13th Sep 2005 07:01
Allergy Therapeutics PLC13 September 2005 Allergy Therapeutics plc Preliminary Results Statement (for the year ended 30 June 2005) SALES UP 20%, R&D PROGRAMME COMMENCED Allergy Therapeutics plc, the specialty pharmaceuticals company focused onallergy vaccines, today announces its maiden preliminary results. Highlights * Total gross sales up 20% to £22.9m (2004: £19.1m) and net sales up 15% at £20.6m (2004: £18.0m) * Operating profit including milestone income but before R&D, rebates and exceptionals up 97% to £6.1m (2004: £3.1m), highlighting an impressive performance from the Company's core business * Gross sales of flagship product, Pollinex(R) Quattro, up 41% to £7.2m (2004: £5.1m) * Successful IPO, raising £15m net of expenses * Market share growing in Germany, Spain and Italy •Germany: sales up 28% to £16.4m •Italy: sales up 17% to £2.1m •Spain: sales up 24% to £1.4m * Commencement of R&D programme * Out-licence agreement for Pollinex(R) Quattro with Canadian pharmaceuticals company Allerpharma for exclusive rights to Canadian market * 13 clinical trials approved under 8 Canadian and 2 EU CTAs and 2 INDs with the FDA Keith Carter, CEO of Allergy Therapeutics, commented: "We are delighted with our first full-year results. The company continues toexpand in all its chosen markets and has made strong progress in the continueddevelopment of Pollinex(R) Quattro. The company's core business has progressed well, contributing significant cashto the investment in R&D in line with our stated strategy. Allergy Therapeuticsis now in a good position to deliver further results in the coming months, bothin the clinic and in the market." - ends - For further information: Allergy TherapeuticsKeith Carter / Ian Postlethwaite 01903 844720 Bell PottingerDan de Belder / Emma Charlton 020 7861 3232 Chairman's Statement This has been a year of significant change for Allergy Therapeutics. We haveundergone a major transition from being a privately-owned company to a publiccompany listed on the London Stock Exchange. From having plans for clinicaltrials, we now have patients enrolled and being treated in a first pivotalstudy. In October 2004 Allergy Therapeutics Group listed on the Alternative InvestmentMarket of the London Stock Exchange, raising £15 million net of expenses. Thedeclared use of proceeds was to accelerate the clinical development of thePollinex(R) Quattro family of products, the Company's innovativeultra-short-course (4 shots total pre-seasonally) allergy vaccines based on theTRL4 agonist vaccine adjuvant MPL(R). Since then excellent progress has beenmade; relationships with various regulatory bodies established, the 'path toregistration' clarified and a first pivotal clinical trial commenced. TheCompany is on track to commence full Phase III studies on vaccines againstallergy to the most common pollens during the 2006 pollen season. Allergy Therapeutics is a fully integrated pharmaceutical company. This gives usgreat strength in further developing the business in tandem with the newproducts. Furthermore, Pollinex(R) Quattro - our main development product - iscurrently being sold on a 'Named Patient' basis in Germany, Italy and Spain,where such sales of pre-registration products are permitted. We have sold over115,000 units of the product to date, giving us great and increasing confidencein the efficacy and safety of these vaccines. The Company has made good progress in its commercialisation activities. Grosssales are £22.9 million, up 20% against the previous year, driven chiefly by a41% increase in sales of Pollinex(R) Quattro. This includes our firstout-licence agreement for Pollinex(R) Quattro, with Allerpharma for the Canadianmarket. One million pounds of milestone income was booked in the year, with afurther £7 million to be paid over the development period of the vaccines,subject to the achievement of certain development objectives. Operating profitincluding milestone income but before German sales rebate, R&D and exceptionalitems has nearly doubled to £6.1 million (2004:£3.1 million). One of the attractions of Allergy Therapeutics' business model is that theextensive R&D programme now under way is funded in part by the profits from ourcommercial operations. Consequently, despite R&D investment of £5.6 millioncompared with £0.5million last year, the loss after tax amounted to £1.9 millioncompared to last year's profit of £1.2 million. We anticipate a furthersubstantial increase in R&D investment this year as the Phase III programme forPollinex(R) Quattro vaccines for Allergic Rhinitis (AR) to major pollens, andthe sublingual programme gets under