Final Results

Quantum Pharma Plc

("Quantum" or the "Group")

Final Results

Quantum Pharma Plc (AIM: QP.), a service-led niche pharmaceutical manufacturer, developer and supplier to the health and care sectors, today announces its maiden set of final results for the year ended 31 January 2015.

Highlights

1 EBITDA - Earnings before interest, tax, depreciation and amortisation

2 Adjusted EBITDA and underlying pre-tax profit exclude share based payments of £2.1 million, a one-off loan release of £1.6 million and non-underlying costs of £4.2 million

3 EPS - earnings per share

4 Adjusted EPS is based on profit after tax and adjusted to exclude share based payments of £2.1 million, a one-off loan release of £1.6 million, non-underlying costs of £4.2 million, one-off debt issue costs of £1.3 million and the tax impact of these adjustments of £1.2 million

5 Net debt is Group loans and borrowings less cash and cash equivalents

6€4.7 million payable in cash on completion and two deferred amounts of €2.5 million payable in cash in each of April 2016 and April 2017

Andrew Scaife, Chief Executive Officer of Quantum Pharma, commented: "I am delighted by the Group's strong progress over the last twelve months and excited about the Group's future potential. Quantum Pharma has had a transformational year in which we successfully joined AIM in December 2014, took significant strategic steps, generated growth across the Group, penetrated new markets both in the UK and overseas and, delivered on commitments made at the time of admission to AIM.

"The Group continues to trade in line with management's expectations and we believe that the outlook for Quantum Pharma is exciting. During the current financial year, we will continue to lay strong foundations for future growth. The Group has a very strong pipeline of niche pharmaceutical products which, coupled with a market-leading service, will provide significant opportunities both in the UK and internationally.

"Quantum Pharma is well positioned to take advantage of the significant opportunities available to it and we look forward to the forthcoming year with significant optimism."

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Notes to Editors

Quantum Pharma is a service-led, niche pharmaceutical manufacturer, developer and supplier to the retail pharmacy, pharmaceutical wholesale, hospital, homecare and care home markets. The Quantum Pharma Group operates through seven business units offering a portfolio of innovative and complementary products and services to providers in primary and secondary care.

Quantum Pharmaceuticalmanufactures and supplies specials and special obtains for the majority of large retail pharmacy chains in the UK, as well as large pharmaceutical wholesalers, hospitals and independent pharmacies. Specials are bespoke, non-licensed medicines which can be custom manufactured as a one-off or procured for individual patient needs where a clinician deems a patient requires a bespoke formulation for their treatment. The company can manufacture and supply bespoke medicines in as little as 15 hours and regularly services around 6,500 pharmacies across the UK with a choice of more than 22,000 specials or special obtains.

Quantum Aseptic Services manufactures aseptically prepared sterile intravenous products, either individually for named patients or in batches. Serving the hospital market (both NHS and private) and homecare patients, its unique, six-day-a-week, next morning (by 10.30am) compounding service enables many hospitals to offer chemotherapy treatment five days a week, unencumbered by the delays of aseptic production.

UL Medicines sources and supplies unlicensed imported medicines and bespoke specials to hospitals, community pharmacies and wholesalers in the UK and overseas. The company offers approximately 500 imported medicines sourced from more than 24 countries, as well as a specialist over-labelling service that translates accompanying local language patient documentation into English.

Biodose® is the only medicines delivery system that accommodates both liquid and solid medication, supporting medicines administration and adherence for 50,000 patients with complex medication regimes, their carers and clinicians. Building on its success, Biodose Connect®, due for launch in early 2016, incorporates telemedicines technology to provide live, remote monitoring and management of patient adherence to prevent avoidable and costly hospital admissions.

Biodose Services® provides pre-prepared medication regimes to care homes and delivery of medication to the home. Biodose Services is the UK's largest provider of the Biodose system and operates from a 7,600ft purpose-designed specialist pharmacy in West Yorkshire. The company also offers a range of homecare services to the NHS, private clinics and pharmaceutical companies including the Stork Fertility Service®, premium homecare for patients receiving fertility treatment.

