26th May 2005 15:40
Company Registered Number: 2992058 S R PHARMA PLC RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Chairman's StatementDear Shareholder,This has been an extremely challenging year for the Company with inconclusiveclinical trial results being announced for SRP 299 in both allergic asthma andatopic dermatitis indications. In addition, last summer, there were a number ofchanges in senior personnel, including the departure of the CEO, whichinevitably led to some internal disruption.In response to these events the Board implemented a number of initiatives toensure financial stability and provide a base from which we can broaden anddevelop the Company's core technology portfolio over the long term. Theseinitiatives included moving the Company's LSE listing from the Main Market tothe AIM Market, reducing the ongoing cost base and seeking to conclude one ormore corporate transactions by mid 2005. The overriding objective remains thatof strengthening the financial basis of the Company and reducing the overallrisk profile of the Company by broadening the product, technology andintellectual property base.Scientifically the Company has made significant progress during the year withthe filing of a patent for a new chemical entity and in liaison with Sakaiundertaking further work on the mechanism of action and delivery of M.vaccae.Deficiencies in our manufacturing processes were identified and in light of thenew European Directive on the manufacturing of clinical trial suppliescorrective action has been identified.In terms of M&A activity the Board has held discussions with a variety ofpublic and private companies both here in the UK and Europe. In November 2004we announced that we were in late stage discussions with a target company buton 3 May 2005 the Board announced that it had decided to terminate thesediscussions and would concentrate on progressing an alternative transactionwith a European biotechnology company which we believed would provide greatertechnical and commercial synergies and sound basis for raising furthersignificant funding to enable the development of the combined product portfolioand to secure further possible acquisitions.At the time of writing this statement M&A negotiations are ongoing and it isanticipated that further announcements will be made at or before theforthcoming AGM on 30 June 2005.In order to take account of business opportunities the Directors wish to have adegree of flexibility in the issue of shares whether or not such issues aremade for cash and accordingly the resolutions being put to the AGM relate to100 million shares. The Directors recognise that these amounts are significantin relation to the Company's current issued share capital, but believe thatauthorities in these terms would be in the best interests of the Company andenable the Directors to conclude transactions on the best available terms withthe minimum of delay.I look forward to updating you further over the coming weeks and remainconfident that an exciting corporate transaction will be concluded. I wouldlike to thank the staff and shareholders for their continued support.Iain G RossChairmanSR PHARMA PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTYEAR ENDED 31ST DECEMBER 2004 2004 2003 ‚£ ‚£ Turnover 159,211 1,344,585 Research and development (1,697,509) (3,012,324) direct costs ________ ________ Gross Loss (1,538,298) (1,667,739) Administrative expenses (1,788,061) (1,004,930) ________ ________ Operating Loss (3,326,359) (2,672,669) Interest received 133,513 215,563 ________ ________ Loss for the year before (3,192,846) (2,457,106) taxation Taxation credit for the year 350,255 176,948 ________ ________ Retained loss for the year after taxation transferred from reserves (2,842,591) (2,280,158) ======= ======= Loss per share 11.91p 9.56p ==== ==== All transactions arose from continuing activities.There were no recognised gains or losses other than the loss for the year.SR PHARMA PLCCONSOLIDATED BALANCE SHEETAT 31 DECEMBER 2004 2004 2003 ‚£ ‚£ Fixed assets Tangible fixed assets 39,950 59,860 ______ ______ Current assets Debtors 518,370 1,336,081 Cash at bank 2,632,002 5,092,751 _________ _________ 3,150,372 6,428,832 Creditors: amounts falling due within (513,911) (1,306,380) one year _________ Net current assets 2,636,461 5,122,452 _________ _________ Total assets less current liabilities 2,676,411 5,182,312 Creditors: amounts falling due after (331,940) - one year _________ Net assets 2,344,471 5,182,312 ======== ======== Share capital 238,857 238,607 Share premium account 19,983,303 19,978,803 Merger reserve 183,916 183,916 Profit and loss account (18,061,605) (15,219,014) _________ _________ Equity Shareholders' funds 2,344,471 5,182,312 ======== ======== SR PHARMA PLCCONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST DECEMBER 2004 2004 2003 ‚£ ‚£ Net cash outflow from operating (2,718,118) (2,544,766)activities Return on investments and servicing of finance Interest received 133,513 215,563 Taxation received 237,375 293,653 Capital expenditure Payment to acquire tangible fixed (18,769) (31,151) assets Sale of tangible fixed assets 500 50 _________ _________ Net cash outflow before use of liquid resources and financing (2,365,499) (2,066,651) Management of liquid resources Cash released from/(transferred 241,937 (11,764) to) liquid resources Financing Issue of shares in the year 4,750 - Loans made in the year (100,000) - _________ _________ Decrease in cash balances (2,218,812) (2,078,415) ======== ======== Reconciliation of Operating Loss to Net operating cash flows ‚£ ‚£ Operating loss (3,326,359) (2,672,669) Depreciation charges 37,623 43,582 Loss on sale of fixed assets 556 121 Decrease/(increase) in debtors 943,886 (107,601) (Decrease)/increase in creditors (373,824) 191,801 _________ _________ Net cash outflow from operating (2,718,118) (2,544,766)activities _________ _________ SR PHARMA PLCNOTES1. The above financial information does not constitute statutory accountswithin the meaning of Section 240, Companies Act 1985.2. Information relating to the year ended 31 December 2004 has been extractedfrom the statutory accounts of the Group which have been audited by the Group'sauditors Grant Thornton UK LLP and whose report thereon is unqualified. Thestatutory accounts are being sent to shareholders shortly and will be deliveredto Companies House in due course. The information relating to the year ended 31December 2003 is extracted from the audited accounts of the Group which havebeen filed at Companies House and on which the auditors issued an unqualifiedopinion.3. The above information has been prepared using the accounting policies setout in the most recently published full accounts and which have not changedsince the previous period (for the year ended 31 December 2003).4. Loss per share is based on the loss for the financial year after taxation of‚£2,842,591 (2003: loss ‚£2,280,158) and on the weighted average of 23,872,872(2003: 23,860,714) ordinary shares in issue during the year. The optionsoutstanding at 31 December 2004 and 31 December 2003 are considered to benon-dilutive in that their conversion into ordinary shares would not increasethe net loss per share. Consequently, there is no diluted earnings per share toreport for either year.5. The credit for UK Corporation Tax arises from the Group taking advantage ofthe legislation regarding the treatment and surrender of tax losses arisingfrom certain qualifying research and development expenditure.6. The directors are not proposing the payment of a dividend.7. Analysis of changes in Net Funds At 1 At 31 January Cash December Cash at bank 2004 Flows 2004 ‚£ ‚£ ‚£ Instant access accounts 4,048,927 (2,218,812) 1,830,115 Deposits 1,043,824 (241,937) 801,887 ________ _________ ________ Total 5,092,751 (2,460,749) 2,632,002 ======= ======== ======= The deposits held at bank are treated as liquid resources under the definitionsof Financial Reporting Standard 1 (revised). Although the sums are held onshort term fixed rate deposit, they are not instantly available to the Groupwithout breaking the terms of the deposit which may incur penalties.ENDSR PHARMA PLCRelated Shares:
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