TIDMAGY
RNS Number : 9227E
Allergy Therapeutics PLC
04 March 2020
Allergy Therapeutics plc
("Allergy Therapeutics", "ATL" or the "Group")
Interim Results for the six months ended 31 December 2019
- Record level of operating profit pre R&D supported by strong sales
- Strong cash position with Grass MATA MPL Phase III programme fully funded for H2 2020 start
- Publication of promising preclinical data from VLP Peanut candidate
4 March 2020 Allergy Therapeutics plc (AIM: AGY), the fully
integrated commercial biotechnology company specialising in allergy
immunotherapy, today announces its unaudited interim results for
the six months ended 31 December 2019.
Highlights
Financial highlights
-- Revenue increased by 9% at constant rate(*) and 8% in actual
terms to GBP50.5m (H1 2019: GBP46.7m)
-- 10% growth in pre-R&D operating profit to GBP17.3m (H1
2019: GBP15.7m) largely as a result of
continued sales growth
-- Operating profit pre R&D margin of 34% (H1 2019 34%)
-- R&D expenditure lower at GBP1.3m (H1 2019: GBP5.0m) due
to receipt of Inflamax legal costs (GBP3.2m)
-- Strong cash balance of GBP39.7m (30 June 2019: GBP27.4m)
Operational highlights
-- Good growth across all key products in the portfolio with
small increase in market share in European business
-- First stage of Grass MATA MPL Phase III programme to start in H2 2020 in EU and USA
-- Preclinical VLP Peanut data published in highly respected journal post period end
Manuel Llobet, CEO at Allergy Therapeutics , stated: "The Group
has made a steady start to the year with good sales growth
supporting our strategy. The regulatory environment remains
uncertain but we continue to perform well commercially and to
progress our high potential pipeline."
(*) Constant currency uses prior year weighted average exchange
rates to translate current year foreign currency denominated
revenue to give a year on year comparison excluding the effects of
foreign exchange movements. See table in finance review for an
analysis of revenue.
This announcement contains inside information for the purposes
of Article 7 of Regulatory (EU) No596/2014.
-S -
Analyst briefing and webcast today
Manuel Llobet, Chief Executive Officer, and Nick Wykeman, Chief
Financial Officer, will host a meeting and webcast for analysts to
provide an update on the Group, followed by a Q&A session, at
09.30am GMT today at the offices of Panmure Gordon & Co, One
New Change, London, EC4M 9AF.
Dial-in details are:
Webcast link: https://edge.media-server.com/mmc/p/mhc6ku2o
UK dial-in: +44 (0) 2071 928000
US dial-in: +16315107495
Conference ID: 3622619
For further information, please contact:
Allergy Therapeutics
+44 (0) 1903 845 820
Manuel Llobet, Chief Executive Officer
Nick Wykeman, Chief Financial Officer
Panmure Gordon
+44 (0) 20 7886 2500
Freddy Crossley, Emma Earl, Corporate Finance
James Stearns, Corporate Broking
Consilium Strategic Communications
+44 20 3709 5700
Mary-Jane Elliott / David Daley / Nicholas Brown / Olivia
Manser
allergytherapeutics@consilium-comms.com
Stern Investor Relations, Inc.
+1 212 362 1200
Christina Tartaglia
christina@sternir.com
Notes for editors:
About Allergy Therapeutics
Allergy Therapeutics is an international commercial
biotechnology company focussed on the treatment and diagnosis of
allergic disorders, including aluminium free immunotherapy vaccines
that have the potential to cure disease. The Group sells
proprietary and third party products from its subsidiaries in nine
major European countries and via distribution agreements in an
additional ten countries. Its broad pipeline of products in
clinical development include vaccines for grass, tree and house
dust mite, and peanut allergy vaccine in pre-clinical development.
Adjuvant systems to boost performance of vaccines outside allergy
are also in development.