way. Allergy Therapeutics has a first-class team of people whose efforts haveproduced these excellent results in every area; I thank each one for his or herefforts. If, as we anticipate, our development activities over the next few years aresuccessful, we will be in the position of having the first ever innovative,ultra-short-course allergy vaccines registered both in Europe and with the FDAfor sale in the USA. This outcome would be extremely positive for the companyand would represent a major change to the opportunities and challenges facingus. In preparation, during the course of the year we have strengthened our teamin sales and marketing, R&D, manufacturing and regulatory. Further investment inthe team will be required over the coming years to meet our strategic goals - todevelop world-beating products, manufacture them for all markets and sell themthrough our own sales and marketing infrastructure across the European Union,working with partners elsewhere. We are looking forward to another year full of accomplishments in 2005/6. Ignace GoethalsChairman12 September 2005 Chief Executive's Review Allergy is the 'epidemic of the 21st Century'. A large and growing proportion ofthe population is suffering in different degrees to allergy to common,unavoidable substances such as pollens, mites and the dander of domestic pets.In the USA, 54% of the total population show positive responses to skin testsfor one or more of the 10 most prevalent allergens(1); such sensitisation is anindication of allergy or the potential to develop the symptoms of allergy. Thenumbers suffering are also growing rapidly; the same US survey conducted 12years earlier put the number of positive skin tests at just over 20% of thepopulation. The same patterns are seen across the developed world. Allergy can be a minor irritation of short duration, or it can seriously impairthe quality of life of the sufferer - rendering work, exams, leisure and evensleep impossible. Furthermore, Allergic Rhinitis (AR) is now recognised to be aprecursor of asthma, a life-threatening condition, in many patients(2). Allergicpeople have three times greater risk of becoming asthmatic than non-allergics(3), a phenomenon known as the 'Allergic March'. Allergy is also very costly - $11 billion is spent annually by patients andhealth insurance systems on symptomatic treatment(4), and the economic costs tosociety in terms of lost days of work and hospitalisation due to asthma attacksare thought to be even greater. Transforming Allergy Treatment As recognised by the World Health Organisation(5), unlike any other availabletreatment, allergy vaccines (also referred to as specific immunotherapy or'allergy shots') act at the immunological source of the disease, have the uniquepotential to offer long term relief to successfully treated patients and arrestthe Allergic March. Allergy Therapeutics plc ('ATp') is at the leading edge in developing newvaccines to treat AR. Currently, allergy vaccines represent a small niche area:less than 3% of allergic patients are offered vaccines. This is mainly becausethe existing products require many injections over a long period - in the USA upto 200 shots over five years is not unusual - and carry greater risks of sideeffects than many physicians and patients are willing to tolerate. Allergy Therapeutics' pipeline of MPL(R)-based products is designed to overcomethese shortcomings, allowing allergy vaccination to become a mainstreamtreatment rather than a last resort. With our ultra-short-course, efficaciousand well-tolerated vaccines our mission is to transform allergy treatment. Registration In mainstream pharmaceuticals the products prescribed by physicians across theworld must have marketing authorisations, granted by national regulatoryauthorities such as the FDA. The granting of such authorisations is commonlyreferred to as 'registration' and requires rigorous proof of product quality,safety and efficacy through clinical trials culminating in pivotal 'Phase III'studies. Allergy vaccines have traditionally been made to order for individualprescription according to which allergens cause the patient's symptoms. This hasmeant that, in general, allergy vaccines fall outside the normal registrationsystem and are sold as 'named patient products' (NPP) - another reason why thistreatment has been relegated to a niche. Footnotes:--------------------------(1) Journal of Allergy and Clin Immunol., August 2005: 'Prevalences of positiveskin test responses to 10 common allergens in the US population: Results fromthe 3rd National Health and Nutrition Examination Survey'(2) 'Bousquet J, van Cauwenberge P, Khaltaev N. Allergic rhinitis and its impacton asthma. ('ARIA') Journal of Allergy and Clinical Immunology - 2001(3) ditto(4) Datamonitor: Pipeline Insight: Asthma, COPD and Allergic Rhinitis April 05.