31st Jan 2008 07:01
Angle PLC31 January 2008 For Immediate Release 31 January 2008 ANGLE plc Interim Results for the six months ended 31 October 2007 ANGLE plc ('ANGLE' or the 'Company'), the intellectual property and technologycommercialisation company, today announces its unaudited interim results for thesix months ended 31 October 2007. Financial Highlights • ANGLE has moved into profitability with profit before tax of £2.8 million (H1 2006: loss £4.9 million) • Strong financial progress made within the investment portfolio: - Fair value of portfolio more than doubled during H1 2007 to £8.4 million (30 April 2007 £3.7 million) - Value of quoted investments increased to £2.5 million at 31 October 2007 (30 April 2007: £1.8 million) - Operating costs to manage and develop the portfolio reduced by 33% to £0.9 million (H1 2006: £1.4 million) • Management services business moved into profitability of £0.5m (H1 2006: loss £0.1 million) through a combination of cost reduction and a focus on long-term contracts. • Cash balance at 31 October 2007 of £1.1 million (30 April 2007: £2.6 million). Operational Highlights • Strong operational progress made with the investment portfolio. Highlights include: - Geomerics (enhanced computer game graphics): successful market launch of 'Enlighten' product. Attracted £2.0 million of investment from new investors. - Parsortix (prenatal foetal cell diagnostics): significant progress in the separation of foetal cells from maternal blood. Results to date support the viability of the technology for clinical applications. - Aguru (rapid capture and recreation of photo-realistic surface images): products launched to the movie animation industry - first sales under negotiation. • Large equity stakes retained in portfolio companies with highest growth potential. • Other investments have been restructured so that they have a low cash dependency on ANGLE whilst retaining upside potential from the investment. • Management contract secured with Innovation Lincolnshire worth £0.9 million over 21 months. • Realisation of cash through partial divestment of Provexis. Garth Selvey, Chairman, commented: "This has been a period during which ANGLE has made significant furtherprogress. Having moved ANGLE into overall profitability and reduced ongoingdemands on cash both for operations and for follow-on investment, the majorfocus continues to be the delivery of substantial cash returns from ourinvestments. Further progress has also been made with a number of the underlying portfoliocompanies and the Board believes that several have the potential to deliver highcash returns to ANGLE." Enquiries: ANGLE plc 01483 295830Andrew Newland, Chief ExecutiveIan Griffiths, Finance Director Buchanan CommunicationsRichard Darby, Suzanne Brocks, James Strong 0207 466 5000 Notes to EditorsFounded in 1994, ANGLE is an international venture management company focusingon the commercialisation of technology and the development of technology-basedindustry. ANGLE creates, develops and advises technology businesses on its ownbehalf and for its clients. ANGLE is listed on AIM (AGL.L); further informationcan be found on www.ANGLEplc.com ANGLE plc CHAIRMAN'S STATEMENT Profitable Results ANGLE made strong progress in the first half of the year, both operationally andfinancially. As highlighted in the pre-close trading update in November 2007,the restructuring process initiated in May 2007 has been implemented generatingkey benefits for ANGLE and its shareholders. I am pleased to report a Group profit before tax of £2.8 million (H1 2006: loss£4.9 million) in the half year to 31 October 2007. The fair value of theinvestment portfolio has more than doubled principally as a result of theincrease in fair value of Geomerics. Overheads have been substantially reduced across the business. Consequently,ongoing cash requirements across the Group are now lower, more predictable andmore sustainable. Activity ANGLE's principal activity remains the management of the portfolio of companieswhich it has founded and developed. During the initial development stage ANGLEtakes direct operational control of its investments, whilst maintaining majorityownership. However, as investments become more mature ANGLE looks to encouragethird party participation by other investors in order to control the level ofinvestment required in the future. ANGLE's Management services business is important in its own right as well asbeing cash generative and providing unique access to new investmentopportunities. Restructured Portfolio In the last six months the portfolio has been restructured with the intention ofmaximising ANGLE's investment return and minimising the investment risk and cashrequirements. The investment portfolio has continued to develop under thisregime and can now be categorised as follows: • Mature investments (2 companies): these require no further investment from ANGLE and are being held pending their realisation into cash. During the last 12 months, £1.5 million was realised from these investments. • High potential returns (4 companies): these are investments which have made progress and are considered to have the potential to deliver exceptional cash returns to ANGLE. Where appropriate, cash requirements are reduced by attracting