Formed in 1999 out of Smith Kline Beecham, Allergy Therapeutics
is headquartered in Worthing, UK with more than 11,000m(2) of
state-of-the-art MHRA-approved manufacturing facilities and
laboratories. The Group, which has achieved over 9% compound annual
growth since formation, employs c.600 employees and is listed on
the London Stock Exchange (AIM:AGY). For more information, please
see www.allergytherapeutics.com .
Joint Statement from the Chairman and Chief Executive
Officer
Operating Review
Overview
The Group performed well in a challenging market and continued
to drive growth in operating profit before R&D (10% up on
2019). There has been increased regulatory activity across Europe
in the period creating uncertainty in the market. The growth
achieved in the last six months highlights the quality and
convenience of our products, our robust supply chain and strong
marketing and sales team.
The Market
Allergy Therapeutics achieved sales growth in constant terms(1)
of 9% (8% at actual rates). This growth came from across the
portfolio with particularly strong performances by Pollinex,
Venomil and Pollinex Quattro. The strong 2019 tree season has
driven a strong demand for our tree allergy products while the
grass season was less pronounced.
We have seen a strong performance in H1 2020 from Germany,
Spain, Netherlands and Switzerland, driven by improved market
positions, promotion of our ultra-short course products and more
focus on key products in the portfolio. The market is generally
becoming more aware of the importance of data-driven products,
which benefits the Group's products which use advanced science and
technology to validate performance.
Regulatory Affairs & Clinical Development
The first half of FY 2020 has been a very busy time for the
clinical team with the analysis of the Birch MATA MPL Phase III
(B301) trial results leading to a revised approach to the Grass
MATA MPL trial. The upcoming Grass development study will now take
a stepwise approach, with two stages covering both the 2021 and
2022 pollen seasons. The stepwise approach has been designed with
input from regulatory consultants. It enables a phase III-scale
development to begin in 2020 and includes a data review to gain
insights into the trial, before continuing to the second part of
the Phase III development. The first stage of the Grass MATA MPL
phase III programme will start in the autumn of this year with read
out in 2021.
A significant amount of work has been carried out by the Group
in relation to the German TAV (Therapy Allergy Ordinance) process
and the products that are part of that process. The German TAV
process is in response to EU legislation relating to named patient
products which requires immunotherapies to the most common
allergens to undergo a market authorisation process. This is also
starting to apply to the Italian and Spanish markets and is likely,
in time, to affect the whole EU market. Further trials are not
expected to be needed for each additional country.
The Group is in dialogue with the German regulatory authorities
about the results of the Birch MATA MPL Phase III trial. The team
will focus first on applying the lessons to the Grass MATA MPL
trials before returning to a further clinical trial in relation to
Birch.
The Group announced the publication, in January 2020, of
encouraging preclinical results of its peanut allergy vaccine
candidate in The Journal of Allergy and Clinical Immunology (JACI),
the most frequently cited allergy and immunology journal in the
field.
The study, which used the Group's novel virus like particle
(VLP) platform, potentially offers an effective way to treat peanut
allergies and prevent anaphylaxis. It provided validation of proof
of concept for the generation of sustained immunity and protection
through vaccination. The study illustrated that a single injection
protected against systemic anaphylaxis, as demonstrated via
subsequent in vivo challenge, skin prick testing and oral
challenge.
(1) Constant currency uses prior year weighted average exchange
rates to translate current year foreign currency denominated
revenue to give a year on year comparison excluding the effects of
foreign exchange movements. See table in finance review for an
analysis of revenue.
With manufacturing scale-up of the product now underway and
following agreement with several regulatory authorities on the
clinical trial design, the programme to initiate first-in-human
studies is progressing well. Given the importance of the trial and
scale of the opportunity, the Group is implementing robust
protocols with the regulatory authorities and plans to introduce
additional in vitro human cell testing to its preclinical programme
to ensure the initial studies will support global registration
plans. Submission of the clinical trial application is anticipated
in 2021.
