Interim Results
December 24 2003 - 2:00AM
UK Regulatory
RNS Number:6093T
Drew Scientific Group PLC
24 December 2003
DREW SCIENTIFIC GROUP PLC
INTERIM RESULTS
Drew Scientific Group PLC ("Drew" or "the Group"), the international healthcare
products manufacturer and supplier announces its interim results for the six
months ended 30 September 2003. Drew produces diagnostics systems and related
consumables for diabetes monitoring, cardiovascular and haematology testing,
Highlights:
* Sales were #4.6m representing a 24.1% fall compared to 2002
* Loss after tax attributable to shareholders of #1.12m (2002: loss #0.09m)
* Operating loss before exceptional item was #0.56m in line with
expectations
* Major reorganisation during the period, UK instrument manufacture
transferred to Dallas
* EXIM facility renewed until May 2004
* Cash remains very tight
Commenting on the Group's current trading John Davis, Chairman, said:
"The fall in sales represents a combination of product issues experienced during
the first quarter and severe cash flow difficulties making purchasing of
components difficult and inefficient. Our products remain in demand and we are
overcoming the challenges we face."
For further information please contact:
Drew Scientific Group PLC Tel: 01229 432089
John Davis, Chairman
Mike Asher, Chief Executive
David Blain, Finance Director
Brewin Dolphin Securities Limited Tel: 0161 214 5553
Richard Evans
Binns and Co Public Relations Tel: 020 7786 9600
Peter Binns
Chairman's statement
The results for the six months ended 30 September 2003 show a loss attributable
to shareholders of #1.12m (2002: loss #0.09m) on sales of #4.6m (2002: #6.05m).
The operating loss before the exceptional item was #0.56m (2002: loss #0.14m).
The directors are not recommending the payment of a dividend.
Sales fell by 24.1% compared to the prior year. This reduction occurred as a
result of a fall in the US of 21.9% in local currency and 14.2% in the UK. The
strengthening of the pound against the dollar accounted for an additional loss
of sales in the USA of 3.5%. The fall in sales represents a combination of
product issues experienced during the first quarter and severe cash flow
difficulties making purchasing of components difficult and inefficient.
During the period we took decisive action to improve the Group's trading
position. The USA operation was reorganised and the number of employees reduced
by approx 30%. The UK instrument production facility was closed and instrument
production transferred to Dallas. The UK closure resulted in a one-off closure
cost of #0.5k which is disclosed in the results as an exceptional item. Three of
the Group directors and 2 other UK based staff have been working in the USA for
a number of months leading to improvements throughout the US operation. The
product issues highlighted earlier in the year have been addressed.
We have made good progress in addressing the cashflow issue but cash remains
very tight. This will continue to affect second half trading. The EXIM facility
has been renewed until 31 May 2004. In October 2003 we did a small share placing
which when combined with new loans and facilities provided an additional #0.5k
of working capital for the Group. Equity shareholders' funds increased by #1.25m
during October 2003 when Medisys converted its preference shares into ordinary
shares upon the cessation of the Alzheimer's research and development work.
Your Board has initiated a strategic review to determine the best way to develop
the Group's products and technology and to maximise shareholder value. Our
products remain in demand and we are overcoming the challenges we face.
John Davis
Non- executive Chairman
23 December 2003
Profit and loss account for the half year to 30 September 2003
Unaudited Unaudited Audited
Half year Half year Full
year
to 30 September to 30 September to 31
2003 2002 March
2003
#'000 #'000 #'000
Turnover - continuing 4,596 6,052 12,453
Cost of sales (3,162) (3,801) (8,497)
--------- --------- ---------
Gross profit 1,434 2,251 3,956
Net operating expenses
-------------------------------- --------- --------- ---------
Trading expenses before
goodwill amortisation,
goodwill
impairment and
exceptional item (1,852) (2,091) (4,329)
Goodwill amortisation (142) (298) (598)
Goodwill impairment - - (5,631)
Exceptional item (500) - -
-------------------------------- --------- --------- ---------
(2,494) (2,389) (10,558)
--------- --------- ---------
Operating loss (1,060) (138) (6,602)
Profit on sale of
freehold land and
buildings - 110 116
Net interest payable (89) (91) (159)
--------- --------- ---------
Loss on ordinary
activities before
taxation (1,149) (119) (6,645)
Taxation 29 33 146
--------- --------- ---------
Loss after taxation