third party investment but high equity stakes are maintained. • Other investments (3 companies): these investments have been restructured so that they have a low cash dependency on ANGLE whilst retaining upside potential from the investment. • Development portfolio (1 company): newly created portfolio companies with high potential and modest cash requirements. Investment Priority The aim in the second half is to ensure that cash generated fromthe Management services business exceeds the cost of managingthe investment portfolio. This is important as it leaves thebusiness in a cash generative condition prior to discretionaryinvestment spend. Further investment in developing companies canbe covered through cash released from more mature investments.This strategy is designed to ensure that ANGLE can generatemajor returns from its existing investments. As further cash is realised from the investment portfolio theBoard will review opportunities to create further portfoliocompanies and, where cash returns have been considerable, toreturn cash to shareholders. The Board believes there to besignificant unrealised value for shareholders in the ventureportfolio. Outlook for the full financial year The second half has started well and the Company expects todeliver positive results for the year in both the investmentportfolio and the Management services business. The Boardbelieves that the Company plays a vital role in the developmentand commercialisation of its intellectual property andtechnology and that potential exists within the portfolio forfair value gains and cash realisations that will createsignificant value for ANGLE shareholders. Garth SelveyChairman30 January 2008 ANGLE plc OPERATIONS SUMMARY Introduction During the half year, ANGLE has restructured its business to reduce costs andincrease focus on its high potential return portfolio companies. There has been strong progress in the development of value in the portfolio withthe fair value of the portfolio, comprising non-controlled investments and otherreceivables, increasing by 126% during the half year to £8.4 million (30 April2007 £3.7 million), principally as a result of the increase in fair value ofGeomerics. This excludes any value for the six portfolio companies which weremajority owned at the half year. The aggregate cost of investment into thesecompanies at the half year end was £5.2 million. Large equity stakes are being maintained in the portfolio companies with highpotential return, although in some cases, third party investors have beenintroduced to share the investment cost and minimise the risk. Results ANGLE has moved into profitability in the half year reflecting the maturing ofthe investment portfolio and increased focus on realising value from theexisting portfolio companies. The profit before tax for the half year of £2.8 million (2006: loss £4.9million), representing a profit per share of 10.6p (2006: loss 17.5p), is as aresult of: • an increase in fair value of non-controlled investments of £4.8 million (2006: decrease £1.9 million); • expenditure on controlled investments in the half year of £1.5 million (2006: £1.4 million); • operating costs to establish, develop and create value in Progeny(R) companies decreasing by 33% to £0.9 million (2006: £1.4 million); • a profit on the Management services business of £0.5 million (2006: loss £0.1 million); and • a share based payments charge of £0.2 million (2006: £0.2 million). Portfolio company status During the half year, a coherent strategy has been deployedacross the portfolio with the intention of maximising ANGLE'sinvestment return, whilst controlling the investment risk andcash requirements. The strategy adopted has involved categorising the investments andadopting a defined investment process for the category as follows: • Mature investments: require no further investment from ANGLE butcontinue to be held where dealing restrictions apply or when valueenhancing events are expected. Cash will be realised if required forinvestment in other portfolio companies. Over the last 12 months,£1.5 million has been realised from these investments. • High potential return: investments which have made progressand are demonstrating the potential to deliver exceptional cashreturns to ANGLE. The investment strategy is to retainsubstantial equity stakes, normally exceeding 40%, to ensurethat significant financial return is secured when the investmentachieves its potential. ANGLE's investment cash is prioritisedto this category of investment with the aim of holding theinvestment through to a major valuation event. It is intendedthat when an exceptional cash return is secured, a proportionwill be distributed to shareholders by way of dividend or sharebuy-back with the balance allocated to the establishment of newinvestments. Speed to exit will be balanced against the timeneeded to achieve a high exit value. • Other investments: investments that have beenrestructured so that they have a low cash dependency onANGLE whilst retaining upside potential from the investment.The strategy is either to secure third party investment sothat the company can progress without further cash fromANGLE or develop the business by generating initial salesand limiting the costs. In the former case it is