TIDMERGO
RNS Number : 6888V
Ergomed plc
10 April 2019
PRESS RELEASE
Unaudited Preliminary Results for the year ended 31 December
2018
-- Revenue increase of 15% on comparable basis
o PrimeVigilance growth of 23%
-- Orphan drug development strategy gaining momentum
o 37% of new business won in CRO is for orphan drugs
-- Backlog increased 20% to GBP109 million underpinning 2019 targets
Guildford, UK - 10 April 2019: Ergomed plc, (LSE: ERGO)
('Ergomed' or the 'Company'), a company focused on providing
specialised services to the pharmaceutical industry, today
announces its unaudited Preliminary Results for the year ended 31
December 2018.
The Company adopted IFRS 15 with effect from 1 January 2018.
Upon adoption, Ergomed elected to use the cumulative effect
transition method meaning that the results of prior years are not
restated under IFRS 15 methodology. For comparison purposes,
therefore, reference is also made to IAS 18 and Note 1 to the
unaudited Financial Statements which includes an analysis of
adjustments required to reconcile these two accounting
methodologies where appropriate in an effort to provide a clear
picture of the impact of adoption.
Selected Financial Highlights
Unaudited Restated(3)
Figures in GBP millions, unless otherwise IFRS 15 IAS 18 IAS 18
stated Full year Full year Full year
2018 2018 2017
-------------------------------------------- ------------ ------------ ------------
Net Service Fee Revenue(1) N/A 46.9 39.6
Total Revenue 54.1 54.9 47.6
Gross Profit 19.3 20.1 17.6
Gross Margin (%) 36% 37% 37%
Research & Development (1.6) (1.6) (2.7)
Adjusted EBITDA (after exceptional
and other items)(2) 2.3 3.1 2.8
Exceptional Items (net) (8.5) (8.5) (0.1)
Cash and Cash Equivalents 5.2 5.2 3.2
Backlog at 31 December 109 106 88
-------------------------------------------- ------------ ------------ ------------
Note: EBITDA is defined as profit before tax for the period plus
finance costs, depreciation and amortisation
Commenting on the results, Dr Miroslav Reljanović, Executive
Chairman of Ergomed, said: "2018 saw us continue to deliver strong
top-line growth and work hard to deliver a significantly improved
financial performance in the second half.
"We are fully committed to our services strategy and confident
in the opportunities for our pharmacovigilance business and in our
orphan drug development emphasis. With our backlog at more than
GBP109 million and the full benefits of the 2018 cost reduction
programme, we believe we are well positioned to build on these
foundations."
Key Financial Highlights
-- Revenue of GBP54.1 million, equivalent to GBP54.9 million
under IAS 18, increased by 15% on a comparable basis (2017: GBP47.6
million).
-- Pharmacovigilance total revenue growth of 23% to GBP27.5 million (2017: GBP22.5 million).
-- EBITDA (adjusted)(2) of GBP2.3 million, representing growth
of 11% on an IAS 18 comparable basis.
-- Unadjusted EBITDA loss of GBP7.9 million, which is GBP7.1
million on an IAS 18 equivalent (2017: loss of GBP2.3 million)
after a GBP6.8 million charge including the full impairment of the
Haemostatix business.
-- Unadjusted EPS loss of 20.0p, equivalent to 18.1p under IAS
18 (2017: 11.0p), which includes the effect of impairment charges
for the Haemostatix business.
-- R&D expense of GBP1.6 million in 2018 (2017: GBP2.7
million) reflected costs incurred on pre-clinical studies, clinical
trial product manufacture and licencing activities.
-- Cash and cash equivalents of GBP5.2 million as at 31 December
2018 (31 December 2017: GBP3.2 million).
-- Strong backlog of GBP109 million contracted revenue as of 31
December 2018 (31 December 2017: GBP90 million after GBP2 million
IFRS 15 adoption adjustment).
Notes:
1. Net service fee revenues exclude reimbursement revenues.
2. Adjustments are made to EBITDA for share-based payment
charge, deferred consideration for acquisitions relating to post
acquisition remuneration, revaluation of contingent consideration
for acquisition, acquisition costs and exceptional items.
3. 2017 income statement was restated to amend the
classification of certain costs between cost of sales and selling,
general and administration expenses (Note 15)
Operational and Other Highlights Including Post Year-End
-- PrimeVigilance established as a leading PV services provider;
bolt-on acquisitions support growth opportunity and expansion of
offering.
-- CRO orphan development strategy consolidated under PSR brand.
-- Asarina Pharma AB, a co-development partner, completed a
public offering and listing on the First North Exchange improving
the liquidity of our investment, valued at GBP0.9 million.
-- Dr Miroslav Reljanović elected Executive Chairman.
-- Michael Spiteri appointed as an additional Non-Executive Director to help drive the digital transformation and automation strategy.
Adoption of IFRS 15 on Revenue Recognition
During 2018 Ergomed adopted IFRS 15 in relation to revenue
recognition. Revenues in 2018 have been presented in accordance
with IFRS 15. The comparative information has not been adjusted and
therefore continues to be reported under IAS 18 - 'Revenue
Recognition'.
The impact of adoption on 1 January 2018 has been to reduce
retained earnings by GBP2.2 million as, based on the portfolio of
projects at that time, recognition of revenue under a percentage of
completion methodology in accordance with IFRS 15 leads to a slower
recognition of revenue than has been the case when reported under
the previous standard IAS 18. Since revenue will be reported
according to percentage of completion after the adoption date there
is a corresponding increase in backlog of GBP2.2 million at 1
January 2018. Furthermore, reimbursement revenues are not presented
separately under IFRS 15 because the reimbursement revenues and the
services fees are accounted for on a combined basis.
Meeting and conference call for analysts:
A briefing for analysts will be held at 8:30am BST on 10(th)
April at the offices of Numis Securities Ltd., 10 Paternoster
Square, London, EC4M 7LT. Photo ID will be required for entry.
There will be a simultaneous live conference call with Q&A.