Colonis is a product development business which takes niche pharmaceutical products through the regulatory pathway to achieve licensed and/or regulated product status. Colonis launched its first licensed product, Aviticol in December 2014. Colonis has also launched one regulated product and a second licensed product is being manufactured ready for launch. The company is currently working on a significant pipeline of approximately 60 products (SKUs) across a growing number of therapeutic areas, 10 of which have been submitted for approval to the MHRA.

Lamda is a full service contract development specialist with customers in the UK, Ireland, Germany, France, Italy, Sweden, Greece and Cyprus. As well as providing in-house development for the Colonis pipeline, Lamda provides a fully outsourced research and development service for pharmaceutical companies looking to develop pharmaceutical forms or to license medicinal products.

For further information, please visit www.quantumpharmagroup.com.

Chairman's Statement

On behalf of the Board, I am pleased to introduce Quantum Pharma's maiden set of final results since the Group's successful admission to AIM in December 2014. The Group has performed strongly in the financial year ended 31 January 2015 and the Board today reports results that are ahead of the expectations outlined at the time of admission.

Admission to AIM

The Group's admission to AIM, which raised £106.1 million before expenses, was the largest float in the pharmaceutical sector on AIM in 2014. The response to the admission was exceptionally positive, demonstrating confidence in both the Group's strategic plan and the management team's ability to deliver and generate returns. The Board joins me in welcoming all our new shareholders and in thanking Lloyds Development Capital for its past and continued support of the Group.

Strategy

Quantum Pharma's overall strategy is to leverage its market-leading position in unlicensed medicine and special obtains in the UK, its growing international network and associated market access as a platform to become a leading service-orientated, niche pharmaceutical business in the UK and to develop the business internationally.

I am pleased to report that the Group is making excellent progress on delivering on its stated strategy and this continues to be achieved through a mixture of strong organic growth and selective strategic acquisitions. The Group's end markets continue to remain robust and in light of the recent government commitment to increase annual spending on the NHS, offer considerable opportunity for future growth. Over the financial year, the Group's six business divisions have all made solid progress and this is covered in more detail in the CEO's Review.

A key objective for Quantum Pharma joining AIM was to provide the Group with a solid platform for future growth. Diversification of our shareholder base as well as direct access to the equity capital markets will allow the Group to facilitate the rapid development of our business and provide funding for future acquisitions.

As part of our strategy, the Group successfully completed the £15 million acquisition of the remaining 49% of Colonis Pharma Limited in December 2014. In April 2015, the Group then acquired the Lamda group of companies (Lamda UK Limited, Lamda Pharmaceutical SA and Lamda Laboratories SA), a pharmaceutical development and licensing business with customers in the UK, Ireland, Germany, France, Italy, Sweden, Greece and Cyprus. The total consideration for the companies was €9.7 million and the acquisition augments the Group's product development capability and increases the pipeline of products in Colonis. It also provides the Group with an international network, which will be used as a platform to enable the Group's other business divisions to penetrate overseas markets in the coming years. The Board looks forward to fully integrating both businesses into the Group as it works to develop the Group both in the UK and internationally.

Corporate Governance

Quantum Pharma values corporate governance highly and the Board believes that effective corporate governance is integral to the delivery of the Group's corporate strategy, to generate shareholder value and to safeguard the long-term interests of our shareholders.

As Chairman, I am responsible for the leadership of the Board and for ensuring its effectiveness in all aspects of its role. The Board is responsible for the Group's strategic development, monitoring and achievement of its business objectives, oversight of risk and maintaining a system of effective corporate governance. I will draw upon my considerable experience in healthcare from my time as global President of GlaxoSmithKline Consumer Healthcare to help ensure the Board delivers maximum shareholder value.

Dividend

Subject to shareholder approval at the Annual General Meeting on 21 July 2015, the Board proposes to pay a final dividend of 0.25 pence per share, which is in line with the stated progressive dividend policy outlined at the time of the Group's admission to AIM. The final dividend of 0.25 pence per share, representing a pro-rata return for the period the Group has been on AIM, will be payable on 7 August 2015 to shareholders on the register at the close of business on 17 July 2015. The shares will go ex-dividend on 16 July 2015. Looking forward, and based on current performance, the Board anticipates increasing future dividend levels from the Group's interim results onwards.

