TIDMVLG
RNS Number : 5249I
Venture Life Group PLC
22 March 2018
Venture Life Group plc
("Venture Life", the "Group", or the "Company")
Final results
Venture Life (AIM: VLG), the international consumer self-care
company focused on developing, manufacturing and commercialising
products for the self-care market, announces its audited results
for the year ended 31 December 2017, including the Company's maiden
pre-tax profits.
Financial highlights
-- Revenues up 12% to GBP16.1 million (2016: GBP14.3 million)
-- Gross profit increased 18% to GBP6.5 million (2016: GBP5.5
million), giving an increased gross margin of 40% (2016: 38%)
-- EBITDA increased by 134% to GBP1.9 million (2016: GBP0.8 million)
-- Maiden profit before tax of GBP0.1 million (2016: loss of GBP1.1 million)
-- Adjusted earnings* per share of 0.66 pence (2016: loss per share of 1.28 pence)
-- Year-end cash balance of GBP1.4 million (2016: GBP2.0 million), cash positive H2 2017
Commercial highlights
-- 10 new long-term distribution agreements signed with partners on key brands
-- Seven new international markets signed for UltraDEX brand,
including France, Italy, Sweden, Denmark, Norway and Finland in the
EU
-- Record and growing annual sales for Lubatti skincare brand in Chinese market
-- Seven new product launches during 2017
-- CE Mark granted for two new products, Myco Clear(TM) and Rosa calma(TM), developed in-house
-- Widest distribution of UltraDEX in the UK for over 5 years
Post period highlights
-- Long term distribution agreements signed for Procto-eze Plus in Poland and Romania
-- Launch of UltraDEX in France, Italy and the Nordic region in Q1 2018
-- Manufacturing capacity now increased through plant
re-organisation, 2017 production represents only 50% of this new
capacity
-- New listings for UltraDEX in UK market with important
pharmacy chains, to take effect in 2018
* Adjusted earnings exclude amortisation and share-based
payments
Commenting on the results, Jerry Randall, Chief Executive
Officer of Venture Life, said: "Venture Life has delivered another
year of good organic revenue growth across its business, and
achieved another of its objectives by delivering a profit before
tax for the first time. This coupled with a cash positive H2 2017,
means we expect to be sustainably profitable going forward. Having
invested in and established excellent operating leverage within our
business, these growing revenues have translated into increasing
profitability, with the majority of incremental gross margin
falling through to the bottom line. This again demonstrates the
opportunity in our business to grow the bottom line at a faster
rate than the top line, and with the recent reorganisation of our
plant in Italy, we have increased our capacity such that we can now
accommodate twice the volumes of 2017. Our strategy continues to be
a focus on revenue growth, through both organic growth of our
existing portfolio and through acquisition. 2018 has started well
with our order book ahead of the same point in 2017, and I look
forward to another good year of growth for the Group."
This announcement contains information which, prior to its
disclosure, was considered inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information please contact:
+44 (0) 1344 578
Venture Life Group PLC 004
Jerry Randall, Chief Executive Officer
Adrian Crockett, Chief Financial Officer
Northland Capital Partners Limited (Nominated +44 (0) 20 3861
Adviser and Joint Broker) 6625
Matthew Johnson/Edward Hutton (Corporate Finance)
Bob Pountney (Corporate Broking)
+44 (0) 20 3621
Turner Pope Investments (TPI) Ltd (Joint Broker) 4120
Andy Thacker
Walbrook PR venturelife@walbrookpr.com or +44
(0) 20 7933 8780
Paul McManus/Anna Dunphy +44 (0) 7980 541 893 / +44 (0) 7876
741 001
Notes to editors
About Venture Life
Venture Life is an international consumer self-care company
focused on developing, manufacturing and commercialising self-care
products globally. The Group's product range and pipeline currently
includes the UltraDEX oral care products range, food supplements
for lowering cholesterol and maintaining brain function,
dermo-cosmetics for addressing the signs of ageing, and medical
devices for onychomycosis (nail fungus), rosacea and
haemorrhoids.
The products, which typically are recommended by pharmacists or
healthcare practitioners, are available primarily through
pharmacies supplied by the Group's international distribution
partners.
Through its Development & Manufacturing business, Biokosmes,
the Group also provides development and manufacturing services to
companies in the medical devices and cosmetic sectors.
Chair's Statement
2017 saw another significant year for the Venture Life Group,
achieving record revenues of GBP16.1 million, up 12% over 2016, an
increase in EBITDA and our first profit before tax of GBP0.1
million. This result was delivered purely from organic growth
within the business, as we expanded the international reach of our
products and consolidated the UltraDEX product range in the UK.
UltraDEX had its first full year of ownership in the Group and we
saw good growth in the revenues of that brand, with an increase of
13% in UK points of distribution and new international partners
being appointed. The UltraDEX acquisition is now fully integrated
into the Group and contributing to the underlying profitability and
growth of the business. We are actively searching for similar
opportunities to integrate into our business.
As well as increased revenue and increased EBITDA, we also
achieved our first pre-tax profit. The latter is a key milestone in
the development of the Group, as we progress to become sustainably
profitable and cash generative with positive earnings.
As we look across our business and products, it is clear that
our expertise and many of our products are suited to the general
self-care market, of which the ageing population are a significant
subset. Products such as UltraDEX are used by people of all ages
but sit in the significant and growing self-care space.
The self-care market is growing as the population both expands
and lives longer, and this is putting extreme strain on healthcare
funding globally. As a result, consumers are expected to take more
responsibility and seek treatment for many non-critical ailments.
This is usually through the pharmacy and grocery multiples.
Self-care is characterised where a patient will:
-- Select the product themselves (although this may be on the
advice of a healthcare practitioner)
-- Pay for the product themselves
-- Take the product home and treat themselves
Self-care does not require the intervention of a healthcare
practitioner and is not reimbursed or dispensed on a prescription.
As a result, pricing is controlled by the pharmacy and not subject
to price reductions that reimbursed products are regularly seeing
from bodies such as NICE in the UK.
The over 50s comprise a significant proportion of this self-care
audience. They generally have much higher disposable income and own
the majority of financial assets, and hence can afford to pay for
healthcare. However, an increasing awareness globally of the need
for each of us to take personal responsibility for our own
healthcare is bringing many younger people into this market.
