24th Jun 2009 07:00
CELSIS INTERNATIONAL PLC
("Celsis", "the Company" or "the Group")
AUDITED Preliminary Results
for the year ended 31 March 2009
Celsis delivers STRONG profits
24 June 2009 - Celsis International plc, the international life sciences products and laboratory services company, today announces its preliminary results for the year ended 31 March 2009.
Financial Highlights
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Group revenues sustained at $52.5 million despite challenging market conditions (2008: $52.9 million) |
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Operating profit increased 17.9% to $13.2 million (2008: $11.2 million) |
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EBITDA increased 13.9% to $15.6 million (2008: $13.7 million) and EBITDA margin increased to 29.7% (2008: 25.9%) |
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Profit before tax increased 21.9% to $12.8 million (2008: $10.5 million) and profit before tax and amortisation increased 19.6% to $13.4 million (2008: $11.2 million) |
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Group cash inflows increased to $13.7 million (2008: $12.9 million) |
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Earnings per share (EPS) increased 27.8% to 41.88 cents (2008: 32.78 cents) and EPS adjusted for amortisation of intangible assets increased 25.1% to 44.57 cents per share (2008: 35.62 cents per share) |
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All numbers above reflect continuing operations and all comparative 2008 numbers have been restated to reflect the prior year results of continuing operations |
Operational Highlights
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Rapid Detection revenues increased 9.2% to $23.7 million (2008: $21.7 million) |
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Strong consumable reagent sales and healthy growth in instrument placements |
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Successful launch of Celsis ReACT™ RNA-based assay |
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Analytical Services revenues decreased 4.7% to $18.1 million (2008: $19.0 million) |
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Strong recovery in H2 after 9.2% fall in H1 on continuing operations |
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Discontinuation of Development Services business unit significantly improves profit margins |
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In Vitro Technologies revenues decreased 13.0% to $10.7 million (2008: $12.3 million) |
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Pharmaceutical industry consolidations impacted H2 |
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Exclusive alliance established with leading life sciences company Promega |
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Jay LeCoque, Chief Executive Officer of Celsis, commented:
"I am pleased to report another year of strong profit growth in what has been a challenging economic environment. Our performance in the year ended 31st March demonstrates the underlying strength of our business model, in particular our focus on driving higher quality revenues and margins while discontinuing less profitable areas of the business.
"Celsis is a highly cash generative business and we are now even better placed to expand our product and laboratory services businesses both organically and by acquisition. With targeted investments in new technologies and in expanding our sales and marketing infrastructure, Celsis is well positioned for growth, even in a tougher economic climate."
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Enquiries: |
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Celsis International plc |
Tel: +44 (0) 1223 598 428 |
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Jay LeCoque, Chief Executive Officer Christian Madrolle, Finance Director Robyn LaLonde, Executive Assistant to CEO |
(+44 (0) 20 7831 3113 on 24 June 2009) |
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Financial Dynamics |
Tel: +44 (0) 20 7831 3113 |
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Jonathan Birt Susan Quigley |
A presentation and conference call will be held for analysts at Financial Dynamics at 9.30am today, Wednesday 24 June 2009. Please ensure that if you wish to join the conference call you do so 5 minutes (9:25am) before the start of the briefing. Please call Juliet Edwards at Financial Dynamics on +44 (0) 207 269 7125 for further details.
Notes to editors
Celsis International plc
Celsis International plc is a leading international provider of innovative life science products and laboratory services to the pharmaceutical and consumer products industries. Each Celsis business has the capacity to deliver substantial time and cost savings to its customers, in addition to ensuring product quality and safety for consumers. Celsis' extensive client base includes many of the world's leading pharmaceutical and consumer products companies. The Company is listed on the London Stock Exchange's Main Market (CEL.L).
Celsis Rapid Detection utilises proprietary enzyme technology to develop and supply diagnostic testing instruments and consumables for the rapid detection of microbial contamination in pharmaceutical and consumer products. These rapid testing systems provide significant economic value by reducing the time it takes to test and release raw materials, in process and finished goods to market.
Celsis Analytical Services provides cost effective outsourced analytical laboratory services to the pharmaceutical and consumer products industries. Its comprehensive service offerings include a full spectrum of laboratory services used in the ongoing manufacture of our customers' products ranging from analytical chemistry and biological sciences to stability storage and testing.
Celsis In Vitro Technologies (IVT) employs proprietary expertise in hepatocyte (liver cell) technology to supply in vitro testing products to the pharmaceutical industry. IVT's consumable testing products screen drug compounds for liver toxicity early in the drug discovery process, thereby reducing the time and cost of further development or research on those compounds that will not be properly metabolised by the human liver.
Further information can be found on its website at www.celsis.com.
Non-Executive Chairman's and Chief Executive's Review
Overview and Summary of Results
In the year ended 31st March the Group again delivered strong profit growth in what was a challenging period. By focusing on higher margin products and laboratory services while concurrently reducing our cost base, we have again demonstrated the underlying inherent strength of the Group. The current economic situation has had a considerable impact on our primary pharmaceutical customer base, and while our consumer product customers have been less impacted, they have also reduced inventories and slowed production schedules to reflect weakened demand.