Conference call details:
Participant dial-in: 0800 376 7922
International dial-in: +44 (0) 2071 928000
Participant code: 1982927
Enquiries:
Ergomed plc Tel: +44 (0) 1483 402
975
Miroslav Reljanović (Executive Chairman)
Stuart Jackson (Chief Financial Officer)
Numis Securities Limited Tel: +44 (0) 20 7260 1000
Freddie Barnfield / Huw Jeremy (Nominated
Adviser)
James Black (Broker)
Consilium Strategic Communications - for Tel: +44 (0) 20 3709 5700
UK enquiries
Chris Gardner / Mary-Jane Elliott ergomed@consilium-comms.com
Matthew Neal / Olivia Manser
MC Services - for Continental European Tel: +49 211 5292 5222
enquiries
Anne Hennecke
About Ergomed plc
Ergomed provides specialist services to the pharmaceutical
industry spanning all phases of clinical development, post-approval
pharmacovigilance and medical information. Ergomed's fast-growing,
profitable services business includes an industry leading suite of
specialist pharmacovigilance solutions, integrated under the
PrimeVigilance brand, and a full range of high-quality contract
research and trial management services under the Ergomed brand
(CRO), and an internationally recognised specialist expertise in
orphan drug development, under PSR. For further information, visit:
http://ergomedplc.com.
Forward Looking Statements
Certain statements contained within the announcement are forward
looking statements and are based on current expectations, estimates
and projections about the potential returns of Ergomed plc
("Ergomed") and industry and markets in which Ergomed operates, the
Directors' beliefs and assumptions made by the Directors. Words
such as "expects", "anticipates", "should", "intends", "plans",
"believes", "seeks", "estimates", "projects", "pipeline" and
variations of such words and similar expressions are intended to
identify such forward looking statements and expectations. These
statements are not guarantees of future performance or the ability
to identify and consummate investments and involve certain risks,
uncertainties, outcomes of negotiations and due diligence and
assumptions that are difficult to predict, qualify or quantify.
Therefore, actual outcomes and results may differ materially from
what is expressed in such forward looking statements or
expectations. Among the factors that could cause actual results to
differ materially are: the general economic climate, competition,
interest rate levels, loss of key personnel, the result of legal
and commercial due diligence, the availability of financing on
acceptable terms and changes in the legal or regulatory
environment.
These forward-looking statements speak only as of the date of
this announcement. Ergomed expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Ergomed's expectations with regard thereto, any new information
or any change in events, conditions or circumstances on which any
such statements are based, unless required to do so by law or any
appropriate regulatory authority.
Executive Chairman's Statement
Introduction
While Ergomed saw a number of challenges during 2018,
particularly in the first half, the Company delivered continued
strong top-line growth and, through the implementation of the cost
reduction programme, a strong financial performance in the second
half of the year.
Our Pharmacovigilance (PV) business saw another year of strong
progress with 23% revenue growth and was strengthened through
technology development, senior hires and small bolt-on
acquisitions.
In Clinical Research Organisation Services (CRO) we consolidated
our focus on orphan drug development utilising the PSR brand and
believe our strategy is gaining traction with 37% of the CRO new
business won being orphan drug related.
We have worked hard to deliver significantly improved results in
the second half of 2018. Based on our contracted backlog and
re-aligned cost base, I am optimistic we can deliver our 2019
growth targets. We continue to execute on our strategy of focusing
on services, specifically on the opportunities in pharmacovigilance
and orphan drug development. I look forward to further progress
this year and in the future.
Services Business
Overall it was a strong year within the services businesses. New
business won in 2018 of GBP73 million, up 35% on 2017 (2017: GBP54
million), helped drive revenue to GBP54.1 million and growth of 15%
on a comparable basis to GBP54.9 million under IAS 18 (2017:
GBP47.6 million).
EBITDA (adjusted) for the year was GBP2.3 million (after GBP0.8
million impact of the new revenue standard) and GBP3.1 million on a
comparable basis compared with GBP2.8 million in 2017. R&D
expense, related to the development of the Haemostatix products,
was GBP1.6 million in 2018 and GBP2.7 million in 2017.
Unaudited Full Year 2018 Full Year 2018 Full Year 2017
(IFRS 15) (IAS 18) (IAS 18)
Figures in GBP millions, CRO PV CRO PV CRO PV
unless otherwise stated
--------------------------- ---------- ---------- ----------- ----------- ---------------- --------------
Net service fees N/A N/A 19.7 27.1 17.4 22.3
Reimbursement and license
revenue N/A N/A 7.7 0.4 7.8 0.2
---------- ---------- ----------- ----------- ---------------- --------------
Total Revenue 26.6 27.5 27.4 27.5 25.2 22.5
Cost of Sales (19.9) (14.9) (19.9) (14.9) (18.1) (12.0)
---------- ---------- ----------- ----------- ---------------- --------------
Gross Profit 6.7 12.6 7.5 12.6 7.1 10.5
Gross Margin % 25% 46% 27% 46% 28% 47%
Net service fee gross
margin % N/A N/A 38% 46% 39% 47%
Backlog 61 48 58 48 56 32
--------------------------- ---------- ---------- ----------- ----------- ---------------- --------------
Pharmacovigilance (PV)
The Pharmacovigilance business, under the PrimeVigilance brand,
performed strongly. Revenue from the Pharmacovigilance segment
increased 23% to GBP27.5 million in 2018 from GBP22.4 million in
2017. Pharmacovigilance revenues are not impacted by IFRS 15.
During the year, the Company added specialist
pharmacoepidemiology services to PrimeVigilance's offering. It also
completed the acquisition of two bolt-on acquisitions; Harefield
Pharmacovigilance Limited and Pharmacovigilance Services Limited.
During the year, PrimeVigilance also built out its network of
internal and external Qualified Persons in Pharmacovigilance (QPPV)
consultants to over 200 covering over 60 countries. Organic growth
of the Pharmacovigilance segment was 22%.
PrimeVigilance, which is already a significant investor in
information technology, has initiated the implementation of robotic
process automation for certain routine pharmacovigilance processes,
resulting in improvements in efficiency and accuracy. As more
processes are robotized, these improvements are expected to improve
efficiency with greater case throughput at lower overall cost.
PrimeVigilance's strategy of appropriately investing in people,
premium services and technology is designed to drive further growth
with the aim of becoming a global leader in pharmacovigilance. The
global pharmacovigilance market is forecast to grow to more than $8
billion by 2024 from around $3 billion in 2015, with contract
outsourcing forecast to expand from around 30% of the market in
2015 to approximately 50% in 2024. (Source: Global Market Insights
2017.)
Clinical Research Organisation Services (CRO)
Total revenue from the CRO segment of GBP26.6 million,
equivalent to GBP27.4 million under IAS 18, increased 9% in 2018 on
a comparable basis from GBP25.2 million in 2017, including a GBP4.1
million contribution from PSR (acquired October 2017).