Our employees and stakeholders

The strong performance of the Group reflects the dedication and quality of the Group's employees. We rely on the skills, experience and commitment of our team to drive the business forward. Their enthusiasm, innovation and performance remain key assets of the Group and its future success. On behalf of the Board, I would like to thank all of our employees, customers, suppliers, business partners and shareholders for their continued support over the last year.

Quantum Pharma is well positioned to take advantage of the significant opportunities available to it and the Board looks forward to the forthcoming year with significant optimism.

John Clarke

Non-Executive Chairman

19 May 2015

CEO's Review

I am delighted by the Group's strong progress over the last 12 months and excited about its future potential. Quantum Pharma has had a transformational year in which the Group successfully joined AIM in December 2014, took significant strategic steps, generated growth across the Group, penetrated new markets both in the UK and overseas and delivered on commitments made at the time of admission to AIM.

We spent the past year developing all key aspects of Quantum Pharma, from infrastructure to management, to put in place a strong platform from which to further develop the Group and deliver its strategy. As a result of being admitted to AIM, the Group was able to strengthen its balance sheet, raise additional funding to support its acquisition plans, accelerate and strengthen its growth strategy, increase its product portfolio and also invest in infrastructure and the management team across the Group.

Quantum Pharma's divisions are now well integrated and we are starting to see the benefits of synergistic working at both turnover and EBITDA levels. This will accelerate further during the next few years as the Group adds to its portfolio of companies, products and services.

The current financial year promises to be the year where we continue to build the base and deliver on the strategy outlined at the time of the AIM admission. We will use this forward momentum to continue Quantum Pharma's expansion and development as a leading provider of niche pharmaceuticals and services.

Results

Although considerable time was spent preparing for the AIM admission during the financial year, the management team remained focused on the Group's operational businesses, delivering a 15% increase in revenue to £61.7 million (2014: £53.5 million) and a 34% increase in adjusted EBITDA to £12.2 million (2014: £9.1 million) with all six business divisions contributing strong organic growth. Underlying pre-tax profit increased by 73% to £5.7 million (2014: £3.3 million) and total gross profit increased by 27% to £25.9 million (2014: £20.4 million). Administration costs were £16.8 million including non-underlying costs of £4.6 million, which mainly related to AIM admission costs and share-based payments. Excluding non-underlying items, administration costs of £12.2 million (2014: £9.4 million) grew by 30% in order to support the strong organic growth of the operating businesses. Reported pre-tax profit of £1.1 million is up £3.7 million on the prior year (2014: £2.6 million loss).

The Board proposes to pay a final dividend for the year ended 31 January 2015 of 0.25 pence per share. Further details of the final dividend are contained in the Chairman's Statement.

Divisional review

Quantum Pharmaceutical

Specials and special obtains

Leading manufacturer and supplier of specials and special obtains to retail pharmacies and wholesalers

The core of the Group performed well in the last year, delivering significant growth at both the turnover (2015: £47.3 million, 2014: £41.0 million - including Quantum Aseptic Services) and the adjusted EBITDA level (2015: £10.8 million, 2014: £9.6 million - including Quantum Aseptic Services), securing several new contracts and customers. This is despite the backdrop of a challenging market as a result of the continued impact of Part VIIIB of the drug tariff, increased competitor activity and further product licensing. Quantum Pharmaceutical continues to maintain its market-leading position and win new customers as well as further strengthening its long-standing and key customer relationships. This demonstrates the strength of this division and the excellent market position it has successfully built over the years, which is the enabler for the rest of the Group's activities. Most notably during the year, Quantum Pharmaceutical secured a three year contract to supply Well Pharmacy, formerly The Co-operative Pharmacy (an existing Quantum Pharmaceutical customer now owned by Bestway Panacea Healthcare Limited). This demonstrates Quantum's attractiveness to large pharmacy chains as well as the strength of its service offering, both in terms of speed of turnaround and breadth of product range.

Importantly, Quantum Pharmaceutical provides the Group with a strong base in addition to excellent market access and product trending information. It has strong, contracted customer relationships which the Group continues to leverage in order to develop and grow the other business divisions. In particular, it is well positioned to identify new products to feed into the Group's product development pipeline, as well as delivering strong product launches through its customer base.

Quantum Pharmaceutical's customer base continues to increase and there are a number of significant opportunities that could further augment our market leading position in unlicensed medicines and special obtains in the UK and which represent potential upside to our current expectations.