Against this backdrop, we are pleased with the performance of the Group and believe that we are well positioned for growth even in this more difficult economic environment. In addition, our targeted investments in new technologies and product offerings coupled with our continued geographic expansion are positioning us well into the future.
Our Rapid Detection business has continued to gain momentum with strengthened growth coming from both our pharmaceutical and consumer product customers as the cost savings impact from the adoption of our rapid testing systems is increasingly apparent. While our consumer products customers have always been focused on streamlined manufacturing and enhanced supply chain management, our pharmaceutical customers have more recently focused on cost containment, and are progressively taking advantage of these benefits.
Our Analytical Services business, which provides contract laboratory services testing for the manufacture of pharmaceutical and consumer products, rebounded in the second half following a slower than anticipated first half. The pressure among customers to reduce costs by outsourcing more routine laboratory testing remains intense, especially in the current industry and economic environment. As our Analytical Services business has been able to take advantage of this trend, we have also repositioned the business unit to offer laboratory services that are in more constant demand and therefore less dependent on cyclical R&D budgets.
We have completed a full strategic review of this business unit and have made the difficult decision to discontinue our nascent Development Services business unit which was focused on outsourced laboratory services for drug development and discovery. Given the current economic climate and the longer project cycle times associated with pre-clinical contract services, we do not believe that this business unit was capable of sustainable profitability in the near term. Our remaining Analytical Services business was able to contribute appreciably to our strong profits for the year.
The demand for our Celsis IVT products, which reduce the cost of drug discovery and development, remains healthy and this business unit experienced a robust first half. However, the recent pharmaceutical industry consolidations and current economic conditions have considerably impacted R&D budgets and reduced drug development projects which resulted in a decline in Celsis IVT revenues for the full year. We expect this slowdown to be temporary as the industry realigns itself in the near to mid-term.
During the year, we have reviewed the core activities and strategies of the Group. As a result of organisational changes, we have reassessed the Group's business segments and determined that the products and services now offered by the Group are more meaningfully segmented between two markets, the Pharmaceutical products market and the Consumer products market. Our strategy to provide our pharmaceutical and consumer product customers with cost-reducing product technologies and outsourced laboratory services is resonating more now than ever, and we have appropriately rationalised our offerings to best meet the growing needs of our customers.
Each of our business units remains acutely focused on helping to reduce the cost base and enhance the supply chains of our growing customer base. As a Group, we have carved out a highly profitable niche as a leading provider of value-enhancing life science products and laboratory services to the pharmaceutical and consumer product industries.
For the year ended 31 March 2009, we are pleased to announce operating profit from continuing operations increased 17.9% to $13.2 million (restated 2008: $11.2 million) with revenues from continuing operations largely unchanged at $52.5 million (restated 2008: $52.9 million), demonstrating our ability to successfully drive positive profit growth during this challenging economic period. Profit before taxation and amortisation from continuing operations increased 19.6% to $13.4 million (restated 2008: $11.2 million). EBITDA from continuing operations increased 13.9% to $15.6 million (restated 2008: $13.7 million).
Celsis Rapid Detection
Celsis' Rapid Detection division provides rapid microbial testing systems that enable our customers to detect microbial contamination (the presence of bacteria or other organic contaminants in raw materials and manufactured products) in 24 hours compared with five to seven days using more traditional technologies such as agar plates. Celsis rapid detection systems are currently addressing industrial pharmaceutical and consumer product markets estimated at approximately $200 million, with a growth rate of at least 10% per year. Further, new applications and technologies will amplify this market opportunity at an accelerated rate by expanding the types of testing procedures that can be transitioned from traditional agar testing to rapid testing systems.
By reducing our customers' manufacturing cycle times by several days, Celsis rapid detection systems save valuable working capital in everything from a reduced need for raw materials and safety stock, to lowered finished product inventory levels and decreased warehouse space. These reductions in working capital materially increase the efficiency and productivity of facilities that use Celsis technology, thereby delivering a measurable financial benefit to our customers. Further, in the event of product contamination, Celsis' technology provides customers with significant financial value and potential brand protection by alerting customers more quickly that corrective action is required.
Revenues from the Rapid Detection division increased 9.2% to $23.7 million (2008: $21.7 million) and now account for almost half of Group revenues at 45%. Instrument placements were strong across all market segments and consumable reagents demonstrated healthy increases at new and existing customer sites. Recurring consumable reagents now represent 90% of the Rapid Detection division's revenues, demonstrating the inherent strength and stability of this business.
We recently launched our new product Celsis ReACTTM, a revolutionary RNA-based rapid identification system, after successful beta trials generated significant interest from our current global customer base. These new tests provide customers with specific organism information within two hours of detecting a contamination, allowing significantly faster reaction time. Currently, using traditional methods can take three to seven days following contamination. Therefore, Celsis ReACT allows our customers to reduce significantly the economic impact of a contaminated manufacturing line. We are initially targeting our well established customer base with this new identification system as Celsis ReACT is designed to run on our existing Celsis AdvanceTM instrument platform.
Celsis Analytical Services
Celsis' Analytical Services division provides outsourced laboratory testing services to pharmaceutical and consumer product companies to ensure the safety, stability and chemical composition of their products. The trend to outsource routine laboratory testing by pharmaceutical and consumer product companies has gained momentum in recent years to an estimated market size of over $2 billion, with particularly strong pickup in the US.