During 2018, we consolidated our focus on orphan drug
development under the PSR brand, a specialist contract research
organisation based in The Netherlands focused on the development of
orphan drugs for rare diseases. Orphan drug development is a
growing area, with up to 30 million people worldwide estimated to
suffer from rare diseases and the market for orphan drugs forecast
to be $200 billion by 2020 (Source: Evaluate Pharma Orphan Drug
Report 2018). The logistical, regulatory and operational
complexities associated with orphan drug trials require specialised
approaches. PSR, combined with Ergomed's site management
organisation and study physician groups, is ideally suited for
efficient management of these types of trials.
Our strategy to focus on orphan drug development is gaining
traction. This is evidenced by 37% of the CRO new business won in
2018 being orphan drug related. While orphan trials, by the nature
of the disease, tend to be smaller than comparable phase non-orphan
trials, they also tend to be more complex and require specialist
skills in their execution. For these reasons, margins are often
higher. Orphan drug development also often requires post market
studies; studies supported by Ergomed Late Phase Division and/or
pharmacoepidemiology and risk management plans supported by
PrimeVigilance. Orphan drug development therefore represents a
cross-selling opportunity.
The Company's goal is to become the leading global contract
research organisation for orphan drug development and, overall, to
continue to outpace the market for clinical research services.
Cost Reduction Programme
During the second half of the year, management implemented a
number of actions to reduce the cost base of the business, increase
operating efficiency and improve overall profitability. This
included reduction of headcount by approximately 10%, a large
proportion focused on non-billable personnel, and management of
supplier and consultancy contracts. The programme is now complete,
delivering benefits of approximately GBP1.2 million in the second
half of 2018 at a cost of GBP0.8 million (which has been treated as
an exceptional item).
The cost reduction programme contributed to the turnaround in
2018 from an adjusted EBITDA of GBP0.0 million in the first half
(GBP(0.4) million IAS 18 equivalent) to a GBP2.3 million adjusted
EBITDA profit in the second half (GBP3.5 million IAS 18
equivalent).
Co-Development
We believe that our co-development pipeline continues to offer
potential upside as programmes progress but, in line with our focus
on services, we have not signed any new co-development partnerships
during 2018. In 2019, we expect Modus Therapeutics AB to report
Phase II data on sevuparin and Asarina Pharma AB ("Asarina") to
report Phase II data on sepranolone. In addition, we expect Cel-Sci
to report Phase III data on Multikine.
During 2018, Asarina completed a public offering and listing on
the First North Exchange. Ergomed's holding at 31 December 2018 was
valued at GBP0.9 million, representing approximately 2.4% of
Asarina's issued share capital.
Haemostatix
We have continued to make certain incremental investments in
Haemostatix during 2018 including pre-clinical studies, clinical
trial product manufacture and intellectual property protection to
maintain readiness for Phase III clinical trials of the lead
product, PeproStat. The experimental formulation of the follow-on
product, ReadyFlow, did not yet produce the desired results and
will require further development work.
We believe that Phase III development and commercialisation of
Haemostatix products need to be in the control of one party, and in
late 2018 we appointed external advisers to find a partner (or
partners) to fund Phase III trials, manufacturing scale-up and
prepare for commercial launch. Negotiations with interested parties
are progressing but management does not consider they are
sufficiently advanced, nor providing sufficient certainty to
support the carrying value of the assets, including the goodwill
arising on acquisition. Consequently, the goodwill, intangible
assets and other assets relating to Haemostatix have been impaired
to the recoverable amount of nil, resulting in an impairment of
goodwill of GBP2.1 million and an impairment of intangibles of
GBP15.2 million as of 31 December 2018. The change in the fair
value of contingent consideration of GBP11.6 million relating to
the acquisition of Haemostatix, which has also been reduced to nil
and certain onerous contract costs committed as of 31 December 2018
amounting to GBP0.2 million, have been included in exceptional
items in 2018. We expect R&D expenses in 2019 to be not more
than GBP0.3million, reflecting the run-down of activities and
ongoing protection of intellectual property whilst we manage the
licencing process.
Board Changes
In October, Michael Spiteri joined the Board as a Non-Executive
Director. Michael is currently Global COO, Digital Data and
Development at HSBC and has nearly 30 years' experience in
information technology and digital implementation and advises the
Board on opportunities presented by automation and machine
learning. Andrew Mackie stepped down as Chief Business Officer and
Board member following the shift in strategy away from
Co-Development and Haemostatix.
With the departure of Stephen Stamp, announced on 23 January
2019, Board roles were realigned with Peter George becoming
Non-Executive and Senior Independent Director of the Company and Dr
Miroslav Reljanović becoming Executive Chairman to provide
executive leadership.
Stuart Jackson subsequently notified the Board of his intention
to return to the energy sector and leave the Company in the early
Summer of 2019. A search for a new CFO is progressing well and once
this appointment is made Ergomed will focus on recruiting for the
CEO role.
The Company was saddened to announce that Chris Collins,
Non-executive Director, passed away on Friday 8 March 2019 and
wishes to acknowledge and express its gratitude for Chris's
significant contribution to Ergomed since its IPO in July 2014.
Impact of Adoption of IFRS 16 in 2019
With effect from 1 January 2019 the Company adopted IFRS 16 in
relation to leases. IFRS 16 requires that the Company recognises a
right of use asset and a corresponding lease liability on the
balance sheet at the point of adoption. Leases held by Ergomed
predominantly relate to office premises and it is estimated that
the right of use asset and associated lease liability will be
approximately GBP7 million.
Additionally, under IFRS 16 the lease expense charged to the
Income Statement is replaced with depreciation and interest charges
relating to the right to use asset and lease liability state on the
balance sheet. Whilst the impact on Net Income will be broadly
neutral, the charge for depreciation of the right to use asset and
the interest expense relating to the lease liability will be
excluded from the calculation of EBITDA whilst the lease expense in
prior periods would have been included in the calculation of
EBITDA. It is anticipated that the adoption of IFRS 16 will,
therefore, have a GBP1.7m positive impact on reported EBITDA in
2019.
Outlook
Demand for both PV and CRO segments remains generally buoyant
and the Company continues to invest in line with its stated
strategy to position itself as a market leader in pharmacovigilance
and orphan drug development. These investments include geographical
expansion, investment in robotic process automation technology to
deliver longer-term operational efficiencies and upgrading of our
support capabilities in terms of systems and personnel.