Quantum Aseptic Services

Manufacturer and supplier of aseptically-prepared intravenous products to the hospital market

Quantum Aseptic Services has had a year of strong growth, with new business wins and operational development, reaffirming the decision to invest in this market. Quantum Aseptic Services' innovative approach has focused on fusing market-changing hardware and software technologies to redefine service and quality levels in the market.

High quality products, coupled with market-leading service levels, allow consultants to place orders up to 5:30pm for delivery the next morning pre 10:30am. This allows them to access high quality medication quickly, reducing wastage and the associated cost burden on the NHS.

Quantum Aseptic Services has made strong progress in winning new customers, both private and NHS, and in penetrating new markets such as ophthalmics (where it launched its own range of products) and compounding services which will be sold into large pharmaceutical companies bringing a new customer base into the Group. Quantum Aseptic Services also provides the Group with the opportunity to identify products that can be added to the Group's product development portfolio.

Pern Consumer Products

Supplier of a range of menthol-in-aqueous creams under the Dermacool™ brand

Pern Consumer Products, a stand-alone subsidiary of Quantum Pharmaceutical, has performed well in the period, further penetrating the market, resulting in growth in both turnover (2015: £0.6 million, 2014: £0.5 million) and adjusted EBITDA (2015: £0.2 million, 2014: £0.1 million). Further developments in the Dermacool™ product are planned over the coming months with an expectation that volume will increase further.

UL Medicines

Supplier of imported, batch-made and bespoke unlicensed medicines, primarily to the hospital market

The Group's hospital-focused division has had a strong year, delivering record results at the adjusted EBITDA level of £1.9 million (2014: £1.6 million) and showing significant growth in turnover at £8.6 million (2014: £7.9 million), driven in particular by sales to the hospital sector. UL Medicines has grown its hospital customer base from 198 hospital pharmacies to 236, strengthened its service levels and broadened its product range (including utilising product ranges from both Quantum Pharmaceutical and Colonis).

UL Medicines has also been successful in penetrating several new overseas markets, providing turnover and margin growth, as well as increasing the Group's international network which will be leveraged over the coming years. Furthermore, utilising its knowledge of the hospital specials market and associated trends, this division has and will continue to be instrumental in strengthening and broadening the Colonis product development pipeline, which is expected to generate significant benefits to the Group in the coming years.

Colonis

Niche licensed and regulated pharmaceutical product development business

During the year Colonis delivered revenues of £1.4 million (2014: nil) and adjusted EBITDA of £0.7 million (2014: nil).

Since acquiring the remaining 49% shares in Colonis at the time of the Group's admission to AIM, Colonis has made substantial strategic strides, broadening and strengthening the pipeline of both licensed and regulated products (medical devices), as well as bringing development capability in-house via the Lamda acquisition.

At the time of admission, the Colonis pipeline was 31 products (SKUs). In the five months since admission the Colonis pipeline has nearly doubled through a combination of new developments started by Colonis leveraging from product and market intelligence in the Group, and existing developments at Lamda at the time of acquisition. Colonis now has approximately 60 products (SKUs) in development across an increasing number of therapeutic areas.

During the year, Colonis was pleased to announce the launch of its first licensed product, Aviticol™ 20,000IU Capsules, which received approval for a UK Marketing Authorisation from the MHRA in December 2014. The product launch is progressing well, considering the competitive environment and the need to convert nutritionals, both of which have resulted in a flatter growth profile and more pressure on pricing than originally anticipated. However, as Colonis was first to market, it has leveraged the Group's strong position with its customer base to secure exclusive and preferential positions with a number of leading pharmacy chains and wholesalers. In addition, a number of discussions are ongoing with regard to out-licensing the product overseas, which represents further potential upside. The launch to date is clearly demonstrating that Colonis is able to leverage the Group's strong customer relationships, market access and increasing international network which bodes very well for the products that Colonis expects to launch over the coming months and years.

During the year, Colonis also launched one regulated product and has one further licensed product which is currently being manufactured ready for launch. It also has a further 10 products (SKUs) in assessment with the MHRA, all of which are expected to achieve licensed status in this current financial year, as well as three further regulated products in the final phase of development which are expected to be launched in the next few months. A number of short-term additions to the pipeline are also being pursued.