In addition to providing the benefits of outsourcing, Celsis has carved out an important niche in this large market by providing faster results coupled with a customer-driven service offering. Analytical Services can provide results for routine testing in ten days or fewer and offers dedicated customer service representatives. This compares favourably with the industry standard of a 15 to 20 day turnaround time, with little or no customer support. Celsis Analytical Services focuses on providing those laboratory services where time and high customer interaction is critical, enabling us to justify a price premium.
Revenues from our Analytical Services division decreased 4.7% to $18.1 million (2008: $19.0 million) and now represent about a third of Group revenues at 35%. This division gained momentum in the second half after being down 9.2% at the end of the first half. Based on restructuring of the management and business development teams the division has become more efficient and customer focused. We remain confident in the underlying strength of our analytical laboratory services offering to industry.
As previously mentioned, we have completed a full strategic review of this business unit and believe that our repositioned Analytical Services business is now properly aligned to provide growth in both revenues and profits. We also made the difficult decision to discontinue our nascent Development Services business unit which offered very early stage and pre-clinical drug development laboratory services. Given the current economic climate and the longer project cycle times associated with pre-clinical contract services, we do not believe that this business unit could secure sustained profitability in the near term. The continuing business unit, Analytical Services, now free from the distraction and resource drain of the non-profitable Development Services business unit, has contributed appreciably to our profits for the year.
Celsis In Vitro Technologies
Celsis' In Vitro Technologies (IVT) division provides in vitro testing products to the pharmaceutical industry to help reduce the time and cost of screening drug compounds in the drug development and discovery process. IVT's primary product offering are cryo-preserved human liver cells that allow customers to determine how well a particular drug compound will be metabolised by the human liver. FDA guidance outlines the acceptance of cryo-preserved cells as equivalent to fresh liver cells. Celsis views this as an important validation that will contribute to the continued evolution and expansion of this new business. The current market for in vitro products used for drug development and discovery is estimated to be approximately $600 million.
The pharmaceutical industry is under increasing and unprecedented pressure to improve its research and development productivity in the face of reduced R&D budgets, industry consolidations and a growing number of drug patent expirations. Contributing to the complexity of this effort is the accelerated use of genomics and ever more sophisticated computer modeling capabilities, which have expanded exponentially the number of drug compounds entering the drug development pipeline over the past several years.
Combined, these trends demonstrate the critical need for pharmaceutical researchers to progress new compounds into viable drug candidates quickly and cost effectively. By detecting and identifying toxic compounds early and pro-actively eliminating them from further research and drug development, pharmaceutical companies can focus time and resources on more promising compounds, thereby saving millions of dollars in the overall cost of bringing a new drug to market.
Revenues from our IVT division decreased 13.0% to $10.7 million (2008: $12.3 million) and now represent 20% of Group revenues. After healthy growth in the six months to 31 October, IVT was negatively impacted by the reductions in R&D spending and recent consolidations in the pharmaceutical industry that has temporarily delayed many research projects. We see this slowdown as temporary, as the industry realigns itself and its R&D priorities in the near to mid-term.
IVT recently announced an agreement with leading life sciences company Promega Corporation to co-market their bioluminescent ADME-TOX testing with Celsis IVT's extensive line of cryopreserved cells. This collaboration will significantly benefit scientists and allow them to identify products quickly and easily that have been validated to work together, thereby saving valuable time and resources, increasing efficiency and leading to faster development of safer drugs. This co-marketing agreement also illustrates Celsis' expansion in luciferase and bioluminescence product technologies.
Finally, IVT is also expanding distribution agreements into China and India. As a result, this division is starting to realise the increased demand from the growing South East Asia market and expects future growth in the near to mid-term.
Financial review
The financial results presented below are prepared in accordance with the Group's International Financial Reporting Standards (IFRS) accounting policies.
On 31 March 2009, the Group closed the Development Services Division, and the activities relating to this division have been classed as discontinued operations in these financial statements.
In accordance with IFRS 5, "Non-current assets held-for-sale and discontinued operations", the net trading results of this division have been presented in the income statement as a single line item below taxation, with comparatives restated accordingly.
As in the previous year our Group's foreign exchange policy has continued to mitigate currency fluctuations resulting from the relative value of the US Dollar versus the Euro during most of the financial year under review. The US Dollar is the functional currency providing the best visibility on the Group's overall performance, as a large component of the Group's revenues arise in the Americas and Asia.
Results
In a difficult global economic environment, total revenue from continuing operations for the year ended 31 March 2009 was down 0.8% at $52.5 million against $52.9 million the previous year. Strict cost control ensured that profit before tax and earnings before interest, tax, depreciation and amortisation ('EBITDA') on continuing operations continued to grow at double digit rates.
Group profit before tax from continuing operations was up 21.9% at $12.8 million against $10.5 million the previous year. Group profit before taxation and before amortisation of intangible assets on continuing operations was up 19.6% to $13.4 million (2008: $11.2 million) and operating margins increased to 25.1% (2008: 21.1%). EBITDA on continuing operations was up 13.9% to $15.6 million against $13.7 million last year. Administrative expenses have been positively impacted by a favourable exchange rate movement.