Dermatology and oral care are significant sectors in this space,
and Venture Life has strong expertise in both.
Whilst we continue to target the ageing population with our
products, we see significant opportunity in the wider self-care
space, where our technical expertise in development, manufacturing
and regulatory can combine with our global commercial expertise in
the pharmacy channel to deliver self-care products around the globe
for all ages.
We have seen the continued pace of organic growth across the
whole Group this year, with UltraDEX contributing a full year's
performance, and the first deals from some of our new products such
as Myco Clear(TM). The Group still has significant operational
leverage and capacity through which it can exploit increasing
revenues to drive incremental gross profit to the bottom line. This
strategy, along with carefully selected acquisitions, will fuel the
Group's continued profitable growth.
We were delighted to welcome Adrian Crockett to the Board in
2017 as our Chief Financial Officer. Adrian brings a wealth of
experience from the pharmaceutical sector, through his previous
roles with GSK, Novartis and latterly Abbott Diabetes. We are
already feeling the positive impact of Adrian's influence in the
Group. We have seen a strong start to 2018, and look forward to the
rest of the year with confidence.
Lynn Drummond
Non-Executive Chair
21 March 2018
Chief Executive Officer's Statement
The Group finished the year with its highest level of turnover
and profitability in its history, demonstrating the continued
strong organic growth from the Group's portfolio. Revenues finished
the year at GBP16.1 million, up 12% from last year, and we also
reported our first profit before tax of GBP0.1 million. EBITDA of
GBP1.9 million is reported for the year, and this figure includes
an amount of GBP0.5m arising from the adoption of new accounting
requirements for long term leases arrangements, principally rent,
as discussed in more detail in the Financial Report. However, on a
like-for-like basis, ignoring this change, EBITDA would have been
reported as GBP1.4 million, which is an increase of over 70% from
the previous year. This change in accounting for long term leases
has minimal effect on the profit before tax.
We also achieved our first pre-tax profit as a Group of GBP0.1
million (2016: loss of GBP1.1million), marking the progression of
our business to becoming sustainably profitable going forward. We
have a significant level of long-term consistent repeat purchasing
from our customers, such that we have a very stable underlying
consolidated level of repeat business. This gives strength and
stability to our business, and allows us to continually build on
top of these strong foundations of revenue and cash flow.
The increase in profitability in 2017 has been created through
organic growth across our business, which is then driven through
the operational leverage we have within the Group. With our cost
base essentially fixed, increasing revenues deliver more gross
margin, the majority of which falls to the bottom line, as the
Group moves to its long standing goal of being sustainably
profitable. In 2017, although we have seen this increasing
profitability delivered from purely organic growth, our strategy
continues to include acquisitions that can add revenues and profits
to our business as we saw in 2016 with the acquisition of UltraDEX.
Further, we have delivered this organic revenue growth with little
contribution from the three most recently developed products (Myco
Clear(TM), Rosa calma(TM) and PhotoAll(TM)), which will only begin
significant commercialisation in 2018/2019, as the clinical trials
for marketing purposes are expected to complete this year or early
next year.
As we have set out previously, the Group has built an operation
that has the capacity to accommodate significantly increased
revenues without the need to increase the fixed cost base. By fully
utilising our existing buildings at Biokosmes, we are now able to
double the 2017 volumes. Above and beyond this, we have the
capacity to increase the footprint of the production buildings on
the current site to the extent of more than doubling capacity
again.
Our products
The Group develops and commercialises a wide range of products
registered as either medical devices, food supplements or cosmetics
for a broad range of customers globally. Some of these are sold
under the Group's own brand names, and some are sold under our
customer's own brand names. The extent of the input to the process
from the customer will often determine the level of margin earned
by the Group. For example, where the Group owns the intellectual
property associated with the product (such as brand, patent,
clinical data, manufacturing formulation and method) the gross
margin earned is expected to be higher.
There are situations where even though Venture Life owns
significant IP (notably formulation, clinical data and/or patent)
around the products, selling under a customer's own brand name may
deliver greater sales velocity and absolute sales compared to using
our own brand name, and in these situations we may choose to sell
under the customer's own brand name in order to maximise profit and
value for the Group for that product.
UltraDEX
UltraDEX has continued to deliver on the promises we made at the
time of its acquisition in 2016, with the brand contributing
significantly to the Group's revenue and profit growth. Total
revenue from the brand in 2017 was GBP3.4 million, an increase of
24% over 2016 and profitability increased in 2017 to GBP1.1
million, more than four times the profitability when we acquired
the brand.
We have seen the continued expansion of the brand in the UK
during 2017 which will contribute to revenue growth in 2018. We
have had the opportunity to re-establish the relationships with all
the key customers, as well as some new customers and as a result,
have seen an increase in store listings during 2017 of over 13%, to
almost 15,000 points of distribution. This includes our first entry
into the significant convenience store market with Moto service
stations and Road Chef post period end.
Internationally, we have been very active in the expansion of
the UltraDEX range. Since acquisition we have appointed long term
distribution partners in nine countries with appointments in seven
new markets during 2017. The UltraDEX range is now present in a
total of 12 countries, including four of the big five EU countries.
Our H2 revenues included first shipments to UltraDEX partners in
France and Italy, and they will be launching the products during Q1
2018.
We have continued to broaden the intellectual property estate
for UltraDEX, with patents being granted for the innovative
UltraDEX Sensitive range in the EU, Australia, Mexico, South Africa
and Indonesia, which add to the existing patent grants in the USA,
New Zealand and Japan. This product launched in some new UK
retailers including Sainsbury's in H2 2017.
During 2017, we went through a brand revitalisation and also
launched larger pack sizes, to offer more value to loyal customers
of the brand. We launched 1 litre packs in two mouthwash varieties.
We are already seeing the benefit of this innovation, as in 2017 we
saw the volume of UltraDEX mouthwash sold growing in the UK.
This type of innovation is key to brand development and adds
longevity; moving forward we will continue to introduce innovation
to this brand in 2018 and beyond, as well as growing its geographic
presence globally.
