Final Results

23rd Sep 2009 07:00

23 September 2009

 

HENDERSON MORLEY PLC

(AIM: HML)

 

FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2009

 

The Board of Henderson Morley plc ("Henderson Morley" or "the Company"), the AIM quoted drug discovery company, announces its final results for the year to 30 April 2009. 

 

HIGHLIGHTS

First revenues from vaccine against Eel Herpes virus (EHV) will be received during the next eel fishing season which runs from November to April.

In discussions with commercial partners to out-license Feline Herpes Virus ("FHV") development candidate and Canine Cancer Immunotherapy.

The Company currently has 47 granted patents with 45 pending.

Losses before tax fell to £1,103,106

Revenues grew to £80,019

 

POST PERIOD EVENTS

Successfully raised £625,000 via an Open Offer.

Grant application submitted to the US government funded National Institute of Health. This could secure non-dilutive funding to further develop the Cytomegalovirus ("CMV") Vaccine.

Koi Herpes Virus ("KHV ") vaccine field study has produced positive results.

Discussions continuing regarding the divestment of ICVT.

 

Commenting on today's results, Executive Chairman, Andrew Knight said: "Our long term strategy remains on consolidating as a pure play vaccine company by 2011. We believe that this is a period of great opportunity for Henderson Morley, as we continue to work on building shareholder value through divestment as well as licensing and collaboration."

 

 

 

---ENDS---

 

ENQUIRIES:

 

HENDERSON MORLEY PLC 0121 442 4600

Andrew Knight, Chairman

 

BISHOPSGATE COMMUNICATIONS LTD 0207 562 3350

Maxine Barnes Gemma O'Hara

 

BREWIN DOLPHIN INVESTMENT BANKING 0113 241 0126

Neil Baldwin

RIVINGTON STREET CORPORATE FINANCE LTD 020 7562 3380 Monisha Varadan

 

Further information on Henderson Morley plc can be accessed through the Company's website at www.henderson-morley.com 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Chairman's Statement for the Year Ended 30 April 2009

 

Financial Summary

 

Turnover for the period under review was £80,019 (2008:£16,468) which, after expenses and R&D costs, showed a pre tax loss of £1,103,106 (2008: £1,304,528). Cash at Bank as at 30 April 2009 was £49,999 (2008: £701,269). The total number of shares in issue at 30 April 2009 was 721,261,963. (2008: 575,261,963). The total number of shares in issue now is 1,004,697,463 (2008: 721,261,963).

 

Overview

 

In June 2009, the Company successfully raised £625,000 via an Open Offer, which was well received by shareholders. Given the strong level of demand from shareholders, the proposed underwriting by Directors was not drawn upon. However, all of the Company's Executive Directors participated in the Offer and continue to support the Company. As such no Board member has sold any shares other than to their SIPPs since the Company was founded.

 

Grant Applications

 

The Company was pleased to confirm that it had submitted a grant application to the US government funded National Institute of Health ("NIH"). The aim is to secure non-dilutive funding to further develop the Cytomegalovirus ("CMV") Vaccine candidate (part of the PREPS and L-particles vaccine platform). The development of a vaccine for CMV is a priority for the NIH and has been identified as a pathogen that has a significant impact on public health.

 

The Australian Centre for Vaccine Development is a leading Australian research centre. It believes that the combination of Henderson Morley's technology and the vaccine design expertise of the Queensland Institute of Medical Research (QIMR), Australia, constitutes a unique and powerful approach to the development of a vaccine for CMV. The Poly-L particle approach, patented by Henderson Morley, is unparalleled globally.

 

Animal Health Division

 

Aqua Health

 

Koi Herpes Virus ("KHV")

 

In August 2009, we announced the results of the study in which eight different vaccine candidates were investigated. These candidates were formulated to examine the effects of different doses of vaccines, the addition of purified virus particles and the formulation of candidates with different adjuvants (components of the vaccine that boost immune responses). Additionally, different combinations of adjuvants, which we believe have never been used in fish vaccines before, were also examined.

 

Ten groups of Koi carp were held in isolated tanks each with individual water supplies, of which eight groups were vaccinated with candidate vaccines. One group received no vaccine (negative control), and another group were survivors of prior KHV infection, (positive controls).

 

Results 

 

The unvaccinated negative control group died from KHV infection, as did the fish in some of the unsuccessful low dose vaccine groups. The Board is very pleased that in two of the vaccine groups, 96% and 93% of the vaccinated fish survived, and remained healthy following the virus challenge and for the month following the virus challenge. Other vaccine groups had 76% and 79% survival; however these candidates are not being selected for further development.

 

The next stage will be for the Company to create an in depth report on these findings for submission to Schering Plough for their consideration. 