Gross Margin
The Group's gross margin from continuing operations for the year to 31 March remains high at 69.8% (2008: 70.2%).
Operating Expenses
Operating costs from continuing operations, excluding research and development, decreased 9.8% from $25.4 million last year to $22.9 million this year. The strengthening of the US dollar versus Sterling and the Euro has generated transactional as well as translational foreign exchange gains helping to reduce total administrative expenses.
Sales and marketing expenses represented 36.3% of revenues, against 37.5% the previous year. Administrative expenses decreased to 7.3% of revenues versus 10.5% the previous year.
Research and Development efforts have continued to focus on the completion of the new ribo-nucleic acid identification test. Our overall R&D expenditure, after adding back the development costs capitalised under IAS 38 ($1.1 million in 2009 against $1.2 million in 2008), has slightly decreased to $1.67 million this year against $1.71 million last year.
Profitability
The Group's operating profit from continuing operations was $13.2 million (2008: $ 11.2 million) representing an increase of 17.9% on the prior year.
Goodwill and Intangible Asset Amortisation
The Board reviewed the carrying value of goodwill and separately recognised acquired intangible assets at 31 March 2009 and confirmed that no provision for impairment was necessary. The amortisation charged during the year on intangible assets amounted to $ 0.6 million (2008: $0.6 million).
Financial Income and Expense
The financial expense for the year amounted to $0.5 million (2008: $0.8 million).
The decrease reflects the early redemption of $2.2 million of the remaining $5.1 million revolving credit facility obtained when the Group acquired IVT and the subsequent improvement in the Group net borrowing position.
The financial income for the year amounted to $0.2 million (2008: $0.1million).
Discontinued Operations
On 31 March 2009, the Group closed the Development Services Division, and this activity has been classified as a discontinued operation. Its trading results have been presented in the income statement as a single line, below profit for the year from continuing operations, with comparatives restated accordingly.
The impact of discontinued operations on the income statement is detailed in Note 5. The operating loss from discontinued operations was $1.3 million (2008: $0.5 million). The Group incurred at year end a sum of $0.8 million for severance payments, onerous lease charges, dilapidation costs and impairment of intangible assets, as well as $0.3 million of legal and professional fees in connection with the closure of this operation. Total loss from discontinued operations was $2.4 million (2008: $0.5 million).
Taxation
The Group's profit after tax was $6.8 million against a profit after tax of $6.7million the previous year.
The Group's tax charge is $3.6 million for the year (2008: $3.3 million). The difference of $0.3 million is mainly due to two factors. Firstly, that during the period the Group has settled upon a consistent approach to the tax deductibility of development costs which have been capitalised under IAS38. This is to allow a full tax deduction for development costs capitalised in the year incurred. Secondly, over recent periods, brought forward losses that would have offset any tax on the amortisation of capitalised development costs have been fully utilised. As a result, under IAS12 it has now become appropriate to recognise a deferred tax liability for capitalised R&D during the period ended 31 March 2009.
At the balance sheet date the net remaining deferred tax liability is $2.1 million (2008: $0.5 million) and comprises a non-current deferred tax asset of $2.0 million (2008: $1.6 million) and a non-current deferred tax liability of $4.1 million (2008: $2.1 million).
Earnings per Share
Basic Earnings per Share (EPS) after discontinued operations were slightly higher compared to 2008 at 30.94 cents per share (2008: 30.53 cents per share).
Capital Expenditure
Tangible fixed asset additions in the year amounted to $1.6 million (2008: $4.6 million). In the prior year, tangible fixed asset additions were higher due to the relocation of our US headquarters in Chicago and the transfer of the Rapid Detection Manufacturing Centre from Holland to Germany.
In the year, intangible fixed asset additions amounted to $1.5 million (2008: $1.3 million) of which $0.6 million related to capitalised internally generated development costs (2008: $0.7 million).
Cash Flow
The Group's cash generation continues to be strong and cash inflows from continuing operating activities increased to $13.7 million from $12.9 million.
Net cash inflows from continuing and discontinued operations are down to $10.2 million in 2009 from $10.3 million in 2008.
Available cash resources have increased to $7.5 million from $6.4 million and cash, net of borrowings, was $4.6 million at the balance sheet date (2008: $1.4 million). Total borrowings were originally a five-year term loan of $8.0 million and a five-year revolving credit facility of $5.5 million, both from Barclays Bank plc.
The $8.0 million term loan was completely repaid in the prior year, ahead of its original due date of 2011. An additional payment of $2.2 million during the current year has also reduced the amounts drawn under the revolving credit facility to $3.0 million. Due to the changes in the credit market during the year, the Group has decided not to continue making early repayments against its bank loans, (a policy that the Group has followed since 2006) and to keep the current remaining revolving loan facility of $3.0 million until its maturity date of July 2011. During the year, the Group has continued to operate an interest rate swap which effectively fixes the interest rate on the term loan and revolving credit facilities for the period that the term loan and credit facilities are utilised. The interest rate on the un-hedged portion of the term loan and revolving credit facility is set at 0.9% above LIBOR.
Balance Sheet
The inventory value has increased to $8.2 million (2008: $7.5 million).
Trade and other receivables decreased to $12.5 million this year from $12.8 million last year. Other receivables and prepayments increased to $2.2 million this year against $1.8 million last year.
