19th May 2008 07:00
BTG plc: Preliminary Results for the Year Ended 31 March 2008
London, UK, 19 May 2008: BTG plc (LSE: BGC), the life sciences company, today announces its preliminary results for the year ended 31 March 2008.
Financial highlights
3rd consecutive year of profit
Operating profit £16.6m (06/07:£0.9m) before £8.1m Wrexham provision
Revenue net of revenue sharing £42.9m (06/07: £26.8m)
Net recurring royalties of £24.9m (06/07: £24.2m)
Surplus of net recurring royalties over operating expenses of £8.9m (06/07: £6.3m)
R&D investment increased to £10.7m (06/07: £9.7m)
Net one-off revenues and profits on assets & investments less direct taxes £16.6m (06/07: £5.3m)
Profit after tax £8.8m (06/07: £2.4m) and earnings per share 5.9p (06/07:1.6p)
Cash and cash equivalents of £57.0m (31/3/07: £43.0m)
Operating highlights
Continued growth in royalty income and good cost control supplemented by valuable one-off transactions generated £14m of cash flow in the period even after increased R&D spend:
Strong momentum in BTG's pipeline with six programmes now in active clinical development:
More than 40 of the 50 required patients treated in Varisolve® phase II safety study, with no adverse MRI results; on track to finish treatments by June 2008
Positive results from clinical proof of concept study of BGC20-0166 in sleep apnoea
Phase I studies initiated for BGC20-1531 (migraine) and BGC20-0134 (multiple sclerosis)
BGC20-1259 progressing towards a European phase IIa study in patients with Alzheimer's disease starting in H2 08
Good progress with licensed programmes:
Genzyme's Campath® label extended to include 1st-line treatment in chronic lymphocytic leukaemia
Two phase III trials of Campath® initiated in multiple sclerosis
Encouraging phase I/II data published on Cougar Biotechnology's CB7630 in prostate cancer; enrolment for phase III trial commenced in April 08
Tolerx signed agreement with GlaxoSmithKline to develop TRX4 in type 1 diabetes and other inflammatory conditions: initial milestone paid to BTG of $10m
Louise Makin, BTG's chief executive officer, commented: "We are reporting excellent financial results, with a third consecutive profitable year based on a strong underlying business with £14m of cash generated and cash reserves of £57m. We now have six clinical programmes in our active development pipeline with Varisolve® moving forward as planned, encouraging results from our sleep apnoea study and our migraine and multiple sclerosis treatments starting clinical development. We are in a strong position to further build value by progressing our development programmes and seeking new opportunities that will help drive us towards sustainable profitability."
For further information contact:
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BTG |
Financial Dynamics |
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Andy Burrows, Director of Investor Relations +44 (0)20 7575 1741; mobile: +44 (0)7990 530605 Christine Soden, Chief Financial Officer +44 (0)20 7575 1596 |
Ben Atwell +44 (0)20 7831 3113 |
About BTG BTG in-licenses, develops and commercialises pharmaceuticals and has a broad pipeline of development programmes targeting neurological and other disorders including varicose veins. The company also has a substantial and growing revenue stream of milestone payments and royalties from out-licensed products. BTG operates from offices in London, Philadelphia and Osaka. For further information, visit: www.btgplc.com.
Chairman's statement
I am pleased to report a very strong financial performance for the year. Net revenues after revenue sharing increased by 60% to £42.9m (06/07: £26.8m) based on gross revenues of £75.0m (06/07: £45.7m). Net recurring royalties grew to £24.9m (06/07: £24.2m) and net non-recurring revenues were significantly higher at £18.0m (06/07: £2.6m).
Research and development investment increased to £10.7m (06/07: £9.7m) while operating expenses reduced by 11% to £16.0m (06/07: £17.9m). As previously reported, following changes to the Varisolve® product design and simplification of the supply chain, BTG decided to terminate the lease on the Wrexham manufacturing facility and as a result has taken a charge of £8.1m being the amounts written off the carrying value of the facility and estimated closure costs. Despite this charge, profit before tax increased from £2.6m to £10.7m and profit after withholding and other taxes increased to £8.8m (06/07: £2.4m). The Group ended the year with net cash of £57.0m (06/07: £43.0m).