 

Vaccine against Eel Herpes virus (EHV)

 

The Company has a vaccine under development for glass eels, designed to protect the fish from EHV infection. This year, there has been a significant reduction in wild catches, consequently heightening the need for a vaccine that may reduce losses from infections.

 

Demand will be underpinned by the fact that each year small and immature glass eels are captured in the rivers of (predominantly) England, France and Spain, to be grown on in farms to produce eels for human consumption. The growth of these captured eels is time consuming, expensive and prone to losses due to infections including EHV, therefore farmers seek to minimise losses of their fish by vaccination where and when available. It is anticipated that the first revenues from this vaccine will be received during the next eel fishing season which runs from November to April. 

 

Feline Herpes Virus ("FHV")

 

The market for treating Feline Herpes Infections in cats and nursing kittens is one of considerable unmet veterinary medical need. We are currently in discussions with more than one commercial partner to out-license this development candidate. These discussions have been initiated in conjunction with our regulatory advisers. They have recommended to us to await signature of a commercial licence, prior to closure of the trial, so that any protocol changes or additions from a licensee may be incorporated into the study. These discussions are ongoing and we will update the market with further information.

 

Cancer Immunotherapy - Canine

 

We propose to start a study during the remainder of 2009 which will be carried out by scientists at the Colorado State University. This study will examine PREPS and L-Particles that have been engineered to express a lymphoma antigen and will examine the safety and efficacy of the vaccine. Again, we are in discussions with a number of companies to effect a licence to take this treatment forwards. 

 

Human Health Division

 

The Australian Centre for Vaccine Development (ACVD)

 

The collaborative research agreement signed with ACVD to participate in the continuing development of a vaccine targeted at preventing Cytomegalovirus (CMV) and Epstein Barr (EBV) virus diseases. As referred to above, the Company and the ACVD have jointly applied for a grant to assist with the development of this project and we await confirmation that this application has been successful.

 

Patent Update

 

We continue to extend and protect our patent portfolio and I am pleased to advise shareholders that we now have 47 granted patents with 45 pending and one allowed but not yet granted.

 

Outlook

 

As I outlined in my letter to shareholders in the Offering Document in June, our long term strategy is to consolidate as a pure play vaccine company by 2011. The first stage in this process is the divestment of ICVT and we continue to negotiate with potential partners who are undertaking due diligence. We also intend to divest the Animal Health division in the medium term as previously advised in the Offering Document.

 

We believe that this is a period of great opportunity for Henderson Morley, as we continue to work on building shareholder value through divestment as well as licensing and collaboration. 

 

ANDREW KNIGHT

Executive Chairman

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Consolidated Income Statement

for the Year Ended 30 April 2009

 

 

 

 

			30.4.09		30.4.08
	Notes		£		£
CONTINUING OPERATIONS
Revenue	2		80,019		16,468
Cost of Sales			-		(503)
GROSS PROFIT			80,019		15,965
Administrative expenses		741,125		839,163
Research and development		451,725		528,118
Total administrative expenses			(1,192,850)		(1,367,281)
OPERATING LOSS			(1,112,831)		(1,351,316)
Finance costs	4		(55)		(617)
Finance income	4		9,780		47,405
LOSS BEFORE TAX being the retained loss for the year attributed to the members of Henderson Morley Plc.	5		(1,103,106)		(1,304,528)
Tax	6		92,798		98,857
LOSS FOR THE YEAR			(1,010,308)		(1,205,671)
Earnings per share expressed in pence per share: Basic & Diluted	7		(0.17p)		(0.24p)

 

 

All amounts relate to continuing activities.

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Consolidated Balance Sheet

as at 30 April 2009

 

	Notes	30.4.09 £	30.4.08 £
ASSETS NON-CURRENT ASSETS
Goodwill	8	58,964	58,964
Intangible assets	9	26,560	31,872
Property, plant and equipment	10	117,896	166,133
		203,420	256,969
CURRENT ASSETS
Inventories	12	200	200
Trade and other receivables	13	73,353	99,293
Tax receivable		92,798	98,857
Cash and cash equivalents	14	49,999	701,269
		216,350	899,619
LIABILITIES CURRENT LIABILITIES
Trade and other payables	15	201,251	199,614
Financial liabilities - borrowings Bank overdrafts	16	-	1,483
		201,251	201,097
NET CURRENT ASSETS		15,099	698,522
NET ASSETS		218,519	955,491
SHAREHOLDERS' EQUITY
Called up share capital	18	901,578	719,078
Share premium	19	6,398,347	6,307,511
Retained earnings	29	(7,081,406)	(6,071,098)
TOTAL EQUITY	23	218,519	955,491

 

 

 

HENDERSON MORLEY PLC

 

Parent Company Balance Sheet

As at 30 April 2009

 