The net deferred tax liability increased to $2.1 million against $0.5 million the prior year. Current liabilities decreased to $7.3 million against $8.3 million last year.
Non-current liabilities have decreased to $8.6 million this year from $9.0 million last year reflecting the early redemption of the term loan and revolving credit facilities, partly offset by an increase in deferred tax liabilities in relation to capitalised R&D.
Total payables have decreased to $15.9 million this year from $17.2 million last year. This decrease in creditors is mostly due to the early redemption of the bank loan facilities discussed above.
Total equity has increased 6.6% (2008: 16.1%) during the year moving to $54.9 million from $51.5 million.
The Group's balance sheet has been strengthened during the year under review and presents a modest amount of leverage taken of $ 3.0 million.
This amount of long term debt is well covered by the cash and cash equivalents position and the Group expects that it will be able to finance its operating costs, together with normal levels of capital expenditure and other commitments including tax, from its existing resources.
The Directors believe that the Group's strong balance sheet and ongoing cash generation leave it well placed to meet its existing borrowing obligations and enable it to fund future investment plans.
Treasury
The Group maintains treasury control systems and procedures to monitor foreign exchange, interest rates, liquidity, credit and other financial risks. The Group does not hedge profit translation exposure, since such hedges provide only a temporary deferral of the effect of movements in exchange rates. Liquid assets surplus to the immediate operating requirements of the Group are invested and managed centrally by Group Head Office.
Exchange rates
Euro and Sterling-denominated transaction exposure arising from normal trade flows, both in respect of external and inter-company trade, is not hedged against US Dollar equivalents. The Group's policy is to minimise the exposure of Euro and Sterling-operating subsidiaries to transaction risk by matching local currency income with local currency costs. For this purpose inter-company trading transactions are matched centrally with inter-company payment terms, and long term financing of each subsidiary is managed to reduce risk. The Euro-Sterling revenue exposure to currency fluctuations is balanced by the Euro-Sterling denominated costs of the Group.
Financial position
The group continues to benefit from strong positive cash flow from operating activities with net debt decreased significantly in the year.
The group has suffered no loss of principal, or any significant interest payable fluctuation as a result of the credit crisis.
Celsis aims to maintain a robust financial position through focused revenue growth, the rigorous control of costs and strong financial management of all aspects of its business. This approach enables Celsis to generate sufficient cash to make the appropriate investments in its business and also to take advantage of external opportunities as and when these arise.
Summary of Group Performance
We are pleased with the performance of the Group in delivering another year of strong profit growth in the face of a challenging environment. We have again demonstrated the strength of our business model by successfully streamlining our product and laboratory services offerings to meet the growing needs of our pharmaceutical and consumer product customer base, while considerably improving the profitability of our continuing business.
Our customers save hundreds of thousands, if not millions, of dollars per year, through the adoption of our products and laboratory services. By consistently focusing on cost saving value to our customers, we have successfully built a highly profitable and cash generative business.
Outlook
We remain confident that we can grow the business as we benefit from disciplined investment in product innovation as well as targeted sales and marketing. We will continue to employ a holistic approach to identifying potential acquisition opportunities and remain focused on delivering long-term shareholder value.
We would like to take this opportunity to thank all of our employees for their many individual and combined contributions this past year. We also would like to thank our new and existing shareholders for their support and continued confidence in Celsis.
Jay LeCoque, Chief Executive Officer
Jack Rowell, Non-Executive Chairman
24 June 2009
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Consolidated Income Statement |
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for the year ended 31 March 2009 |
restated |
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|
Total |
Total |
||
|
Year to 31 |
Year to 31 |
||
|
March 2009 |
March 2008 |
||
|
Notes |
$'000 |
$'000 |
|
|
Continuing operations |
|
|
|
|
Revenue |
52,489 |
52,943 |
|
|
Cost of sales |
(15,844) |
(15,778) |
|
|
|
|
||
|
Gross profit |
36,645 |
37,165 |
|
|
|
|
||
|
Overheads |
|
|
|
|
Sales & marketing expenses |
(19,077) |
(19,856) |
|
|
Administrative expenses |
(3,834) |
(5,582) |
|
|
Research & development expenditure |
(556) |
(553) |
|
|
Total operating expenses |
(23,467) |
(25,991) |
|
|
|
|
||
|
Operating profit |
13,178 |
11,174 |
|
|
Analysed as: |
|
|
|
|
EBITDA |
15,622 |
13,728 |
|
|
Depreciation of property, plant and equipment |
(1,854) |
(1,929) |
|
|
Amortisation of intangible assets |
(590) |
(625) |
|
|
|
|
|
|
|
Operating profit |
|
13,178 |
11,174 |
|
|
|
||
|
Interest receivable and similar income |
|
168 |
117 |
|
Interest payable and similar charges |