There was also significant progress in our clinical development pipeline. Encouraging data were reported from clinical studies of Varisolve®, the novel treatment for varicose veins, BGC20-0166, the combination product for sleep apnoea, and BGC20-0582, a non-insecticide treatment for head lice infestation. In addition, BGC20-1531, which is being developed to treat migraine headaches, and BGC20-0134, which is targeting multiple sclerosis, both commenced Phase I clinical studies. Many of our partners also saw good progress in their products, in particular Genzyme with Campath®, Cougar Biotechnology with CB7630 and Tolerx with TRX4.
Board changes
Professor Colin Blakemore and Giles Kerr were appointed as non-executive directors in October 2007 and both bring extensive industry expertise to BTG's Board.
I joined the Board in January 2008 and became chairman in March, at which time Sir Brian Fender retired from the Board, having been a director since 1992 and chairman from 2003. My colleagues and I wish him well for the future and thank him for his many contributions to BTG over the years, in particular for guiding the Company as chairman successfully through a period of significant change.
Fred Weiss retired as a director in November 2007 after six years' service and Consuelo Brooke, having also served six years as a director, is not standing for re-election at the annual general meeting in July. Alison Wood has decided not to stand for re-election, due to commitments in her full-time position. The Board thanks each for their contributions to the Company's development and wishes them all success in future roles.
Outlook
We anticipate another strong financial performance in the current year. Good growth in recurring royalties from marketed products is anticipated, particularly driven by a change in revenue sharing arrangements on BeneFIX® and the anticipated sales growth of key products. We aim to meet a number of important development milestones this year. In addition to completing the US phase II safety study of Varisolve®, we plan to progress partnering discussions and to prepare for a special protocol assessment (SPA) for the phase III trials. The phase I studies of BGC20-1531 and BGC20-0134 are expected to finish this calendar year, with phase II studies planned to commence during the first half of 2009. A phase II study of BGC20-1259 is scheduled to begin by the end of 2008. We also anticipate development progress in our key partnered programmes.
Another priority is to further strengthen our pipeline, which may be achieved by licensing individual assets and through broader corporate transactions, moving us towards our goal of sustainable growth.
Dr John Brown
Operating review
We remain focused on maximising the cash flow from our pre R&D profits generated from royalties and licensing transactions in order to finance and facilitate the development of our drug pipeline.
This year we moved two further programmes into the clinic, bringing our current active pipeline to six clinical and two earlier stage programmes. In addition we have interests in 10 programmes under development by licensees.
Progress in the internal pipeline:
Varisolve® - polidocanol microfoam treatment for varicose veins
The US Phase II safety study is progressing well. No new MRI lesions or neurological abnormalities have been found in any of the more than 40 patients who have been treated with Varisolve® to date. The study is on track to complete treatment of the required 50 patients by the end of June 08.
Partnering discussions will be progressed in parallel with making preparations for the pivotal phase III trials. In making ready an application for a Special Protocol Assessment for these trials, BTG plans to conduct a pilot clinical study to validate the control procedure and a non-clinical study to validate a patient questionnaire. Updated market research shows a market potential of over $500m for the product from reimbursed procedures in the US alone with additional potential in the US self-pay and rest of world markets.
The product presentation has been improved with the development of a smaller, user-friendly single canister product, and the manufacturing supply chain has been simplified.
BGC20-1259 - Alzheimer's disease
BGC20-1259 is a multifunctional compound being developed for the treatment of Alzheimer's disease. It combines inhibition of acetylcholinesterase, serotonin transport and calcium channels to improve both cognitive and behavioural symptoms of the disease. Its neuroprotective properties and ability to stimulate neurogenesis suggest that BGC20-1259 also has the potential to slow disease progression.
A human positron emission tomography study was completed to aid dose selection in a planned European, 6 month, phase II proof of concept study in Alzheimer's disease patients scheduled to start in H2 08.
BGC20-0166 - sleep apnoea
BGC20-0166 is a proprietary combination of two marketed serotoninergic modulating drugs being developed for the treatment of obstructive sleep apnoea. The results of a clinical study in 39 patients were reported in April 2008. BGC20-0166 reduced the Apnoea Hypopnoea Index (AHI), a clinically accepted scale of apnoea severity, by a mean of 40% in patients with mild to severe obstructive sleep apnoea. BGC20-0166 was shown to be well-tolerated and had no impact on sleep architecture. BTG is continuing with both non-clinical studies and the development of a proprietary product formulation in preparation for US IND submission.