	Notes	30.4.09 £	30.4.08 £
ASSETS NON-CURRENT ASSETS
Investments	27	130,145	130,145
CURRENT ASSETS
Trade and other receivables	13	146,509	210,529
Cash and cash equivalents	14	13,095	685,998
		159,604	896,527
LIABILITIES CURRENT LIABILITIES		-	-
NET ASSETS		289,749	1,026,672
SHAREHOLDERS' EQUITY
Called up share capital	18	901,578	719,078
Share premium	19	6,398,347	6,307,511
Retained earnings	29	(7,010,176)	(5,999,917)
TOTAL EQUITY	24	289,749	1,026,672

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Statement of Changes in Equity 

30 April 2009

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

	Called up share capital £	Share premium account £	Retained Earnings   £	Total Equity     £
Balance 30 April 2007	614,911	5,940,641	(4,865,427)	1,690,125
Issue of shares (net of issue costs)	104,167	366,870	-	471,037
Loss for the year	-	-	(1,205,671)	(1,205,671)
Balance 30 April 2008	719,078	6,307,511	(6,071,098)	955,491
Issue of shares (net of issue costs)	182,500	90,836	-	273,336
Loss for the year	_______-	________-	(1,010,308)	(1,010,308)
Balance 30 April 2009	901,578	6,398,347	(7,081,406)	218,519

 

 

 

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Consolidated Cash Flow Statement

for the Year Ended 30 April 2009

 

 

		30.4.09	30.4.08
	Notes	£	£
Cash flow from operating activities
Cash generated from operations	1	(1,021,999)	(1,227,185)
Interest paid		(55)	(617)
Tax credits received		98,857	77,679
Net cash from operating activities		(923,197)	(1,150,123)
Cash flows from investing activities
Purchase of tangible fixed assets		(15,549)	(161,508)
Sale of tangible fixed assets		3,328	1,400
Interest received		9,780	47,405
Net cash from investing activities		(2,441)	(112,703)
Cash flows from financing activities
Amount introduced by directors		2,515	21,426
Issue of new shares net of expenses		273,336	471,037
Net cash from financing activities		275,851	492,463
(Decrease)/Increase in cash and cash equivalents		(649,787)	(770,363)
Cash and cash equivalents at beginning of  year	2	699,786	1,470,149
Cash and cash equivalents at end of year	2	49,999	699,786

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Consolidated Cash Flow Statement

for the Year Ended 30 April 2009

 

 

 

1.	RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS
		30.4.09	30.4.08
		£	£
	Operating Loss	(1,112,831)	(1,351,316)
	Depreciation charges	66,602	74,512
	Profit on disposal of fixed assets	(832)	(725)
		(1,047,061)	(1,277,529)
	Decrease in inventories	-	200
	(Increase)/Decrease in trade and other receivables	25,940	(51,476)
	Increase/(Decrease) in trade and other payables	(878)	101,620
	Cash generated from operations	(1,021,999)	(1,227,185)
2.	CASH AND CASH EQUIVALENTS
	The amounts disclosed on the cash flow statement in respect of cash and cash equivalents are in respect of these balance sheet amounts:
	Year ended 30 April 2009
		30.4.09	1.5.08
		£	£
	Cash and cash equivalents	49,999	701,269
	Bank overdrafts	-	(1,483)
		49,999	699,786
	Year ended 30 April 2008
		30.4.08	1.5.07
		£	£
	Cash and cash equivalent	701,269	1,478,460
	Bank overdraft	(1,483)	(8,311)
		699,786	1,470,149

 

 

The financial statements were approved by the Board of Directors on 22 September 2009 and were signed on its behalf by: 

 

A N KnightExecutive Chairman

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

1. ACCOUNTING POLICIES

 

Basis of Accounting

 

The financial report has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS).

 

The report has been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") at 30 April 2009 as well as all interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") at 30 April 2009. The group has not availed itself of early adoption options in such standards and interpretations. 

 

As discussed in the Directors Report on Pages 4 to 9 the validity of the going concern basis will depend on the ability of the directors to arrange further funding to support the activities of the subsidiary undertaking, Henderson Morley Research and Development Limited, or to obtain income from the sale of some of its intellectual property rights and associated know how so that its products under development can achieve commercial success. The Directors are confident that the group will be able to raise appropriate funding or to make such a sale and accordingly have prepared these accounts on a going concern basis

 

The financial statements have been prepared under the historical cost basis and are presented in sterling. The principal accounting policies adopted are set out below:

 

New standards and Interpretations of existing standards that are not yet effective and have not been early adopted by the group. 