Other oral care products
We have extensive expertise in the oral care area, and aside
from our UltraDEX brand, our Biokosmes facility has developed and
produced a series of products, registered as both medical devices
and cosmetics, in the oral care sector since 2000, for a number of
customers, who market these products under their own brands. This
is a resilient area that has seen consistent growth for many years
with revenues (excluding our UltraDEX brand) of GBP5.5 million in
2017 (2016: GBP5.3 million). The Group's expertise in the
development and manufacture of medical devices has enabled it to
bring innovation through new product development in this area, as
well as support our key customers. These products are now sold to a
number of customers, across many territories, and include products
for aphthous ulcers, oral mucositis and dry mouth.
Lubatti (China)
We have continued to see growth in China from this skincare
brand during 2017, with revenues of GBP0.5 million (2016: GBP0.4
million). Sales out of the Lubatti range through our partner
Gialen, have grown consistently during 2017 with monthly sales in
December 2017 over three times higher than monthly sales in January
2017. Gialen now have over 2,100 stores in China, and they have
launched the range in all eight regions. We are hopeful this level
of sales growth will continue to deliver growing revenues for
Venture Life from this range. The brand is well received by the
Chinese consumer and some clear 'hero' products are emerging, which
lead the brand forward. Importantly, we have already received
significant orders in 2018 which are ahead of our expectations.
We have a number of other key brands in the portfolio:
-- NeuroAge(TM) - food supplement indicated for short-term
memory loss and cognitive function. Sold in six countries and
recently registered in a new market, Canada.
-- Myco Clear(TM) - indicated for the management of
onychomycosis (fungal nail infection), which can leave the toes or
fingernails discoloured and uneven. Registered during 2017 in the
EU and the subject of a patent application, this innovative product
deals with both the aesthetic issue surrounding the condition, as
well as the underlying cause. Having successfully completed a
preliminary aesthetic evaluation demonstrating the improvement in
appearance of the nail through use of the product, we are currently
conducting a further clinical study, demonstrating the efficacy on
the underlying fungus that we have already seen at an in vitro
level. We already have partners in four markets for this.
-- Rosa calma(TM) - a range of three topical products that
treats this inflammatory skin condition; rosacea affects up to 10%
of the population, occurring mostly in middle-aged people. This
innovative range, which is undergoing further studies for marketing
purposes, provides a unique long-term safe treatment regime for
patients suffering from this condition.
-- Procto-eze(TM) Plus - an innovative range of medical devices
and cosmetics for the treatment of haemorrhoids. Already partnered
in 12 countries, this product offers a unique treatment regime for
the patient.
Organic growth in product revenues is delivered year-on-year
by:
-- Our existing partners growing their in-country revenues, and
hence buying more product from us.
-- Venture Life partnering products into new or existing
countries, either with existing partners or new partners
globally.
-- Venture Life developing new brands, which are in turn offered
to existing partners by way of line extensions.
In addition, we will continue to identify and assess selective
acquisition opportunities, which, like UltraDEX, we believe can be
integrated effectively into our operations and can enhance earnings
and deliver growth in shareholder value.
Operations
The Group now has 100 employees in total throughout the
business. Venture Life is a fully integrated business for the
development, manufacture and commercialisation of self-care
products. The UK operation employs 18 people at its UK head office
and manages finance, business development and partner management
for the Venture Life Brands, both in the UK and internationally.
The Italian operation employs 82 people, and houses development,
production, procurement, technical, regulatory, customer services/
support, business development and administration.
The production facility comprises 56 staff operating across all
functions, primarily divided between bulk manufacture and
filling/packing. In 2017, we produced 21 million units of product
in the plant which included 7 million sachets. We are conscious as
our business grows we need to ensure sufficient capacity for
growth, and we currently have a two-stage plan to more than double
the existing capacity within our existing buildings, and then over
the following 3-5 years increase our building footprint on our
current site, which will increase capacity again.
The fixed nature of the cost base in the business means that
incremental revenue generates additional gross margin, the majority
of which flows to the bottom line. This was seen in 2017 as the
growing revenues drove more gross margin through to the
profitability level, helping the Group to report significant growth
in EBITDA and its first profit before tax.
The production facility in Italy has all the necessary approvals
and accreditations to manufacture products regulated as medical
devices and cosmetics, for many of the countries around the world,
including EU, North America, Brazil, MENA and the Far East. In
2017, the facility had a successful inspection from the US FDA,
which allows the facility to manufacture products as OTC drug
category for the US or for sale in the US. This can include
products with compounds regulated as OTC drugs in the US, such as
fluoride. This additional certification is a great opportunity for
us to offer this service to our existing and new customers.
We relocated to our new head office in Bracknell without any
significant increase in cost base. This comfortably accommodates
our existing UK operation and allows for future growth.
Outlook
Recent new projects with a number of our customers, including
Menarini and Alliance, are testament to the capabilities and value
offered by our business and team. These customers look to work more
and more with us, as we deliver innovation through to first class
product delivery, in the highly technical area of product
development and manufacture, especially in the area of medical
devices. We are delighted that this year our collaboration with
Menarini will see the completion of a suite of 27 new products
developed for international commercialisation, which will begin in
2018.
We continue to screen and review a number of acquisition
opportunities, and fully expect to continue to add acquired assets
to our operating platform in the coming months and years, in the
same way that we have accommodated UltraDEX successfully.
We continue to fulfil our promise to deliver increasing
profitability, now at the pre-tax level also, and hence demonstrate
that our business model possesses the operational leverage that we
planned. This model will continue to deliver accelerating profits
and cash flow as we continue to grow revenues, and a key focus for
us in 2018 is to ensure this is clearly communicated to the market,
so that shareholders and investors alike understand the current
strong, low risk position of the Group and the consolidated
underlying business that we have. We believe this will translate
into strong sustainable profit and cash flow growth, generating
value for shareholders. Through delivering these results and
positive communication to the market, we are very hopeful that the
share price will begin to reflect the true underlying value of the
business and its prospects.
We are comfortable with the level of debt in the business and
comfortable that we have the resources to deal with both the
interest and capital elements. The most imminent capital repayment
is the GBP1.9 million UKBN convertible bond which is due to be
repaid, if not converted in March 2019. We are already in
discussions to defer this convertible bond or refinance with debt
in the event we choose not to repay the capital from our funds, but
instead retain them in the business for funding more growth. We
have used this debt to finance the growth of the business and now
the business is starting to generate the cash resulting from this
investment. The net debt to EBITDA multiple sat at 3.5 times at 31
December 2017, but we expect this to fall significantly during
2018, to much closer to 2, as the business generates more profit
and cash flow without incurring any organic growth in debt.
