20th Jun 2007 07:00
Celsis International PLC20 June 2007 CELSIS INTERNATIONAL PLC ("Celsis", "the Company" or "the Group") PRELIMINARY RESULTS for the year ended 31 March 2007 RECORD REVENUE AND PROFIT GROWTH Celsis International plc, the life sciences products and laboratory servicescompany, today announces its preliminary results for the year ended 31 March2007. Financial Highlights • Group revenues increased 43.3% to $47.4 million (2006: $33.1 million) - Organic business revenues increased 15.1% to $38.1 million (2006: $33.1 million) - $9.3 million from In Vitro Technologies since 20 July 2006 • Profit before tax increased 20.1% to $8.7 million (2006: $7.2 million)• Earnings per share (EPS) increased 29% to 26.81 cents per share (2006: 20.78 cents per share)• EBITDA increased 34.9% to $11.00 million (2006: $8.16 million) Operational Highlights • Analytical Services revenues up 25.7% to $20.4 million (2006: $16.3 million) - Strong year posted by all segments of this division• Rapid Detection full year revenues up 4.8% to $17.7 million (2006: $16.8 million) following 1% drop in H1 - Celsis Rapid Detection system becomes first microbiological method to be described in an approved New Drug Application ("NDA") following FDA approval of GlaxoSmithKline's Veramyst(TM)• In Vitro Technologies integration proceeding ahead of plan - US FDA guidance accepts cryo-preserved liver cells as equivalent to fresh cells for drug submission studies - IVT Development Services integrated into Analytical Services division Jay LeCoque, Chief Executive Officer of Celsis, commented: "I am pleased to report another strong year for the Group, with record revenueand profit growth with our earnings up 29%. Our Analytical Services divisionfinished the year very strongly following healthy customer wins across thebusiness. The Rapid Detection division recovered well in the second half withincreases in instrument placements and continued robust growth in reagent andconsumable sales. Our acquisition and integration of IVT is proceeding ahead ofplan resulting in a strong finish to the year under our new managementstructure. "The addition of IVT to the Celsis Group has transformed our business byexpanding our product and laboratory services offerings with clear cross-sellingopportunities. We have started to realise the material growth in revenues andprofits that was outlined in our acquisition strategy. The enlarged CelsisGroup is well positioned to continue its track record of strong growth bothorganically and through further acquisitions." Enquiries: Celsis International plc Tel: 01223 598 428 Jay LeCoque, Chief Executive Officer Tel: 020 7831 3113 Christian Madrolle, Finance Director on 20 June 2007 Financial Dynamics Tel: 020 7831 3113 David Yates Ben Atwell A presentation for analysts will be held at Financial Dynamics at 9.30am today,Wednesday 20 June 2007. Please call Gemma Cross Brown at Financial Dynamics on0207 269 7125 for further details. Notes to editors Celsis International plc Celsis International plc is a world leading provider of innovative life scienceproducts and laboratory services to the pharmaceutical, biopharmaceutical, andconsumer products industries through its three business areas; rapid detection,analytical and drug development services and ADME-Tox in vitro technologies.The company is listed on the London Stock Exchange (CEL.L). Each division of Celsis International plc has the capacity to deliversubstantial time and cost savings to its customers, in addition to ensuringproduct quality and safety for consumers. Using proprietary technology, theCelsis Rapid Detection division provides diagnostic systems for the rapiddetection of contamination. These systems provide significant economic value byreducing the time it takes to test and release raw materials, in process andfinished goods to market. Celsis Analytical Services division provides costeffective outsourced laboratory testing services to pharmaceutical andbiopharmaceutical companies. Its comprehensive service offerings include a fullspectrum of laboratory services from drug development and discovery toanalytical chemistry and biological sciences to stability storage and testing.Celsis In Vitro Technologies (Celsis IVT) supplies in vitro testing products tothe pharmaceutical and biotechnology industries. IVT's in vitro products screendrug compounds early in the discovery process, thereby reducing the time andcost of drug development. Further information can be found on its website at www.celsis.com. Chief Executive's Review Overview Celsis' products and laboratory