(5) WHO Position Paper 1997. Allergen Immunotherapy: therapeutic vaccines forallergic diseases As part of Allergy Therapeutics' aim of transforming allergy treatment bymodernising allergy vaccination, we have embarked on a programme of clinicaltrials with the objective of gaining registration in all the major marketsworld-wide for standardised products suitable for a broad range of patients. Asfar as we are aware, no other allergy vaccines are being developed on thisworld-wide basis which requires the highest standard of evidence of efficacy andsafety. The money raised at the IPO was required to fund this programme ofstudies. Allergy Therapeutics strategy Allergy Therapeutics has continued to pursue its strategy as an integrated,Europe-based, specialty pharmaceutical company and over the last 12 months hasmade major steps forward. The Company is building its EU sales and marketinginfrastructure and has made significant progress in its development pipeline ofinnovative, ultra-short-course allergy vaccines based on MPL(R), the TLR4agonist which acts as a vaccine adjuvant. The guiding principle of thedevelopment pipeline is to create efficacious and safe allergy vaccines withimproved product characteristics for patient and payers, as they can beadministered over a short period of time, with few injections or possiblyinjection-free, as a sublingual treatment. Progress Allergy Therapeutics performed well in the twelve months ended June 2005, bothin delivering strong financial results and taking strategic actions that willunderpin the delivery of long-term future performance of the group. In particular, the move into life as a publicly listed company in October 2004has been a major highlight. The raising of £15 million, net of expenses, was themost advantageous means of securing funds to accelerate the clinical developmentof Pollinex(R) Quattro. The Company has since made progress with establishingthe 'path to registration' for the family of vaccines and building relationshipswith various regulatory bodies. Subject to further regulatory approval, theCompany is on track to commence full Phase III studies on vaccines againstallergy to certain common pollens during the 2006 pollen season. The financial performance of the business reflects significant advances made inthe year throughout the Company. The Company has benefited from good progress inits commercialisation activities - for the year ended 30 June 2005 gross sales,before milestone income, of £21.9 million were generated, up 15% against theprevious year, driven chiefly by a 41% increase in sales of Pollinex(R) Quattro.Operating profit including milestone income but before German sales rebate, R&Dand exceptional items , a key measure of performance of the core business, hasnearly doubled to £6.1 million for the financial year (2004: £3.1 million). We have also signed our first out-licence agreement for Pollinex(R) Quattro,with Canadian pharmaceuticals company Allerpharma, to whom Allergy Therapeuticsgranted exclusive rights for the Canadian market. £1 million of milestone incomewas earned in the year, with a further £7 million to be paid over thedevelopment period of the vaccines, subject to the achievement of certaindevelopment objectives. Pollinex(R) Quattro Description: Ultra-short-course vaccines for allergy to major pollensDosing: 4 subcutaneous injections administered pre-seasonally by specialist forsame season efficacy.Composition: MPL(R) (TLR4 agonist adjuvant) combined with allergoids (chemicallymodified allergens) with L- tyrosine as depot carrier Pollinex(R) Quattro, which on a NPP basis is both a marketed product in certainterritories and our flagship development product, has generated sales of £7.2million (2004: £5.1million). We have achieved this growth through a targetedapproach to marketing in key areas. In Germany, winning the prestigious MMWAward for pharmaceutical innovation has had a noticeably positive effect onsales. The company received a further boost regarding the North American market, inJune when it received clearance from Health Canada to commence pivotal studieson Pollinex(R) Quattro Ragweed, a vaccine for seasonal rhinitis caused byRagweed pollen, the major allergen in North America. If successful, the studywill allow submission for registration in H1 2006, offering the possibility of afirst marketing authorisation for a Pollinex(R) Quattro product in time for the2007 season. Should such a registration be