acceptedthat ANGLE's equity stake will fall, probably to less than25% over time, but this is considered sensible in thecontext of reducing ANGLE's follow-on investmentrequirements so as to prioritise resources towards thebiggest potential winners. • Development portfolio: newly created companies wherethe investment is considered to have potential but thishas not yet been demonstrated. Pending a major cashrealisation, investment into this category is limited inorder to prioritise investment on high potential returninvestments already in the portfolio. During the halfyear only one new company was developed within thiscategory. This was progressed as it was an exceptionalopportunity and ANGLE's Progeny(R) business model wasadapted to allow development of the company for under£0.1 million. Once a major cash realisation has beenmade, we expect to establish several new companies toexploit the pipeline of opportunities available toANGLE. The status of the portfolio companies, all of which havebeen founded and developed by ANGLE, is summarisedbelow. Mature investments ANGLE's mature investments require no further investment fromANGLE and are being held pending their realisation into cash. • Acolyte Biomedica, ANGLE's "hospital super-bug" company wassold to 3M Corporation in February 2007 at a multiple of up to8x ANGLE's investment, assuming the earn-out is received infull. See www.acolytebiomedica.com for more information. ANGLEreceived £0.9 million in cash at exit and has an outstandingearn-out of up to £4.7 million receivable early in 2010. Only£1.9 million of this potential £4.7 million is entered onANGLE's balance sheet, although there is no indication that thefull earn-out will not be achieved. • Provexis (AIM:PXS) (18% holding) developsscientifically-proven functional and medical foods. Duringthe half year Provexis has announced agreements for itspatented Fruitflow(R) anti-thrombotic technology withUnilever (owner of Becel/Flora brands) for spreads andCoca-Cola (owner of the Minute Maid brand) for beverages.See www.provexis.com for more information. During the sixmonths to 30 January 2007, ANGLE successfully realised £0.5million from this investment having made an average of 2.5xthe related investment cost in under nine months. High potential return investments These companies have the potential to deliver exceptional cashreturns to ANGLE. • Geomerics (48% holding) is attracting corporate interest inits computer graphics products and underlying technologyplatform. Rapid computation of direct and indirect lighting incomputer graphics is a key factor in creation of greater realismin computer games. With strong demand anticipated from AsiaPacific and EMEA regions, the computer gaming market is forecastto grow at an average 11.4% compound annual rate. The marketsize for North America and Europe alone was $14 billion in 2006(Source: International Development Group), of which Geomerics'current addressable market is estimated to be $1.4 billion. Thecompany is poised to make its first sales. During the half yearGeomerics received £2.0 million in investment funding from newinvestors. For more information see www.geomerics.com. • Parsortix (66% holding) is developing its prenataldiagnostic device based on the isolation of foetal cellswithin maternal blood, eliminating the need for invasiveprocedures such as amniocentesis. Since the half yearParsortix has made substantial progress in work to separatefoetal cells in maternal blood. Results to date support theviability of the technology for clinical applications.Success in this area would be a major technical breakthroughand is the company's priority at present. The next step willbe to optimise the design to provide a uniquely non-invasiveproduct for the prenatal diagnostic market. In the high riskcategory, there are over 375,000 prenatal tests undertakeneach year in the US alone costing over $100 million perannum. The non-invasive nature of Parsortix's test suggeststhat the market may extend to low risk pregnancies with thepotential for 2.6 million tests per annum in the US alone.For more information see www.parsortix.com. • Aguru Images (81% holding) is commercialisingtechnology from New York University and the Universityof Southern California that enables the rapid captureand recreation of photo-realistic surface images. Thetechnology has a wide range of commercial applicationsin high value industries, including special effects,animation, computer gaming and medical devices. Sincethe half year end, Aguru has launched its products tothe movie animation special effects industry and is inthe process of negotiating its first sales. Thisindustry alone provides a $300 million market for Aguru.The company's first service bureau opened in January2008 in Los Angeles to service the film industry. Formore information see www.aguruimages.com. • Novocellus (82% holding) The lead product,EmbryoSureTM, has the potential to improve pregnancysuccess rates in IVF by at least a third through theselection of the best embryos for transfer to theuterus. The global IVF market is expected to exceed1.1 million cycles by 2010 representing a potentialglobal market opportunity of over $1 billion. Themarket is evolving as the UK's regulatory body forIVF, the Human Fertilisation and