repayable in December 2008, however
repayment has been deferred, with the agreement of the note holders, until a
refinancing package has been completed. The terms previously applicable for the
GBP0.5m secured loan notes remain in force.
8. Post balance sheet events
Since the period end the Group has been funded by loans from supportive
shareholders and selective sale of investments, most significantly those in
First Aid Holdings Limited ("FAH"). The Group is currently engaged in a process
of refinancing whereby it is proposed that certain significant liabilities,
including convertible unsecured loan stock, held by Healthcare Enterprise Group
plc ("HCEG") will be converted into a combination of equity in HCEG, Ebiox
Limited ("Ebiox"), Reproductive Sciences Limited and FAH.
The value realised in the refinancing for part of the Group's economic interest
in Ebiox is expected by the directors to be significantly below the valuation of
the Group's economic interest as at 31 December 2008. However it the directors'
opinion that this is due to conditions and events since 31 December 2008 and the
changes will be reflected in the financial statements to 30 June 2009. The
potential impairment to be recognised is estimated by directors to be GBP0.7m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KVLFFKQBLBBZ
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