Our employees have been carefully chosen and are absolutely core
to the performance and growth plans of the business. Their hard
work, enthusiasm, loyalty and dedication are key to being able to
deliver our products to our customers around the globe. I would
like to thank everyone in the business for being part of the
Venture Life story. Also, thank you to all our customers and
suppliers alike, who continue to trust and support our
business.
We have started 2018 well with our KPIs looking strong and in
line with our expectations. The current order book in Q1 is strong
with some customers' order patterns already ahead of where we
thought they would be by this time. We look forward to 2018 with
confidence as the business goes from strength to strength. We would
like to thank all our shareholders for their ongoing support of the
Board and our business, and I look forward to updating the
shareholders on our progress further this year.
Financial Review
2017 saw another significant year for the Venture Life Group,
achieving record revenues of GBP16.1 million up 12% from 2016. The
strong performance of our UltraDEX brand growing 24% year-on-year
along with our existing brands and Development and Manufacturing
businesses helped drive increasing revenues, achieved through a
mixture of new and existing partnerships. The year also showed the
Group's first profit before tax of GBP0.1 million.
Statement of Comprehensive Income
The Group reported 2017 revenues of GBP16.1 million, an increase
of 12% over the GBP14.3 million reported in 2016. The increase
includes a full 12 months of the UltraDEX brand, which we acquired
in March 2016. The Brands segment, which includes the UltraDEX
brand, increased revenues by 20% to GBP4.5 million (2016: GBP3.8
million). Of the total Brands revenue in 2017, GBP2.8 million was
generated by UltraDEX sales with UK retailers, and new UltraDEX
deals signed in Scandinavia, France and Italy added a further
GBP0.6 million. Our Development and Manufacturing business, where
we sell under customers brands, reported revenues (including
intercompany sales) of GBP13.8 million, an increase of 22%. The
Euro strengthened significantly against sterling in 2017 - the
average exchange rate during 2017 was EUR:GBP 1.15 compared to
EUR:GBP 1.23 during 2016. This has increased reported revenue and
administrative costs where a large element of these are in Euros.
The overall impact of the changes in foreign currency rates had a
limited effect on the reported profit after tax of the Group. The
change in foreign exchange in the year gave a higher revenue offset
by higher costs, and a foreign exchange charge resulting from the
revaluation of the Group's Euro loan notes. So far in 2018, the
Euro has remained relatively close to the closing rate of 2017.
The Brands business was enhanced in the current year with the
addition of a full trading year of the UltraDEX brand. A change in
product mix of the Brands business slightly reduced the gross
margin to 52% (2016: 54%). Our Development and Manufacturing
business (excluding intercompany) generated an improved gross
margin of 36% in 2017 (2016: 33%), which reflects contracts held
with existing and new customers and the adoption of the new lease
accounting standard. Higher revenue and gross profit of this unit
was generated with a minimal increase in local currency
administrative expenses in the year.
Administrative costs (pre-exceptional items) increased
marginally in 2017 to GBP6.0 million (2016: GBP5.8 million). This
reflects the focus of the Group on cost control with the backdrop
of increasing revenues.
Operating profit totalled GBP0.6 million (2016: loss of GBP0.5
million) with the first reported profit before tax for the Group of
GBP0.1 million (2016: loss of GBP1.1 million). Loss after tax was
GBP0.4 million (2016: loss of GBP1.4 million). These translated
into an adjusted profit per share of 0.7 pence (2016: adjusted loss
per share of 1.3 pence), with the improvement in business
performance generating enhanced shareholder value. The number of
shares in issue at 31 December 2017 was 36,837,106 (31 December
2016: 36,837,106).
Statement of Financial Position
Property, plant and equipment increased as a result of an
investment of GBP0.3 million (2016: GBP0.2 million) in new
equipment in the Development and Manufacturing business and lease
accounting changes during the year. The net working capital balance
at 31 December 2017 increased from 31 December 2016 due to the
increased activity in the year as well as the addition of the
UltraDEX brand business. Total assets of GBP31.3 million at 31
December 2017 were GBP4.0 million higher than at 31 December 2016,
largely owing to the lease accounting changes and the related
additional right-of-use lease assets.
Cash and debt
Cash and cash equivalents at the year-end totalled GBP1.4
million (2016: GBP2.0 million) and was GBP0.1 million higher than
30 June 2017. Net cash outflow during 2017 amounted to GBP0.6
million with the reduction in cash balances accounted for as
follows:
-- Operating cash flow before movements in working capital - inflow of GBP1.3 million;
-- Tax paid - outflow of GBP0.7 million;
-- Net movement in working capital - outflow of GBP0.6 million;
-- Investment in manufacturing facility - outflow of GBP0.3 million;
-- Investment in intangible assets - outflow of GBP0.6 million;
-- Net movement in interest bearing borrowings - inflow of GBP0.3 million.
Net debt levels, before leasing obligations, increased from
GBP6.0 million at 30 June 2017 to GBP6.3 million at 31 December
2017 (31 December 2016: GBP5.1 million).
The Group is financed by a range of instruments including
convertible bonds, vendor loan notes and other interest bearing
debt of varying maturities comprising invoice financing, unsecured
bank loans and deferred consideration. As highlighted earlier in
this report, we are comfortable with the level of debt in the
business which is being used to finance growth and investment. The
Directors have prepared detailed forecasts looking beyond 12 months
from the date of these financial statements and expect to move to
profitability in the foreseeable future. The most imminent capital
repayment is the GBP1.9 million UKBN convertible bond which is due
to be repaid, if not converted in March 2019. We are already in
discussions to either defer or refinance with debt this convertible
bond and consequently fully expect this to be confirmed in the
foreseeable future. Forecasts assume the convertible bond is
refinanced rather than repaid from existing funds.
Accounting developments
During the period the Group elected to adopt IFRS 15 'Revenue
from Contracts with Customers' and IFRS 16 'Leases' with effect
from 1 January 2017.
Under IFRS 15, management performed a full review of all Group
revenue contracts to assess the impact of the new accounting
standard. There were no changes to the accounts as a result of
IFRS15.