A contracted backlog of GBP109 million, GBP106 million on a
comparable basis (2017: GBP88 million) underpins Ergomed's ability
to deliver its targets for 2019 and creates a solid foundation for
continued growth. During the coming period we expect to continue to
deliver on our strategy of focusing on the growth and profitability
of our services businesses, and to increasingly benefit from the
opportunities for cross-selling to customers across the Group,
particularly in pharmacovigilance and orphan drug development.
Dr Miroslav Reljanović
Financial review
Key performance indicators
The Directors consider the principal financial performance
indicators of the Group to be:
GBPmillion (unless stated otherwise) 2018 2018 2017
IFRS 15 IAS 18 IAS 18
-------------------------------------- --------- -------- --------
PV service fee growth N/A 23% 68%
CRO service fee growth N/A 11% 9%
Net service revenue N/A 46.9 39.6
Total Revenue 54.1 54.9 47.6
Gross profit 19.3 20.1 17.6
Gross margin % 36% 37% 37%
EBITDA (adjusted) (note 12) 2.3 3.1 2.8
Cash and cash equivalents 5.2 5.2 3.2
-------------------------------------- --------- -------- --------
The Ergomed services businesses are run as discrete business
units with clear visibility at a gross margin level. Selling,
general & administrative costs have historically not been
allocated to the business units. As the group matures it will adopt
an allocation of SG&A costs so that it is able to report on
business unit EBITDA and therefore provide more appropriate
external market comparisons of business unit performance.
The Directors consider the principal non-financial performance
indicators of the Group to be:
1. The delivery of high quality services that continue to meet
the highest industry standards as evidenced by internal and
external quality audits
2. The development or acquisition of new and/or the expansion of existing service offerings
Non-financial performance indicators are routinely reviewed by
the Directors at Board meetings.
The Group adopted IFRS 15 with effect from 1 January 2018. Upon
adoption, Ergomed elected to use the cumulative effect transition
method meaning that prior years are not restated under IFRS 15
methodology. For comparison purposes, therefore, reference is also
made to IAS 18 and the financial results provide a bridge between
these two accounting methodologies where appropriate in an effort
to provide a clear picture of the effects.
Condensed consolidated statement of comprehensive income
Total revenue for the year ended 31 December 2018 was GBP54.1
million, which is equivalent to GBP54.9 million under IAS 18 (2017:
GBP47.6 million), an increase of 15%, on a comparable basis, driven
by 23% growth in PV revenues, complemented by 9% growth from
Clinical Research Organisation Services.
Gross profit was GBP19.3 million and gross margin was 36%. By
way of comparison, 2018 gross profit and gross margin were GBP20.1
million and 37% respectively under IAS 18 (2017 restated: gross
profit GBP17.6 million and gross margin 37%).
Selling, general & administration expenses, after excluding
exceptional items and acquisition related costs was GBP16.7 million
(2017 restated: GBP13.6 million). The increase in other SG&A
expenses of GBP3.1 million was driven by an additional GBP0.6
million of overhead in acquisitions, GBP0.5 million additional
recruitment costs, GBP0.7 million increase in depreciation of
internally generated software, GBP0.5 million in increased premises
costs across the group and GBP1.4 million increase in support
functions, offset by a GBP0.6 million movement in foreign exchange
from a GBP0.5 million loss in 2017 to a GBP0.1 million gain in
2018.
SG&A expense also includes amortisation of acquired fair
valued intangible assets of GBP1.3 million, share based payment
charge of GBP0.8 million, acquisition-related contingent
compensation of GBP1.0 million, acquisition costs of GBP0.2 million
and exceptional items of GBP8.5 million, offset by a change in the
fair value of deferred consideration of GBP0.2 million.
Research and development costs expensed in the year were GBP1.6
million (2017: GBP2.7 million) relating to Haemostatix and included
chemistry, manufacturing and controls (CMC) costs for clinical
trial material of PeproStat and pre-clinical formulation
development costs for ReadyFlow. As noted, at the end of 2018
Ergomed made the decision to fully impair the investment in
Haemostatix as insufficient progress had been made with partnering
activities and Ergomed will not fund the Phase III trials
alone.
Exceptional costs for the year ended 31 December 2018 related to
the establishment of the pharmacoepidemiology business of GBP0.4
million, the cost reduction program to increase operating
efficiency and improve overall profitability of GBP0.7 million,
other business reorganisation costs of GBP0.6 million, the
impairment of the Haemostatix business of GBP18.2 million, and
onerous contract costs relating to Haemostatix of GBP0.2 million,
offset by the revaluation of deferred consideration for Haemostatix
of GBP11.6 million.
The Group adopted IFRS 9 in respect of financial instruments and
its application to receivables. This had minimal impact on the 2018
results.
Condensed consolidated balance sheet
As at 31 December 2018 total assets less total liabilities
amounted to GBP28.4 million (2017: GBP34.8 million) including cash
and cash equivalents of GBP5.2 million (2017: GBP3.2 million).
The principal movements in the Condensed consolidated balance
sheet during the year were:
1. A decrease in intangibles and goodwill of GBP1.6 million and
GBP16.5 million, respectively, and deferred taxes of GBP2.8
million, primarily due to the impairment of the Haemostatix
assets.
2. An increase in accrued income of GBP1.4 million and an
increase in deferred revenue of GBP4.7 million, including the
impact of adopting IFRS 15.
3. An increase in cash and cash equivalents of GBP2.0 million.
4. A decrease in the fair value of contingent consideration
relating to the Haemostatix acquisition.
5. An increase in share premium, arising from the institutional
placing in February 2018, net of costs.
Condensed consolidated cash flow statement
At present, the Group does not have any borrowings or long term
debt.
Cash outflows from operating activities before changes in
working capital in the year were GBP1.6 million (2017: inflows of
GBP1.4 million). Changes in working capital included a GBP0.2
million increase in trade and other receivables, a GBP0.5 million
increase in other current assets and a GBP3.2 million increase in
trade and other payables. The Group also paid taxation of GBP0.1
million in 2018 (2017: GBP0.4 million).