(544) |
(755) |
|
|
|
|
||
|
Profit before taxation |
12,802 |
10,536 |
|
|
|
|
||
|
Profit before amortisation of intangible assets (from continuing operations) |
|
13,392 |
11,161 |
|
|
|
||
|
Taxation |
3 |
(3,607) |
(3,294) |
|
|
|
||
|
Profit for the year from continuing operations |
9,195 |
7,242 |
|
|
|
|
||
|
Loss on Discontinued operations |
5 |
(2,403) |
(498) |
|
|
|
||
|
Profit for the year |
6,792 |
6,744 |
|
|
Basic earnings per ordinary share |
2 |
||
|
Continuing operations |
41.88c |
32.78c |
|
|
Discontinued operations |
(10.94c) |
(2.25c) |
|
|
Total |
30.94c |
30.53c |
|
|
Diluted earnings per ordinary share |
2 |
||
|
Continuing operations |
40.98c |
31.78c |
|
|
Discontinued operations |
(10.71c) |
(2.19c) |
|
|
Total |
30.27c |
29.59c |
|
|
Non-GAAP measure: |
2 |
|
|
|
Adjusted earnings per ordinary share |
|
|
|
|
Basic earnings per ordinary share |
|||
|
Continuing operations |
44.57c |
35.62c |
|
|
Discontinued operations |
(10.91c) |
(2.24c) |
|
|
Total |
33.66c |
33.38c |
|
Consolidated Statement of Recognised Income and Expense |
restated |
|
|
Year to 31 |
Year to 31 |
|
|
March 2009 |
March 2008 |
|
|
$'000 |
$'000 |
|
|
Profit for the financial year |
6,792 |
6,744 |
|
Currency exchange adjustment |
(3,299) |
(368) |
|
Deferred tax on share options |
(50) |
5 |
|
Total recognised income for the year |
3,443 |
6,381 |
|
Consolidated Balance Sheet |
||
|
at 31 March 2009 |
||
|
At 31 March |
At 31 March |
|
|
2009 |
2008 |
|
|
$'000 |
$'000 |
|
|
Assets |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
32,263 |
31,496 |
|
Property, plant and equipment |
8,231 |
8,942 |
|
Other receivables and prepayments |
62 |
62 |
|
Deferred tax asset |
1,966 |
1,577 |
|
42,522 |
42,077 |
|
|
Current assets |
|
|
|
Inventory |
8,185 |
7,518 |
|
Trade and other receivables |
12,533 |
12,768 |
|
Cash and cash equivalents |
7,535 |
6,356 |
|
28,253 |
26,642 |
|
|
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Bank borrowings |
- |
(104) |
|
Trade and other payables |
(6,625) |
(7,465) |
|
Current tax liability |
(648) |
(681) |
|
(7,273) |
(8,250) |
|
|
|
|
|
|
Net current assets |
20,980 |
18,392 |
|
Non-current liabilities |
|
|
|
Bank borrowings |
(2,968) |
(4,960) |
|
Other non-current liabilities |
(1,633) |
(1,962) |
|
Deferred tax liability |
(4,031) |
(2,072) |
|
(8,632) |
(8,994) |
|
|
|
|
|
|
Net assets |
54,870 |
51,475 |
|
Shareholders' equity |
|
|
|
Called up share capital |
1,611 |
1,611 |
|
Share premium account |
13,120 |
13,120 |
|
Treasury shares |
(1,749) |
(1,201) |
|
Currency translation reserve |
(3,229) |
70 |
|
Retained earnings |
43,635 |
36,393 |
|
Reserve arising on consolidation |
1,482 |
1,482 |
|
|
|
|
|
Total equity |
54,870 |
51,475 |
|
Consolidated Cash Flow Statement
|
|
|
|
|
for the year ended 31 March 2009
|
|
restated
|
|
|
|
Year To 31 March
|
YearTo 31 March
|
|
|
|
2009
|
2008
|
|
|
|
$’000
|
$’000
|
|
|
|
|
|
|
|
Cash flows from continuing operating activities
|
13,688
|
12,869
|
|
|
Cash flows from discontinued operations (note 5)
|
(1,147)
|
(647)
|
|
|
Tax paid
|
(2,120)
|
(1,257)
|
|
|
Interest paid
|
(439)
|
(750)
|
|
|
Interest received
|
168
|
117
|
|
|
Net cash from operating activities
|
10,150
|
10,332
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of property, plant and equipment
|
(873)
|
(3,326)
|
|
|
Expenditure on intangible fixed assets
|
(1,526)
|
(1,326)
|
|
|
Net cash used in investing activities from continuing operations
|
(2,399)
|
(4,652)
|
|
|
Net cash used in investing activities from discontinued operations
|
(589)
|
(30)
|
|
|
Net cash used in investing activities
|
(2,988)
|
(4,682)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Purchase of treasury shares
|
(548)
|
-
|
|
|
Repayment of principal under finance leases
|
(359)
|
(213)
|
|
|
Repayment of loan principal
|
(2,200)
|
(4,508)
|
|
|
Net cash used in financing activities
|
(3,107)
|
(4,721)
|
|
|
|
|
|
|
|
Effects of exchange rate changes
|
(2,876)
|
(519)
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents in the year
|
1,179
|
410
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the year
|
6,356
|
5,946
|
|
|
Cash and cash equivalents at the end of the year
|
7,535
|
6,356
|
|
|
|
|
|
|
|
Reconciliation of profit before taxation to cash generated from operations
|
|
|
|
|
Profit before taxation
|
12,802
|
10,536
|
|
|
Depreciation of property, plant and equipment
|
1,854
|
1,929
|
|
|
Amortisation of intangible assets
|
590
|
625
|
|
|
(Profit)/loss on disposal of property, plant and equipment
|
(25)
|
66
|
|
|
Share option compensation charge
|
500
|
762
|
|
|
Net finance expense
|
376
|
638
|
|
|
Operating cash flow before changes in working capital and provisions
|
16,097
|
14,556
|
|
|
|
|
|
|
|
(Increase) in receivables
|
(519)
|
(2,567)
|
|
|
(Increase) in inventory
|
(667)
|
(124)
|
|
|
(Decrease)/increase in payables
|
(1,223)
|
1,004
|
|
|
Cash flow from operating activities
|
13,688
|
12,869
|
|
Notes to the Preliminary results
for the year ended 31 March 2009
1. Basis of preparation
The financial information contained in this statement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The information has been extracted from financial statements approved by the Directors on 23 June 2009 which have received an unqualified auditors' report from PricewaterhouseCoopers LLP, Chartered Accountants and Registered Auditors of Abacus House, Castle Park, Cambridge CB3 0AN. The financial statements will be delivered to the Registrar of Companies after the Annual General Meeting. The 2008 financial statements were given an unqualified opinion by the Company's auditors.