EmbryologyAuthority (HFEA) and other international authoritiesare moving towards a requirement for single embryotransfer, for which Novocellus is particularlyrelevant. In the meantime, ANGLE is exploring thepotential for a strong, ideally international,co-development partner for Novocellus. For moreinformation see www.novocellus.com. Other investments Third party shareholders have been brought into thesecompanies and the businesses structured to reduce thefurther requirement for investment from ANGLE. Theinvestments offer the potential for reasonable returnson ANGLE's investment without any significant furthercash commitment. • Synature (55% holding) has secured initialinvestment from Amadeus, the leading Cambridge based ITinvestors since the half year end and is progressing itsinternet personalisation products. See www.synature.comfor more information. • Aberro (65% holding) provides automated softwaretesting that enable customers to increase theoverall reliability of their software while reducingboth time to market and development costs. Seewww.aberrosoftware.com for product details. Thebusiness model has been adjusted to focus on drivingrevenues and the product sales through consulting. • NeuroTargets (25% holding) is developingtherapeutics for pain and nerve injury in theareas of neuropathic and inflammatory pain. Thecompany has completed in vivo trials of its leadcompounds and is presently seeking collaborationpartners to develop its small molecules. Development Portfolio During the half year, ANGLE developed one additionalcompany from its pipeline. This was developed undera reduced investment model costing less than £0.1million in total. The business model for the newcompany is predicated on its delivery of earlyproduct sales. • Mogility (100% holding) utilises US military technology for agile mobile telephone applications. The company's technology platform makes it easy for anyone to create, modify and deploy applications running on standard data plans or as SMS text messages. Several US police forces are presently considering applications. See www.mogilitytech.com for more information. The percentage shareholdings are based on issued share capital as at 31 October 2007. Pipeline ANGLE's major focus is the realisation of value from theexisting portfolio. Operating costs have been streamlinedand focused on this key activity. At present we are notprogressing the pipeline of new opportunities. We are confident that when it is appropriate to reactivate theestablishment of new ANGLE companies, the pipeline available tous will be strong as a result of ANGLE's long-term managementcontracts. For example, the Carbon Trust ANGLE Incubator is nowone of the largest clean energy incubators in the world whenmeasured by number of companies assisted, according to theOctober 2007 New Energy Finance (NEF) report titled "GlobalClean Energy Incubators" that presents the results of the NEF'sthird worldwide survey of incubation activity in the cleanenergy industry. This is one example of the pipeline ofopportunities available to ANGLE in its investment business as aresult of its Management services business. Consistent with our focus on the existing portfolio, we have agreed with the University of Reading to move our relationship on to a non-exclusive transactional basis. This approach is consistent with that used successfully by ANGLE to set up companies with the UK universities of Bristol, Cambridge and York and the US universities of New York, Southern California and Virginia as well as other major research organisations including Dstl Porton Down, Rowett Institute and British Telecom. Management services The Management services business is developing well. It has continued to winnew business, is profitable and cash generative. The business has been re-shaped during the half year to reduce dependency onshort-term consulting contracts and place the major emphasis on long-termmanagement contracts. This has led to increased profitability. During the half year the Management services business delivered a profit of £0.5million on turnover of £1.8 million, which compares to a £0.1 million loss onsimilar turnover for the same period in the previous year. Plans are being put in place to grow the business over the next two years inorder to build critical mass and to replace the management contract in Qatar,which completes in 2009. During the half year, ANGLE won the InnovationLincolnshire contract worth £0.9 million over 21 months and the MansfieldiCentre was renewed with a base value of £0.6 million for a five year term. Outlook The outlook for the full year is encouraging. Continued development and growthin the investment portfolio is expected. There are a number of excitingopportunities under discussion, which may well lead to significant gains orrealisations in the short to medium term. ANGLE plcCONSOLIDATED INTERIM INCOME STATEMENTFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Note Six months ended Year ended 31 October 31 October 30 April 2007 2006 2007 (Unaudited) (Unaudited) (Audited) £ £ £ Turnover 3 1,836,634 1,799,113 3,377,354 Change in fair value 6 4,837,686 (1,891,088) (2,036,814) Operating costsManagement services (1,324,983) (1,862,293) (3,769,204)Ventures (938,097) (1,399,779) (2,994,989)Controlled