achieved, Allergy Therapeuticsintends to conduct post-marketing studies to collect further safety and efficacydata which will be supportive to the registration applications to be made inother territories, in particular the USA. Subject to regulatory approval, Allergy Therapeutics is on track to commence thepivotal Phase III clinical trial programme during the 2006 pollen season. Thesestudies will be multi-centre, multi-national, conducted in both North Americaand Europe - Allergy Therapeutics is the only allergy vaccine company known tohave such a programme of world-wide studies, including in the USA. Oralvac(R) Plus Description: Sublingual vaccines for allergy to major pollens, house dust miteand catDosing: Daily drops of liquid under the tongue continued for 1 - 5 years subjectto physician advice.Composition: Standardised sterile aqueous allergen extracts, Raspberry flavour. Sales of Oralvac(R) have increased to £3.9 million (2004: £2.9 million). Sublingual allergy vaccines have the advantage of easy administration; followingdiagnosis and prescription by the specialist, the patients self-administer athome. This also makes these products preferable for paediatric use. Sublingualvaccines, however, are generally considered to be less efficacious than injectedallergy vaccines, and require unsupervised long-term repeat administration sopatient compliance is questionable. By including MPL(R) in a sublingualformulation, Allergy Therapeutics is planning to develop new products to addressthese issues; first-in-man Phase I/II studies are planned to start in thefinancial year 2005/6. Other products For patients with allergy to less common allergens and for markets whereshort-course injected and sublingual vaccines are not yet accepted, AllergyTherapeutics has the Tyrosine TU Top and Venomil products. For markets where theNPP route is not possible, we offer the registered Pollinex(R) Grass, Tree andRagweed products. Combined sales of these vaccines amounted to £7.9million inthe year (2004: £8.5million). Key markets For GMP-manufactured allergy vaccines, Germany, Italy, Spain and France are thebiggest markets in the world. Germany is the largest market and it remainsAllergy Therapeutics' most important source of revenue, accounting for nearly69% of sales. Italy and Spain are of growing importance to us and we continue toinvest in these businesses, which represent 10% and 7% of sales respectively. During the course of the year we initiated plans to set up our own commercialoperations in Austria, the UK, Poland, and the Czech and Slovak Republics. Wealso entered into new distribution agreements for Canada (Allerpharma) andGreece (Kite Hellas). The US is a prime target market for Allergy Therapeutics; it represents over 40%by value of the world pharmaceutical market and allergy is a major and growinghealth problem; added to this, current allergy vaccine treatment practice isold-fashioned, invasive and not controlled by the FDA - potentially makingAllergy Therapeutics new MPL(R) containing vaccines very attractive. Thereforewe continue to work hard to progress to Phase III clinical trials with the FDA. Corporate and social responsibility Allergy Therapeutics recognises its responsibilities to its employees, the widercommunity and the environment. We are determined to be regarded as awell-managed, responsible company in all the communities in which we operateworld-wide. We are committed to supporting our employees and aim to help them flourish byproviding an enjoyable and safe workplace free from discrimination where allemployees can receive the training they require to further their development. Wealso value our relationships with the local community, as indicated by our linkswith The University of Brighton. We have a responsibility to consider our impact on the environment and arecommitted to managing our environmental performance and minimising risk. Strategy and Prospects Our strategy going forward can be simply summarised. We will develop modern,registered allergy vaccines which are attractive for patients, physicians andpayers, thereby widening considerably the markets for which these treatments areappropriate. We will build on our strength in the EU to prepare for fullcommercialisation of Pollinex(R) Quattro on our own account when theregistrations are achieved. At the appropriate time we will seek partners formarkets outside the EU, in particular the USA and Japan. With respect tosublingual allergy vaccines, which should be a General/Family Practitionerproduct and therefore require a larger sales force than a company of the size ofAllergy Therapeutics can reasonably muster, we will seek partners world-wide -again at the appropriate time. We will continue to manufacture our own productsfor sale across the world.The strategy is ambitious, requiring continued achievement in every area of thebusiness. 