 

International Accounting Standards (IFRS/IAS) 

 

IFRS 2	Share Based Payments
IFRS 3	Business Combinations
IFRS 5	Non current assets held for sale and discontinued operations
IFRS 8	Operating Segments, Segment information should be presented on the same basis as that used for internal reporting purposes
IAS 1	Presentation of Financial Statements (revised 2007)
IAS16	Property plant and equipment
IAS 26	Impairment of assets
IAS 27	Group and Separate Financial Statements
IAS 28	Investments in associates
IAS 32	Financial Instruments: Disclosure and Presentation

 

IFRIC Interpretations

 

IFRIC 11	Group and Treasury Share Transactions
IFRIC 12	Service Concessions Arrangements
IFRIC 13	Customer Loyalty programmes

 

 

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30 April each year. Control is achieved where the Company has the power to govern the financial and operating policies so as to obtain benefits from its activities.

 

The group does not disclose transactions or balances between Group entities that are wholly eliminated on consolidation.

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

 

1. ACCOUNTING POLICIES - Continued 

 

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes, and amounts received in accordance with licensing agreements.

 

Research and Development

The group considers that the regulatory, technical and market uncertainties inherent in the development of new products mean that internal development costs should not be capitalised as intangible non-current assets until commercial viability of a project is demonstratable and appropriate resource is in place to launch the products. Except in those circumstances, research and development expenditure is expensed as incurred.

 

Taxation

The tax charge or credit represents the sum of the current and deferred tax.

 

Current tax is provided as amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that is no longer probable that sufficient taxable profits will be available to allow all, or part, of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

 

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets are not capitalised until commercial viability of a project is demonstrable and appropriate resource is in place to launch the product. Except in those circumstances expenditure is charged against profit in the year in which the expenditure is incurred. Intangible assets with a future useful life are amortised over their useful economic lives. The intangible assets residual values, useful lives and methods of valuation are reviewed and adjusted, if appropriate, at each financial period end.

 

For intangible assets with finite useful lives, amortisation is calculated so as to write off the cost of an asset less its estimated residual value over its useful economic life as follows:

 

Know how, patents and licences - over 10 years.

 

Goodwill

Goodwill arising on consolidation represents the excess cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition.

 

 

1. ACCOUNTING POLICIES - Continued 

 

Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill arising on acquisition before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

 

Impairment of tangible and intangible assets excluding goodwill 

Intangible and tangible assets are reviewed for impairment both annually and when there is an indication that an asset may be impaired when events of changes in circumstances indicate that carrying value may not be recoverable. The recoverable amount of the asset is calculated, this being the higher of the assets fair value less costs to sell and its value in use. Where the carrying amount exceeds the recoverable amount, the intangible assets are considered impaired and written down to their recoverable amounts. 

 

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

 

Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives on the following bases:

 

Equipment and fixtures	25% per annum on reducing balance
Leasehold property	Straight line over 10 years

 

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

 

Leases

Rentals under operating leases are charged against profit as incurred.

 

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

 

Share based payments

The only share based payments of the group are equity settled Share options. Options have been granted over the ordinary shares of Henderson Morley to employees and advisors. All options granted had an exercise price of either market value or above at the date of grant. Taking into account all the terms and conditions upon which the options are granted the Directors believe that a fair value for such shares does not exceed the exercise price. As a consequence the amount recognised as an expense and as a share based payment reserve is £Nil.

 

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials. Cost is calculated using the first in first out (FIFO) basis. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing and selling.

 

Trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

 

Trade payables

Trade payables are not interest-bearing and are stated at their nominal value.

 

Employee benefit costs 

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. 

 

 

1. ACCOUNTING POLICIES - Continued 

 

Financial Liabilities

 

Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered in to. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recognised at the amounts of proceeds received net of costs directly attributable to the transaction. To the extent that those proceeds exceed the par value of the shares issued they are credited to share premium account.

 

Key sources of estimation uncertainty and critical accounting judgements

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. 

 

Valuation of intangibles and impairment of goodwill and valuation of intangibles 

 

Determining whether a carrying value of goodwill and the other intangibles is impaired requires an estimation of their values. Although there are uncertain cash flows, the directors consider that there is sufficient value in intellectual property and development to justify the carrying values. Therefore there was no impairment during the year. 

 

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's function currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. 

 

Research and development expenditure was recognised in the income statement during the year. Management made the judgement not to capitalise this expenditure as it did not meet the criteria of IAS 38 in that it related to costs incurred on the development of products which have not been approved from a regulatory point of view at that stage.

 

Dividend policy

The directors currently intend to devote the Company's cash resources to its operations and therefore do not anticipate paying dividends in the near future. They will reconsider the Company's dividend policy as and when the Company is in a position to pay dividends. The declaration and payment by the Company of any dividends will depend on the results of the Group's operations, its financial condition, cash requirements, future prospects, profits available for distribution and other factors deemed to be relevant at the time.