BGC20-0582 - head lice infestation
BGC20-0582 is a non-pesticidal product derived from a natural botanical source in development for the treatment of head lice infestation. The results of a phase II trial reported in April 2008 showed that although BGC20-0582 did not significantly increase the cure rate at 14 days compared to placebo, the modified combined cure / re-infestation measure of efficacy was 76.5% for the 10% dose compared with 56.1% for placebo, which was statistically significant (p. This was also superior to the efficacy rate exhibited by a leading over-the-counter product in studies of similar design and patient demographic. An in vitro study is underway to establish the product's resistance characteristics compared to other treatments.
BGC20-1531 - migraine headache
BGC20-1531 is an orally available EP4 receptor antagonist which inhibits prostaglandin-induced vasodilatation of cranial blood vessels via selective blockade of EP4 receptors, thereby reducing inflammation and migraine pain. With its novel mode of action, this compound targets those patients that do not respond to or cannot tolerate current treatments. In early 2008 dosing began in a randomised, double-blind, placebo controlled phase I study to assess the safety, tolerability and pharmacokinetic profile of single rising doses of oral BGC20-1531 in healthy volunteers. A phase II study is planned to begin in H1 09.
BGC20-0134 - multiple sclerosis
BGC20-0134 is a novel structured lipid designed to restore the balance between pro-inflammatory (tumour necrosis factor-, TNF-) and anti-inflammatory (transforming growth factor-1, TGF1) cytokines in patients with multiple sclerosis. As an oral therapy, BGC20-0134 could provide a significant advantage over current treatments. A combined single and repeat, rising dose phase I study in healthy male and female subjects commenced early in 2008. A phase II study is anticipated to commence in H1 09.
Pre-clinical programmes: BTG6001 - pain and BTG6228 - solid tumours
BTG6001 is an opioid agonist in preclinical development for the control of post-operative pain. In vitro and in vivo data suggest an improved side-effect profile and long duration of action compared with other opioid analgesics. BTG6228 is a novel, targeted, broad spectrum cancer therapeutic whose primary target is Na/K ATPase with effects on downstream pathways involved in tumour hypoxia including the Hif pathway. It has demonstrated in vivo efficacy in renal, pancreatic and chondrosarcoma xenograft models. Both programmes are moving towards development candidate selection.
Plevitrexed and BGC945 - cancer
Both are thymidylate synthase inhibitors targeting cancer. BTG has been seeking a licensee for plevitrexed and has held discussions with a number of companies, though no agreement has been reached. BTG remains open to interest from potential licensees. As previously announced, the development of BGC945 had been put on hold pending a review of its technical and commercial feasibility. Having completed this review, BTG has decided not to progress BGC945 any further.
Progress in key partnered programmes:
Campath® - chronic lymphocytic leukaemia, multiple sclerosis
Licensed to Genzyme Corporation, Campath® has been approved for the first-line treatment of CLL. Positive final data from a phase II trial in multiple sclerosis showed that Campath® reduced the risk for relapse by 73% and the risk for sustained accumulation of disability by 71% compared with Rebif® in patients with relapsing-remitting multiple sclerosis. Two phase III trials in RRMS are under way.
TRX4 - type 1 diabetes
TRX4 is a monoclonal antibody licensed to Tolerx, Inc, which has signed an agreement with GlaxoSmithKline to develop TRX4 in type 1 diabetes and a range of inflammatory conditions. BTG receives half of all the development and sales milestones due to Tolerx under that agreement. TRX4 is anticipated to start a phase III trial in type 1 diabetes in 2008.
CB7630 (abiraterone) - prostate cancer
BTG's licensee Cougar Biotechnology, Inc. announced the start of a phase III trial of CB7630 in patients with metastatic, castration-resistant prostate cancer in April 2008. The study, whose start triggered a milestone payment to BTG, is expected to enrol over 1100 patients and will have overall survival as the primary endpoint.
Financial Results for the year ended 31 March 2008
Revenues and gains
Net revenues after revenue sharing increased by 60% to £42.9m (06/07: £26.8m). Total gross revenues for the year increased by 64% to £75.0m (06/07: £45.7m) and revenue sharing averaged 43% (06/07: 41%). Revenues included recurring royalties from marketed products and milestone and other one-off transactions such as licensing payments or development milestones.