services provide solutions to one of the mostimportant issues confronting today's pharmaceutical and consumer productindustries - the need to continuously maximise the efficiency of theiroperations and reduce costs. During the year, Celsis has consolidated its position as a world-leadingprovider of innovative life science products and laboratory services to thepharmaceutical, biopharmaceutical, and consumer product industries. Each division (Analytical Services, Rapid Detection and In Vitro Technologies)aims to deliver substantial time and cost savings to its customers, in additionto ensuring product quality and safety for consumers. The markets in which weoperate are rapidly growing as companies increasingly recognise the value oftechnology and services that are able to save them time and money. The financial results being reported for the year ended 31 March 2007 continueCelsis' strong track record in recent years of growth in its original twobusinesses. This year, we added a third division to the business with theacquisition of IVT which provides in vitro products and drug developmentservices to improve efficiency in the drug discovery and development process. With leading technologies and operating in fast growing markets, Celsis today iswell positioned to continue its track record of strong growth both organicallyand by acquisition. Summary of results For the year ended 31 March 2007, we are pleased to announce record revenue andprofit growth. Total revenue increased 43.3% to $47.4 million (2006: $33.1million) with organic revenue up 15.1% to $38.1 million (2006: $33.1 million)and IVT contributing $9.3 million in the 8.3 months since acquisition on 20 July2006. Profit before tax increased 20.1% to $8.7 million (2006: $7.2 million)and EBITDA increased 34.9% to $11.00 million (2006: $8.16 million). We have integrated the recently acquired IVT business into Celsis and continueto look for future acquisition opportunities. We see healthy, sustainablebusiness growth from the new consolidated Group and remain confident in both theshort and long-term prospects for the Company. Celsis Analytical Services Celsis' Analytical Services division provides outsourced laboratory testingservices to pharmaceutical companies to ensure the safety, stability andchemical composition of their products. The trend by pharmaceutical companiesto outsource their analytical testing, especially in the US, has accelerated inrecent years to an estimated market size of over $2 billion - now growing atapproximately 10% per year. The outsourcing of analytical services saves our clients headcount andlaboratory space and allows them to focus their resources on research and drugdiscovery and development. In addition to providing these important benefits ofoutsourcing, Celsis has also carved out an important niche in this large marketby providing faster results to its customers. The Company can provide resultsin just 10 days, with a very focused customer service offering, compared to anindustry standard of 15 days to 20 days, with little to no customer service.Celsis can therefore secure a price premium for this added value. Revenues from the Analytical Services division, which represented 43% of Grouprevenues, grew by 25.7% to $20.4 million (2006: $16.3 million). This was anexceptionally strong year driven by strong customer growth across all segmentsof the division. Our New Jersey chemistry business increased revenues by 37% to $9.0 million andbenefited from investments to expand its capacity during the year. Thisoperation is working to consolidate the significant increases seen in customergrowth in the year to come. The St Louis chemistry business posted a veryhealthy increase in revenues of 18% to $6.2 million for the year and has morethan recovered the lost ground from the temporary slow down experienced lastyear. Our biological sciences business units from both sites saw healthyincreases in revenues when combined increased 19% to $5.3 million with theaddition of several new customer contracts. Our Business Development team continues to concentrate on securing new businesswith major customer contracts. Over the past year, we have obtained a number ofvaluable new long-term contracts with many blue chip pharmaceutical companiesand have also been successful in renewing our existing business agreements withour largest pharmaceutical and biotechnology customers. Celsis Rapid Detection Celsis' Rapid Detection division provides testing systems to more rapidly detectmicrobial contamination (the presence of bacteria or other organic contaminantsin manufactured