2004/5 was a very busy year for Allergy Therapeutics; 2005/6 promisesto bring even more challenges and opportunities. Keith CarterChief Executive Officer12 September 2005 Financial Review The following review should be read in conjunction with the Group's consolidatedfinancial statements and related notes appearing elsewhere in this annualreport. Turnover For the year ended 30 June 2005 total gross sales increased by 20% to£22.9million (2004: £19.1million); after statutory rebates in the German marketnet sales were £20.6million (2004: £18.0million) an increase over the previousyear of 14%. Own markets The Group competes directly in three markets, 3 of Europe's 4 most important forallergy vaccination: Germany, Italy and Spain.The Group is the third largest allergy vaccine company in Germany, with annualgross sales of £16.4million (2004: £12.8million), an increase over the previousyear of 28%. The German market is the largest in the world for 'finished form'allergy vaccines; the Group's share is growing and last year amounted to 13%.Trading in Germany improved during the year as the effects of patientco-payment, which temporarily reduced the frequency of patients' doctor visitswhen introduced in 2003, diminished. The rebate on pharmaceutical sales, whichwas market-wide, was increased in January 2004 to 16% from the 6% in force thepreceding year. This has been costly to the Group, since approximately 70% ofsales originate in Germany, with a charge of £2.3million for the year (2004:£1.1million). As from 1 January 2005, the rebate has reverted to 6% and is nowcalculated using current list prices, instead of the October 2002 prices usedpreviously.In Italy and Spain the Group has continued to increase its market share. InItaly annual sales were £2.1million, an increase of 17%, and in Spain annualsales increased by 24% to £1.4million.. Licencees The Group also sells through licencees and distributors, accounting for 13% ofthe gross sales. Total sales for the year were £3.0million (2004: £3.4million) adecrease of 12% on the previous year, and included a milestone of £1million fromthe Company's Canadian licencee for Pollinex(R) Quattro. Lower sales have been recorded in some territories. In line with the strategy ofbuilding a pan European sales force, the contract with Pliva, who had the rightsto the Central and Eastern Europe (CEE) markets, was terminated. Consequentlyany unsold stock in the CEE market was bought back from Pliva and sales that hadbeen recorded in June of the previous year were not repeated this year. Product sales The Group's flagship product, Pollinex(R) Quattro, continued to sellexceptionally well, with gross sales of £7.2million (2004 £5.1million) anincrease of 41% over the previous year. Cost of sales and net operating expenses Despite the rebate on sales in Germany of £2.3million the gross margin hasimproved to 76% due to: the use of production resources in supporting the R&Dactivities, the one-off release of a stock obsolescence provision and theinclusion of £1million of upfront milestones with no associated cost of goods.Cost of goods sold were 12% lower than in the previous year at £4.9million. An investment in additional sales people and an uplift in the marketing andpromotion spend increased the distribution costs by 22% in the year to£8.0million. However administration costs were held at the same level as thepreceding year at £4.3million. As discussed in the Chief Executive's Review, thedevelopment programme for Pollinex(R) Quattro was initiated this year and as aresult development costs are significantly higher than in the previous year at£5.6million (2004: £0.5million),. This expenditure supported the ongoing earlyphase development activity associated with grass, tree and ragweed allergens andthe pivotal ragweed study in Canada, designed to achieve the registration ofPollinex(R) Quattro in Canada for ragweed earlier than anticipated at the timeof the IPO in October 2004. Of the total R&D expenditure £1.5million relates tointernal development costs. Results of operation The Group recorded an operating loss of £2.4million (2004: profit £1.6million).However, before development costs, the German rebates and exceptional items, theoperating profit was £6.1million (2004: £3.1million) including milestone incomeof £1million (2004:NIL); which allows for a more reasonable comparison ofperformance and highlights an impressive result from the