Gross recurring royalty revenues were slightly higher than in the previous year at £42.4m (06/07: £41.3m). Revenue-sharing payments on royalties averaged 41% in both years resulting in net recurring revenues of £24.9m (06/07: £24.2m). Underlying sales growth in a number of products was significant but the weak US dollar resulted in growth of just 3% upon translation into our sterling-denominated results.
BeneFIX®, the treatment for haemophilia B marketed by Wyeth, performed well and contributed gross revenues of £16.9m (06/07: £15.8m). The hip cup continued to deliver steady underlying growth and generated £8.5m gross (06/07: £8.6m). Campath®, the label for which was extended to include first-line treatment in late 2007, generated £5.0m (06/07: £4.5m) and gross revenues from the MRC humanisation patents were £4.1m (06/07: £3.4m).
The successful further licensing of BTG's patents on semiconductor chip memory capacity for net revenues after costs and taxes of £10m was the major factor in the significant increase in non-recurring revenues to £32.6m gross (06/07: £4.4m), which resulted in £18.0m net revenues after revenue sharing (06/07: £2.6m). Other one-off revenues included a $10m milestone payment from Tolerx, Inc. when it signed an agreement with GlaxoSmithKline to develop and commercialise TRX4, £2.7m gross from the MRC in relation to a paid-up licence it signed, and £1.5m gross from the assignment of AQ4N rights from KuDOS to Novacea, Inc.
Strong Operating Surplus and Operating Profit
During the year BTG generated an operating surplus of net recurring revenues over operating expenses of £8.9m (06/07: £6.3m) further supplemented by net financial income of £2.2m (06/07: £1.7m). These together funded the increased research & development costs of £10.7m. The one-off revenues further supplemented profits and cash reserves.
Total operating expenses decreased by 11% to £16.0m (06/07: £17.9m) and included employment costs of £8.3m (06/07: £10.1m). Operating costs were £2.4m (06/07: £2.4m) and included impairment and amortisation costs of £1.6m (06/07: £1.9m).
This operating surplus is expected to increase in the coming year with operating costs being held steady and expected increases in net recurring revenues, with growth forecast in all the major royalty-generating products and additional contributions expected from changes in the BeneFIX® revenue sharing arrangements.
Group research and development costs of £10.7m (06/07: £9.7m) were lower than originally planned for the year owing to small delays in the start of a number of non-clinical and clinical studies. However, these are largely timing issues and many of the costs will roll forward into the current financial year. Varisolve® costs were £4.6m (06/07: £3.5m).
Expenditure on other programmes under development was £5.4m (06/07: £5.5m), including costs related to the phase I clinical studies of BGC20-1531 in migraine, BGC20-0134 in multiple sclerosis and to completion of the sleep apnoea, head lice and BGC20-1259 PET clinical studies. BTG's share of the results of its associate companies involved in development activities was losses of £0.7m (06/07: £0.7m). Total R&D expenditure for 2008/09 is targeted in the £10m to £15m range.
Impairment Provision against Wrexham Facility
As previously announced, given the design improvements achieved and proven ability to outsource the manufacturing process for Varisolve®, the economics of the leasehold manufacturing facility constructed to facilitate the product's development were re-assessed. The decision was taken to close this facility and as a result the overall economics and flexibility of product manufacture are expected to improve significantly in the period up to launch and beyond without adverse impact on our ability to develop or partner the programme. Of the £8.1m total charge, £7.5m is a non-cash expense being the write-off of the net book value of the manufacturing facility carried in fixed assets and the balance reflects the estimated costs to closure of £0.6m. Development costs of Varisolve® in 08/09 and future years will be reduced as a result of this decision.
Profit for the year and earnings per share
The profit before tax was £10.7m (06/07: £2.6m) and the profit after tax was £8.8m (06/07: £2.4m). The tax charge of £1.9m arose primarily as a result of £1.8m of withholding taxes on the semi-conductor technology licensing deal. The Group expects to utilise certain of its brought forward tax losses against taxable profits achieved in the year.
Earnings per share based on an average 149.7m (06/07: 149.5m) shares in issue were 5.9p (06/07: £1.6p).
Position at year end
Total equity at 31 March 2008 increased during the year by £7.9m to £55.2m.
Non-current assets
Intangible assets at 31 March 2008 were £6.8m, with additions of £2.1m being offset by disposals and amortisation charges of £2.9m. Most of the intangible assets held are patents, which are written off over their remaining effective life - or their remaining useful economic life if shorter - and are subject to regular impairment reviews.