investments (1,487,857) (1,417,592) (3,126,480)Share based payments (156,593) (222,241) (414,741)Restructuring charges - - (540,814) _____________ _____________ _____________ (3,907,530) (4,901,905) (10,846,228) Operating profit / (loss) 2,766,790 (4,993,880) (9,505,688) Net finance income 29,299 122,354 196,821 _____________ _____________ _____________Profit / (loss) before tax 2,796,089 (4,871,526) (9,308,867) -------------------- ----- ----------- ---------- ----------Profit/ (loss) beforeControlled investments andtax 4,329,620 (3,454,448) (6,120,766)Controlled investments (1,533,531) (1,417,078) (3,188,101)-------------------- ----- ----------- ---------- ---------- Tax 4 68,841 131,777 201,184 _____________ _____________ _____________ Profit / (loss) for theperiod 2,864,930 (4,739,749) (9,107,683) =========== =========== ===========Profit / (Loss) per share 5Basic and Diluted (penceper share) 10.56 (17.47) (33.57) ANGLE plcCONSOLIDATED BALANCE SHEETAS AT 31 OCTOBER 2007 Note 31 October 31 October 30 April 2007 2006 2007 (Unaudited) (Unaudited) (Audited) £ £ £ASSETSNon-current assetsNon-controlledinvestments 6 3,991,667 1,732,831 -Otherreceivables 6 1,902,724 - 1,902,724Property,plant andequipment 91,410 140,750 122,863Intangibleassets 270,330 7,713 389,159 ______________ _______________ _______________ _Totalnon-currentassets 6,256,131 1,881,294 2,414,746 Current assetsNon-controlledinvestments 6 2,490,099 2,976,989 1,812,197Trade andotherreceivables 604,235 1,474,108 964,293Cash and cashequivalents 1,068,702 4,327,383 2,551,168 _______________ _______________ _______________ Total currentassets 4,163,036 8,778,480 5,327,658 _______________ _______________ ______________ Total assets 10,419,167 10,659,774 7,742,404 ============== ============== =============EQUITY AND LIABILITIESEquityIssued capital 2,713,293 2,713,293 2,713,293Share premiumaccount 13,701,935 13,701,935 13,701,935Share basedpaymentreserve 1,788,458 1,141,117 1,713,289Other reserves 2,553,356 2,553,356 2,553,356Translationreserve (193,478) (99,499) (193,813)Retainedearnings (11,452,438) (10,052,704) (14,420,638)ESOT shares (370,000) (370,000) (370,000) _______________ _______________ _______________ Total equity 8,741,126 9,587,498 5,697,422 _______________ _____________ _____________ LiabilitiesNon-current liabilitiesObligationsunder financeleases - 13,681 4,560Controlledinvestments -convertibleloans 72,202 - - _____________ _____________ _____________Totalnon-currentliabilities 72,202 13,681 4,560Current liabilitiesTrade andother payables 1,592,158 1,040,165 2,022,180Obligationsunder financeleases 13,681 18,430 18,242 _____________ _____________ _____________Total currentliabilities 1,605,839 1,058,595 2,040,422 _____________ _____________ _____________Totalliabilities 1,678,041 1,072,276 2,044,982 _____________ _____________ _____________Total equityandliabilities 10,419,167 10,659,774 7,742,404 =============== =============== =============== === === === ANGLE plcCONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Six months ended Year ended 31 October 31 October 30 April 2007 2006 2007 (Unaudited) (Unaudited) (Audited) £ £ £Operating activitiesOperating profit / (loss) 2,766,790 (4,993,880) (9,505,688)Depreciation of property,plant and equipment 30,004 29,227 63,964Amortisation of intangibleassets 90,189 1,898 4,164(Profit) / loss on disposal ofproperty (1,338) 429 -Exchange differences (10,477) (50,268) (121,562)(Increase) / decrease in tradeand other receivables 125,890 (199,415) 283,908Increase / (decrease) in tradeand other payables (296,821) (438,481) 454,887Income tax received 118,882 - 142,506Change in fair value ofNon-controlled investments (4,837,686) 1,891,088 2,036,814Share based payments 156,593 222,241 414,741 _____________ _____________ _____________Net cash from operatingactivities (1,857,974) (3,537,161) (6,226,266) Investing activitiesPurchase of property, plantand equipment (6,004) (24,755) (43,268)Disposal of property, plantand equipment 776 - 2,756Purchase of intangible assets (36,252) (5,188) (10,117)Purchase of Non-controlledinvestments - - (262,500)Provision of convertible loans (47,000) (90,780) (90,780)Proceeds from sale ofinvestments 360,848 - 1,111,673Purchase of ESOT shares - (350,000) (350,000)Net interest received 40,058 129,478 208,935 _____________ _____________ _____________Net cash used in investingactivities 312,426 (341,245) 566,699 Financing activitiesNet proceeds from issue ofshare capital - (14,255) -Capital elements of financelease contracts (9,120) (14,809) (24,118)Proceeds from issue ofconvertible loans 72,202 - - _____________ _____________ _____________Net cash from financingactivities 63,082 (29,064) (24,118) Net increase / (decrease) incash and cash equivalents (1,482,466) (3,907,470) (5,683,685) Cash and cash equivalents atstart of period 2,551,168 8,234,853 8,234,853 _____________ _____________ _____________Cash and cash equivalents atend of period 1,068,702 4,327,383 2,551,168 =========== =========== =========== ANGLE plcCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Attributable to equity holders of the Group Share based Issued Share payment Other Translation Retained ESOT Total capital premium reserve reserves reserve earnings shares Equity (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) £ £ £ £ £ £ £ £ At 1 May 2,713,293 13,701,935 918,876 2,553,356 (73,159) (5,312,955) (20,000) 14,481,3462006For theperiod to 31October2006Consolidatedprofit /(loss) (26,340) (4,739,749) (4,766,089)Share basedpayments 222,241 222,241ESOT (350,000) (350,000) shares ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------At 31October 2,713,293 13,701,935 1,141,117 2,553,356 (99,499) (10,052,704) (370,000) 9,587,4982006For theperiod to 30April 2007Consolidatedprofit /(loss) (94,314) (4,367,934) (4,462,248)Share basedpayments 572,172 572,172 ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------At 1 May 2,713,293 13,701,935 1,713,289 2,553,356 (193,813) (14,420,638) (370,000) 5,697,4222007For theperiod to 31October2007Consolidatedprofit /(loss) 335 2,864,930 2,865,265Share basedpayments 178,439 178,439Deemeddisposal ofsubsidiary (103,270) 103,270 ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ ___ _____ --- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------At 31October 2,713,293 13,701,935 1,788,458 2,553,356 (193,478) (11,452,438) (370,000) 8,741,1262007 ========== ========== ========== ========== ========= =========== ========== Share based payment reserveThe share based payment reserve account is used for the corresponding entry tothe share based payments charged through: a) the income statement for staffincentive arrangements in the Group; b) the income statement for staff incentivearrangements in the Controlled investments; and c) the balance sheet foracquired intangible assets in the Controlled investments comprising intellectualproperty (IP). These components are separately identified in the table below. Transfers are made from this reserve to retained earnings as the related shareoptions are exercised, lapse or expire or as a Controlled investment becomesnon-controlled. Share based payments Controlled Controlledreserve Group investments investments employees employees IP Total £ £ £ £At 1 May 2006 904,629 14,247 - 918,876Charge for the period 198,029 24,212 - 222,241 -------------- -------------- -------------- -------------At 31 October 2006 1,102,658 38,459 - 1,141,117Acquired intellectualproperty 379,672 379,672Charge for the period 157,496 35,004 - 192,500 -------------- -------------- -------------- -------------At 30 April 2007 1,260,154 73,463 379,672 1,713,289Acquired intellectualproperty 27,014 27,014Deemed disposal ofsubsidiary - (19,937) (83,333) (103,270)Charge for the period 113,816 42,777 156,593Exchange movement - (1,420) (3,748) (5,168) -------------- -------------- -------------- -------------At 31 October 2007 1,373,970 94,883 319,605 1,788,458 ========== ========== ========= ========= Translation reserveThe translation reserve account comprises cumulative exchange differencesarising on consolidation from the translation of the financial statements ofinternational operations. Under IFRS this is separated from retained earnings. ESOT sharesThese relate to shares purchased by the ANGLE Employee Share Ownership Trust. ANGLE plcNOTES TO THE INTERIM FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 1 Basis of preparation and accounting policiesThe Condensed Interim Financial Statements in this document does not constitutestatutory financial statements for the purposes of s240 of the Companies Act1985. The Statutory Financial Statements for the year ended 30 April 2007("Report and Accounts 2007") have been filed with the Registrar of Companies.The auditor's report on those Financial Statements, which were prepared inaccordance with International Financial Reporting Standards (IFRS) as adopted bythe European Union (EU), was unqualified and did not contain statements unders237(2) or s237(3) of the Companies Act 1985. This Condensed Interim Financial Statements is the unaudited interimconsolidated financial statements (the "Condensed Interim Financial Statements")of ANGLE plc, a company incorporated in Great Britain and registered in Englandand Wales, and its subsidiaries (together referred to as the "Group") for thesix month period ended 31 October 2007 (the "interim period"). The condensedinterim financial statements are unaudited but have been reviewed by theAuditors in accordance with the International Standard on Review Engagements (UKand Ireland) 2410, "Review of Interim Financial Information Performed by theIndependent Auditor of the "Entity" issued by the Auditing Practices Board foruse in the United Kingdom. The Condensed Interim Financial Statements have been voluntarily prepared inaccordance with International Accounting Standard 34 Interim Financial Reporting("IAS 34"), as adopted by the EU, and on the basis of the accounting policiesset out in the Report and Accounts 2007. The presentation of the CondensedInterim Financial Statements is consistent with the Report and Accounts 2007.Where necessary, comparative information has been reclassified or expanded fromthe previously reported Condensed Interim Financial Statements to take intoaccount any presentational changes made in the Report and Accounts 2007. The Condensed Interim Financial Statements were approved by the Board andauthorised for issue on 30 January 2008. Going concernThe Directors have reviewed the projections for the