products) than older more traditional technologies such as agarplates. Traditional agar plates can take up to 7 days to provide a confirmationof "no growth" whereas Celsis' systems can provide a "no growth" confirmation injust 24 hours. Celsis' rapid detection systems are currently addressing anindustrial market estimated to be approximately $200 million and growing at 12%to 15% per year. New applications and technologies will expand this market muchfaster by expanding the numbers of testing procedures that can be transitionedfrom traditional agar testing to rapid testing systems. By reducing its customers' manufacturing cycle times by several days, the Celsisrapid detection system can save valuable working capital in everything fromreduced need for raw materials and safety stock, lower finished productinventory levels and a decrease in warehouse space. These reductions in workingcapital materially increase the efficiency and productivity of facilities thatuse Celsis technology, thereby delivering a measurable financial benefit toCelsis' customers. In addition, if there is a product contamination episode,the use of Celsis technology means that customers can be alerted that correctiveaction is required in 24 hours vs multiple days, using traditional agar methods,which is also of significant financial and potentially brand value to Celsis'customers. Revenues from the Rapid Detection division, which represented 37.2% of Grouprevenues, increased 4.8% to $17.7 million (2006: $16.8 million), following theslight decrease (-1%) posted in the first half due to a temporary slowdown ininstrument sales. This increase was driven both by increased instrumentplacements in the second half, as well as continued healthy growth in reagentsand consumables sales. Reagents and consumables now represent over 85% of theRapid Detection division's revenues indicating that our recurring revenuebusiness model remains robust. We continue to focus on expanding our presence in the pharmaceutical industryand were pleased to receive two Drug Master File ("DMF") acceptances during theyear from the US FDA. The Celsis DMF benefits Celsis' pharmaceutical customersby providing specific regulatory information which can be referenced in drugapplications making the approval process more efficient. We were also pleasedthat Celsis' Rapid Detection system is the first rapid microbiological method tobe described in an approved original New Drug Application ("NDA") following theFDA approval of GSK's Veramyst(TM). We also continue to invest in R&D to ensure that Celsis remains the leader inits respective fields of interest. Our work with new enzyme and nucleic acidtechnologies have resulted in a patent application that has been filed duringthe year and we look forward to testing these new detection systems withcustomers as part of our product development activity in the coming year. Celsis In Vitro Technologies The pharmaceutical industry is under unprecedented pressure to improve itsresearch and development productivity. As such, the number of drug compoundsunder development has expanded significantly over the past years. It iscritical that companies progress new compounds into viable drug candidates asquickly as possible. Days and weeks saved early in the drug development processcan mean millions of dollars saved in the overall cost of bringing a new drug tomarket. Celsis In Vitro Technologies division (IVT) helps accelerate drug development byproviding in vitro testing products and development services to thepharmaceutical and biotechnology industries. Approximately 80% of IVT'srevenues come from its products and 20% from development services. IVT'sprimary product offering is cryo-preserved human liver cells that allow itscustomers to determine how well a particular drug compound will be metabolisedby the human liver. FDA guidance released in September 2006 has outlined theiracceptance of cryo-preserved cells as equivalent to fresh liver cells and Celsisviews this as an important development in the continued evolution and expansionof this new business. IVT's in vitro products screen drug compounds early inthe drug discovery process, thereby reducing the time and cost of drugdevelopment. The market for in vitro products and development services isestimated to be approximately $600 million and is growing at 15% per year.Celsis IVT is operating in an important niche market that focuses on the abilityof the human liver to metabolise drug compounds, which is a critical check boxin the drug discovery process. Revenues from the IVT division since completion of