 

 

2.  SEGMENTAL REPORTING

 

The revenue, loss on ordinary activities and net assets of the group are attributable to two business segments, the development of drugs and vaccines for (a) human health purposes and (b) animal health purposes, both of which are undertaken in the United Kingdom. 

 

 

3. EMPLOYEES AND DIRECTORS 

 

	30.4.09	30.4.08
	£	£
Wages and salaries	525,151	534,774
Social security costs	53,046	51,517
Other pension costs	1,800	102,600
	579,997	688,891

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

 

3.	EMPLOYEES AND DIRECTORS (cont..)
	The average monthly number of employees during the year was as follows
		30.4.09	30.4.08
		No.	No.
	Research and development	7	6
	Management and administration	3	3
		10	9
		30.4.09	30.4.08
		£	£
	Directors' emoluments	314,506	303,453
	Directors' pension contributions to money purchase schemes	-	100,800
		30.4.09	30.4.08
		No.	No.
	The number of directors to whom retirement benefits were accruing was as follows:
	Money purchase schemes	2	2
	Information regarding the highest paid director is as follows:
		30.4.09	30.4.08
		£	£
	Emoluments etc	136,904	132,924
	Pension contributions to money purchase schemes	-	50,400
4.	NET FINANCE INCOME
		30.4.09	30.4.08
		£	£
	Finance income:
	Deposit account interest	9,780	47,405
	Finance costs:
	Bank interest	55	617
	Net finance income	9,725	46,788

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

5.	OPERATING LOSS
	The loss before tax is stated after charging/(crediting):
					30.4.09			30.4.08
					£			£
	Cost of inventories recognised as expense				-			503
	Hire of plant and machinery				5,581			7,591
	Depreciation - owned assets				61,290			69,200
	Profit on disposal of fixed assets				(832)			(725)
	Patents and licences amortisation				4,750			4,750
	Auditors' remuneration   - Audit services to the parent company - Audit services to the Group	2,500 10,000			12,500	2,000 7,250		9,250
	Research and Development expenditure (including wages)				451,725			528,118
	Operating lease rentals				27,000			27,000
	Amortisation of know how				562			562
	Finance Cost				617			617
	Finance Income				(9,780)			(47,405)
6.	TAX
	Analysis of the tax credit
					30.4.09			30.4.08
					£			£
	Current tax:
	Corporation tax recoverable				(92,798)			(98,857)
	Total tax credit in income statement				(92,798)			(98,857)
	Factors affecting the tax charge
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:
				30.4.09			30.4.08
				£			£
	Loss on ordinary activities before tax			(1,103,106)			(1,304,528)
	Loss on ordinary activities  Multiplied by the standard rate of corporation tax  in the UK of 28% (2008-29.800%)			(308,870)			(388,749)
	Effects of:
	Disallowable expenses including leasehold depreciation and goodwill			14,317			18,703
	Capital allowances in excess of depreciation			2,341			(7,094)
	Research and development surrendered for tax credit			108,264			122,747
	Losses arising in the period			183,948			254,393
	Research and development tax credit			(92,798)			(98,857)
	Total tax			(92,798)			(98,857)
	Effective tax rate			8.4%			7.6%

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

 

6. TAX - continued

 

Factors that may affect future tax charges

Deferred tax assets have not been recognised in respect of timing differences relating to revenue losses as there is insufficient evidence that the assets will be recovered. The amount of the asset not recognised in respect of the revenue losses is £1,574,000 (2008 £1,337,000).These assets would be utilised if the companies was to make future taxable income.

 

There are trading losses of approximately £5.2m (2008 £4.6m) available to carry forward against future tax liabilities.

 

7. LOSS PER SHARE

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

 

Reconciliations are set out below.

 

 

	Earnings £	30.4.09 Weighted average number of shares	Per- share amount pence
Basic and Diluted EPS
Earnings attributable to ordinary shareholders	(1,010,308)	611,261,963	(0.17p)
	Earnings £	30.4.08 Weighted average number of shares	Per- share amount pence
Basic and Diluted EPS
Earnings attributable to ordinary shareholders	(1,205,671)	495,809,909	(0.24p)

 

On the 29th June 2009 the company issued a further 283,085,500 shares and on 9th July 2009 350,000 shares following an open offer. This offer raised £626,737 gross, £526,828 after expenses.