Prior to the acquisition of Lamda, Colonis was utilising third party contract development companies to assist with its pipeline development. The majority of products in the Colonis pipeline will now be developed in-house by Lamda. Lamda has a proven track record of product development and successful licensing, having completed in excess of 100 projects. In-house development gives much greater control and certainty to the Group over timetable and cost on each of the products developed. The teams at Colonis and Lamda are already working closely together and the first four products (SKUs) to be developed by Lamda for Colonis were submitted for MHRA assessment within a week of the acquisition. Several more are expected to be submitted in the next few months.

We believe that this significant pipeline of products will have a substantial positive impact on the Group as products move through the development process and reach licensed or regulated status. We believe the outlook for Colonis is very exciting, particularly in the medium term, given the growing product pipeline and the demonstration of Colonis' ability to leverage the strong base and product and market intelligence of the Group and the operational and financial synergies which in-house development by Lamda will bring.

Biodose®

Protomed

Owner of a patent-protected medicines adherence product and supplier to pharmacies

During this financial year Protomed delivered revenues of £3.1 million (2014: £3.0 million) and its adjusted EBITDA loss reduced to £0.5 million (2014: £0.6 million loss). We expect the commercialisation of Biodose Connect® to move the business unit into profit.

Biodose® is the only monitored dosage system that can contain both solids and liquids in the same tray. Strong strategic progress has been made with the product and, in particular, the preparation for its use as a tool for medicine adherence in a patient's own home.

Protomed has taken steps in the development of Biodose Connect®, its telemonitoring product which allows remote monitoring of adherence to medication regimes. A number of successful pilots have been completed or are underway utilising Biodose® and Biodose Connect®, with several more due to start in the coming months. These pilots are providing results which demonstrate that Biodose Connect® has the ability to significantly reduce the cost burden on the NHS that results from non-adherence to medication regimes. In addition, these outcomes are affirming the strategic direction this division is taking. Once the pilots are completed, Protomed will commence the commercialisation of Biodose Connect® which is expected to occur in the first quarter of 2016.

Biodose Services®

Supplier of pre-prepared, patient-specific medication regimes to care homes and patients at home

Biodose Services® has had a strong year, delivering growth at the turnover level of £4.8 million (2014: £3.4 million) and narrowing its adjusted EBITDA loss to £0.7 million (2014: £1.3 million loss).

Given the mature nature of the care home business, resulting in a flat profile, much of this growth has come from the rapidly expanding homecare division which distributes medicines to patients at home which are self-administered and do not require nursing provision. Currently focusing on the fertility market, where it has grown significantly from a standing start in April 2014, Biodose Services® has won business from a significant number of fertility centres and is servicing and in discussions with multiple pharmaceutical companies (this represents a new cohort of customers). Plans are in place to expand into new markets in the next year.

Investment

During the period, the Group has invested heavily in infrastructure, people and research and development. The investment in new product development was £3.1 million and, given the Group's strategic direction, we anticipate this spend will increase over the coming years.

Strategy

We have spent the last year laying the foundations for a robust platform to deliver the growth anticipated in the Group's strategy. This involves the Group using its market-leading position in UK unlicensed medicines and special obtains, its growing international network and the associated market access and its live product intelligence as a base to become a leading, service-orientated, niche pharmaceutical business both in the UK and internationally.

The Group has a significant portfolio of new products and services in development, which we anticipate will be commercialised over the coming years. Geographically, the Group has a strong presence in the UK and a growing international network, which provides an excellent base for the Group to exploit these unique opportunities. There is also substantial scope to further strengthen Quantum Pharma's position as market leader in the UK in unlicensed medicines and special obtains and to further capitalise on the relatively underdeveloped international markets. The Group is now trading in over ten overseas territories and is looking to increase its services throughout the UK, Europe and ultimately, globally.

Recent activity

I am delighted by the organic growth seen across the Group's divisions, but I also remain dedicated to our strategy of growth through synergistic acquisition, as explained at the time of the Group's admission to AIM. The €9.7 million acquisition of the Lamda group of companies in April 2015 is the Group's first step towards this strategy. Lamda has a proven track record of product development and gaining Marketing Authorisations for its products across the UK and Europe. The acquisition significantly increases the Group's product development pipeline in Colonis, gives the Group in-house development capability and access to new markets overseas.