the acquisition on 20 July2006 were $9.3 million and represented 19.8% of Group revenues, addingsignificantly to this year's second half. We project that on an annualisedbasis, IVT will represent approximately 30% of Group revenues in the comingyears. Annualising the 8.3 months of Celsis IVT revenue since acquisition wouldgive pro-forma annual revenues of $13.5 million, which is well within ourexpectations during the first year of acquisition. In our IVT product business unit, we have expanded our business development teamto include scientific advisory staff to help customers install and validateIVT's products in their labs. A similar strategy was employed to help increasereagent and consumable sales in our Rapid Detection division, that has been verywell received by our customers. In doing so, we have also realigned the focusof our business development team on generating new business with largercustomers, in a strategy similar to that which we have employed in ourAnalytical Services division with success. Operationally, we are focusing on higher margin products and ensuring that wehave scalable product manufacturing that continues to meet the highest qualitystandards expected by Celsis IVT's growing customer base. As a pioneer in livercell technology, Celsis IVT will continue to lead the industry in productquality, innovation and superior customer and technical service. As part of our integration, IVT's Development Services business unit is nowmanaged by our Analytical Services division, which has started to developconsiderable cross-selling and operational synergies. The addition of IVT'sDevelopment Services to our analytical services' offering means that CelsisAnalytical Services can offer a much more comprehensive set of services thatwill allow larger contract size and scope than was previously available fromCelsis. Revenues and profits from these two business units will continue to bereported under the IVT division for optimal financial transparency. Financial Review The financial results presented below are prepared in accordance with theGroup's International Financial Reporting Standards (IFRS) accounting policies. As in the previous year our Group's foreign exchange policy has continued tomitigate currency fluctuations resulting from the relative value of the USDollar versus the Euro during most of the financial year under review.Following the acquisition of IVT we have reviewed the Group's currency ofreference and concluded that the US Dollar continues to be the functionalcurrency to provide the best visibility on the Group's overall performance, as alarge component of the enlarged Group's revenues arise in the Americas and Asia. Results Turnover and profit before tax reached new record levels this year. Totalrevenues for the year ended 31 March 2007 were up 43.3% at $47.4 million against$33.1 million the previous year. IVT contributed revenues of $9.35 millionsince the acquisition in July 2006. Underlying revenue from continuing operations from the Rapid Detection andAnalytical Services divisions were up 15.1% (2006: 8.9%). Group profit beforetaxation was up 20.1% to $8.65 million and operating margins decreased slightlyto 18.8% compared with a profit before tax of $7.20 million and operatingmargins of 19.9% the previous year, due to the integration and restructuringcost of the IVT division. Gross Margin The Group's gross margin for the year under review has remained stable at 65.7%against 65.9% last year. Operating Expenses Our operating costs, excluding Research and Development, increased 46.8% from$14.86 million last year to $21.81 million this year. The IVT acquisitioncontributed $4.75 million to this increase. Underlying costs from continuingoperations of the Rapid Detection and Analytical Services divisions were up14.9%, and approximately 3.5% is due to the weakening of the US dollar. Salesand marketing expenses represented 35.2% of revenues, against 33.1% the previousyear. This was due to increased expenditure on sales, marketing and supportstaff particularly in the Analytical Services division in line with the revenuegrowth of this division. Administrative expenses decreased to 10.7% of revenuesversus 11.8% the previous year. Our Research and Development efforts have been focused on the development of thenew nucleic acid technology for the Rapid Detection division and manufacturingprocess improvements in the IVT division. Our overall R&D expenditure, afteradding back the development costs capitalised under IAS38 ($0.7 million against$0.9 million in 2006), has been stable at $1.1 million this year