Cash outflows from investing activities were GBP2.7 million
(2017: GBP3.9 million) including GBP0.4 million related to the
acquisition of Harefield Pharmacovigilance and Pharmacovigilance
Services, GBP0.7 million related to a PharmInvent earn-out payment,
GBP0.8 million for the acquisition of property, plant and equipment
and GBP0.8 million for the acquisition of intangible assets.
Cash inflows from financing activities included proceeds of the
institutional placing of GBP3.8 million net of expenses in February
2018.
Going concern and medium term viability
As at 31 December 2018 the Group had GBP5.2 million in cash and
cash equivalents and a strong backlog of GBP109 million of signed
contracts. The Directors expect Ergomed's services business to be
cash generative. Taking into account existing cash resources and,
after due consideration of cash flow forecasts, the Directors are
of the view that Ergomed will continue to have access to adequate
resources to allow the Group to continue trading on normal terms of
business for no less than 12 months from the date of signing of the
financial statements and have therefore prepared the financial
statements on a going concern basis.
The board assesses the medium term viability of the business
periodically. In this regard, forecasts extending 3 years are
considered appropriate because this matches the average contract
duration of the PV business and, whilst CRO contracts can extend
for longer periods, activity levels become less certain over time.
The Directors expect Ergomed's services business to be cash
generative over the medium term.
UNAUDITED PRELIMINARY RESULTS
Condensed Consolidated Income Statement
2018 2017
Restated
(note 15)
Notes GBP000s GBP000s
Service revenue 54,112 47,254
Licence revenue - 370
REVENUE 2 54,112 47,624
Cost of sales (26,788) (22,398)
Reimbursable expenses (8,070) (7,609)
Gross profit 19,254 17,617
Selling, general and administration expenses (28,152) (19,784)
------------------------------------------------ ------- -------- ----------
Selling, general and administrative expenses
comprises:
Other selling, general and administrative
expenses (16,701) (13,555)
Amortisation of acquired fair valued intangible
assets (1,286) (1,167)
Share-based payment charge (758) (1,033)
Acquisition-related contingent consideration 8 (972) (752)
Changes in the fair value of contingent
consideration for acquisition 233 (2,875)
Acquisition costs 9 (174) (259)
Exceptional items 10 (8,494) (143)
------------------------------------------------ ------- ----------
Research and development (1,578) (2,689)
Net impairment losses on financial and
contract assets (9) 834
Other operating income 39 118
OPERATING LOSS (10,446) (3,904)
Investment income 23 3
Unrealised gains on revaluation of equity
investments 277 -
Finance costs 4 (622) (546)
LOSS BEFORE TAXATION (10,768) (4,447)
Taxation 5 1,788 (57)
LOSS FOR THE YEAR (8,980) (4,504)
LOSS PER SHARE
Basic 6 (20.0)p (11.0)p
Diluted 6 (20.0)p (11.0)p
All activities in the current and prior period relate to
continuing operations.
Condensed Consolidated Statement of Comprehensive Income
2018 2017
GBP000s GBP000s
Loss for the year (8,980) (4,504)
Items that may be classified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations 120 619
Other comprehensive income for the period
net of tax 120 619
Total comprehensive loss for the year (8,860) (3,885)
Condensed Consolidated Balance Sheet
2018 2017
Notes GBP000s GBP000s
Non-current assets
Goodwill 13,659 15,269
Other intangible assets 3,740 20,229
Property, plant and equipment 1,344 1,078
Equity investments (fair value through
profit and loss) 2,065 -
Investments - 754
Deferred tax asset 581 1,613
21,389 38,943
Current assets
Trade and other receivables 16,429 16,807
Other current assets - 502
Accrued income 3,857 2,443
Cash and cash equivalents 5,189 3,218
25,475 22,970
Total assets 46,864 61,913
Current liabilities
Borrowings (6) (12)
Trade and other payables (10,989) (10,717)
Contingent and deferred consideration 11 (119) (1,957)
Deferred revenue (5,651) (976)
Current tax liability (422) (201)
Total current liabilities (17,187) (13,863)
Net current assets 8,288 9,107
Non-current liabilities
Borrowings - (6)
Provisions (216) -
Contingent and deferred consideration 11 (544) (9,804)
Deferred tax liability (554) (3,397)
Total liabilities (18,501) (27,070)
Net assets 28,363 34,843
Equity
Share capital 452 428
Share premium account 24,458 20,616
Merger reserve 11,329 11,008
Share-based payment reserve 3,115 2,674
Translation reserve 882 762
Retained earnings (11,873) (645)
Total equity 28,363 34,843
--
Consolidated Statement of Changes in Equity
Share Share Merger Share-based Translation Retained Total
capital Premium reserve payment reserve earnings
account reserve
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Balance at 31 December 2016 406 17,957 10,264 1,829 143 3,799 34,398
Loss for the year - - - - - (4,504) (4,504)
Other comprehensive income for the
year - - - - 619 - 619
Total comprehensive income for the
year - - - - 619 (4,504) (3,885)
Transactions with shareholders in
their capacity as shareholders:
Share-issue for cash during the year
for cash (net of expenses) 18 2,659 - - - - 2,677
Share-issues during the year for non-cash
consideration 3 - 555 - - - 558
Contingent share-issues for non-cash
consideration 1 - 189 (188) - - 2
Share-based payment charge for the
year - - - 1,033 - - 1,033
Deferred tax credit taken directly
to equity - - - - - 60 60
-------- -------- -------- ----------- ----------- --------- --------
Total Transactions with shareholders
in their capacity as shareholders 22 2,659 744 845 - 60 4,330
Balance at 31 December 2017 428 20,616 11,008 2,674 762 (645) 34,843
Cumulative effect adjustment for IFRS
15 - - - - - (2,232) (2,232)
Balance at 1 January 2018 428 20,616 11,008 2,674 762 (2,877) 32,611
Loss for the year - - - - - (8,980) (8,980)
Other comprehensive income for the
year - - - - 120 - 120
Total comprehensive income for the
year - - - - 120 (8,980) (8,860)
Transactions with shareholders in
their capacity as shareholders:
Shares issue for cash during the year
for cash (net of expenses) 21 3,768 - - - - 3,789
Shares issued in exchange for acquired
shares 1 74 80 (74) - - 81
Contingent share-issues for non-cash
consideration 2 - 241 (243) - - -
Share-based payment charge for the
year - - - 758 - - 758
Deferred tax debit taken directly
to equity - - - - - (16) (16)
-------- -------- -------- ----------- ----------- --------- --------
Total Transactions with shareholders
in their capacity as shareholders 24 3,842 321 441 - (16) 4,612
Balance at 31 December 2018 452 24,458 11,329 3,115 882 (11,873) 28,363
Condensed Consolidated Cash Flow Statement
2018 2017
GBP000s GBP000s
Cash flows from operating activities
Loss before taxation (10,768) (4,447)
Adjustment for:
Amortisation and depreciation 2,534 1,626
Impairment of goodwill, intangibles and
other assets 18,222 -
Gain on disposal of fixed assets 33 (7)
Share-based payment charge 758 1,033
Equity investments received in exchange
for services provided (1,054) (462)
Acquisition costs - 218
Changes in the fair value of contingent
consideration for acquisition (11,617) 2,875
