11th Oct 2005 07:01
Premier Research Group11 October 2005 Immediate Release 11 October 2005 Premier Research Group plc Interim Results for the six months ended 31 July 2005 11 October 2005, London, UK - Premier Research Group plc (AIM: PRG) ("PremierResearch", "Company" or "Group"), the international pharmaceutical servicesgroup today announces its interim results for the six months ended 31 July 2005. HIGHLIGHTS • Financial Performance o Revenues of £6.1m, an increase of 41% (H1 '04 £4.3m) o Operating profit of £1.3m, an increase of 258% (H1 '04 £0.5m) o Pre-tax profit of £0.9m (H1 '04 £(0.2)m Loss) • Two highly complementary acquisitions during the period o EPA EuroPharma for up to £3.6m adding sales and delivery capability in Germany o PharmData for up to £12.5m adding technical capability and delivery capacity to US operations • Post acquisition integration of both EPA EuroPharma and PharmData progressing as planned • Continued strong order intake has maintained the book-to-bill ratio at reater than one over the past eight months of the financial year Commenting on the performance and outlook, Dr Simon Yaxley, CEO said: "I am delighted with the Company's progress over the last six months. The tworecent acquisitions have both delivered considerable benefit to the Group interms of new customers, additional capabilities and top quality people. We havestrengthened significantly our service offering and ability to compete forhigher value, multinational projects. Moving into the second half of the year, we are confident of meeting themarket's expectations. Our organic growth is accelerating whilst at the sametime we're investing in infrastructure and seeking out further synergisticacquisitions to bring further scale to the business." Enquiries:Premier Research Group plc Tel: 01344 458311Dr Simon Yaxley, Chief Executive Officer Tel: 01344 458309Bernard Gallagher, Chief Financial Officerwww.premier-research.com: Buchanan Communications Tel: 020 7466 5000Lisa Baderoon / Rebecca Skye Dietrich Evolution Securities Tel: 020 7071 4300Matt Wood / Simon Leathers CHIEF EXECUTIVE'S STATEMENT Overview After our successful flotation on AIM in December 2004, followed by theCompany's maiden Preliminary results in April 2005, Premier Research hascontinued on a positive trend into the current financial year. Therefore, I ampleased to report a period of sustained growth during the first half of 2005building on the excellent results achieved last year. Throughout 2004, the changes we made to the business as a result of theintegration of our first three acquisitions as a private entity were designed tosupport growth in turnover and to improve our ability to win and deliver highervalue, multi-national projects. The first half of 2005 has seen us deliver onthese goals with turnover increasing in line with expectations and strong demandfor our services from new and existing customers, particularly over the summerperiod. In summary, our financial performance during the period demonstrated revenuesgrowing by 41% to £6.1m (H1 2004: £4.3m), excluding the effect of acquisitions,turnover was up 19% to £5.1m (H1 2004: £4.3m). The Group's EBITDA for the first6 months was £1.6m (H1 2004: £0.5m), whilst profit before tax in the periodincreased to £0.9m (H1 2004: £(0.2m) loss). Strong order intake maintained theH1 book-to-bill ratio at greater than one, indicating the consistent growth ofthe order book. This indicator of future sales visibility will becomeincreasingly important as our recent acquisitions, which have different levelsof visibility, are integrated into the Group. As a company focused on maximisingshareholder value by growth, supported by an aggressive acquisition strategy,the Board has decided that cash should be retained to provide capital for futureinvestment opportunities. Accordingly, and in line with current policy, theBoard does not propose an interim dividend. After a period of good organic growth in 2004, the first half of this financialyear saw Premier Research return to the acquisition trail with acquisitionsbeing completed during June and July. The funding for these two acquisitions wasprovided by means of two vendor share placings with institutions, together withincreases in our banking facilities. The successful completion of thesetransactions underlines the stakeholders' support of management's growthstrategy for the business and our focus on providing