The consolidated financial information of the Group has been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union, International Financial Reporting Interpretation Committee ("IFRIC") interpretations and those parts of the Companies Act 1985 applicable to companies reporting under IFRS.
The consolidated financial information has been prepared on a historical cost basis except for certain items that have been measured at fair value.
2. Basic and Diluted Profit per Ordinary Share
|
Year |
Year |
||
|
to 31 March |
to 31 March |
||
|
2009 |
2008 |
||
|
|
|
||
|
Profit on ordinary activities after taxation ($'000) |
6,792 |
6,744 |
|
|
Basic weighted average number of ordinary shares in issue |
21,955,128 |
22,088,673 |
|
|
Diluted weighted average number of ordinary shares in issue |
22,440,644 |
22,788,644 |
|
|
|
|
||
|
Earnings per ordinary share |
|||
|
Basic earnings per ordinary share |
2 |
||
|
Continuing operations |
41.88c |
32.78c |
|
|
Discontinued operations |
(10.94c) |
(2.25c) |
|
|
Total |
30.94c |
30.53c |
|
|
Diluted earnings per share |
2 |
||
|
Continuing operations |
40.98c |
31.78c |
|
|
Discontinued operations |
(10.71c) |
(2.19c) |
|
|
Total |
30.27c |
29.59c |
|
Earnings per share are calculated by dividing the profit after tax of $6,792,000 (2008: $6,744,000) by the weighted average number of shares in issue during the year. Earnings per share from continuing operations are calculated by dividing the profit after tax from continuing operations of $9,195,000 (2008: $7,242,000) by the weighted average number of shares in issue during the year. Earnings per share from discontinued operations are calculated by dividing the loss after tax from discontinued operations of $2,403,000 (2008: $498,000) by the weighted average number of shares in issue during the year.
Diluted earnings per share are calculated by dividing the profit after tax of $6,792,000 (2008: $6,744,000) by the weighted average number of diluted shares. Diluted earnings per share from continuing operations are calculated by dividing the profit after tax from continuing operations of $9,195,000 (2008: $7,242,000) by the weighted average number of diluted shares. Diluted earnings per share from discontinued operations are calculated by dividing the loss after tax from discontinued operations of $2,403,000 (2008: $498,000) by the weighted average number of diluted shares.
|
Year |
Year |
|
|
to 31 March |
to 31 March |
|
|
2009 |
2008 |
|
|
Adjusted earnings per ordinary share |
||
|
Basic earnings per ordinary share |
||
|
Continuing operations |
44.57c |
35.62c |
|
Discontinued operations |
(10.91c) |
(2.24c) |
|
Total |
33.66c |
33.38c |
Adjusted earnings per share are calculated by dividing the adjusted profit after tax of $7,389,000 (2008: $7,373,000) obtained by adding back the amortisation of intangible assets charge of $597,000 (2008: $629,000) to the profit after tax for the year of $6,792,000 (2008: $6,744,000) by the weighted average number of shares in issue during the year. Adjusted earnings per share from continuing operations are calculated by dividing the adjusted profit after tax from continuing operations of $9,785,000 (2008: $7,867,000) obtained by adding back the amortisation of intangible assets charge of $ 590,000 (2008: $625,000) to the profit after tax from continuing operations for the year of $ 9,195,000 (2008: $ 7,242,000) by the weighted average number of shares in issue during the year. Adjusted earnings per share from discontinued operations are calculated by dividing the adjusted loss after tax from discontinued operations of $2,396,000 (2008: $494,000) obtained by adding back amortisation of intangible assets charge of $7,000 (2008: $4,000) to the loss after tax from discontinued operations for the year of $2,403,000 (2008: $498,000) by the weighted average number of shares in issue during the year.