Investment income (300) (3)
Finance costs 622 546
Operating cash flow before changes in working
capital and provisions (1,570) 1,379
Increase in trade and other receivables (505) (3,445)
Increase in other current assets (248) (262)
Increase in trade and other payables 3,221 2,753
Cash generated from operations 898 425
Taxation received/(paid) 146 (355)
Net cash inflow from operating activities 1,044 70
Investing activities
Investment income received 5 3
Acquisition of intangible assets (753) (704)
Acquisition of property, plant and equipment (834) (721)
Receipts from sale of property, plant and
equipment 7 11
Acquisition of subsidiaries, net of cash
acquired (410) (1,946)
Acquisition related earn-out paid (751) (559)
Net cash outflow from investing activities (2,736) (3,916)
Financing activities
Issue of new shares 3,973 2,900
Expenses of fundraising (183) (224)
Finance costs paid (4) (2)
Increase in borrowings - 20
Repayment of borrowings (12) (10)
Net cash inflow from financing activities 3,774 2,684
Net increase/(decrease) in cash and cash
equivalents 2,082 (1,162)
Effect of foreign currency on cash balances (111) (44)
Cash and cash equivalents at start of the
year 3,218 4,424
Cash and cash equivalents at end of year 5,189 3,218
ERGOMED PLC
NOTES TO THE UNAUDITED PRELIMINARY RESULTS
For the year ended 31 December 2017
1. BASIS OF PREPARATION
The unaudited preliminary results for the year ended 31 December
2018 were approved by the Board of Ergomed plc on 9 April 2019. The
unaudited preliminary results do not constitute the statutory
financial statements within the meaning of section 434 of the
Companies Act 2006, but are an extract from the financial
statements. They are based on, and are consistent with, those in
the Group's statutory accounts for the year ended 31 December 2018
and those financial statements will be delivered to the Registrar
of Companies following the Company's Annual General Meeting.
Financial statements for the year ended 31 December 2017 have been
delivered to the Registrar of Companies, with an unmodified
opinion.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards, as adopted by the European Union (EU) (IFRS), this
announcement does not in itself contain sufficient information to
comply with IFRS.
The audited statutory financial statements for the year ended 31
December 2018 are expected to be distributed to shareholders in May
2019 and will be available at the registered office of the Company,
1 Occam Court, Surrey Research Park, Guildford, Surrey, GU2 7HJ.
Details can also be found on the Company's website at:
www.ergomedplc.com.
The Consolidated income statement for 2017 has been restated.
This is detailed in note 15.
On 1 January 2018, the Group adopted International Financial
Reporting Standard ("IFRS") 15, Revenue from Contracts with
Customers ("IFRS 15") and IFRS 9, Financial Instruments ("IFRS 9").
The comparative financial information for the year ended 31
December 2017 has not been restated for the effect of this guidance
and is prepared in accordance with the previous accounting
guidance.
GOING CONCERN
The unaudited preliminary results have been prepared on the
going concern basis, which assumes that the Group will have
sufficient funds to continue in operational existence for the
foreseeable future, being a period of no less than 12 months from
the expected date of signing of the financial statements in April
2019. Having regard to the performance of the business, the
Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. The Group is financed by funds
generated from profitable operations and equity.
The Directors have reviewed a cash flow forecast for the period
ending 31 December 2019 through to 31 December 2021, which is
derived from the Board approved budget, and a medium term cash flow
forecast through to 31 December 2021, which is an extrapolation of
the approved budget under multiple scenarios and growth rates. The
2019 and medium term forecast represents the Directors' best
estimate of the Group's future performance and necessarily includes
a number of assumptions, including the level of revenues. The 2019
and medium term forecast demonstrate that the Directors have a
reasonable expectation that the Group will be able to meet its
liabilities as they fall due, for a period of at least 12 months
from the date of approval of the financial statements.
On the basis of the above factors and, having made appropriate
enquiries, the Directors have a reasonable expectation that the
Company and Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing these
unaudited preliminary results.
IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group adopted IFRS 15 with a date of initial application of
1 January 2018. The revenue recognition accounting policy applied
in preparation of the results for the year ended 31 December 2018
therefore reflects the application of IFRS 15. The Group has
elected to adopt the standard using the cumulative effect
transition method. Under this transition method, the new standard
has been applied as at the date of initial application without
restatement of comparative amounts. The cumulative effect of
initially applying the new standard (to revenue, costs and tax) is
recorded as an adjustment to the opening balance of equity at the
date of initial application. The comparative information has not
been adjusted and therefore continues to be reported under IAS 18,
'Revenue Recognition'.
The new standard requires application of five steps: (1)
identify the contract(s) with a customer; (2) identify the
performance obligation in the contract; (3) determine the
transaction price; (4) allocate the transaction price to the
performance obligations in the contract; and (5) recognize revenue
when (or as) the entity satisfies the performance obligation.
The Group primarily earns revenue from Pharmacovigilance (PV)
services and Clinical Research Organisation Services (CRO).
Clinical Research Organisation Services
The CRO Services comprise clinical trial management from Phase I
to IV on behalf of customers. The contract with the customer
defines the nature, quantity and price of the various services to
be provided, which includes patient recruitment, data management,
regulatory affairs and adverse event case processing. The CRO
services provided (included those provided by a third party and
reimbursed by the customer) under each contract are a single
performance obligation satisfied over time. The Group is the
contract principal in respect of both direct services and in the
use of third parties (principally investigator services) that
support the clinical research project. The transaction price is
determined by reference to the contract and change orders,
including any pass-through or reimbursable expenses, adjusted
downward to reflect the amount the Group expects to be entitled to
in exchange for transferring promised goods or services to a
customer. Revenue is recognised as the single performance
obligation is satisfied. The progress towards completion for
clinical service contracts is measured based on an input measure
being project costs incurred to date as a proportion of total
project costs (including third party costs) at each reporting
period.