Management performed a full review of all lease contracts of the
Group to assess the Group's leasing obligations in line with the
guidance of IFRS16.
The new Standard has been applied retrospectively without
restatement, with the cumulative effect of initial application
recognised as an adjustment to the opening balance of retained
earnings at 1 January 2017. The impact to Venture Life Group was as
follows:
-- GBP486,000 improvement of EBITDA;
-- GBP465,000 extra depreciation;
-- GBP42,000 extra finance cost.
This has a minimal impact on profit after tax but moves the
lease charges of Biokosmes (the Development and Manufacturing
facility) to depreciation and finance costs instead of across cost
of sales and administration costs. Right-of-use assets capitalised
onto the balance sheet increased by GBP3,676,000 and lease
liabilities of GBP3,696,000 were recorded. Further details of the
adoption of IFRS16 are included in note 9.
Amortisation was also reviewed and the useful lives of the
Group's intangible assets revisited. This resulted in the
re-assessed future estimated life of the acquired customer
relationships, patents and trademarks from Biokosmes and
Periproducts - re-assessed to 10 years future life from 1 January
2017, updated from the former 5 years from acquisition. The impact
for the Group in 2017 is GBP397,000 lower amortisation and better
reflects the utilisation of these long term assets.
Dividend
The Group paid a dividend in 2017 of 0.04 pence per share (2016:
0.04 pence per share) and is recommending a dividend of 0.04 pence
per share be paid to shareholders in 2018.
Dividend Timetable
Subject to shareholder approval at its Annual General Meeting,
its proposed final dividend of 0.04 pence per ordinary share
related to the financial year ended 31 December 2017 is expected to
be paid according to the timetable below:
Ex-dividend date: 24 May 2018
Record date: 25 May 2018
Dividend payment date: 22 June 2018
Jerry Randall
Chief Executive Officer
21 March 2018
Consolidated Statement of Comprehensive Income
Company number 05651130
for the year ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
Notes GBP'000 GBP'000
------------------------------------------------------ ----- ----------- -----------
Revenue 2 16,052 14,280
Cost of sales (9,581) (8,789)
------------------------------------------------------ ----- ----------- -----------
Gross profit 6,471 5,491
Administrative expenses
Operating expenses (5,431) (4,979)
Amortisation of intangible assets (521) (862)
------------------------------------------------------ ----- ----------- -----------
Total administrative expenses (5,952) (5,841)
Other income 62 65
------------------------------------------------------ ----- ----------- -----------
Operating profit/(loss) before exceptional
items 581 (285)
Exceptional costs 3 - (180)
------------------------------------------------------ ----- ----------- -----------
Operating profit/(loss) 581 (465)
Finance income - -
Finance costs (518) (644)
------------------------------------------------------ ----- ----------- -----------
Profit/(loss) before tax 63 (1,109)
Tax 4 (430) (260)
------------------------------------------------------ ----- ----------- -----------
Loss for the year (367) (1,369)
Other comprehensive income which will not - -
be subsequently reclassified to the income
statement
Other comprehensive income which will be subsequently
reclassified to the income statement 121 317
------------------------------------------------------ ----- ----------- -----------
Total comprehensive loss for the year attributable
to equity holders of the parent (246) (1,052)
------------------------------------------------------ ----- ----------- -----------
All of the loss and the total comprehensive income for the year
is attributable to equity holders of the parent.
Year ended Year ended
31 December 31 December
2017 2016
----------------------------------------- ----------- -----------
Loss per share
Basic and diluted loss per share (pence) 5 (1.00) (3.76)
Adjusted profit/(loss) per share (pence) 5 0.66 (1.28)
----------------------------------------- ----------- -----------
Consolidated Statement of Financial Position
Company number 05651130
at 31 December 2017
At 31 December At 31 December
2017 2016
Note GBP'000 GBP'000
-------------------------------------------- ---- -------------- --------------
Assets
Non-current assets
Intangible assets 16,175 16,272
Property, plant and equipment 5,069 1,279
-------------------------------------------- ---- -------------- --------------
21,244 17,551
-------------------------------------------- ---- -------------- --------------
Current assets
Inventories 3,563 3,141
Trade and other receivables 5,141 4,656
Cash and cash equivalents 1,361 1,998
-------------------------------------------- ---- -------------- --------------
10,065 9,795
-------------------------------------------- ---- -------------- --------------
Total assets 31,309 27,346
-------------------------------------------- ---- -------------- --------------
Equity and liabilities
Capital and reserves
Share capital 7 111 111
Share premium account 7 13,289 13,289
Merger reserve 7 7,656 7,656
Convertible bond reserve 109 109
Foreign currency translation reserve 234 113
Share-based payments reserve 497 409
Retained earnings (7,711) (7,329)
-------------------------------------------- ---- -------------- --------------
Total equity attributable to equity holders
of the parent 14,185 14,358
-------------------------------------------- ---- -------------- --------------
Liabilities
Current liabilities
Trade and other payables 4,404 4,347
Taxation 29 195
Interest bearing borrowings 8 1,509 687
Convertible bond 171 171
Vendor loan notes 71 54
-------------------------------------------- ---- -------------- --------------
6,184 5,454
-------------------------------------------- ---- -------------- --------------
Non-current liabilities
Interest bearing borrowings 8 6,243 2,986
Convertible bond 1,631 1,546
Vendor loan notes 1,751 1,700
Statutory employment provision 909 795
Deferred tax liability 406 507
-------------------------------------------- ---- -------------- --------------
10,940 7,534
-------------------------------------------- ---- -------------- --------------
Total liabilities 17,124 12,988
-------------------------------------------- ---- -------------- --------------
Total equity and liabilities 31,309 27,346
-------------------------------------------- ---- -------------- --------------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2017
Foreign Share-based
Share currency
premium Merger Convertible translation payments Retained
Share account reserve bond reserve reserve reserve earnings Total
capital equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Balance at 1 January
2016 103 11,826 7,656 - (204) 367 (5,946) 13,802
Loss for the year - - - - - - (1,369) (1,369)
Foreign exchange on
translation - - - - 317 - - 317
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Total comprehensive
expense - - - - 317 - (1,369) (1,052)
Issue of share capital 8 1,463 - - - - - 1,471
Share options charge - - - - - 42 - 42
Issue of convertible
bond - - - 109 - - - 109
Dividends - - - - - - (14) (14)
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Transactions with