 

  HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements 

for the Year Ended 30 April 2009

 

 

 

8.	GOODWILL-GROUP
				£
	COST
	At 1 May 2008
	and 30 April 2009			147,404
	AMORTISATION
	At 1 May 2008			88,440
	Charge for year			-
	At 30 April 2008 and 30 April 2009			88,440
	NET BOOK VALUE
	At 30 April 2009			58,964
	At 30 April 2008			58,964
9.	INTANGIBLE ASSETS - GROUP
		Know How £	Patents and licences £	Totals £
	COST
	At 1 May 2008	5,620	47,501	53,121
	and 30 April 2009
	AMORTISATION
	At 1 May 2008	2,248	19,001	21,249
	Amortisation for year	562	4,750	5,312
	At 30 April 2009	2,810	23,751	26,561
	NET BOOK VALUE
	At 30 April 2009	2,810	23,750	26,560
	At 30 April 2008	3,372	28,500	31,872

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements 

for the Year Ended 30 April 2009

 

 

 

10.	PROPERTY, PLANT AND EQUIPMENT - GROUP
		Leasehold Property £	Equipment and Fixtures £	Website £	Totals £
	COST
	At 1May 2008	85,530	247,597	38,600	371,727
	Additions	-	15,549	-	15,549
	Disposals	-	(3,328)	-	(3,328)
	At 30 April 2009	85,530	259,818	38,600	383,948
	DEPRECIATION
	At 1 May 2008	53,458	113,536	38,600	205,594
	Charge for year	24,500	36,790	-	61,290
	Eliminated on disposal	-	(832)	-	(832)
	At 30 April 2009	77,958	149,494	38,600	266,052
	NET BOOK VALUE
	At 30 April 2009	7,572	110,324	-	117,896
	At 30 April 2008	32,072	134,061	-	166,133

11. IMPAIRMENT OF GOODWILL, INTANGIBLE AND TANGIBLE ASSETS

The Directors have reviewed the carrying value for assets for impairment. In their view, although there are uncertain cash flows, there is sufficient value in intellectual property and development to justify the carrying values bearing in mind long term cash flows anticipated.

 

 12. INVENTORIES - GROUP

	30.4.09	30.4.08
	£	£
Goods for resale	200	200

13. TRADE AND OTHER RECEIVABLES

 

	30.04.09		30.04.08
	Parent Undertaking	Group	Parent Undertaking	Group
Current	£	£	£	£
Trade Receivables	-	23,553	-	15,150
Other Receivables	-	-	-	3,195
VAT	-	20,956	-	53,334
Prepayments	-	28,844	-	27,614
Subsidiary Undertaking	146,509	-	210,529	-
	146,509	73,353	210,529	99,293

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 14. CASH AND CASH EQUIVALENTS

 

	30.04.09		30.04.08
	Parent Undertaking	Group	Parent Undertaking	Group
	£	£	£	£
Bank deposit account	315	-	282,335	282,450
Bank accounts	12,780	49,999	403,663	418,819
	13,095	49,999	685,998	701,269

 

 

15. TRADE AND OTHER PAYABLES

	30.04.09		30.04.08
	Parent Undertaking	Group	Parent Undertaking	Group
Current	£	£	£	£
Trade Creditors	-	141,518	-	144,188
Social security and other taxes	-	15,315	-	15,695
Amount owed to related undertakings	-	19,688	-	17,642
Accrued expenses	-	12,511	-	12,385
Directors' current accounts	-	12,219	-	9,704
	-	201,251	-	199,614

 

 

 

16.	FINANCIAL LIABILITIES - BORROWINGS

 

	30.04.09		30.04.08
Terms and debt repayments schedule is within one year or on demand.	Parent Undertaking £	Group £	Parent Undertaking £	Group £
Current:
Bank overdrafts	-	-	-	1,483
	-	-	-	1,483

 

Bank loans and overdrafts are secured by a personal guarantee from A N Knight, a director of the company, up to a maximum amount of £50,000 (2008 £50,000).

 

The Board provides written objectives, policies and procedures with regards to managing currency and interest risk exposures, liquidity and credit risk including guidance on the use of certain derivate and non derivate financial instruments. 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

16 FINANCIAL LIABILITIES - BORROWINGS (cont.)

 

Credit risk

Currently Henderson Morley has little exposure to credit risk relating to receivables as its sale of goods and services are on a very limited scale. The credit risk is regarded as limited because the counterparties are banks or other institutions with high credit ratings. 

 

Interest rate and liquidity risk 

The Group is principally funded by equity and invests in short - term deposits, having access to these funds at short notice. The group's policy throughout the period has been to minimise interest rate risk by placing funds in low risk cash deposits but also to maximise the return on funds placed on deposit. 

 

All cash deposits attract a floating rate of interest. The benchmark rate for determining interest receivable and floating rate assets is linked to the UK base rate. 

 

Foreign currency risk

The Group has little exposure to foreign currency risk as the majority of transactions are conducted in sterling and only nominal amounts are maintained in foreign currency accounts. 

 

Fair value

There were no material differences between the book value of financial instruments and their fair value at 30 April 2009 or 30 April 2008. 