long-term value for ourshareholders. Acquisition of EPA EuroPharma (June 2005) EPA EuroPharma provides a broad range of outsourced clinical services to thebiotechnology and pharmaceutical industries. The acquisition has providedPremier Research with a solid base from which to capitalise on marketopportunities in Germany, Europe's second largest outsourcing market and to useas a foothold into Eastern Europe. The acquisition of EPA EuroPharma alsoallowed the Group to achieve improved operating margins through regionalisedmonitoring of investigator sites, high value regulatory affairs and statisticsservices and the integration of central overheads. Acquisition of PharmData (July 2005) PharmData specialises in clinical data management, statistical analysis, medicalwriting, electronic archiving and project management services. Operating solelywithin the US market, PharmData provides Premier Research principally withincreased scope and scale of data management services. Due to the specialistnature of its service offering, PharmData achieves a higher operating marginthan Premier Research's existing data management operations. The customer base,which is comprised of largely US based pharmaceutical and biotechnologycompanies, is almost entirely complementary to that of Premier Research. Thisprovides considerable scope for cross-selling opportunities, particularlyoffering clinical services to PharmData's customers who have, to date, securedthese services elsewhere. Post Acquisition Integration The integrations of EPA EuroPharma into our International (i.e. non-US)infrastructure and of PharmData into our US infrastructure are progressing asplanned. Cost savings that were identified during the acquisition process forboth companies have largely been realized and will enhance our second halfearnings. No customers have been lost from either of the acquisition targets orthe previous core business. Indeed, since the respective acquisitions have beencompleted we have been awarded repeat business from a number of legacy customersand we have continued to be successful in attracting new customers to theenlarged Group, with the winning of several new significant contracts on bothsides of the Atlantic. Strengthening Management The International and US operational management teams have been strengthenedconsiderably to facilitate the integration of the acquisitions. Furthermore, asmall number of management positions with global responsibility have beencreated (information technology, quality assurance, finance and proposals/sales)to drive the integration harder and to aid in the migration of best practicebetween business units. The Group now has a robust structure capable of handlingthe increasing operational requirements associated with Premier Research'sprojected growth and development in the global marketplace. We have also recently strengthened our sales teams to retain a balanced focusacross the US and International territories and to continue driving organicgrowth. Sales Environment Focusing on sales activity during the half year, I am pleased to say that demandfor our services remains strong and this stems from our continued focus on threeof the highest growth areas in drug development (oncology, central nervoussystem and anti-infectives) and our underlying expertise in pediatrics, aspecialised area with strong regulatory drivers. The outsourcing market continues to be buoyant and the requirement foroutsourced clinical research services continues to grow. We know of no reasonwhy this trend will not continue for the foreseeable future. Our broad customer base comprising over 75 current customers, many of which aremajor pharmaceutical organisations, is continuing the trend of providing us withrepeat business and is a good indication of our excellence in service delivery. The International and US sales professionals have since further demonstratedtheir continued success through the achievement of an increasing number ofcontract wins. Directorate Change Tim Carden, Chief Operating Officer and a co-founder, steps down from hisposition with immediate effect. We thank him for his invaluable efforts over thelast few years and wish him well in his future endeavours. Having recentlydeveloped and strengthened our international and US management infrastructure,Premier Research has no immediate plans to recruit a replacement. Current Trading Trading has continued to be strong