The net book value of the Group's property, plant and equipment reduced by £7.9m to £0.8m, largely as a result of the decision to terminate the lease on the Varisolve® manufacturing facility. Additions of £0.6m were offset by charges of £1.0m in respect of depreciation and currency movements.
The value of investments and investments in associates increased by £0.3m in the year to £6.5m following additional investments offset by operating losses and impairment charges. During the year, BTG invested an additional £1.9m (06/07: £0.8m), including £0.7m in Senexis Ltd, which is developing small molecule drugs targeting CNS disorders. Other investments include Xention Discovery Ltd, a drug discovery company focused on ion channels, Protez, Inc, which is developing new antibiotics, and holdings in two venture funds.
Current assets, current and non-current liabilities
Trade and other receivables were £15.2m at 31 March 2008 (06/07: £10.5m), the increase being mainly due to remaining deferred payments totalling £5.5m due by December 2009 from the licensing of the semi-conductor technology patents.
Current liabilities increased from £21.9m at the previous period end to £24.2m at 31 March 2008. The increase relates mainly to revenue sharing payments due relating to revenues received and expected in respect of the semi-conductor technology licenses referred to above.
Non-current liabilities moved from £6.8m at the previous year end to £6.9m at 31 March 2008. They include £4.9m in relation to the BTG defined benefit pension plan and the remaining amounts payable against provisions for impairment charges under non-commercial leases.
Cash
Net cash and cash equivalents rose by £14.0m to £57.0m at 31 March 2008 (31 March 2007: £43.0m). The cash was generated primarily from the profit after tax of £8.8m which includes non-cash charges of £3.9m for depreciation, amortisation, share-related incentives and pension adjustments and the £8.1m Wrexham write-off charge. Cash outflows included funding of £2.2m for the deficit repair plan on the defined benefit pension plan, investments of £1.9m and acquisition costs of £1.7m on patents and fixed assets.
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Consolidated income statement for the year ended 31 March 2008 |
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Year ended 31 March |
Year ended 31 March |
||
|
Note |
2008 |
2007 |
|
|
£m |
£m |
||
|
Revenue |
2 |
75.0 |
45.7 |
|
Revenue sharing |
(32.1) |
(18.9) |
|
|
Revenue net of revenue sharing |
42.9 |
26.8 |
|
|
Operating expenses |
3 |
(16.0) |
(17.9) |
|
Research and development expenses |
4 |
(10.7) |
(9.7) |
|
Profit on disposal of assets and investments |
5 |
0.4 |
2.7 |
|
Amounts written off associates |
6 |
- |
(1.0) |
|
Impairment charge and closure costs of Wrexham facility |
7 |
(8.1) |
- |
|
Operating profit |
8 |
8.5 |
0.9 |
|
Financial income |
2.7 |
1.8 |
|
|
Financial expense |
(0.5) |
(0.1) |
|
|
Net financial income |
9 |
2.2 |
1.7 |
|
Profit before tax |
10.7 |
2.6 |
|
|
Tax |
10 |
(1.9) |
(0.2) |
|
Profit after tax for the year |
8.8 |
2.4 |
|
|
All attributable to equity shareholders |
|||
|
Basic and diluted earnings per share |
12 |
5.9p |
1.6p |
|
Consolidated balance sheet as at 31 March 2008 |
|||
|
31 March |
31 March |
||
|
Note |
2008 |
2007 |
|
|
£m |
£m |
||
|
Non-current assets |
|||
|
Intangible assets |
6.8 |
7.6 |
|
|
Property, plant and equipment |
0.8 |
8.7 |
|
|
Investments in associates |
0.7 |
1.2 |
|
|
Other investments |
5.8 |
5.0 |
|
|
14.1 |
22.5 |
||
|
Current assets |
|||
|
Trade and other receivables |
15.2 |
10.5 |
|
|
Cash and cash equivalents |
57.0 |
43.0 |
|
|
72.2 |
53.5 |
||
|
Total assets |