shareholders 8 1,463 - 109 - 42 (14) 1,608
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Balance at 1 January
2017 111 13,289 7,656 109 113 409 (7,329) 14,358
Loss for the year - - - - - - (367) (367)
Foreign exchange on
translation - - - - 121 - - 121
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Total comprehensive
expense - - - - 121 - (367) (246)
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Share options charge - - - - - 88 - 88
Dividends - - - - - - (15) (15)
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Transactions with
shareholders - - - - -- 88 (15) 73
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Balance at 31 December
2017 111 13,289 7,656 109 234 497 (7,711) 14,185
----------------------- -------- -------- -------- ------------ ----------- ----------- -------- -------
Consolidated Statement of Cash Flows
for the year ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
-------------------------------------------------------------- ----------- -----------
Cash flow from operating activities
Profit/(loss) before tax 63 (1,109)
Finance expense 518 644
-------------------------------------------------------------- ----------- -----------
Operating profit/(loss) 581 (465)
Adjustments for:
- Depreciation of property, plant and equipment 668 176
- Amortisation of intangible assets 521 862
- Disposal of capitalised development costs 165 -
- Finance cost (285) (212)
- Leasing obligation repayments (previously in administration
costs) (486) -
- Share-based payment expense 88 42
-------------------------------------------------------------- ----------- -----------
Operating cash flow before movements in working
capital 1,252 403
Tax paid (694) (251)
Increase in inventories (322) (263)
Increase in trade and other receivables (392) (251)
Increase/(decrease) in trade and other payables 72 (95)
-------------------------------------------------------------- ----------- -----------
Net cash used in operating activities (84) (457)
-------------------------------------------------------------- ----------- -----------
Cash flow from investing activities:
Acquisition of subsidiary - net cash payment - (4,258)
Purchases of property, plant and equipment (285) (185)
Expenditure in respect of intangible assets (568) (355)
Proceeds on disposal of tangible asset - 7
-------------------------------------------------------------- ----------- -----------
Net cash used in investing activities (853) (4,791)
-------------------------------------------------------------- ----------- -----------
Cash flow from financing activities:
Net proceeds from issuance of ordinary shares - 1,471
Net proceeds from issuance of convertible bond - 1,750
Drawdown of new interest-bearing borrowings 312 1,140
Repayment of existing interest-bearing borrowings (45) (41)
Dividends paid (15) (14)
-------------------------------------------------------------- ----------- -----------
Net cash from financing activities 252 4,306
-------------------------------------------------------------- ----------- -----------
Net decrease in cash and cash equivalents (685) (942)
Net foreign exchange difference 48 83
Cash and cash equivalents at beginning of period 1,998 2,857
-------------------------------------------------------------- ----------- -----------
Cash and cash equivalents at end of period 1,361 1,998
-------------------------------------------------------------- ----------- -----------
Notes to the Consolidated Financial Statements for the year
ended 31 December 2017
1. Basis of the announcement
The financial information of the Group set out above does not
constitute statutory accounts for the purposes of Section 435 of
the Companies Act 2006. The financial information for the year
ended 31 December 2016 has been extracted from the Group's audited
financial statements which were approved by the Board of directors
on 22(nd) March 2017 and delivered to the Registrar of Companies
for England and Wales following the Company's 2017 Annual General
Meeting.
The financial information for the year ended 31 December 2017
has been extracted from the Group's audited financial statements
for that period. The reports of the auditor on both these financial
statements were unqualified, did not include any references to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain a statement
under Section 498(2) or Section 498(3) of the Companies Act
2006.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards ('IFRSs') as adopted by the European Union, this
announcement does not itself contain sufficient information to
comply with those IFRSs. This financial information has been
prepared in accordance with the accounting policies set out in the
2016 Report and Accounts and updated for new standards adopted in
the current year.
Items included in the financial information of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the functional
currency). The consolidated financial information is presented in
UK sterling (GBP), which is the Group's presentational
currency.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange.
2.1 Segment revenue and results
The following is an analysis of the Group's revenue and results
by reportable segment.
Development Consolidated
and
Brands Manufacturing Group
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------- ------------- ------------
Year ended 31 December 2017
Revenue
Sale of goods 4,502 13,491 17,993
Sale of services - 297 297
Intercompany sales elimination - (2,238) (2,238)
-------------------------------------------- ------- ------------- ------------
Total external revenue 4,502 11,550 16,052
-------------------------------------------- ------- ------------- ------------
Results
Operating profit before exceptional items
and excluding central administrative costs 255 1,756 2,011
-------------------------------------------- ------- ------------- ------------
Year ended 31 December 2016
Revenue
Sale of goods 3,764 11,099 14,863
Sale of services - 243 243
Intercompany sales elimination - (826) (826)
-------------------------------------------- ------- ------------- ------------
Total external revenue 3,764 10,516 14,280
-------------------------------------------- ------- ------------- ------------
Results
Operating profit before exceptional items
and excluding central administrative costs 17 1,509 1,526
-------------------------------------------- ------- ------------- ------------
All revenue of the Group is recognised at point in time as
determined by IFRS15.
The reconciliation of segmental operating profit to the Group's
profit before tax is as follows:
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
-------------------------------------------------------- ------------ ------------
Operating profit before exceptional items and excluding
central administrative costs 2,011 1,526
Exceptional items - (180)
Central administrative costs (1,430) (1,811)
Finance costs (518) (644)
-------------------------------------------------------- ------------ ------------
Profit/(loss) before tax 63 (1,109)
-------------------------------------------------------- ------------ ------------
One customer generated revenue of GBP3,376,000 which accounted
for 10% or more of total revenue (2016: one customer generated
revenue of GBP3,388,000 which accounted for 10% or more of total
revenue).