 

17.	LEASING AGREEMENTS - GROUP
	Total commitments under non-cancellable operating leases are as follows:
	Land and Buildings			30.4.09	30.4.08
				£	£
	Within one year			27,000	27,000
	Between one and five years			108,000	108,000
	Over 5 years			132,750	159,750
18.	CALLED UP SHARE CAPITAL
	Authorised:
	Number:   1,200,000,000  (30.4.08 - 800,000)	Class   Ordinary shares	Nominal Value .125p	30.4.09 £ 1,500,000	30.4.08 £ 1,000,000
	Allotted, issued and fully paid:
	Number:    721,261,963 (30.4.08-575,261,963)	Class    Ordinary shares	Nominal Value .125p	30.4.09 £ 901,578	30.4.08 £ 719,078

 

On the 30 January 2009 the company issued 146,000,000 ordinary shares of 0.125p each at a value of 0.2p each raising £273,336 after expenses.

 

On the 29th June 2009 the company issued a further 283,085,500 shares and on 9th July 2009 350,000 shares following an open offer. This offer raised £626,737 gross, £526,828 after expenses.

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

 

19.	SHARE PREMIUM - GROUP AND COMPANY
		30.4.09	30.4.08
		£	£
	Brought forward	6,307,511	5,940,641
	Cash share issue	109,500	395,834
	Expenses of Share Issue	(18,664)	(28,964)
		6,398,347	6,307,511

 

20. Share Based Payments

 

The Group operates both unapproved option schemes and schemes under the Enterprise Management Incentive regime over the Ordinary Shares of Henderson Morley Plc.

 

The movement in share options during the year were as follows:

 

	No.	At	Options	At	Exercise	Earliest	Options	Expiry
		1 May	Granted	30 April	Price	Date	Vested	Date
		2008		2009	(pence)	Exercisable
		No.		No.
Directors
A N Knight	(1)	5,600,000	-	5,600,000	2.00	1.3.2005	yes	28.2.2010
A N Knight	(1)	1,577,000	-	1,577,000	2.25	1.5.2007	yes	30.4.2012
A N Knight	(2)	923,000	-	923,000	2.25	1.5.2007	yes	30.4.2012
I S Pardoe	(1)	5,600,000	-	5,600,000	2.00	1.3.2005	yes	28.2.2010
I S Pardoe	(1)	1,577,000	-	1,577,000	2.25	1.5.2007	yes	30.4.2012
I S Pardoe	(2)	923,000	-	923,000	2.25	1.5.2007	yes	30.4.2012
MW Fowler	(2)	400,000	-	400,000	2.00	1.3.2005	yes	28.2.2010
CR Pate	(2)	1,200,000	-	1,200,000	2.00	1.3.2005	yes	28.2.2010
CR Pate	(2)	800,000	-	800,000	2.25	1.5.2007	yes	30.4.2012
Others			-
C Hartley	(1)	400,000	-	400,000	2.00	1.3.2005	yes	28.2.2010
C Hartley	(1)	2,000,000	-	2,000,000	1.50	26.5.2005	yes	25.5.2009
C Hartley	(1)	2,900,000	-	2,900,000	2.25	1.5.2007	yes	30.4.2012
C Hartley	(2)	2,700,000	-	2,700,000	2.25	1.5.2007	yes	30.4.2012
M Hartley	(1)	160,000	-	160,000	2.00	1.3.2005	yes	28.2.2010
M Hartley	(1)	1,100,000	-	1,100,000	2.25	1.5.2007	yes	30.4.2012
U Patel	(1)	80,000	-	80,000	2.00	1.3.2005	yes	28.2.2010
U Patel	(1)	420,000	-	420,000	2.25	1.5.2007	yes	30.4.2012
M Jordan	(2)	1,600,000	-	1,600,000	2.00	1.3.2005	yes	28.2.2010
M Jordan	(2)	1,000,000	-	1,000,000	1.50	26.5.2005	yes	25.5.2009
R Roberts	(2)	500,000	-	500,000	3.70	28.4.2007	yes	28.2.2010
J Burden	(1)	1,250,000		1,250,000	1.65	14.12.2007	yes	13.12.2014
E Surgate	(1)	1,000,000		1,000,000	1.65	14.12.2007	yes	13.12.2014
A Wood	(1)	1,000,000		1,000,000	1.65	14.12.2007	yes	13.12.2014

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements 

for the Year Ended 30 April 2009

 

20.	Share Based Payments (cont.)
		30.04.09 £	30.04.08 £
(1) (2)	Under the Enterprise Management Incentive Regime    Unapproved
	The amounts charged to the group were as follows
	Share based payments	-	-
	The resulting reserves were as follows:
	Share based payment reserve	-	-

 

The options granted during the year and still outstanding at 30 April 2009 had a weighted average exercise price of 2.04p, a weighted average remaining contractual life of 738 days and a weighted average expected life of 738 days. The aggregate of the estimated fair values of the options at grant date was £Nil. The weighted average of those fair values was £Nil.