core business thisyear. Interest receivable was significantly higher at £0.5million (2004:£0.1million) as a result of higher cash balances following the IPO. Taxation As a result of the investment in development, the Group has the option toreceive a tax credit of £0.7million which, if claimed, is expected to bereceived in the following financial year. In the previous year no tax credit wasclaimed but tax losses surrendered to a shareholder under consortium relieflegislation, less the release of a deferred tax credit, resulted in a charge of£0.4million. The Group has losses to carry forward for the current year of£8.9million. Net assets Net assets at 30 June 2005 were £20.1million (2004: £7.1million), an increase of£13.0million due primarily to the £15million net proceeds raised from the IPO inOctober 2004.Intangible assets comprise goodwill and know-how and continue to be amortisedover 15 years. Capital expenditure on tangible fixed assets in the year was £0.9million,contributing to the increase in the value of tangible fixed assets to£2.1million from £1.7million. This expenditure included upgrades to plant andmachinery and further payments on the ERP system. Stock has increased during the year to £2.7million (2004: £1.8million) tosupport the increase in sales and after a number of one-off events including therelease of a stock obsolescence provision of £0.3million. The increase indebtors falling due within 1 year to £3.2million (2004: £2.1million) resultsmainly from the milestone invoiced of £1million. Creditors falling due within 1 year increased significantly at the year end to£6.1million (2004: £3.3million), primarily due to an increase in accrualsrelating to development activities. Capital structure The Group finances its operations through cash generated from its core businessand the net proceeds raised from the IPO. The Group's funding requirements depend on a number of factors, including theGroup's product development programs, which were initiated in the year to June2005 and are planned to increase further in activity in the following financialyear. The Group currently has no debt on its balance sheet but will in thefuture be considering bank debt as a means of financing its manufacturingrelated increases in working capital and capital expenditure as the corebusiness prepares itself for supplying world-wide markets. Cash flows As at 30 June 2005 cash totalled £15.1million, an increase of £13.6million from£1.5million at 30 June 2004. For the year net cash outflow from operatingactivities amounted to £0.4million compared to net inflow in the previous year(2004: £1.1million). Net cash outflow includes significant product developmentcosts of £3.8million which, when added back to the operating activities,generates core net cash inflow of £3.4million. During the previous year, cash generated from operations was used primarily tofund capital expenditure and a share buy-back for the creation of an employeebenefit trust. Ian PostlethwaiteFinance Director12 September 2005 Consolidated Profit and Loss Accountfor the year ended 30 June 2005 Year Year Year Year ended ended ended ended 30 June 30 June 30 June 30 June 2005 2005 2004 2004 Note £'000 £'000 £'000 £'000 Turnover 20,606 18,001 Cost of sales (4,853) (5,513) ------- ------- Gross Profit 15,753 12,488 Distributioncosts (8,012) (6,569)Administrativeexpenses - other (4,303) (4,335) Research anddevelopment costs (5,620) (451) Exceptional costs (614) - ------- ------- Administrative expenses (10,537) (4,786) Other operatingincome 378 423 Operating (loss)/profit (2,418) 1,556 Interest receivableand similar income 531 60 Interest payable on loansand overdrafts (42) (26) ------- ------- 489 34 ------- -------(Loss)/profit on ordinaryactivities before tax (1,929) 1,590 Tax on (loss)/profit on ordinary activities - (372) --------- ------- Retained (loss)/profitfor the financialyear 3 (1,929) 1,218 ======== ====== Basic (loss)/earningsper share 2 (3.4p) 3.0p Diluted (loss)/earningsper share 2 (3.4p) 2.5p All amounts relate to continuing activities Consolidated Balance Sheetat 30 June 2005 30 June 30 June 2005 2004 Note £'000 £'000Fixed assetsIntangible assetsGoodwill 2,617 2,945Other intangible assets 951 1,072 ------- ------- 3,568 4,017 Tangible assets 2,111 1,650 ------- ------- 5,679 5,667Current assetsStocks 2,741 1,825Debtors: amounts falling due within oneyear 3,160 2,062Debtors: amounts falling due after oneyear - 223 Cash at bank and in hand 15,080 1,457 ------- ------- 20,981 5,567 Creditors: amounts falling due within oneyear (6,121) (3,277) ------- -------Net current assets 14,860 2,290 ------- -------Total assets less