forthcoming 12 month periodfrom the date of approval of these Interim Financial Statements and based on thelevel of existing cash, projected income and expenditure, the Directors aresatisfied that the Company and Group have adequate resources to continue inbusiness for the foreseeable future. Accordingly the going concern basis hasbeen used in preparing the Interim Financial Statements. Critical accounting estimates and judgementsThe preparation of the Interim Financial Statements requires the use ofestimates and assumptions that affect the reported amounts of assets andliabilities at the date of the Financial Statements and the reported amounts ofrevenues and expenses during the reporting period. Although these estimates andassumptions are based on management's best knowledge of the amount, event oractions, actual results ultimately may differ from those estimates. The estimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities relate to thevaluation of unlisted investments held at fair value in accordance with IAS39and on the basis of the accounting policies in the Report and Accounts 2007, andto the valuation of earn-outs. 2 Summary segmental analysisThe Group operates in one principal area of activity - technology wealthcreation through the commercialisation of intellectual property and thedevelopment of technology industry. The primary business segments are: • Management services - provision of management services to clients including research organisations, corporate and governmental organisations on a fee-for-service basis. This business segment provides a platform for the Ventures activities. • Ventures - activities to establish, develop and create value in technology companies. The Group uses a proprietary Progeny(R) process to develop these companies, which are referred to as Progeny(R) companies. ANGLE's unique business model involves ANGLE founding new companies which it controls during the critical early stages of development, before securing third party funding. Under IFRS, the accounting for Progeny(R) companies divides into controlled investments and non-controlled investments. - Controlled investments - Progeny(R) companies where the Group has control, typically as a result of owning in excess of 50% of the equity. These are consolidated and the Group's investment costs are expensed in the Income Statement. - Non-controlled investments - Progeny(R) companies where the Group does not have control. These investments are held on the Balance Sheet at fair value, with changes in fair value passing through the Income Statement. The nature of these operations is significantly different. The primary formatand segmentation by class of business has been provided on the face of theConsolidated Interim Income Statement.3 TurnoverThe breakdown of turnover by business segment is set out below: Six months ended Year ended 31 October 31 October 30 April 2007 2006 2007 (Unaudited) (Unaudited) (Audited) £ £ £TurnoverManagement services 1,828,877 1,792,290 3,364,547Ventures 7,757 6,308 11,865Controlled investments - 515 942 _____________ _____________ _____________ 1,836,634 1,799,113 3,377,354 =========== =========== =========== Turnover from Management represents fees received from clients for Managementservices. Turnover from Ventures represents fees received from thenon-controlled investments for accounting and other services provided by theCompany until those companies take those activities in-house. Turnover fromControlled investments represents the turnover of those businesses, which isconsolidated prior to the company becoming non-controlled. 4 TaxThe Group is eligible for the substantial shareholdings relief UK corporationtax exemption. This results in the gain from any disposals of UK investmentswhere the Group has an equity stake greater than 10%, subject to certain othertests, being free of corporation tax. Tax is therefore based on the profits inthe Management services business as relieved by losses incurred in theestablishment and development of new Ventures.Controlled investments undertake research and development activities. In the UKthese activities qualify for tax relief and result in tax credits.5 Earnings / (loss) per shareThe basic and fully diluted earnings / (loss) per share is calculated on anafter tax profit of £2.9 million (6 months to 31 October 2006: loss £4.7million, year to 30 April 2007: loss £9.1 million).The basic and fully diluted earnings / (loss) per share are based on 27,132,931weighted average ordinary 10p shares (6 months to 31 October 2006: 27,132,931,year to 30 April 2007: 27,132,931). Share options are non-dilutive for theperiod.6 Non-controlled investments and Other receivablesThe Group's investment portfolio comprises investments in Progeny(R) companies.Where the Group has control of a Progeny(R) company (typically owning more than50% of the equity), these are Controlled investments and are consolidated assubsidiaries. At the point control no longer exists, a deemed profit arises andthe Non-controlled investment is held at fair value on the Consolidated BalanceSheet In the six months to 31 October 2007 net costs before taxation relating toControlled investments of £1.5 million (2006: £1.4 million) were charged to theIncome Statement.Where the Group