2.2 Segmental assets and liabilities
At 31 December At 31 December
2017 2016
GBP'000 GBP'000
------------------------------- -------------- --------------
Assets
Brands 3,255 2,431
Development and Manufacturing 13,683 9,820
Group consolidated assets 14,371 15,095
------------------------------- -------------- --------------
Consolidated total assets 31,309 27,346
------------------------------- -------------- --------------
Liabilities
Brands 1,651 1,059
Development and Manufacturing 11,014 7,336
Group consolidated liabilities 4,459 4,593
------------------------------- -------------- --------------
Consolidated total liabilities 17,124 12,988
------------------------------- -------------- --------------
2.3 Other segmental information
Additions
to
Depreciation non-current
and amortisation assets
GBP'000 GBP'000
------------------------------ ----------------- -----------
Year ended 31 December 2017
Brands 123 362
Development and Manufacturing 735 4,485
Central administration 331 -
------------------------------ ----------------- -----------
1,189 4,847
------------------------------ ----------------- -----------
Year ended 31 December 2016
Brands 79 81
Development and Manufacturing 258 463
Central administration 701 4,189
------------------------------ ----------------- -----------
1,038 4,733
------------------------------ ----------------- -----------
2.4 Geographical information
The Group's revenue from external customers by geographical
location of customer is detailed below:
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
------------------ ----------- -----------
Revenue
UK 5,538 4,762
Italy 4,936 4,417
Switzerland 3,791 3,338
Rest of Europe 857 819
Rest of the World 930 944
------------------ ----------- -----------
Total revenue 16,052 14,280
------------------ ----------- -----------
3. Exceptional items
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
-------------------------------------------------- ----------- -----------
Costs incurred in the acquisition of Periproducts - (180)
-------------------------------------------------- ----------- -----------
Total exceptional items - (180)
-------------------------------------------------- ----------- -----------
During the prior period the Group incurred legal and
professional fees in relation to the Periproducts acquisition, as
well as certain restructuring costs.
4. Income tax expense
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
-------------------------------------------------- ----------- -----------
Current tax:
Current tax on profits for the year 528 455
Adjustments in respect of earlier years - (21)
-------------------------------------------------- ----------- -----------
Total current tax expense 528 434
-------------------------------------------------- ----------- -----------
Deferred tax:
Origination and reversal of temporary differences (98) (174)
-------------------------------------------------- ----------- -----------
Total deferred tax expense (98) (174)
-------------------------------------------------- ----------- -----------
Total income tax expense 430 260
-------------------------------------------------- ----------- -----------
Tax on the Group's profit/(loss) before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to profits and losses of the consolidated entities
as follows:
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
----------------------------------------------------- ----------- -----------
Profit/(loss) before tax 63 (1,109)
Profit/(loss)before taxation multiplied by the local
tax rate of 19% 2016: 20%) (12) (222)
Expenses not deductible for tax purposes 159 248
Research and development tax credit for current
year - (21)
Change in recognised deferred tax liability (98) (174)
Change in unrecognised deferred tax asset 255 342
Higher rate on foreign taxes 126 87
----------------------------------------------------- ----------- -----------
Income tax charge 430 260
----------------------------------------------------- ----------- -----------
There are no enacted or substantively enacted changes to the
small profits tax rate.
As at the reporting date, the Group has unused tax losses of
GBP8,610,000 (2016: GBP7,195,000) available for offset against
future profits generated in the UK. No deferred tax asset has been
recognised in respect of these losses due to the uncertainty of its
recoverability.
The tax charge of the Group is driven by tax paid on the profits
of Biokosmes, offset by the release of deferred tax liabilities
generated on the acquisition of Biokosmes and Periproducts
businesses. In 2017 the effective tax rate of Biokosmes was 25%
(2016: 25%).
5. Earnings per share
A reconciliation of the weighted average number of ordinary
shares used in the measures is given below:
Year ended Year ended
31 December 31 December
2017 2016
Number Number
--------------------------------------------- ----------- -----------
For basic and diluted EPS calculation 36,837,106 36,409,340
--------------------------------------------- ----------- -----------
A reconciliation of the earnings used in the
different measures is given below:
GBP'000 GBP'000
--------------------------------------------- ----------- -----------
For basic and diluted EPS calculation (367) (1,369)
--------------------------------------------- ----------- -----------
For adjusted EPS calculation* 242 (465)
--------------------------------------------- ----------- -----------
* Adjusted EPS is loss after tax excluding amortisation and
share-based payments.
The resulting EPS measures are:
Pence Pence
--------------------------------------------- ----------- -----------
Basic and diluted EPS calculation (1.00) (3.76)
--------------------------------------------- ----------- -----------
Adjusted EPS calculation 0.66 (1.28)
--------------------------------------------- ----------- -----------
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for the purpose of calculating
the diluted loss per ordinary share are identical to those used for
basic loss per share. This is because the exercise of share options
and conversion of the vendor loan notes would have the effect of
reducing the loss per ordinary share and is therefore not dilutive
under the terms of IAS 33.
6. Dividends
Amounts recognised as distributions to equity holders in the
period:
Year ended Year ended
31 December 31 December
2017 2016
GBP'000 GBP'000
--------------- ----------- -----------
Final dividend 15 14
--------------- ----------- -----------
The Directors recommend the payment of a dividend of 0.04 pence
per share (2016: 0.04 pence per share) in 2017 and a resolution
will be put to shareholders at the 2018 Annual General Meeting.
7. Share capital and share premium
Share capital
All shares are authorised, issued and fully paid. The Group has
one class of ordinary shares which carry no fixed income.
Ordinary Ordinary
shares of shares of
0.3p each 0.3p each Share premium Merger reserve
Number GBP GBP'000 GBP'000
----------------------------- ---------- ---------- ------------- --------------
At 31 December 2016 and 2017 36,837,106 110,511 13,289 7,656
----------------------------- ---------- ---------- ------------- --------------
The Company issued no new shares during the period (2,433,572 in
2016).
The Group operates a Long-Term Incentive Plan. Up to the balance
sheet date, there have been three awards under this plan, in which
Executive Directors and senior management of the Group
participate.