Pharmacovigilance Services
The Pharmacovigilance Services comprise contract support
services to pharmaceutical, biotechnology and generics companies in
managing the global safety of their products from early clinical
trial development to full post-marketing activities. The typical
length of a contract is 36 months, and the services include the
collection, aggregation and reporting of safety issues related to
drugs on the market. Invoicing is based on prices specified in the
service agreement with the customer. On evaluation of the five
steps in the revenue recognition guidance, the Group has applied
the practical expedient which results in recognition of revenue on
a right to invoice basis. Application of the practical expedient
reflects the right to consideration from the customer in an amount
that corresponds directly with the value to the customer of the
performance completion to date. This reflects hours performed by
contract staff and the value of services provided.
ACCOUNTING STANDARDS ADOPTED IN THE PERIOD
Impact of adopting IFRS 15
The most significant impact of application of IFRS 15 relates to
the timing of revenue recognition for CRO services and that
reimbursement revenues are not presented separately under IFRS 15
because the reimbursement revenues and the services fees are
considered as being a single performance obligation. Prior to
application of IFRS 15, the revenue attributable to performance was
determined based on both input and output methods of measurement.
Under IFRS 15, the progress towards completion for CRO contracts is
measured based only on an input measure being total project costs
(including third party costs) at each reporting period.
The impact of adopting IFRS 15 on the key financial statement
line items within the consolidated income statement for the year
ended 31 December 2018 compared to the revenue determined in
accordance with IAS 18 is as follows:
Under
As reported Adjustments IAS 18
GBP000s GBP000s GBP000s
Net service revenue 54,112 (7,261) 46,851
Reimbursement revenue - 8,091 8,091
REVENUE 54,112 830 54,942
GROSS PROFIT 19,254 830 20,084
OPERATING LOSS (10,446) 830 (9,616)
LOSS BEFORE TAXATION (10,768) 830 (9,938)
Taxation 1,788 26 1,814
LOSS FOR THE YEAR (8,980) 856 (8,124)
LOSS PER SHARE
Basic (20.0)p - (18.1)p
Diluted (20.0)p - (18.1)p
The cumulative effect of initially applying the new standard on
the consolidated balance sheet as of 1 January 2018 and 31 December
2018 and on the income statement and consolidated cashflow
statement for the year ended 31 December 2018 is fully set out in
Note 16.
Impact of adopting IFRS 9, Financial Instruments (IFRS 9)
IFRS 9 replaces the previous guidance relating to the
recognition, classification and measurement of financial assets and
financial liabilities, derecognition of financial instruments,
impairment of financial assets and hedge accounting. The adoption
of IFRS 9 from 1 January 2018 resulted in changes in accounting
policies and adjustments to the amounts recognised in the financial
statements. The new accounting policies are set out below. In
accordance with the transitional provisions of IFRS 9, comparative
figures have not been restated. The adoption of IFRS 9 had no
impact on the opening retained losses of the Group.
(i) Classification and measurement
On 1 January 2018 (the date of initial application of IFRS 9),
the Group's management has assessed which business models apply to
the financial assets held by the Group and has classified its
financial instruments into the appropriate IFRS 9 categories. The
primary effects resulting from this reclassification are that the
Group's investment in privately held companies of GBP754,000 were
previously held at amortised cost due to an exemption available
under the previous guidance are now measured at fair value through
the profit and loss. This did not have a material impact on the
consolidated financial statements.
(ii) Impairment of financial assets
The Group's financial assets are subject to IFRS 9's new
expected credit loss model. The Group's financial assets are trade
receivables and investments in equity. Applying the expected credit
risk model resulted in the recognition of a loss allowance of
GBP9,000 as of 31 December 2018.
ACCOUNTING STANDARDS TO BE ADOPTED IN FUTURE PERIODS
IFRS 16, Leases (effective 1 January 2019) (IFRS 16)
IFRS 16 specifies how an IFRS reporter will recognise, measure,
present and disclose leases. The standard provides a single lessee
accounting model, requiring lessees to recognise assets and
liabilities for all leases unless the lease term is 12 months or
less or the underlying asset has a low value. Lessors continue to
classify leases as operating or finance, with IFRS 16's approach to
lessor accounting substantially unchanged from the previous
guidance.
The Group is currently evaluating the impact of adopting IFRS
16. However, the adoption of IFRS 16 is likely to have a material
impact on the consolidated financial statements due to the
following:
-- It is anticipated that lease assets of approximately GBP7
million and a corresponding lease liability will be recorded upon
adoption.
-- Under current guidance, the costs in respect of operating
leases are charged to the income statement on a straight line basis
over the lease term as a lease expense. Under IFRS 16, the cost in
respect of leases are the depreciation of the right-of-use asset
and an imputed interest charge arising on the lease liability. This
may result in lease expenses being recognized sooner under IFRS 16
than under previous guidance, however the impact is not anticipated
to be material to the consolidated income statement.
-- Under IFRS 16, the lease expense will be replaced by
depreciation and interest charges, which will be excluded from our
key performance metric, EBITDA. The impact of is anticipated to be
an improvement in EBITDA of approximately GBP1.7 million in
2019.
The Group plans to apply IFRS 16 initially on 1 January 2019,
using the modified retrospective approach. Therefore, the
cumulative effect of adopting IFRS 16 will be recognised as an
adjustment to the opening balance of retained losses at 1 January
2019, with no restatement of comparative information.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements in applying the Group's accounting
policies
The following are the critical judgements, apart from those
involving estimations (which are dealt with separately below), that
the Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the unaudited preliminary results.
Revenue recognition for 2018 (after the adoption of IFRS 15)
The accounting policy for revenue from contracts with customers
(after the adoption of IFRS) is detailed above.
There are significant management judgments and estimates
involved in the recognition of revenue for the CRO contracts.
Revenue for CRO services is recognised based on the costs incurred
on a project as a proportion of total expected costs to determine a
percentage of completion that is applied to the estimate of the
transaction price. The most significant judgement involved in
determining the revenue is the percentage of completed at each
reporting period. This involves an evaluation of labour cost and
third party costs incurred on the project at the reporting date,
which requires an estimate of third party costs incurred but not
billed, and an up to date evaluation of the forecast costs to
complete in respect of these projects. Given the long-term and
complex nature of the clinical trials, the forecast costs to
complete is judgemental. The costs to complete are prepared by
project managers on a recurring basis during the year, including
comparison to previous forecasts and past experience.