21.	CAPITAL COMMITMENTS
		30.4.09	30.4.08
		£	£
	Contracted but not provided for in the  financial statements	-	-

 

 

22. TRANSACTIONS WITH DIRECTORS

 

A Knight is owed £4,214 (2008 £3,699) at the year end as he made an interest free loan to the company.

 

I S Pardoe is owed £8,005 (2008 £6,005) at the year end as he made an interest free loan to the company.

 

 

23.	RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - GROUP
		30.4.09	30.4.08
		£	£
	Loss for the financial year	(1,010,308)	(1,205,671)
	Shares allotted	182,500	104,167
	Share premium	90,836	366,870
	Net (reduction)/addition to shareholders' funds	(736,972)	(734,634)
	Opening shareholder' funds	955,491	1,690,125
	Closing shareholders' fund	218,519	955,491
	Equity interest	218,519	955,491

 

 

 

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

Notes to the Financial Statements

for the Year Ended 30 April 2009

 

 

24.	RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - COMPANY
		30.4.09	30.4.08
		£	£
	Loss for the financial year	(1,010,259)	(1,180,772)
	Share allotted	182,500	104,167
	Share premium	90,836	366,870
	Net addition/(reduction) to shareholders' funds	(736,923)	(709,735)
	Opening shareholders' funds	1,026,672	1,736,407
	Closing shareholders' funds	289,749	1,026,672
	Equity Interests	289,749	1,026,672

 

 

 

 

25. PROFIT OF HOLDING COMPANY

 

As permitted by section 408 of the Companies Act 2006 the profit and loss account of the Parent Company is not presented as part of these financial statements. The Parent Company's loss for the year is £1,010,259 (2008 £1,180,772)

 

 

26. PENSION SCHEME

 

The company paid contributions amounting to £1,800 (2008 £1,800) to a personal pension in respect of one (2008 one) of its employees in addition to the payments in respect of directors. 

 

 

27	FIXED ASSET INVESTMENT - COMPANY
		£
	COST
	At 30 April 2008 and 30 April 2009	130,145
	NET BOOK VALUE
	At 30 April 2008 and 30 April 2009	130,145
	Unlisted investments	130,145

 

 

The subsidiaries owned by Henderson Morley Plc at 30 April 2009 are:

 

	Incorporated in	% of Ordinary Shares held by the Group
Henderson Morley Research and Development Limited	England	100
Exanol Limited	England	100
Sci Tech Limited	England	100
Frost and Simpson Limited	England	100
Henderson Morley Biomarine Limited	Republic of Ireland	75

 

 

Henderson Morley Research and Development Limited's trading activity is the research and development of drugs and vaccines for the pharmaceutical industry and has been included in the consolidated results.

 

All other companies have been dormant throughout the year.

 

 

 

 

 

HENDERSON MORLEY PLC AND SUBSIDIARY

UNDERTAKINGS

 

Notes to the Financial Statements 

for the Year Ended 30 April 2009

28. RELATED PARTY DISCLOSURES

 

During the year, payments were made to the following:-

 

1) Southern Metropolitan and Memphis Properties (private unlimited companies which are controlled by A. Knight) as follows:-

 

 

		2009 £	2008 £
	Rent-Memphis Properties	27,000	27,000

 

At 30 April 2009 and 30 April 2008 there were no amounts due to Memphis Properties.

1a) Southern Metropolitan paid for services during the year to the value of £1,054 (2008 £5,655) on behalf of Aderson Morley Research and Development Limited

 

At 30 April 2009 amounts due to Southern Metropolitan were £11,064 (2008 £10,010)

 

2) Trafalgars Chartered Accountants, C.R.Pate's practice as follows:-

 

Accountancy services

21,910

16,580

 

At 30 April 2009, the following amounts were due to Trafalgar

8,623

7,632

 

 

29. PROFIT AND LOSS ACCOUNTS

 

	30.04.09		30.04.08
	Parent undertaking £	Group £	Parent Undertaking £	Group £
1 May	(5,999,917)	(6,071,098)	(4,819,145)	(4,865,427)
Retained loss for the year	(1,010,259)	(1,010,308)	(1,180,772)	(1,205,671)
30 April	(7,010,176)	(7,081,406)	(5,999,917)	(6,071,098)

 

 

30. POST BALANCE SHEET EVENT

 

On the 29th June 2009 the company issued a further 283,085,500 shares and on 9th July 2009 350,000 shares following an open offer. This offer raised £626,737 gross, £526,828 after expenses.

ENDFR SEWFMESUSEIU

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Related Shares:

HML.L