86.3 |
76.0 |
|
|
Equity |
|||
|
Share capital |
13 |
15.1 |
15.1 |
|
Share premium account |
13 |
187.0 |
187.0 |
|
Other reserves |
13 |
(1.4) |
(0.9) |
|
Retained earnings |
13 |
(145.5) |
(153.9) |
|
Total equity |
55.2 |
47.3 |
|
|
Non-current liabilities |
|||
|
Trade and other payables |
1.8 |
0.7 |
|
|
Employee benefits |
4.9 |
5.7 |
|
|
Provisions |
14 |
0.2 |
0.4 |
|
6.9 |
6.8 |
||
|
Current liabilities |
|||
|
Trade and other payables |
22.6 |
20.6 |
|
|
Taxation |
0.5 |
- |
|
|
Provisions |
14 |
1.1 |
1.3 |
|
24.2 |
21.9 |
||
|
Total liabilities |
31.1 |
28.7 |
|
|
Total equity and liabilities |
86.3 |
76.0 |
|
Consolidated cash flow statement |
|||
|
for the year ended 31 March 2008 |
|||
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Profit before tax |
10.7 |
2.6 |
|
|
Profit on disposal of intangible assets and investments |
(0.4) |
(2.7) |
|
|
Amounts written off associates and investments |
- |
1.0 |
|
|
Financial income |
(2.7) |
(1.8) |
|
|
Financial expense |
0.5 |
0.1 |
|
|
Amortisation and impairment of intangible assets |
1.7 |
1.9 |
|
|
Depreciation on property, plant and equipment |
1.0 |
0.9 |
|
|
Impairment charge of Wrexham facility |
7.5 |
- |
|
|
Share-based payments |
0.9 |
0.8 |
|
|
Pension scheme funding |
(1.9) |
(1.9) |
|
|
Increase in trade and other receivables |
(5.1) |
(0.4) |
|
|
Increase/(decrease) in trade and other payables |
2.7 |
(0.8) |
|
|
Decrease in provisions |
(0.4) |
(2.9) |
|
|
Share of associates' losses |
0.7 |
0.7 |
|
|
Other |
(0.4) |
(0.3) |
|
|
Cash from/(used in) operations |
14.8 |
(2.8) |
|
|
Interest expense |
- |
(0.1) |
|
|
Tax paid |
(1.4) |
(0.2) |
|
|
Net cash inflow/(outflow) from operating activities |
13.4 |
(3.1) |
|
|
Investing activities |
|||
|
Interest received |
2.7 |
2.0 |
|
|
Purchases of intangible assets |
(1.1) |
(2.5) |
|
|
Proceeds from disposal of intangible assets |
1.7 |
5.0 |
|
|
Payments made in relation to disposal of intangible assets |
(0.2) |
(10.0) |
|
|
Purchases of property, plant and equipment |
(0.6) |
- |
|
|
Investment in associates |
(0.7) |
(0.2) |
|
|
Expenditure on investments |
(1.2) |
(0.6) |
|
|
Proceeds on disposal of investments |
0.1 |
0.9 |
|
|
Capital repayment |
0.1 |
- |
|
|
Net cash inflow/(outflow) from investing activities |
0.8 |
(5.4) |
|
|
Cash flows from financing activities |
|||
|
Proceeds of share issues |
- |
0.8 |
|
|
Net cash from financing activities |
- |
0.8 |
|
|
Increase/(decrease) in cash and cash equivalents |
14.2 |
(7.7) |
|
|
Cash and cash equivalents at start of year |
43.0 |
51.0 |
|
|
Effect of exchange rate fluctuations on cash held |
(0.2) |
(0.3) |
|
|
Cash and cash equivalents at end of year |
57.0 |
43.0 |
|
|
Consolidated statement of recognised income and expense |
|||
|
for the year ended 31 March 2008 |
|||
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Foreign exchange translation differences |
(0.2) |
(0.7) |
|
|
Actuarial (loss)/gain on pension liabilities |
(1.2) |
2.0 |
|
|
Change in fair value of equity securities available-for-sale |
(0.3) |
(0.3) |
|
|
Net (expense)/income recognised directly in equity |
(1.7) |
1.0 |
|
|
Profit for the year |
8.8 |
2.4 |
|
|
Total recognised income and expense for the year |
7.1 |
3.4 |
|
|
All attributable to equity shareholders |
|||
1. Financial Information
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2008 or 2007. Statutory accounts for 2007 have been delivered to the registrar of companies, and those for 2008 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
2 Business segments
Segment information is presented in respect of the Group's business segments based on the Group's management and internal reporting structure.