does not control a Progeny(R) company (typically owning lessthan 50% of the equity), these are defined as Non-controlled investments andheld on the balance sheet at fair value, as set out in the table below: Non-current Current assets Total - Non assets controlled Unquoted Quoted investments (Unaudited) (Unaudited) (Unaudited) £ £ £At 1 May 2006 1,642,051 4,868,077 6,510,128Investments 90,780 - 90,780Change in fairvalue - (1,891,088) (1,891,088) _____________ _____________ _____________At 31 October2006 1,732,831 2,976,989 4,709,820Investments - 262,500 262,500Disposals *(2,733,647) (280,750) (3,014,397)Change in fairvalue 1,000,816 (1,146,542) (145,726) _____________ _____________ _____________At 1 May 2007 - 1,812,197 1,812,197Investments 89,461 - 89,461Disposals - (360,848) (360,848)Fair value gainon deemeddisposal ofsubsidiary #3,991,667 - 3,991,667Change in fairvalue (89,461) 1,038,750 949,289 _____________ _____________ _____________At 31 October2007 3,991,667 2,490,099 6,481,766 =========== =========== =========== ANGLE's holding in Provexis plc was valued at £1.3 million at market price on 30January 2008. Other receivables* ANGLE's Progeny(R) company Acolyte Biomedica was sold to 3M Corporation inFebruary 2007. ANGLE's share of the proceeds was an initial £0.9 million in cashand an earn-out of up to £4.7 million receivable early in 2010. A fair value of£1.9 million of this potential £4.7 million earn-out is held on ANGLE's balancesheet under the "Other receivables" category. Change in fair value# ANGLE's accounting policy is that, in accordance with IAS39 FinancialInstruments: Recognition and Measurement, upon initial recognition of aninvestment it is designated at fair value through the Income Statement. As aresult of securing third party funds and reducing the equity position inGeomerics then this is a "deemed" disposal as its status changed from asubsidiary (Controlled Investment) which is consolidated to an associate(Non-controlled investment) which is held at fair value. £Deemed loss from net assets no longer consolidated (103,270)Fair value gain on deemed disposal of subsidiary 3,991,667Change in fair value of investments 949,289_________Change in fair value 4,837,686======= 7 Shareholder communicationsThe announcement is being sent to all shareholders on the register on 31 January2008. Copies of this announcement are posted on the Company's websitewww.ANGLEplc.com and are available from Buchanan Communications and theCompany's registered office: 20 Nugent Road, Surrey Research Park, Guildford,GU2 7AF. ANGLE plcINDEPENDENT REVIEW REPORT TO ANGLE PLCFOR THE SIX MONTHS ENDED 31 OCTOBER 2007 Introduction We have been engaged by the Company to review the condensed set of FinancialStatements in the Financial Report for the six months ended 31 October 2007which comprises the Consolidated Interim Income Statement, the ConsolidatedBalance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statementof Changes in Equity and the Notes to the Interim Financial Information. We haveread the other information contained in the interim financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of FinancialStatements. This report, including the conclusion, has been prepared for and only for theCompany for the purpose of meeting the requirements of the AlternativeInvestment Market (AIM) Rules for companies and for no other purpose. We do not,therefore in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whosehands it may come save where expressly agreed by our prior consent in writing. Directors' Responsibilities The Interim Financial Report is the responsibility of, and has been approved bythe directors. The directors are responsible for preparing and presenting theInterim Financial Report in accordance with the AIM Rules for Companies. As disclosed in Note 1, the Annual Financial Statements of the Group areprepared in accordance with International Financial Reporting Standards andInternational Financial Reporting Interpretations Committee (IFRIC)pronouncements as adopted by the European Union. The condensed set of FinancialStatements included in this Interim FinancialReport has been prepared in accordance with International Accounting Standard(IAS) 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibilityOur responsibility is to express to the Company a conclusion on the condensedset of Financial Statements in the Interim Financial Report based on our review. Scope of ReviewWe conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of Interim Financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other procedures.A review is substantially less in scope than an audit conducted in accordancewith International Standards on Auditing (UK and Ireland) and consequently doesnot enable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. ConclusionBased on our review, nothing has come to our attention that causes us to believethat the condensed set of Financial Statements in the Interim Financial Reportfor the six months ended 31 October 2007 is not prepared, in all materialrespects, in accordance with IAS 34 as adopted by the European Union, and theAIM Rules for Companies. BAKER TILLY UK Audit LLP Chartered AccountantsGuildford This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Angle