Trading Update and Outlook

The last quarter of the period saw record performances from UL Medicines, Biodose® and Quantum Aseptic Services and I am pleased to report that these record performances were subsequently beaten in the first quarter of the current financial year. The Colonis pipeline has nearly doubled in the five months since Admission to approximately 60 products through a combination of new developments started by Colonis and existing developments at Lamda at the time of acquisition. We expect to see further growth in the coming months and years as the Group continues to expand its target markets and successfully launches more products and services.

The Group continues to trade in line with management's expectations. I believe that the outlook for Quantum Pharma is exciting. During the current financial year, we will continue to lay strong foundations for future growth. The Group has a very strong pipeline of niche pharmaceutical products which, coupled with a market-leading service, will provide significant opportunities both in the UK and internationally.

Andrew Scaife

Chief Executive Officer

19 May 2015

Financial Review

The financial year to January 2015 has seen a transformational change in business performance with strong growth in revenue, margin, underlying EBITDA, underlying profit before tax and reported profit before tax. Quantum Pharma's admission to AIM in December 2014 also enabled the Group to significantly strengthen its balance sheet, reducing its debt by £39.1 million.

Key Performance Indicators (KPIs)

Revenue

Group revenue rose by 15% in the year to £61.7 million (2014: £53.5 million). All trading entities within the Group recorded sales growth in the year, with the launch of Aviticol™by Colonis having a positive impact during the period. Biodose Services® also saw impressive organic growth of 41% to £4.8 million (2014: £3.4 million) as a result of the launch into the homecare market. Quantum Aseptic Services saw revenue increase to £1.8 million (2014: £0.1 million).

Gross Profit

Total gross profit increased by 27% during the year to £25.9 million (2014: £20.4 million). During the year, the core elements of Quantum Pharmaceutical and UL Medicines saw growth in gross profit. Colonis also had a positive impact on gross profit, via sales of its two products (one licensed product and one regulated product).

Distribution Expenses

Group distribution expenses were £2.4 million (2014: £2.6 million), highlighting that the Group continues to deliver efficiencies. This cost represents 4% of revenue (2014: 5%).

Administrative Expenses

Administrative expenses increased by 9% during the year to £16.8 million (2014: £15.4 million) as the Group invested in infrastructure and senior management in order to support its future growth plans. These administrative expenses included £2.1 million of share-based payment charges (2014: £1.4 million). Of these charges, £2.0 million were incurred as a result of the exercise of share options on admission and £0.1 million relate to the newly established management Long Term Incentive Plan (LTIP).

Also included was a one-off loan release of £1.6 million. This relates to a loan that was novated to the Group as a result of the acquisition of Total Medication Management Services Limited (trading as Biodose Services®). This loan was repayable based on performance criteria within the sale and purchase agreement. These criteria were not met and the loan was no longer payable. This has been released to the consolidated income statement.

Administration expenses also included £4.2 million of non-underlying costs which related to restructuring and IPO related activities.

Operating Profit

Full year operating profit rose 193% to £6.7 million (2014: £2.3 million).

Net Finance Expenses

Net finance expenses in 2015 were £5.6 million (2014: £4.9 million). These included a one-off charge of £1.3 million being the write-off of capitalised debt issue costs repaid on admission to AIM.

Also included were £4.1 million of interest on loans, of which a substantial amount was paid on admission and £0.2 million related to interest on deferred consideration payable relating to the acquisition of Protomed Limited which is also non-recurring.

Adjusted EBITDA

Adjusted EBITDA rose in the year to £12.2 million (2014: £9.1 million), after taking account of non-underlying costs, share-based payment charges and net of a one-off loan release.

Profit Before Tax

Underlying profit before tax increased by 73% to £5.7 million (2014: £3.3 million) after adjusting for share based payments, one-off loan release and non-underlying costs which totalled £4.6 million (2014: £5.9 million). Reported profit before tax increased by 3.7 million to £1.1 million (2014: £2.6 million loss).