The Group is evaluating further opportunities in the immunology
field that could utilise VLP technology alongside the adjuvant
systems that the Group owns.
Financial Review
Reported revenues for the first half of the financial year were
GBP50.5m (H1 2019: GBP46.7m), representing a growth of 9% at
constant currency (see table below) and 8% in actual terms. The
sales growth has been driven primarily by the Group's investment in
marketing and sales teams and broadening of the product portfolio
as it continues to increase its market share in all of its main
markets. Rebates were higher this period due to increased sales and
price rises of certain products.
A reconciliation between reported revenues and revenues in
constant currency(1) is provided in the table below:
6 months to 6 months to Increase Increase
31-Dec-19 31-Dec-18
GBPm GBPm GBPm %
Revenue 50.5 46.7 3.8 8.1%
Adjustment to retranslate to prior year foreign exchange
rate 0.3 - 0.3
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Revenue at constant currency (1) 50.8 46.7 4.1 8.8%
Add rebates at constant currency 3.3 2.4 0.9
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Gross revenue at constant currency 54.1 49.1 5.0 10.2%
As in previous years, owing to the seasonality of the pollen
allergy market, between 60% to 70% of Allergy Therapeutics'
revenues are generated in the first half of the financial year and,
as a consequence, the Group typically reports profits in the first
half of the year and losses in the second half.
Cost of goods sold increased in the period to GBP11.4m (H1 2019:
GBP9.4m), mainly due to higher volumes being sold, Brexit costs and
reversal of stock provisions in the prior year. Gross profit
increased to GBP39.1m (H1 2019: GBP37.3m), which represents a gross
margin of 77% (H1 2019: 80%).
Sales, marketing and distribution costs of GBP13.6m (H1 2019:
GBP13.6m) were in line with the previous period. Administration
expenses of GBP8.2m (H1 2019: GBP8.1m) were broadly in line with
the previous period.
Research and development costs of GBP1.3m (H1 2019: GBP5.0m)
reflected the lower level of activity in H1 2020 with the key Grass
MATA MPL trials starting in autumn 2020 and included the GBP3.2m
received in settlement of legal costs relating to the litigation
with Inflamax.
The tax charge in the period of GBP0.6m (H1 2019: GBP0.4m)
relates to overseas subsidiaries. It should be noted that IFRIC 23
(Uncertainty over income tax treatment) has been implemented in the
period ended 31 December 2019. The Group prepares provisions
against uncertain tax positions in accordance with IFRIC 23. IFRIC
23 has been adopted by the Group with effect from 1 July 2019, with
the modified retrospective approach being applied (i.e. the
cumulative effect of initially applying the Interpretation is
recognised as an adjustment to the opening balance of retained
earnings, with no change being made to the prior year comparative
numbers).
The effect of IFRIC 23 provisions in these interim financial
statements amounts to GBP0.7m and this has been dealt with through
retained earnings.
Property, plant and equipment excluding IFRS16 increased by
GBP1.3m to GBP11.3m compared to the year before, mainly as a result
of investment in new storage facilities as part of our Brexit
contingency planning. IFRS16 additions amounted to GBP9m and
depreciation of GBP0.7m. Goodwill was GBP3.3m (H1 2019: GBP3.4m)
and was lower than the prior year due to changes in the foreign
exchange rates. Other intangible assets have decreased by GBP0.2m
due to the amortisation charge being in excess of additions.
Total current assets excluding cash have decreased by GBP1.6m to
GBP17.8m (H1 2019: GBP19.4m) mainly due to a reduction in debtor
days.
Retirement benefit obligations, which relate solely to the
German pension scheme, increased to GBP12.3m (H1 2019: GBP10.5m)
due to a decrease in the discount rate primarily as a result of
lower corporate bond yields in Germany.
Net cash generated by operations was strongly positive, due to
lower R&D spending in the first half of the year 2020 as well
as the strong trading result, with an inflow of GBP14.3m (H1 2019:
GBP6.8m).