attributable to
shareholders (1,120) (86) (6,499)
Dividend - - -
--------- --------- ---------
Retained loss (1,120) (86) (6,499)
--------- --------- ---------
Loss per share (Note 2) (2.0p) (0.2p) (12.0p)
Consolidated balance sheet as at 30 September 2003
Unaudited Unaudited Audited
As at 30 September As at 30 September As at 31
2003 2002 March
#'000 #'000 2003
#'000
Fixed assets
Intangible assets 4,957 11,356 5,482
Tangible assets 1,184 1,198 1,348
---------- ---------- ----------
6,141 12,554 6,830
Current assets
---------- ---------- ----------
Stocks 3,029 4,154 3,030
Debtors 1,975 3,579 3,484
Cash at bank and in hand 682 209 546
---------- ---------- ----------
5,686 7,942 7,060
Creditors: amounts
falling due within one
year (4,410) (4,450) (4,828)
---------- ---------- ----------
Net current assets 1,276 3,492 2,232
---------- ---------- ----------
Total assets less current
liabilities 7,417 16,046 9,062
Creditors: amounts
falling due after more
than one year (394) (804) (480)
---------- ---------- ----------
7,023 15,242 8,582
---------- ---------- ----------
Capital and reserves
Called up equity share
capital 556 556 556
Share premium 23,524 23,524 23,524
Profit and loss account (18,307) (10,088) (16,748)
---------- ---------- ----------
Equity shareholders'
funds 5,773 13,992 7,332
Minority interest -
non-equity 1,250 1,250 1,250
---------- ---------- ----------
Capital employed 7,023 15,242 8,582
---------- ---------- ----------
Consolidated cashflow statement for the half year to 30 September 2003
Unaudited Unaudited Audited
Half year Half year Full
year
to 30 September to 30 September to 31
2003 2002 March
2003
#'000 #'000 #'000
Net cash inflow/(outflow) from
operating activities
Operating loss (1,060) (138) (6,602)
Depreciation and
amortisation charges 304 441 6,571
(Increase)/decrease in
stocks (86) (369) 404
Decrease/(increase) in
debtors 1,319 (401) (437)
(Decrease)/increase in
creditors (31) (534) (780)
--------- --------- ---------
446 (1,001) (844)
Returns on investments and servicing
of finance
Interest paid (89) (91) (159)
Taxation
UK Corporation tax
received 136 - 90
Net capital
receipts/(capital
expenditure) (19) 403 101
Acquisition - (325) -
Financing (126) 807 436
--------- --------- ---------
Increase/(decrease) in
cash 348 (207) (376)
--------- --------- ---------
Reconciliation to net debt
Increase/(decrease) in
cash during period 348 (207) (376)
Decrease in debt and
finance leases 126 94 83
--------- --------- ---------
Change in net funds from
cash flow 474 (113) (293)
Non-cash movements 79 - 97
--------- --------- ---------
Movement in net debt
during period 553 (113) (196)
Net debt at start of
period (2,128) (1,932) (1,932)
--------- --------- ---------
Net debt at end of
period (1,575) (2,045) (2,128)
--------- --------- ---------
Notes:
1. The above results do not represent full accounts within the meaning of
section 254 of the Companies Act 1985.
2. The loss per share for the half year to 30 September 2003 has been
calculated as follows:
2003 2002
Losses Weighted Per share Losses Weighted Per share
average no. amount average amount
of shares pence no. pence
#'000 #'000 of shares
Basic EPS
Loss
attributable
to
shareholders (1,120) 55,568,764 (2.0p) (86) 52,450,458 (0.2p)
Effect of
dilutive
securities
Options - -
------ -------- ------- ------ ---------- -------
Diluted EPS (1,120) 55,568,764 (2.0p) (86) 52,450,458 (0.2p)
------ -------- ------- ------ ---------- -------
3. The figures for the year to 31 March 2003 are an extract from the full
accounts for that year which have been filed with the Registrar of Companies
and on which the auditors gave an unqualified opinion.
4. The interim financial information has been prepared on the basis of
accounting policies adopted for the year ended 31 March 2003 as set out in
the group statutory accounts.
5. Reconciliation of movement in equity shareholders' funds:
Unaudited Unaudited Audited
Half year Half year Full year
to 30 September 2003 to 30 September 2002 to 31
March
2003
#'000 #'000 #'000
Opening equity
shareholders' funds 7,332 13,945 13,945
Loss for the year
attributable to equity
shareholders
transferred (1,120) (86) (6,499)
from reserves
Foreign exchange
translation differences (439) (702) (949)
New shares issued - 835 835
--------- --------- ---------
Closing equity
shareholders' funds (5,773) 13,992 7,332
--------- --------- ---------
6. The interim statement is being sent to all shareholders and is available
from the registered office of the Company: Sowerby Woods Industrial Estate,
Park Road, Barrow in Furness, Cumbria LA14 4QR.
This information is provided by RNS
The company news service from the London Stock Exchange
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