Taxation

The tax charge for the year is £0.4 million and is based on prevailing UK effective tax rates. The charge is calculated as £0.2 million on underlying profits net of the following adjustments; £1.1 million non-deductible expenses and credits of £0.9 million in respect of the exercise of share options at the Group's admission to AIM.

Earnings Per Share

Adjusted EPS for the year was 9.7 pence (2014: 6.8 pence), calculated based on profit after tax and adjusted for: one-off costs (£4.2 million), share based payments (£2.1 million), one-off debt issue costs (£1.3 million) net of a loan release (£1.6 million) and the tax impact of these adjustments (£1.2 million).

Dividend

The Board is committed to establishing a progressive dividend policy and going forward, expects interim and final dividend payments to be split one-third to two-thirds respectively. Given the Group's successful admission to AIM and its trading performance last year, the Board is pleased to recommend a final dividend, in respect of the period for which the company was on AIM, of 0.25 pence per share (2014: nil). Details of when the final dividend will be paid is contained in the Chairman's Statement.

Balance Sheet

Quantum Pharma's successful admission to AIM enabled the Group to significantly restructure and strengthen its balance sheet.

Proceeds from the funds raised were used primarily to purchase the remaining 49% of Colonis (total cost of £15.0 million) and repay all the Group's debt totalling £59.9 million. As a result of this, as at 31 January 2015, the Group had net debt of £9.0 million (£14.9 million bank loan, less £5.9 million of cash) and now has net assets of £50.7 million (2014: £3.9 million net liabilities).

During the year inventories increased to £3.3 million (2014: £2.6 million). This was a working capital investment which supported the increased trading across the Group, particularly Quantum Aseptic Services and Biodose Services®.

Cash Flow

Operating cash flow before working capital movements was £8.1 million (2014: £4.6 million). Operating cash flow after working capital movements was £2.9 million (2014: £4.6 million). Net cash outflow from operating activities was £7.2 million (2014: £1.9 million inflow). Interest paid in the year was £10.9 million (2014: £2.0 million). As a result of the Group's admission to AIM, the Group was able to make a repayment on borrowings of £59.9 million. This will enable the Group to significantly reduce interest payments in future years, with only £14.9 million of debt remaining on the balance sheet. Cash and cash equivalents at 31 January 2015 were £5.9 million (2014: £4.3 million).

Martin Such

Chief Financial Officer

19 May 2015

Consolidated Income Statement

for year ended 31 January 2015

Consolidated Statement of Comprehensive Income

for year ended 31 January 2015

Consolidated Balance Sheet

at 31 January 2015

Consolidated Balance Sheet (continued)

at 31 January 2015

Consolidated Statement of Changes in Equity

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statements

for year ended 31 January 2015

Notes

(forming part of the financial statements)

1 Basis of preparation and status of financial information

The financial information set out above has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the EU (Adopted IFRSs).

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 January 2015 or 2014. Statutory accounts for 2014 have been delivered to the Registrar of Companies, and those for 2015 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report (iii) did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

These results were approved by the Board of Directors on 19 May 2015.

2 Summary of impact of Group restructure and Initial Public Offering

On 11 December 2014, the Group listed its shares on AIM. In preparation for the Initial Public Offering ('IPO') the Group was restructured. The restructure has impacted a number of the current year and comparative primary financial statements and notes.

For the consolidated financial statements of the Group, prepared under IFRS, the principles of reverse acquisition accounting under IFRS 3 'Business Combinations' have been applied. The steps to restructure the Group had the effect of Quantum Pharma Plc being inserted above Quantum Pharma Group (previously known as Hamsard 3149 Limited) ('QPG') as the holders of QPG share capital.

By applying the principles of reverse acquisition accounting, the Group is presented as if Plc has always owned the QPG. The comparative Income Statement and Balance Sheet are presented in line with the previously presented QPG position. The comparative and current year consolidated reserves of the Group are adjusted to reflect the statutory share capital and share premium of Plc as if it had always existed, adjusted for movements in the underlying QPG share capital and reserves until the share for share exchange.

3 Acquisitions of subsidiaries

Acquisitions in the current period

On 11 December 2014, the Group exercised its option and acquired the remaining 49 per cent of the issued share capital in Colonis Pharma Limited for consideration of £15,000,000 settled in cash.

£175,000 of expenses relating to the acquisition were charged to the Consolidated Income Statement in accordance with IFRS 3.