It should be noted that the financial results for H1 2020 now
incorporate IFRS16, the new accounting standard on leased assets.
This requires companies reporting under International Accounting
Standards to place operating lease assets on the balance sheet with
an accompanying liability. Furthermore, depreciation is charged on
these assets (GBP0.7m) as well as a finance charge (GBP0.2m) with
removal of lease charges (GBP0.9m). The impact of this is that
lease costs in the P&L reduce and depreciation increases.
Hence, the measure of earnings before interest, tax and
depreciation and amortisation has benefited to the order of
GBP0.9m. There is no material impact on the operating profit.
Financing
The Group had cash of GBP39.7m (30 June 2019 GBP27.4m) and debt
on its balance sheet at the close of the period relating to loans
held in the Spanish subsidiary of GBP2.0m (H1 2019: GBP2.8m). The
seasonal overdraft was not used during the calendar year 2019 but
the Group expects to renew its banking facilities when they are due
for review in August 2020.
The Directors believe that the Group will have sufficient
facilities for the foreseeable future and, accordingly, they have
applied the going concern principle in preparing these interim
financial statements.
Movements in the currency markets between the respective values
of the euro and sterling have an effect on the Group's operations.
The Group manages its cash exposure in this respect by foreign
currency hedges. Over 90% of our gross sales are denominated in
euros whereas approximately 60% of costs are incurred in the United
Kingdom and denominated in sterling.
Outlook
This calendar year is key in order to prepare for several
important trials for the 2021 financial year.
The Board and management team expect that net sales will
continue to grow in line with market expectations in the second
half of the year and have confidence in the future of the business.
The gross margin is expected to be lower in the second half of the
year compared with the first, as volumes through the factory are
likely to be lower, leaving gross margin for the whole year in line
with last year. As planned, research and development costs,
excluding the Inflamax legal cost recovery, are expected to double
in the second half of the year compared with the first half,
reflecting the period of higher activity of the Grass MATA MPL
trial and further work on peanut study as well as TAV costs. Other
costs for the full year are expected to be in line with market
expectations due to phasing and Brexit.
As noted in the Group Risks section of the 2019 Annual Report,
management has taken action to try to mitigate the impact of
Brexit. It will be difficult to determine precisely what impact
Brexit will have on the business until a trade deal is
concluded.
The Group continues to grow well while developing a very
exciting and valuable pipeline of products.
The regulatory environment is a challenge but the Group is best
placed to meet it with its strong portfolio of products and high
potential pipeline.
Peter Jensen
Chairman
Manuel Llobet
Chief Executive Officer
4 March 2020
ALLERGY THERAPEUTICS PLC
Consolidated income statement
Note 6 months 6 months 12 months
to to to
31 Dec 31 Dec 30 Jun
2019 2018 2019
2 GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Revenue 50,472 46,713 73,717
Cost of sales (11,414) (9,411) (18,379)
---------- ---------- -------------
Gross profit 39,058 37,302 55,338
Sales, marketing and distribution
costs (13,614) (13,563) (26,995)
Administration expenses - other (8,177) (8,063) (17,595)
Research and development costs
(includes GBP3.2m received relating
to the litigation with Inflamax.