against $1.2million last year. Profitability The Group's operating profit was $8.93 million (2006: $6.60 million)representing an increase of 35.3% on the prior year. The profit before taxincreased by 20.1% to $8.65 million against $7.20 million last year. The profitbefore tax (excluding intangible assets amortisation) increased by 21.6% to$9.18 million against $7.55 million the previous year. EBITDA increased 34.9%to $11.00 million (2006: $8.16 million). Goodwill and Intangible Asset Amortisation The Board reviewed the carrying value of goodwill and separately recognisedacquired intangible assets at 31 March 2007 and confirmed that no provision forimpairment was necessary. The amortisation charged during the year on acquiredintangible assets amounted to $0.15 million (2006: $nil) and the amortisation ofother intangibles amounted to $0.38 million (2006: $0.35 million). An independent purchase price allocation exercise has been conducted tocalculate the fair values of the intangibles assets of IVT as at the date ofacquisition. The intangible assets acquired amounted to $2.43 million andgoodwill to $24.53 million. The intangible assets are attributable to brand,patents, know how, and customers contracts and have been evaluated by anindependent valuation consulting firm. The goodwill is attributable to theworkforce of the acquired business and the significant synergies and integrationbenefits of combining the two organisations expected to arise after the Group'sacquisition of IVT. Restructuring Following the acquisition of IVT, the Group restructured these operations,reducing the size of the management team, from seven to four, closed down theLeipzig (Germany) distribution centre and consolidated all IVT European sales,logistics, invoicing, accounting and IT functions with the existing CelsisEuropean Centre in Brussels. This has generated short-term additional expenses,which are all recorded in the reported operating costs, but has also been offsetby savings, which have already started positively impacting the IVT divisionresults. Financial Income and Expense The financial expense for the year amounted to $0.69 million (2006: $0.02million) reflecting the interest relating primarily to a term loan facility of$8.0 million and a $5.5 million revolving credit facility obtained when theGroup acquired IVT. The financial income for the year amounted to $0.41 million (2006: $0.63million) mostly from the interest received from the cash invested in short termdeposits prior to the acquisition of IVT. Taxation The Group's profit after tax was $5.9 million against a profit after tax of$4.60 million the previous year. The Group's tax charge increased to $2.7 million for the year (2006: $2.6million) representing 31.6% of profit before tax (2006: 36.1%). The decrease intaxation as a percentage of profit is due to the favourable impact of theamortisation of the goodwill arising on the IVT acquisition over a period of 15years. Celsis has accumulated during its initial years of operations a significantamount of tax losses carried forward both in the UK and in the US. At the startof the year the total deferred tax asset was $3.84 million of recognised butstill unutilised deferred tax assets mainly related to tax losses carriedforward. At the balance sheet date the net remaining deferred tax asset amountis $1.03 million, and comprise of non-current deferred tax asset of $2.39million and a non-current deferred tax liability of $1.36 million. Earnings per Share Basic Earnings per Share (EPS) in 2007 increased by 29% to 26.81 cents per share(2006: 20.78 cents per share). Capital Expenditure Tangible fixed asset additions (excluding IVT acquisition) in the year amountedto $2.30 million (2006: $2.09 million) reflecting the extension of theAnalytical Services laboratories capacity, particularly in New Jersey inresponse to an increase in demand for its services. Intangible fixed assetadditions (excluding IVT acquisition) in the year amounted to $0.89 million(2006: $1.09 million) from which $0.31 million was capitalised internallygenerated development costs (2006: $0.53 million). Cash Flow The operating cash flow before changes in working capital and provisionsincreased 36.0% to $11.4 million (2006: $8.4 million). The IVT acquisition andstrong revenue growth of the Analytical Services division have required anincrease of the working capital of $3.63 million. As a result, the cash flowfrom operating activities has decreased from $8.94 million to $8.34 million. Cash resources have decreased by $15.3 million, from $21.2 million to $5.9million, as $16.9 million (net of borrowings) was utilised for the acquisitionof IVT, (the borrowings being a five year term loan of $8 million and a fiveyear revolving credit facility of $5.5 million, both from Barclays Bank plc). The outstanding balance on the term loan has been reduced to $4.2 millionfollowing a payment of $3 million in the year in addition to the requiredsemi-annual repayment of $0.8 million. During the year, the Group entered intoan interest rate swap which effectively fixes the interest rate on the term loanand revolving credit facilities for the period that the term loan and creditfacilities are utilised. At the year-end, the $5.5 million revolving creditfacility was drawn in full. The interest rate on the un-hedged portion of theterm loan and revolving credit facility is set at 0.9% above LIBOR. Balance Sheet The inventory value has increased to $7.39 million (2006: $2.81 million) as aresult of the integration of $3.59 million of In Vitro Technologies inventory,an increase of the Analytical Services division's inventory, in line with theincreased activity, and a temporary increase of the Rapid Detection inventory.The Rapid Detection inventory increased following the decision to stock anadditional month of reagent production pending the future relocation of thisdivision's manufacturing facilities planned for the end of 2007. Net trade receivables increased to $8.11 million against $6.26 million theprevious year after the integration of IVT trade receivables of $1.52 million.The trade receivables of the Analytical Services and Rapid Detection divisionshave increased 5.3% to $6.59 million, from $6.26 million, to be compared withthe 15.1% revenue growth of the two divisions. Other receivables increased from$1.16 million last year to $1.84 million this year after integration of $0.83million of IVT other receivables. The total receivables, excluding tax, increased from $7.43 million last year to$9.95 million this year. The total recognised but unutilised deferred tax assetaccount decreased from $3.84 million to a net deferred tax asset of $1.03million. Current liabilities increased to $8.05 million against $5.51 millionlast year after the integration of IVT trade and other payables of $1.62million. Non-current liabilities have increased from $0.50 million last year to $10.43million this year reflecting the term loan and revolving credit facilitieslong-term portion. Total payables have increased from $6.01 million last year to $18.48 millionthis year. This increase in creditors is mostly due to the banking facilitiesdiscussed above and the integration of IVT's trade payables. Net shareholders' funds have increased 18.9% (2006: 7.2%) during the year movingfrom $37.3 million to $44.3 million. The Group's balance sheet has been restructured during the year under review anda moderate amount of leverage taken of $13.5 million. Investment of prioryear's cash resources in the IVT acquisition has increased the net shareholders'funds. The amount of long term debt is decreasing faster than planned, resulting in thestrengthening of the balance sheet which leads the Group to expect that it willbe able to finance its operating costs, together with normal levels of capitalexpenditure and other commitments including tax, from its existing resources.The cash position at the year end was $5.9 million (2006: $21.2 million)following the acquisition of IVT and comments on the movement of cash resourcesare disclosed in the cash flow section above. The Directors believe that the Group's strong balance sheet and ongoing cashgeneration leave it well placed to meet its existing borrowing obligations andenable it to fund future investment plans. Treasury The Group maintains treasury control systems and procedures to monitor foreignexchange, interest rates, liquidity, credit and other financial risks. Liquidassets surplus to the immediate operating requirements of the Group are investedand managed centrally by Group Head Office. Exchange rates Euro and Sterling-denominated transaction exposure arising from normal tradeflows, both in respect of external and inter-company trade, is not hedgedagainst US Dollar equivalents. The Group's policy is to minimise the exposureof Euro and Sterling-operating subsidiaries to transaction risk by matchinglocal currency income with local currency costs. For this purpose inter-companytrading transactions are matched centrally and inter-company payment terms aremanaged to reduce risk. The Euro-Sterling revenue exposure to currencyfluctuation are balanced by the Euro-Sterling denominated costs of the