since the Interim results date and the bookto bill ratio remains greater than one. The continued growth of the order bookand the realisation of the operational benefits associated with the integrationof the recent acquisitions provide management with added confidence that theCompany's performance for the full year will meet the market's expectations. Summary & Outlook "As we move into the second half of the year we are confident of meeting themarket's expectations. Our focus remains on both stimulating organic growth andbroadening the skills base of the Group through further strategic acquisitionswhich are clearly earnings enhancing and offer real added valuepost-acquisition. In closing, I would like to thank all our staff for their commitment and forembracing this exciting period of change, our new employees who join us from EPAEuroPharma and PharmData and our shareholders for their continued support." Simon Yaxley Chief Executive Officer Premier Research Group plc - Financial StatementsInterim Results 2005 Consolidated profit and loss accountFor the six months ended 31 July 2005 - Unaudited Six months Six months Twelve months ended ended ended 31 July 31 July 31 January 2005 2004 2005 Note £000's £000's £000's-------------------------- ------ --------- --------- -----------TurnoverContinuing operations 5,109 4,290 9,282Acquisitions 958 - --------------------------- ------ --------- --------- -----------Group turnover 3 6,067 4,290 9,282Administrative expenses 4,811 3,800 7,752-------------------------- ------ --------- --------- -----------Operating profit 1,256 490 1,530Exceptional items 5 (255) (99) (154)-------------------------- ------ --------- --------- ----------- 1,001 391 1,376Interest receivable - 3 -Interest payable and similar charges (102) (632) (724)-------------------------- ------ --------- --------- -----------Profit/(loss) on ordinaryactivities before taxation 899 (238) 652Tax on profit/(loss) onordinary activities (155) (240) (127)-------------------------- ------ --------- --------- -----------Retained profit/(loss) for the period 744 (478) 525-------------------------- ------ --------- --------- -----------Earnings per share basic 4 1.80p - -Earnings per share diluted 4 1.70p - - Statement of total recognized gains and lossesFor the six months ended 31 July 2005 - Unaudited Six months Six months Twelve months ended ended ended 31 July 31 July 31 January 2005 2004 2005 £000's £000's £000's------------------------------------ ---------- --------- -----------Profit/(loss) for the period 744 (478) 525Exchange difference on translation of net assets of subsidiary undertakings (100) - ------------------------------------- ---------- --------- -----------Total gains and losses for theperiod 644 (478) 525------------------------------------ ---------- --------- ----------- Consolidated Balance SheetAs at 31 July 2005 - Unaudited As at As at As at 31 July 31 July 31 January 2005 2004 2005 Note £000's £000's £000's-------------------------- ---- ---------- --------- -----------Fixed assetsIntangible assets 2 19,525 6,321 6,249Tangible assets 955 910 835Investments 6 1,486 44 52-------------------------- ---- ---------- --------- ----------- 21,966 7,275 7,136-------------------------- ---- ---------- --------- -----------Current assetsDebtors 7 5,180 1,847 3,701Cash at bank 1,489 183 --------------------------- ---- ---------- --------- ----------- 6,669 2,030 3,701Creditors: Amounts falling due within one year 8 5,300 11,607 3,274-------------------------- ---- ---------- --------- -----------Net current assets/(liabilities) 1,369 (9,577) 427-------------------------- ---- ---------- --------- -----------Total assets less current 23,335 (2,302) 7,563liabilitiesCreditors: Amounts falling due after more than one year 9 7,975 50 1,953-------------------------- ---- ---------- --------- ----------- 15,360 (2,352) 5,610-------------------------- ---- ---------- --------- -----------Capital and reservesCalled-up equity share capital 10 482 1 400Deferred shares 10 2,844 - -Share premium account 10 12,939 - 6,759Other reserves (37) - (37)Profit and loss account (868) (2,353) (1,512)-------------------------- ---- ---------- --------- -----------Shareholders' funds 15,360 (2,352) 5,610-------------------------- ---- ---------- --------- ----------- Consolidated Cash Flow StatementFor the six months ended 31 July 2005 - Unaudited Six months Six