8. Interest bearing borrowings
At 31 December At 31 December
2017 2016
GBP'000 GBP'000
----------------------------------------- -------------- --------------
Current
Invoice financing 965 629
Leasing obligations 485 -
Unsecured bank loans due within one year 59 58
----------------------------------------- -------------- --------------
1,509 687
----------------------------------------- -------------- --------------
Non-current
Deferred consideration 426 416
Leasing obligations 3,211 -
Unsecured bank loans due after one year 2,606 2,570
----------------------------------------- -------------- --------------
6,243 2,986
----------------------------------------- -------------- --------------
All bank loans are held by the Group's Italian wholly-owned
subsidiary, Biokosmes. During the year, an existing bank loan held
with Unicredit SPA for EUR0.8 million, due to expire in November
2018, was extended. The loan principal remained at EUR0.8m and the
expiry date was extended to May 2023. Invoice financing includes
the Italian RiBa (or "Ricevuta Bancaria") facility and UK invoice
financing facility with HSBC. Both are short term facilities. The
balance shown above of GBP965,000 (2016: GBP629,000) reflects the
amount that had been settled in Biokosmes's account under RiBa and
drawn against invoices in the UK as at the reporting date.
Deferred consideration reflects the fair value of a loan held by
the Company with the vendors of Periproducts. The loan principal of
GBP400,000 is repayable in March 2019 and has an annual interest
charge of 10% from September 2017. Its carrying value at 31
December 2017 was GBP426,000 (2016: GBP416,000).
A summary showing the contractual repayment of interest bearing
borrowings is shown below:
At 31 December 2017 At 31 December 2016
Leasing Other Total Leasing obligations Other Total
obligations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------------ ------- ------- ------------------- ----------- -------
Amounts and timing of non-current
debt repayable
Between 1 January 2018 and
31 December 2018 - - - - 742 742
Between 1 January 2019 and
31 December 2019 486 612 1,098 - 473 473
Between 1 January 2020 and
31 December 2020 491 584 1,075 - 400 400
Between 1 January 2021 and
31 December 2021 489 533 1,022 - 343 343
Between 1 January 2022 and
31 December 2026 1,745 1,303 3,048 - 1,028 1,028
---------------------------------- ------------ ------- ------- ------------------- ----------- -------
3,211 3,032 6,243 - 2,986 2,986
---------------------------------- ------------ ------- ------- ------------------- ----------- -------
Reconciliation of debt Short-term Long-term Total
borrowings borrowings
GBP'000 GBP'000 GBP'000
---------------------------------- ------------ ------- ------- ------------------- ----------- -------
1 January 2017 912 6,232 7,144
Cash flows:
Draw-down/(Repayment) 312 (45) 267
Non cash:
Movement in fair value and
foreign exchange 42 227 269
31 December 2017 1,266 6,414 7,680
---------------------------------- ------------ ------- ------- ------------------- ----------- -------
Lease liability
The Group's net debt position remains unchanged from 2016 in
respect of it's lease contracts. Under IFRS16 leases that have
previously been recognised as operating leases have now been
recognised in the Statement of Financial Position showing
additional lease liabilities at 31 December 2017 of GBP3,696,000
offsetting right-of-use assets of GBP3,676,000, giving a net
liability position of GBP20,000.
9. Leases
During the year the Group early adopted IFRS16 'Leases', which
has been applied from 1 January 2017.
IFRS16 requires the Group, with the exception of short-term and
low value leases, to value all leasing obligations, disclosing
right-for-use assets and corresponding lease liabilities. As
detailed below, all leases of the group have been considered to
have balance sheet leasing obligations with the exception of a UK
property lease which expired within the year.
Right-of-use assets Office
equipment Motor vehicles Property Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------------- --------------------- -------
Carrying value 1 January
2017 62 15 3,664 3,741
Additions - - 271 271
Depreciation charge
in the year (16) (10) (439) (465)
Foreign exchange 2 - 127 129
---------------------------- --------- -------------- --------------------- -------
Carrying value 31 December
2017 48 5 3,623 3,676
---------------------------- --------- -------------- --------------------- -------
Interest charge in
the year 1 - 41 42
Cash outflow for leases
in the year 17 10 459 486
Lease liabilities were calculated as the present value of the
future lease obligations of the Group. The future lease obligations
were discounted using the relevant Italian and UK local borrowing
rates of 1% and 5% respectively.
There was one lease contract of the Group that was not
considered to have a balance sheet leasing obligation in the year,
with its monthly lease payments taken through the income statement.
This lease contract for the office of the former UK headquarters
was terminated in October 2017 and consequently was considered
short term in nature. The 10 monthly lease payments made during the
year totalled GBP59,000.
The lease categories of the Group are made up of:
Office equipment
> Photocopiers and laboratory equipment leased by the Group
in Italy and the UK are rented under contract with lease terms
extending between 2019 and 2021. Each contract comes with a three
month break clause, but management do not expect that these break
clauses will be exercised.
Motor vehicles
> A company car is provided to the Group's Chief Executive
Officer. This lease has a three year term ending June 2018
whereupon the leased asset is required to be returned to the
lessor.
Property
> The Group's Italian subsidiary has one operating location
and storage location in Lecco, near to Milan. The operating
location has a long-term rental agreement until November 2019.
Rental obligations on the storage location continue until September
2020. Both locations have a six year extension option at the end of
the initial term that is available to the Group. Due to the fixed
nature of the Italian business, management consider that these
extensions will be exercised.
> The Group's current UK operation is head quartered in
leased premises in Bracknell. The lease contract commenced in
August 2017 and expires in July 2022. The contract has a three year
break clause, but management does not expect that this break clause
will be exercised.
At transition, IFRS16 permits the cumulative effect of adopting
the standard to be taken to retained earnings. The Group has also
elected to value the right-of-use lease assets in line with the
lease liabilities at transition. There were no movements taken to
retained earnings in the year as a result of transition.
If IFRS16 was not adopted in the year, operating profit of the
Group for the year would be reduced by GBP21,000 and profit before
tax would be increased by GBP21,000.
10. 2017 Annual Report and Accounts and 2018 Annual General Meeting
The Group's Annual Report and Accounts for the year ended 31
December 2017 will be posted to shareholders in early April 2018.
It will be available on the Company's website
(http://www.venture-life.com/investor-relations) from 11.00am on 26
March 2018. The Annual General Meeting of Venture Life Group plc
will be held on 23 May 2018 at 10.30am at the offices of Simmons
& Simmons LLP, CityPoint, One Ropemaker Street, London, EC2Y
9SS. A notice of meeting will be sent to shareholders with the
Annual Report and Accounts and a copy will be available on the
Company's website (http://www.venture-life.com/investor-relations)
in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UAUKRWBAOUAR
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