Inter-segment pricing is determined on an arm's length basis.
|
Revenue |
Year ended 31 March |
Year ended 31 March |
|
2008 |
2007 |
|
|
£m |
£m |
|
|
Life sciences |
52.2 |
45.0 |
|
Technology commercialisation |
22.8 |
0.7 |
|
75.0 |
45.7 |
|
Result |
Year ended 31 March |
Year ended 31 March |
|
2008 |
2007 |
|
|
£m |
£m |
|
|
Life sciences |
1.2 |
5.0 |
|
Technology commercialisation |
11.3 |
(1.4) |
|
12.5 |
3.6 |
|
|
Restructuring |
- |
1.0 |
|
Unallocated expenses |
(4.0) |
(3.7) |
|
Operating profit |
8.5 |
0.9 |
|
Net financing income |
2.2 |
1.7 |
|
Profit before tax |
10.7 |
2.6 |
|
Income tax expense |
(1.9) |
(0.2) |
|
Profit for the year |
8.8 |
2.4 |
3 Operating expenses
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Amortisation and impairment of intangible assets |
1.6 |
1.9 |
|
|
Patent renewal fees |
0.6 |
0.4 |
|
|
Litigation costs |
0.2 |
0.1 |
|
|
Operating costs |
2.4 |
2.4 |
|
|
Staff costs |
8.3 |
10.1 |
|
|
Other administrative expenses |
5.8 |
6.1 |
|
|
Exchange (gains)/losses |
(0.3) |
0.3 |
|
|
Provision for onerous leases |
(0.2) |
(1.0) |
|
|
16.0 |
17.9 |
||
4 Research and development expenses
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Varisolve® development |
4.6 |
3.5 |
|
|
Other development programmes |
5.4 |
5.5 |
|
|
10.0 |
9.0 |
||
|
Share of results of research associates |
0.7 |
0.7 |
|
|
10.7 |
9.7 |
||
5 Profit on disposal of assets and investments
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Profit on disposal of patents* |
0.7 |
2.1 |
|
|
(Loss)/profit on disposal of investments |
(0.3) |
0.6 |
|
|
0.4 |
2.7 |
||
* The profit for the year ended 31 March 2008 is net of £0.1m (06/07: £1.6m) shared with the inventive source.
Loss relief has absorbed the tax due in respect of the profit on disposals.
6 Amounts written off associates
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Amount written off associates |
- |
1.0 |
|
The amount written off associates in the prior year represents a reduction in the carrying value, taken directly to the income statement, following an impairment review.
7 Impairment charge and closure costs of Wrexham facility
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Impairment of Wrexham facility |
7.5 |
- |
|
|
Onerous lease provision in respect of Wrexham facility |
0.6 |
- |
|
|
8.1 |
- |
||
The Group has reassessed the economics of the existing facility for the manufacture of products for Varisolve® given the design improvements and outsourcing of the manufacturing process during the year, which triggered an impairment review. The Group has made full provision against the carrying value of this asset. This has been done on the basis that the fair value less costs to sell of the asset is deemed to be nil. In addition, a provision of £0.6m has been made in relation to an onerous lease in respect of the Wrexham site. This provision was triggered by the decision to exit the Wrexham facility. The £8.1m total charge to the Income Statement arises in the UK Life sciences business segment.
8 Operating profit
Operating profit has been arrived at after charging/(crediting):
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Auditor's remuneration: |
|||
|
- Group audit fee payable to KPMG Audit Plc |
0.1 |
0.1 |
|
|
- Fees payable to KPMG Audit Plc for taxation and other services |
0.1 |
0.1 |
|
|
Depreciation and other amounts written off property, plant and equipment |
1.0 |
0.9 |
|
|
Impairment of property, plant and equipment |
7.5 |
- |
|
|
Amortisation and impairment of intangible assets |
1.7 |
1.9 |
|
|
Net foreign exchange (gains)/losses |
(0.3) |
0.3 |
|
|
Research and development expenses |
10.7 |
9.7 |
|
|
Staff costs |
8.3 |
10.1 |
|
|
Operating lease rentals payable on property |
2.9 |
3.0 |
|
|
Operating lease rentals receivable on property |
(1.5) |
- |
|
9 Net financial income
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Interest receivable on money-market and bank deposits |
2.7 |
1.7 |
|
|
Other interest |
- |
(0.1) |
|
|
Fair value of foreign exchange forward contracts |
(0.5) |
0.1 |
|
|
Net financial income |
2.2 |
1.7 |
|
10 Tax
|
Year ended 31 March |
Year ended 31 March |
||
|
2008 |
2007 |
||
|
£m |
£m |
||
|
Current tax |
|||
|
UK corporation tax charge |
0.1 |
0.1 |
|
|
Overseas tax on royalties |
1.8 |
0.1 |
|
|
Total income tax expense |
1.9 |
0.2 |
|
11 Dividends
The Directors do not propose to declare a dividend for the year (06/07: nil).