months Twelve months ended ended ended 31 July 31 July 31 January 2005 2004 2005 £000's £000's £000's------------------------------------ ---------- --------- -----------Net cash inflow/(outflow) fromoperating activities 458 (158) (1,909)Returns on investments andservicing of financeInterest received - 3 -Interest paid (100) (518) (720)Interest element of hire purchase (2) - (4)------------------------------------ ---------- --------- -----------Net cash outflow from returnson investments and servicing offinance (102) (515) (724)Taxation (69) (4) 47Capital expenditure and financialinvestmentPayments to acquire intangiblefixed assets - - (128)Payments to acquire tangiblefixed assets (60) - (28)Receipts from sale of fixedassets 6 4 12Acquisition of investments 1 - (8)------------------------------------ ---------- --------- -----------Net cash outflow from capitalexpenditure and financialinvestment (53) 4 (152)------------------------------------ ---------- --------- -----------Acquisitions and disposalsAcquisition of shares in groupundertakings (9,314) - -Deferred consideration onacquisitions (276) - -Net cash acquired with subsidiary 10 - ------------------------------------- ---------- --------- -----------Net cash outflow fromacquisitions and disposals (9,580) - ------------------------------------- ---------- --------- -----------Cash outflow before financing (9,346) (673) (2,738)FinancingIssue of equity share capital 82 - 200Share premium on issue ofequity share capital 6,180 - 6,759Repayment of loans (1,492) - (7,846)New bank loans 6,870 - 2,200Repayment of bank loans (76) - (9)Capital element of hire purchase (20) (17) (47)------------------------------------ ---------- --------- -----------Net cash inflow from financing 11,544 (17) 1,257------------------------------------ ---------- --------- -----------Increase/(decrease) in cash 2,198 (690) (1,481)------------------------------------ ---------- --------- ----------- Reconciliation of operating profit to net cash inflow/(outflow) from operatingactivitiesFor the six months ended 31 July 2005 - Unaudited Six months Six months Twelve months ended ended ended 31 July 31 July 31 January 2005 2004 2005 £000's £000's £000's------------------------------------ ---------- --------- -----------Operating profit 1,256 490 1,530Amortisation 236 145 345Depreciation 89 170 222(Profit)/loss on disposal offixed assets (6) - 63Increase in debtors (962) (1) (1,577)Increase/(decrease) in creditors 100 (863) (2,338)Reorganisation costs (255) (99) (154)------------------------------------ ---------- --------- -----------Net cash inflow/(outflow) fromoperating activities 458 (158) (1,909)------------------------------------ ---------- --------- ----------- Reconciliation of net cash flow to movement in net debtFor the six months ended 31 July 2005 - Unaudited Six months Six months Twelve months ended ended ended 31 July 31 July 31 January 2005 2004 2005 £000's £000's £000's------------------------------------ ---------- --------- -----------Increase/(decrease) in cash in theperiod 2,198 (690) (1,481)Cash outflow from loans 1,492 - 7,846Cash inflow from bank loans (6,794) - (2,191)Cash outflow from lease financing 20 17 47------------------------------------ ---------- --------- -----------Change in net debt resulting fromcash flows (3,084) (673) 4,221Non cash movements on loans - (114) -New finance leases (96) - (20)Debt acquired with acquisitions (1,442) - -Foreign exchange (101) - ------------------------------------- ---------- --------- -----------Movement in net debt in the period (4,723) (787) 4,201Opening net debt (3,144) (7,345) (7,345)------------------------------------ ---------- --------- -----------Closing net debt (7,867) (8,132) (3,144)------------------------------------ ---------- --------- ----------- Analysis of changes in net debtFor the six months ended 31 July 2005 - Unaudited At 1 February Cash flows Other At 31 July 2005 Changes 2005 £000's £000's £000's £000's------------------------- ----------- ---------- --------- ----------Net Cash:Cash at bank and in hand - 1,590 (101) 1,489Overdrafts (608) 608 - -------------------------- ----------- ---------- --------- ---------- (608) 2,198 (101) 1,489------------------------- ----------- ---------- --------- ----------Debt:Debt due within 1 year (552) 880 (1,666) (1,338)Debt due after 1 year (1,914) (6,182) 224 (7,872)Finance Lease (70) 20 (96) (146)------------------------- ----------- ---------- --------- ---------- (2,536) (5,282) (1,538) (9,356)------------------------- ----------- ---------- --------- ----------Net debt (3,144) (3,084) (1,639) (7,867)------------------------- ----------- ---------- --------- ---------- Notes to the financial information 1. Basis of preparation The interim financial information has been prepared on the basis of theaccounting policies set out in the Group's statutory financial statements forthe year ended 31 January 2005. These interim financial statements do not constitute statutory financialstatements within the meaning of section 240 of the Companies Act 1985. Resultsfor the six month periods ended 31 July 2005 and 31 July 2004 have not beenaudited. The results for the year ended 31 January 2005 have been extracted fromthe statutory financial statements, upon which the auditors reported withoutqualification. 2. Acquisitions During the period the Group acquired EPA EuroPharma and the assets of PharmData.The provisional goodwill on these acquisitions is being written off on astraight line basis over a period of twenty years. 3. Geographical Analysis Six months Six months ended ended 31 July 2005 31 July 2004 £000's £000's------------------ ----------- -------- ---------- --------UK 2,932 48% 1,347 31%Europe 711 12% 501 12%USA 2,424 40% 2,442 57%------------------ ----------- -------- ---------- --------Total 6,067 100% 4,290 100%------------------ ----------- -------- ---------- -------- 4. Earnings per share Earnings per share for the six month period ended 31 July 2005 is based on theprofit after taxation of £744,000 divided by the weighted average number ofshares during the period, 41,287,171 (basic) and 43,832,352 (dilutive) 1pordinary shares. A reconciliation of the basic and diluted number of shares used in the six monthperiod ended 31 July 2005 is: Weighted average number of shares 41,287,171Dilutive share options 2,545,181Diluted 43,832,352 5. Exceptional items The exceptional items represent restructuring costs arising as a result ofrationalisation and reorganisation following the acquisitions in the period. 6. Investments EPA has on its books an asset of £1,435k being the amount it paid for the rightsto eight generic drug products. The rights were acquired from EuropharmaContract Research Limited a company owned by EPA's former major shareholder. 7. Debtors As at As at 31 July 2005 31 July 2004 £000's £000'sTrade 2,519 1,165Prepayments and other debtors 2,661 682------------------------------ ------------- ------------ 5,180 1,847------------------------------ ------------- ------------ 8. Creditors and amounts due within one year As at As at 31 July 2005 31 July 2004 £000's £000'sBank loans and overdrafts 1,113 -Trade creditors 1,560 845Corporation tax 168 16Other taxes 205 206Other creditors and accruals 1,987 2,275Acquisition loans - 7,960Other loans 225 275HP and leasing 42 30------------------------------ ------------- ------------ 5,300 11,607------------------------------ ------------- ------------ 9. Creditors and amounts due over one year As at As at 31 July 2005 31 July 2004 £000's £000'sHP and leasing 103 50Bank loans 7,872 ------------------------------- ------------- ------------ 7,975 50------------------------------ ------------- ------------ 10. Share capital and share premium account Called Up and Fully Paid 1p Ordinary Shares £000's1 February 2005 40,000,000 400On acquisition EPA 3,666,667 37On acquisition Pharmdata 4,578,313 45-------------------- ------------- ------------31 July 2005 48,244,980 482-------------------- ------------- ------------ Share Premium £000's1 February 2005 6,759On acquisition EPA 2,602On acquisition Pharmdata 3,578-------------------- -------------31 July 2005 12,939-------------------- ------------- Also included in share capital and reserves is the equivalent amount of sharesthat will be issued upon Pharmdata meeting the first tier earn out - USD 5M or£2,844k of ordinary shares. 11. A copy of this statement is being sent to all shareholders and further copies are available from the Company's Registered Office at the address below as well as on the Company's website: www.premier-research.com Premier Research Group plc, 30 Wellington Business Park, Dukes Ride, Crowthorne, Berkshire, RG45 6LS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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