FY19:GBP6.0m received) (1,273) (4,968) (6,950)
---------- ---------- -------------
Administration expenses (9,450) (13,031) (24,545)
Other income - 31 593
Operating profit 15,994 10,739 4,391
Finance income 152 118 103
Finance expense (291) (124) (201)
---------- ---------- -------------
Profit before tax 15,855 10,733 4,293
Income tax (579) (408) (826)
---------- ---------- -------------
Profit for the period 15,276 10,325 3,467
========== ========== =============
Earnings per share 3
Basic (pence per share) 2.40p 1.64p 0.55p
Diluted (pence per share) 2.27p 1.55p 0.52p
Consolidated statement of comprehensive
income
6 months 6 months 12 months
to 31 Dec to to
31 Dec 30 Jun
2019 2018 2019
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Profit for the period 15,276 10,325 3,467
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of net defined benefit
liability (1,060) 206 (906)
Remeasurement of investments-retirement
benefit
assets 65 (83) (42)
Revaluation gains - freehold land
and buildings - - 312
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations (286) 131 130
Total comprehensive income 13,995 10,579 2,961
=========== ========== ==========
Consolidated balance sheet 31 Dec 31 Dec 30 Jun
2019 2018 2019
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Assets
Non-current assets
Property, plant and equipment 11,336 10,034 11,481
Right of use assets (property, 9,004 - -
plant and equipment)
Intangible assets - goodwill 3,324 3,438 3,432
Intangible assets - other 1,245 1,437 1,408
Investment - retirement benefit
asset 5,479 5,369 5,551
Total non-current assets 30,388 20,278 21,872
Current assets
Inventories 8,716 9,033 9,409
Trade and other receivables 8,769 10,324 9,776
Cash and cash equivalents 39,725 31,642 27,440
Derivative financial instruments 324 - -
Total current assets 57,534 50,999 46,625
Total assets 87,922 71,277 68,497
---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (12,903) (12,892) (15,736)
Current borrowings (659) (664) (694)
Lease liabilities (1,457) - -
Derivative financial instruments - (65) (429)
Total current liabilities (15,019) (13,621) (16,859)
Net current assets 42,515 37,378 29,766
---------- ---------- ----------
Non-current liabilities
Retirement benefit obligations (12,299) (10,477) (11,747)
Deferred taxation liability (284) (304) (318)
Non-current provisions (264) (306) (273)
Lease liabilities (7,536) - -
Long term borrowings (1,317) (2,092) (1,742)
Total non-current liabilities (21,700) (13,179) (14,080)
Total liabilities (36,719) (26,800) (30,939)
Net assets 51,203 44,477 37,558
========== ========== ==========
Equity
Capital and reserves
Issued share capital 646 646 646
Share premium 112,576 112,576 112,576
Merger reserve - shares issued
by subsidiary 40,128 40,128 40,128
Reserve - share based payments 3,368 2,324 3,023
Revaluation reserve 1,207 949 1,207
Foreign exchange reserve (1,131) (844) (845)
Retained earnings (105,591) (111,302) (119,177)
---------- ---------- ----------
Total equity 51,203 44,477 37,558
========== ========== ==========
Consolidated statement of changes in equity
Issued Share Merger Reserve Foreign Retained Total
Capital premium reserve - share Revaluation exchange earnings equity
- shares based reserve reserve
issued payment
by subsidiary
--------- --------------- --------- -------------- ---------- ----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2018 646 112,576 40,128 2,324 949 (844) (111,302) 44,477
--------- --------- --------------- --------- -------------- ---------- ---------- --------
Exchange
differences
on translation
of foreign
operations - - - - - (1) - (1)
Valuation
gains taken
to equity
(land and
buildings) - - - - 312 - - 312
Remeasurement
of net defined
benefit
liability - - - - - - (1,112) (1,112)
Remeasurement
of investments
- retirement
benefit assets - - - - - - 41 41
--------- --------- --------------- --------- -------------- ---------- ---------- --------
Total other
comprehensive
income - - - - 312 (1) (1,071) (760)
Loss for the
period after
tax - - - - - - (6,858) (6,858)
--------- --------- --------------- --------- -------------- ---------- ---------- --------
Total
comprehensive
income - - - - 312 (1) (7,929) (7,618)
Share based
payments - - - 699 - - - 699
Transfer of
depreciation
on revalued
property - - - - (54) - 54 -
--------- --------- --------------- --------- -------------- ---------- ---------- --------
At 30 June
2019 646 112,576 40,128 3,023 1,207 (845) (119,177) 37,558
Exchange
differences