Group. Financial position Celsis aims to maintain a robust financial position through focused revenuegrowth and the rigorous control of costs and strong financial management of allaspects of its business. This approach enables Celsis to generate sufficientcash to make the appropriate investments in its business and also to takeadvantage of external opportunities as and when these arise. Outlook During the past year we have integrated a growing IVT business unit into theGroup whilst continuing to deliver strong growth in both revenues and profits. All three divisions are now well placed to continue to deliver healthy increasesin both revenues and profit as the markets for our products and servicescontinue to expand. We will continue to focus on both organic as well asacquisitive growth in the disciplined approach that we have demonstratedpreviously. We believe that we are well placed to deliver continuing stronggrowth for shareholders in the coming years. We would like to take this opportunity to thank all of our employees for theirmany individual and combined contributions toward making this past year asuccess. We would also like to thank our new and existing shareholders fortheir continued support during the year and confidence in Celsis. Jay LeCoque, Chief Executive Officer Jack Rowell, Non-Executive Chairman 20 June 2007Consolidated Income Statementfor the year ended 31 March 2007 Total Total Year to 31 Year to 31 Note March 2007 March 2006 (unaudited) (audited) $'000 $'000 _____ _____Continuing operationsRevenue 47,441 33,104Cost of Sales (16,285) (11,305) _____ _____ Gross profit 31,156 21,799 OverheadsSales & marketing expenses (16,719) (10,972)Administrative expenses (5,089) (3,892)Research & development expenditure (419) (335) _____ _____Total operating expenses (22,227) (15,199) Operating profit 8,929 6,600Analysed asEBITDA 11,002 8,158Depreciation of property, plant and equipment (1,544) (1,209)Amortisation of intangible assets (529) (349) Operating profit 8,929 6,600 Interest receivable & similar income 412 628Interest payable & similar charges (687) (24) _____ _____ Profit before taxation 8,654 7,204 Taxation 4 (2,733) (2,601) _____ _____ Profit for the year 5 5,921 4,603 _____ _____ DividendsFinal 2005 paid at 5.13 cents per share 3 - 1,150 Earnings per Ordinary ShareBasic earnings per Ordinary Share 2 26.81c 20.78cDiluted earnings per Ordinary Share 2 26.29c 20.57c Consolidated Statement of Recognised Income and Expense Year to 31 Year to 31 March March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____ Profit for the financial year 5,921 4,603Currency exchange adjustment offset in the reserve 506 (377)Deferred tax on currency adjustment 129 -Deferred tax on share options 44 - _____ _____Total recognised income for the year 6,600 4,226 _____ _____ Consolidated Balance Sheetat 31 March 2007 At 31 March At 31 March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____AssetsNon-current assetsIntangible assets 30,795 3,357Property, plant and equipment 6,268 4,652Other receivables 69 23Deferred tax asset 2,387 2,050 _____ _____ 39,519 10,082Current assetsInventory 7,394 2,813Trade and other receivables 9,952 7,444Current tax asset - 1,792Cash and cash equivalents 5,946 21,174 _____ _____ 23,292 33,223LiabilitiesCurrent liabilitiesBorrowings (1,504) -Trade and other payables (6,548) (5,514) _____ _____ (8,052) (5,514) _____ _____ Net current assets 15,240 27,709Non-current liabilitiesBorrowings (7,964) -Other non-current liabilities (1,108) (501)Deferred tax liability (1,355) - _____ _____ (10,427) (501) _____ _____ Net assets 44,332 37,290 _____ _____ Shareholders' equityCalled up share capital 1,611 1,611Share premium account 13,120 13,120Treasury shares (1,201) (1,224)Currency translation reserve 438 (197)Retained earnings 28,882 22,498Reserve arising on consolidation 1,482 1,482 _____ _____ Total equity 44,332 37,290 _____ _____ Cashflow Statementfor the year ended 31 March 2007 Year Year to 31 March to 31 March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____ Cash flows from operating activities 8,338 8,939Tax paid (420) (647)Interest paid (587) (24)Interest received 480 590 _____ _____Net cash from operating activities 7,811 8,858 Cash flows from investing activitiesAcquisition of subsidiary, net of cash acquired (30,408) -Purchase of property, plant and equipment (1,590) (1,595)Expenditure on intangible fixed assets (862) (1,000) _____ _____Net cash used in investing activities (32,860) (2,595) Cash flows from financing activitiesEquity dividends paid - (1,150)Sale/(purchase) of treasury