12 Earnings per share
The calculation of basic earnings per share at 31 March 2008 was based on the profit attributable to ordinary shareholders of £8.8m (06/07: £2.4m) and a weighted average number of ordinary shares outstanding during the year of 149.7m (06/07: 149.5m), diluted earnings per share 149.8m (06/07: 149.9m), calculated as follows:
|
Year ended 31 March |
Year ended 31 March |
||||
|
2008 |
2007 |
||||
|
Profit for the financial year (£m) |
8.8 |
2.4 |
|||
|
Profit per share (p) |
|||||
|
Basic and diluted |
5.9 |
1.6 |
|||
|
Number of shares (m) |
|||||
|
Weighted average number of shares - basic |
149.7 |
149.5 |
|||
|
Effect of share options on issue |
0.1 |
0.4 |
|||
|
Weighted average number of shares - diluted |
149.8 |
149.9 |
|||
13 Equity
|
Share capital |
Share premium |
Other reserves |
Retained earnings |
Total equity |
|
|
£m |
£m |
£m |
£m |
£m |
|
|
At 1 April 2006 |
15.0 |
186.3 |
1.5 |
(160.6) |
42.2 |
|
Foreign exchange translation differences |
- |
- |
(0.7) |
- |
(0.7) |
|
Actuarial gain on pension liabilities |
- |
- |
- |
2.0 |
2.0 |
|
Change in the fair value of equity securities available-for-sale (net) |
- |
- |
(0.3) |
- |
(0.3) |
|
Profit for the year |
- |
- |
- |
2.4 |
2.4 |
|
Total recognised income and expense |
- |
- |
(1.0) |
4.4 |
3.4 |
|
Movement in shares held by Trust |
- |
- |
- |
0.1 |
0.1 |
|
Transfer of reserves |
- |
- |
(1.4) |
1.4 |
- |
|
Share based payments |
- |
- |
- |
0.8 |
0.8 |
|
Share capital issued |
0.1 |
0.7 |
- |
- |
0.8 |
|
At 1 April 2007 |
15.1 |
187.0 |
(0.9) |
(153.9) |
47.3 |
|
Foreign exchange translation differences |
- |
- |
(0.2) |
- |
(0.2) |
|
Actuarial loss on pension liabilities |
- |
- |
- |
(1.2) |
(1.2) |
|
Change in the fair value of equity securities available-for-sale (net) |
- |
- |
(0.3) |
- |
(0.3) |
|
Profit for the year |
- |
- |
- |
8.8 |
8.8 |
|
Total recognised income and expense |
- |
- |
(0.5) |
7.6 |
7.1 |
|
Movement in shares held by Trust |
- |
- |
- |
(0.1) |
(0.1) |
|
Share based payments |
- |
- |
- |
0.9 |
0.9 |
|
Share capital issued |
- |
- |
- |
- |
- |
|
At 31 March 2008 |
15.1 |
187.0 |
(1.4) |
(145.5) |
55.2 |
14 Provisions
|
2008 |
2007 |
||
|
£m |
£m |
||
|
At 1 April |
1.7 |
4.6 |
|
|
Provisions utilised during year |
(0.8) |
(1.8) |
|
|
Provisions made during year |
0.6 |
- |
|
|
Provisions released during year |
(0.2) |
(1.0) |
|
|
Difference on exchange |
- |
(0.1) |
|
|
At 31 March |
1.3 |
1.7 |
|
|
Balance due within one year |
1.1 |
1.3 |
|
|
Balance due after more than one year |
0.2 |
0.4 |
|
|
1.3 |
1.7 |
These provisions relate to onerous leases and represent the net present value of future obligations, not covered by income from tenants, both in the UK and US offices of the Group.
Related Shares:
BTG