current liabilities 20,539 7,957 Creditors: amounts falling due after oneyear (455) (881) ----- ----- Net assets 20,084 7,076 ====== ===== Capital and reservesCalled up share capital 73 51Share premium account 14,924 -Other reserves - shares issued by subsidiary 40,128 40,128Other reserves - shares held in EBT (322) (373)Profit and loss account (34,719) (32,730) ------- ------- Shareholders' funds - equity 3 20,084 7,076 ====== ===== These financial statements were approved by the board of directors on 12September 2005 and were signed on its behalf by: K Carter I PostlethwaiteChief Executive Officer Finance Director Consolidated Cash Flow Statementfor the year ended 30 June 2005 Year Year Year Year to to to to 30 30 30 30 June June June June 2005 2005 2004 2004 Note £'000 £'000 £'000 £'000 Cash (outflow)/inflow fromoperatingactivities 4 (15) 1,508 Returns on investment and servicingof finance Interest received 531 60Interest paid (42) (26) ---- ---- 489 34Taxation - 364 Capital expenditure and financialinvestmentPurchase of tangible fixed assets (903) (760) ----- ----- Cash (outflow)/inflow before financing (429) 1,146 Acquisitions and disposalsDeferred consideration - (308) Financing 5Gross funds raised on issue ofshares 16,000 -Bank loans repaid (945) (305)Sale/(purchase) of EBT shares 51 (373)Premium on shares issued bysubsidiary - 30Expenses paid in connection withissue of shares (1,054) - ------- ------ 14,052 (648) ------- ----- Increase in cash in year 6 13,623 190 ====== === Reconciliation of Net Cash Flow to Movement in Net Funds Year to Year to 30 June 2005 30 June 2004 £'000 £'000 Increase in cash in the year 13,623 190Net loans repaid 945 305 Movement in net funds in year 14,568 495Net funds at beginning of year 512 17 Net funds at end of year 15,080 512 Notes to the Financial Statements 1 Basis of preparation The financial information herein does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The financial information has been extracted from the Group's statutoryfinancial statements upon which the auditors reported on 12 September 2005.Their opinion is unqualified and does not include any statement under section237 of the Companies Act 1985. The accounts have been prepared in accordancewith applicable accounting standards and under the historical cost convention. Copies of the annual report are being posted to shareholders and copies will beavailable from the Company's registered office at Dominion Way, Worthing, WestSussex BN14 8SA. 2 (Loss)/Earnings per share Year to Year to 30 June 2005 30 June 2004 (Loss)/earnings for the year (£'000) (1,929) 1,218 Weighted number of shares in issue 57,471,180 40,935,583Diluted weighted number of shares in issue n/a 49,294,066 Basic (loss)/earnings per share (pence) (3.4) 3.0Diluted (loss)/earnings per share (3.4) 2.5 3 Reconciliation of movement in shareholders' funds Year to Year to 30 June 2005 30 June 2004 £'000 £'000 (Loss)/profit for the financial year (1,929) 1,218Other recognised gains and lossesrelating to the period (net) (60) 40Issue of shares 16,000 -Shares issued by subsidiary - 30Purchase of shares by EBT - (375)Transfer of EBT balance fromsubsidiary - -Sale of shares by EBT 51 2Expenses paid in connection with shareissue (1,054) - ------- --- Net addition to shareholders' funds 13,008 915 Opening shareholders' funds 7,076 6,161 ------ ----- Closing shareholders' funds 20,084 7,076 ====== ===== 4 Reconciliation of operating (loss)/profit to operating cash flow Year to Year to 30 June 2005 30 June 2004 £'000 £'000 Operating (loss)/profit (2,418) 1,556Depreciation 436 319Amortisation of intangibles 448 333Loss on disposal of fixed assets 5 -Effect of foreign exchange rate changes (58) 109(Increase)/decrease in stocks (916) 90(Increase)/decrease in debtors (875) (682)Increase/(decrease) in creditors 3,363 (217) ------ ----- Net cash (outflow)/inflow from operatingactivities (15) 1,508 ==== ===== 5 Analysis of financing Year to Year to Year to Year to 30 June 2005 30 June 2004 30 June 2003 30 June 2002 £'000 £'000 £'000 £ Repayment of loans (945) (1,305) -New loan facility - 1,000 -Issue of ordinary shares(net of expenses) 14,946 - 27 -Share premium on sharesissued by subsidiary - 30Purchase of shares by EBT - (375) -Issue of shares by EBT 51 2 - ---- ---- ---- ---- 14,052 (648) (316) 2,065,958 ======= ===== ==== ========= 6 Analysis of change in net funds At beginning At end of of period Cash flow period £'000 £'000 £'000 Cash at bank and in hand 1,457 13,623 15,080Debt due (945) 945 - ----- ---- --- 512 14,568 15,080 ====== ====== ====== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Allergy Thera.