shares 23 (804)Receipt of new bank loan 13,500 -Repayment of principal under finance leases (60) (115)Repayment of loan principal (3,800) - _____ _____Net cash generated by/(used in) financing activities 9,663 (2,069) Effects of exchange rate changes 158 (383) _____ _____ Net (decrease)/increase in cash and cash equivalents in the year (15,228) 3,811 _____ _____ Cash and cash equivalents at the beginning of the year 21,174 17,363Cash and cash equivalents at the end of the year 5,946 21,174 Reconciliation of profit before tax to cash generated from operations Profit before taxation 8,654 7,204Depreciation of tangible fixed assets 1,544 1,209Amortisation of intangible assets 529 349Loss on disposal of tangible fixed assets 14 10Share option compensation 419 239Net finance expense/(income) 275 (604) _____ _____Operating cash flow before changes in working capital and provisions 11,435 8,407(Increase) in receivables (857) (759)(Increase)/decrease in inventory (1,173) 31(Decrease)/increase in payables (1,067) 1,270(Decrease) in provisions - (10) _____ _____Cash flows from operating activities 8,338 8,939 _____ _____ Notes to the Financial Statementsfor the year ended 31 March 2007 1. Basis of preparation The financial information for the year ended 31 March 2007 is unaudited and hasbeen prepared in accordance with the Group's accounting policies, based on IFRS,as adopted by the European Union. The financial information for the year ended31 March 2006 is audited. This summary of results does not constitute the full financial statements withinthe meaning of s240 of the Companies Act 1985. The 2006 financial statementshave been reported on by the Company's auditors and have been delivered to theRegistrar of Companies. The audit report was unqualified and did not contain astatement under s237(2) or s237(3) of the Companies Act 1985. 2. Basic & Diluted Profit per Ordinary Share Year Year to 31 March to 31 March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____ Profit on ordinary activities after taxation 5,921 4,603Basic weighted average number of ordinary shares in issue 22,083,054 22,148,577Diluted weighted average number of ordinary shares in issue 22,525,556 22,374,644 _____ _____Pre tax earnings per ordinary shareBasic earnings per ordinary share 39.19c 32.53cDiluted earnings per ordinary share 38.42c 32.20c _____ _____ 3. Dividends Year Year to 31 March to 31 March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____ No dividends paid (2006: 5.13c) per ordinary share - 1,150 _____ _____ 4. Taxation Year Year to 31 March to 31 March 2007 2006 (unaudited) (audited) $'000 $'000 _____ _____ United Kingdom taxation at 30% 763 834Foreign taxation (US-Europe) charge 1,970 1,767 _____ _____ 2,733 2,601 _____ _____ 5. Consolidated Statement of Changes in Shareholders' Equityat 31 March 2007 Share Currency Share premium Treasury translation capital account shares reserve (unaudited) (unaudited) (unaudited) (unaudited) $'000 $'000 $'000 $'000 _____ _____ _____ _____ Balance at 1 April 2005 1,611 13,120 (420) 180 Movement in own shares (804)Profit for the year ended 31 March 2006DividendsCurrency translation differences group (377)Share option compensation charge - gross Balance at 31 March 2006 1,611 13,120 (1,224) (197)and at 1 April 2006 Movement in own shares 23Profit for the year ended 31 March 2007Currency translation differences - gross 506Currency translation differences - tax 129Share option compensation charge - grossShare option compensation charge - tax _____ _____ _____ _____Balance at 31 March 2007 1,611 13,120 (1,201) 438 _____ _____ _____ _____ Consolidated Statement of Changes in Shareholders' Equity at 31 March 2007(continued from table above) Retained Reserve arising earnings on consolidation Total (unaudited) (unaudited) (unaudited) $'000 $'000 $'000 _____ _____ _____ Balance at 1 April 2005 18,806 1,482 34,779 Movement in own shares (804)Profit for the year ended 31 March 2006 4,603 4,603Dividends (1,150) (1,150)Currency translation differences group (377)Share option compensation charge - gross 239 239 Balance at 31 March 2006 22,498 1,482 37,290and at 1 April 2006 Movement in own shares 23Profit for the year ended 31 March 2007 5,921 5,921Currency translation differences - gross 506Currency translation differences - tax 129Share option compensation charge - gross 419 419Share option compensation charge - tax 44 44 _____ _____ _____Balance at 31 March 2007 28,882 1,482 44,332 _____ _____ _____ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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