As there was no change in control as a result of this transaction, the difference between the fair value of the net assets acquired and the consideration has been recognised directly in equity as other reserves.

Acquisitions in the prior period

On 18 March 2013 the Group exercised its option and acquired the remaining 76.6% of the issued share capital in Protomed Limited for consideration of £6,856,000, £3,428,000 settled in cash and £3,428,000 as deferred consideration, which was subsequently paid on 16 September 2014.

£234,000 of expenses relating to the acquisition were charged to the Consolidated Income Statement in accordance with IFRS 3.

As there was no change in control as a result of this transaction, the difference between the fair value of the net assets acquired and the consideration has been recognised directly in equity as other reserves.

4 Segmental reporting

The following analysis by segment is presented in accordance with IFRS 8 on the basis of those segments whose operating results are regularly reviewed by the Board of Directors (the Chief Operating Decision Maker as defined by IFRS 8) to assess performance and make strategic decisions about allocation of resources.

The sectors distinguished as operating segments are A, B, C, D, E and F. A short description of these sectors is as follows:

A Quantum Pharmaceutical Limited - Manufacture and supply of niche pharmaceutical products, including Aseptics.

B Pern Consumer Products Limited - Supply and distribution of menthol in aqueous cream.

C Colonis Pharma Limited - Development and commercialisation of pharmaceuticals and related products.

D Total Medication Management Services Limited (trading as Biodose Services). Supply of prescription drugs to the care home and domiciliary care sectors.

E U L Medicines Limited - Sourcing and supply of imported and batch made unlicensed pharmaceutical products.

F Protomed Limited - Supply of Biodose MDS and ancillary products.

These segments have separate management teams and offer different products and services. These operating segments are reportable segments. The segment results, as reported to the Board of Directors, are calculated under the principles of IFRS. Performance is measured on the basis of Adjusted EBITDA which comprises the segment result before non cash items (amortisation, depreciation and share based payments) and other items that are excluded when the Board assess performance. This includes 'One-off costs, as termed in the tables below, which include restructuring, professional fees and management bonus. A reconciliation between Adjusted EBITDA and Profit before tax is included in the tables below:

31 January 2015

4 Segmental reporting (continued)

Unallocated net assets include goodwill and intangibles (£12.5m), cash and cash equivalents (£1.9m), bank term loan (£14.8m) and net inter-group loan receivables (£35.5m).

31 January 2014

4 Segmental reporting (continued)

Unallocated net liabilities include goodwill and intangibles (£27.9m), cash and cash equivalents (£0.1m), bank term loans, loan notes and other loans (£54.0m) and net inter group loan receivables (£10.4m).

In all periods revenue is generated almost entirely in the UK. In the year ended 31 January 2015 two customers accounted for 34% of revenue (2014: 42%).

5 Earnings/(loss) per share

Basic weighted average number of shares includes those shares in the EBT to which the beneficiaries are unconditionally entitled.

The diluted loss per share is identical to the basic loss per share in 2014 as potential dilutive shares are not treated as dilutive since they would reduce the loss per share.

The dilutive potential shares relate to the share options. There were no potentially dilutive shares or other instrument that have been excluded from Diluted EPS because they are antidilutive.

The adjusted EPS, based on the following earnings figure for the year and number of shares in issue of 54,507,000 (2014: 43,057,000) is 9.7 pence (2014: 6.8 pence).

The adjusted diluted earnings per share based on the weighted average number of shares of 55,356,000 (2014: 43,057,000) is 9.6 pence (2014: 6.8 pence).

6 Intangible assets

7 Subsequent events

In April 2015, the Group announced the acquisition of 100% of the share capital of Lamda (UK) Limited, Lamda Laboratories SA and Lamda Pharmaceuticals SA for a total consideration of €9.7 million. The consideration comprises €4.7 million payable on completion and €5.0 million deferred consideration, to be paid in two equal instalments 12 and 24 months after the date of completion. An exercise is currently underway to identify, and measure the fair value of, the assets and liabilities acquired. This exercise will be completed by, and reported in, our announcement of interim results for the forthcoming half year.

Lamda provide a fully outsourced research and development service to companies looking to license medical products from its state of the art development laboratories near Athens, Greece.

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