3. Taxation
|
Year |
Year |
|
|
to 31 March |
to 31 March |
|
|
2009 $'000 |
2008 $'000 |
|
|
United Kingdom taxation at 28% |
1,488 |
1,497 |
|
Foreign taxation (US and Europe) charge |
2,119 |
1,797 |
|
3,607 |
3,294 |
4. Consolidated Statement of Changes in Shareholders' Equity
|
at 31 March 2009 |
Share |
Share |
Treasury |
Currency |
|
Capital |
Premium |
Shares |
translation |
|
|
|
Account |
|
reserve |
|
|
Group |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
|
|
|
|
|
Balance at 1 April 2007 |
1,611 |
13,120 |
(1,201) |
438 |
|
Currency translation differences group |
- |
- |
- |
(368) |
|
Share option compensation charge - gross |
- |
- |
- |
- |
|
Excess deferred tax on share options recognised directly in equity |
- |
- |
- |
- |
|
Net income/(expense) recognised directly in equity |
- |
- |
- |
(368) |
|
Profit for the year |
- |
- |
- |
- |
|
|
|
|
|
|
|
Balance at 1 April 2008 |
1,611 |
13,120 |
(1,201) |
70 |
|
|
|
|
|
|
|
Movement in own shares |
- |
- |
(548) |
- |
|
Currency translation differences group |
- |
- |
- |
(3,299) |
|
Share option compensation charge - gross |
- |
- |
- |
- |
|
Excess deferred tax on share options recognised directly in equity |
- |
- |
- |
- |
|
Net income/(expenses) recognised directly in equity |
- |
- |
(548) |
(3,299) |
|
Profit for the year |
- |
- |
- |
- |
|
|
|
|
|
|
|
Balance at 31 March 2009 |
1,611 |
13,120 |
(1,749) |
(3,229) |
|
at 31 March 2009 |
Retained |
Reserve |
Total |
|
Earnings |
arising on |
|
|
|
|
consolidation |
|
|
|
Group |
$'000 |
$'000 |
$'000 |
|
|
|
|
|
|
Balance at 1 April 2007 |
28,882 |
1,482 |
44,332 |
|
Currency translation differences group |
- |
- |
(368) |
|
Share option compensation charge - gross |
762 |
- |
762 |
|
Excess deferred tax on share options recognised directly in equity |
5 |
- |
5 |
|
Net income/(expense) recognised directly in equity |
767 |
- |
399 |
|
Profit for the year |
6,744 |
- |
6,744 |
|
|
|
|
|
|
Balance at 1 April 2008 |
36,393 |
1,482 |
51,475 |
|
|
|
|
|
|
Movement in own shares |
- |
- |
(548) |
|
Currency translation differences group |
- |
- |
(3,299) |
|
Share option compensation charge - gross |
500 |
- |
500 |
|
Excess deferred tax on share options recognised directly in equity |
(50) |
- |
(50) |
|
Net income/(expenses) recognised directly in equity |
(450) |
- |
(3,397) |
|
Profit for the year |
6,792 |
- |
6,792 |
|
|
|
|
|
|
Balance at 31 March 2009 |
43,635 |
1,482 |
54,870 |
5. Discontinued Operations
On 31 March 2009, the Group closed the Development Services Division. In accordance with IFRS 5, "Non-current assets held-for-sale and discontinued operations", the net trading results of this division have been presented in the income statement as a single line item below taxation, with comparatives restated accordingly.
The detailed results of the discontinued operations are presented below:
|
Year |
Year |
||
|
to 31 March |
to 31 March |
||
|
2009 |
2008 |
||
|
Notes |
$'000 |
$'000 |
|
|
|
|
||
|
Revenue |
1,118 |
3,127 |
|
|
Cost of sales |
(966) |
(1,820) |
|
|
Gross profit |
152 |
1,307 |
|
|
Net operating expenses |
(1,466) |
(1,805) |
|
|
Operating loss |
(1,314) |
(498) |
|
|
Impairment provisions |
(a) |
(495) |
- |
|
Closure costs |
(b) |
(594) |
- |
|
Loss before tax |
(2,403) |
(498) |
|
|
Taxation |
- |
- |
|
|
Loss for the year |
(2,403) |
(498) |
(a) Impairment provisions comprise bad debt provision and a write-off of a intangible asset in connection with the closure.
(b) Closure costs comprise legal and professional fees, onerous lease provision and redundancy cost in connection with the closure.
|
Cash flow statement for discontinued operations |
Year |
Year |
|
to 31 March |
to 31 March |
|
|
2009 |
2008 |
|
|
$'000 |
$'000 |
|
|
Reconciliation of loss before taxation to cash generated |
||
|
from discontinued operations |
||
|
Loss before taxation |
(2,403) |
(498) |
|
Depreciation of property, plant and equipment |
93 |
79 |
|
Amortisation of intangible assets |
7 |
4 |
|
Loss on disposal of intangible assets |
96 |
- |
|
Operating cash flow before changes in working capital and provisions |
(2,207) |
(415) |
|
Decrease/(Increase) in receivables |
754 |
(242) |
|
Increase in payables |
306 |
10 |
|
Cash flow from operating discontinued activities |
(1,147) |
(647) |
|
Cash flows from investing activities |
||
|
Purchase of property, plant and equipment |
(589) |
(30) |
|
Net cash used in investing activities |
(589) |
(30) |
|
Net decrease in cash and cash equivalents in the year |
(1,736) |
(677) |
Related Shares:
Celadon Pharmaceuticals