on translation
of foreign
operations - - - - - (286) - (286)
Remeasurement
of net defined
benefit
liability - - - - - - (1,060) (1,060)
Remeasurement
of investments
- retirement
benefit assets - - - - - - 65 65
--------- --------- --------------- --------- -------------- ---------- ---------- --------
Total other
comprehensive
income - - - - - (286) (995) (1,281)
Profit for
the period
after tax - - - - - - 15,276 15,276
--------- --------- --------------- --------- -------------- ---------- ---------- --------
Total
comprehensive
income - - - - - (286) 14,281 13,995
Share based
payments - - - 345 - - - 345
IFRIC 23 tax
provision - - - - - - (695) (695)
(See Note
2)
At 31 December
2019 646 112,576 40,128 3,368 1,207 (1,131) (105,591) 51,203
========= ========= =============== ========= ============== ========== ========== ========
Condensed consolidated cash flow statement
6 months 6 months 12 months
to to to
31Dec 31Dec 30Jun
2019 2018 2019
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Cash flows from operating activities
Profit before tax 15,855 10,733 4,293
Adjustments for:
Finance income (152) (118) (103)
Finance expense 291 124 201
Non cash movements on defined benefit
pension plan 81 79 273
Depreciation and amortisation 1,922 1,014 2,090
Net monetary value of above the line
R&D tax credit - (31) (593)
Charge for share based payments 345 668 1,367
Movement in fair value of derivative
financial instruments (753) (32) 332
Foreign exchange revaluation on US
dollar cash deposits 53 4 (36)
(Increase) in trade and other receivables (178) (4,024) (1,864)
Decrease/(increase) in inventories 571 (183) (543)
(Decrease)/increase in trade and other
payables (3,727) (1,441) 162
---------- ---------- ----------
Net cash generated by operations 14,308 6,793 5,579
Bank loan fees and Interest paid (291) (124) (204)
Income tax received 572 353 225
Net cash generated by operating activities 14,589 7,022 5,600
Cash flows from investing activities
Interest received 152 119 151
Payments for retirement benefit investments (101) (231) (405)
Payments for intangible assets (53) (7) (289)
Payments for property plant and equipment (998) (722) (2,810)
Net cash used in investing activities (1,000) (841) (3,353)
Cash flows from financing activities
Proceeds from issue of equity shares - 10,600 10,600
Share issue costs - (404) (404)
Repayment of bank loan borrowings (350) (346) (651)
Repayments of lease creditor (683) - -
Net cash (used in)/generated by financing
activities (1,033) 9,850 9,545
---------- ---------- ----------
Net increase in cash and cash equivalents 12,556 16,031 11,792
Effects of exchange rates on cash and
cash equivalents (271) 78 115
Cash and cash equivalents at the start
of the period 27,440 15,533 15,533
---------- ---------- ----------
Cash and cash equivalents at the end
of the period 39,725 31,642 27,440
---------- ---------- ----------
1. Interim financial information
The unaudited consolidated interim financial information is for
the six month period ended 31 December 2019. The financial
information does not include all the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 30 June 2019, which were prepared under International
Financial Reporting Standards (IFRS) as adopted by the European
Union (EU).
The interim financial information has not been audited nor has
it been reviewed under ISRE 2410 of the Auditing Practices Board.
The financial information set out in this interim report does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Company's statutory financial statements
for the year ended 30 June 2019 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with applicable accounting standards and under the
historical cost convention except for land and buildings and
derivative financial instruments which have been measured at fair
value. The accounting policies adopted in this report are
consistent with those of the annual financial statements for the
year to 30 June 2019 as described in those financial statements.
There are no accounting standards that have become effective in the
current period that would have a material impact upon the financial
statements except for IFRS16 "Leases" and IFRIC 23, "Uncertainty
over income tax treatments" as below.
IFRS16 "Leases"
IFRS 16 "Leases" was published by the IASB and adopted by the
EU. It came into effect from 1 January 2019. The Group adopted the
standard with effect from 1 July 2019 and included related
transactions in these interim financial statements.
The effects of IFRS16 on the balance sheet at the reporting date
is to increase lease liabilities by GBP9.0m of which GBP7.5m are
within non-current liabilities and GBP1.5m within current
liabilities and correspondingly a Right-of-Use Asset of GBP9.0m
under tangible assets net of related depreciation costs of
GBP0.7m.
The impact of IFRS16 on the income statement in these interim
financial statements is an increase in EBITDA*** of GBP0.9m with no
net effect on the profit before tax.
IFRIC 23 "Uncertainty over income tax treatments"
The Group prepares provisions against uncertain tax positions in
accordance with IFRIC 23. IFRIC 23 has been adopted by the Group
with effect from 1 July 2019, with the modified retrospective
approach being applied (i.e. the cumulative effect of initially
applying the interpretation is recognised as an adjustment to the
opening balance of retained earnings, with no change being made to
the prior year comparative numbers).
The effect of IFRIC 23 provisions in these interim financial
statements amounts to a GBP0.7m adjustment dealt with through
opening retained earnings and a current period additional tax
charge of GBP0.1m.
Going Concern
The Group has been profit making in the six months to 31
December 2019, as it was in the corresponding period ending 31
December 2018.
Detailed budgets have been prepared, including cash flow
projections for the periods ending 30 June 2020 and 30 June 2021.
These projections include assumptions on the trading performance of
the operating business and the continued availability of the
existing bank facilities. The Group had a cash balance of GBP39.7m
at 31 December 2019 and expects to renew its banking facilities
when they are due for renewal in August 2020. After making
appropriate enquiries, which included a review of the annual budget
and latest forecast, by considering the cash flow requirements for
the foreseeable future and the effects of sales and other
sensitivities on the Group's funding plans, the Directors continue
to believe that the Group will have sufficient resources to
continue in operational existence for the foreseeable future and
accordingly have applied the going concern principle in preparing
these interim financial statements.
***EBITDA Profit before interest, tax, depreciation and
amortisation.
3. Earnings per share
6 months 6 months 12 months
to 31 Dec to 31 Dec to 30 Jun
2019 2018 2019
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Profit after tax attributable to equity
shareholders 15,276 10,325 3,467
Shares Shares Shares
'000 '000 '000
Issued ordinary shares at start of the
period 636,169 596,169 596,169
Ordinary shares issued in the period - 40,000 40,000
----------- ----------- -----------
Issued ordinary shares at end of the
period 636,169 636,169 636,169
Weighted average number of shares in
issue for the period 636,169 629,502 632,835
=========== =========== ===========
Weighted average number of shares for
diluted earnings per share 672,321 667,845 669,703
=========== =========== ===========
Basic earnings per ordinary share (pence) 2.40p 1.64p 0.55p
=========== =========== ===========
Diluted earnings per ordinary share
(pence) 2.27p 1.55p 0.52p
=========================================== =========== =========== ===========
4. Contingent liabilities
On 23 February 2015, the Company received notification that The
Federal Office for Economics and Export ("BAFA") had made a
decision to reverse their preliminary exemption to the increased
manufacturers rebate in Germany for the period July to December
2012. The Company was granted a preliminary exemption to the
increased rebate for this period by BAFA in 2013. The Company
recognised revenue of EUR1.4m (GBP1.1m at that time, now GBP1.2m)
against this exemption in the year ended 30 June 2013. All other
preliminary exemptions (granted for periods up to 30 June 2012)
have previously been ratified as final by BAFA. After taking legal
advice, the Company has lodged an appeal against this decision and
is confident that the exemption will be re-instated. Therefore, as
at 31 December 2019, no provision has been recognised for the
repayment of the rebate refund. This position will be kept under
review.
In respect of net revenue relating to certain products, there is
a risk that up to GBP5.8m cumulative revenue (2019: GBP3.5m)
recorded in periods up to and including December 2019 may be
subject to a retrospective change. This is due to the level of
rebate being applied.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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