Material differences in the amount of revenue in any given
period may result if these judgments or estimates prove to be
incorrect or if management's estimates change on the basis of
development of the business or market conditions. To date there
have been no material differences arising from these judgments and
estimates.
Revenue recognition for 2017 (prior to the adoption of IFRS
15)
The amount of revenue to be recognised is based on, inter alia,
management's estimate of the fair value of the consideration
received or receivable, the stage of completion and of the point in
time at which management considers that it becomes probable that
economic benefits will flow to the entity (as the outcome is not
always certain at the inception of a contract).
Reimbursement revenue and reimbursable expenses for 2017 (prior
to the adoption of IFRS 15)
Reimbursable expenses are reflected in the Company's Condensed
Consolidated Income Statement as "Reimbursement revenue" in total
revenue and as "Reimbursable expenses" separately from cost of
sales as the Company is the primary obligor for these expenses
despite being reimbursed by its clients. Reimbursable expenses are
comprised primarily of payments to physicians (investigators) who
oversee clinical trials and travel expenses for our clinical
monitors and other employees. Costs for such activities are
recorded based upon payment requests or invoices that have been
received from third parties in the periods presented or accrued
based on patient recruitment. Reimbursed expenses may fluctuate
from period-to-period due, in part, to the lifecycle of contracts
that are in progress at a particular point in time. Service
revenues or revenues before reimbursements ("net service revenues")
include any margin earned on reimbursed expenses. When such an
expense is not reimbursed, they are classified as costs of sales on
the Condensed Consolidated Income Statement.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the reporting period, that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Bad debt provision
On 1 January 2018, the Group adopted IFRS 9, Financial
Instruments, which requires that the allowance for credit losses
for trade receivables and accrued income is based on the expected
losses over the life of the receivables. In making this
determination, the Directors have considered the receivables aging,
the payment history and financial position of debtors. The
provision against trade receivables at 31 December 2018 was
GBP9,000 (2017: GBP214,000). There was no provision against accrued
income (2017: GBPnil).
Impairment of Goodwill
Under IFRSs, goodwill is reviewed for impairment at least
annually. The Group tests goodwill on 31 December each year.
Goodwill is impaired if the carrying value of the cash-generating
unit including the goodwill is in excess of the recoverable amount,
which is the higher of the value in use and the fair value less
costs to sell for that cash-generating unit. The calculation of the
recoverable amount requires the entity to estimate the future cash
flows expected to arise from the cash-generating unit and a
suitable discount rate in order to determine whether the
recoverable amount is greater than the carrying value.
The key inputs for estimating the future cash flows of operating
businesses are revenue growth over the next five years, terminal
revenue growth, working capital changes and discount rate. See note
2 for further details.
The impairment provision against goodwill as at 31 December 2018
was GBP2,143,000 (2017: GBPnil), which relates to the Haemostatix
goodwill. The carrying amount of goodwill and any impairment loss
is disclosed in note 2.
Fair value measurements
Some of the Group's assets and liabilities are measured at fair
value for financial reporting purposes. In estimating the fair
value of an asset or a liability, the Group uses market-observable
data to the extent it is available, and management estimates of
commercial and development risk where appropriate. Where Level 1
inputs are not available, the Group engages third party qualified
valuers to perform the valuation. The Directors work closely with
the qualified external valuers to establish the appropriate
valuation techniques and inputs to the model. This includes
contingent consideration relating to acquisitions valued at
GBP544,000. Contingent consideration relates to the acquisitions of
Haemostatix, PSR and PharmInvent (note 11).
Share-based payment charges
The Group incurs share-based payment charges in relation to
share options awards made in the current and prior periods. This
charge is based on the fair value of such share options for
financial reporting purposes. In estimating the fair value of a
share-based payment, the Group engages third party qualified
valuers to perform the valuation. The Directors work closely with
the qualified external valuers to establish the appropriate
valuation techniques and inputs to the model.
2. OPERATING SEGMENTS
Products and services from which reportable segments derive
their revenues
The Directors are of the opinion that the Group operates as two
business segments; Clinical Research Organisation Services (CRO)
(previously Clinical Research Services) and pharmacovigilance (PV)
services (previously Drug Safety and Medical Information). The PV
business segment includes the results of Harefield
Pharmacovigilance Ltd and Pharmacovigilance Services Ltd following
their acquisition by the Group in 2018. The accounting policies of
the reportable segments are the same as the Group's accounting
policies, with the exception that the information reported to the
Executive Chairman, who is the chief operating decision maker, was
prior to the effect of adopting IFRS 15.
2018
IAS 18 IAS 18 IFRS 15 Consolidated
CRO PV Adjustment total
GBP000s GBP000s GBP000s GBP000s
Net service revenue 19,713 27,138 7,261 54,112
Reimbursement revenue 7,697 394 (8,091) -
SEGMENT REVENUES 27,410 27,532 (830) 54,112
Cost of sales (12,172) (14,616) - (26,788)
Reimbursable expenses (7,744) (326) - (8,070)
SEGMENT GROSS PROFIT 7,494 12,590 (830) 19,254
Selling, general & administration
expenses (28,152)
------------------------------------- -------- -------- ----------- ------------
Selling, general & administration
expenses comprises:
Other selling, general &
administration expenses (16,701)
Amortisation of acquired
fair valued intangible assets (1,286)
Share-based payment charge (758)
Acquisition-related contingent
compensation (972)
Changes in the fair value
of contingent consideration
for acquisitions 233
Acquisition costs (174)
Exceptional items (8,494)
------------------------------------- -------- -------- ----------- ------------
Research and development (1,578)
Net impairment of financial
and contract assets (9)
Other operating income 39
OPERATING LOSS (10,446)
Investment income 23
Unrealized gains on equity
investments 277
Finance costs (622)
LOSS BEFORE TAXATION (10,768)
2017
Consolidated
CRO PV total
GBP000s GBP000s GBP000s
Net service revenue 17,386 22,259 39,645
Licence revenue 370 - 370
Reimbursement revenue 7,396 213 7,609
SEGMENT REVENUES 25,152 22,472 47,624
Cost of sales (10,616) (11,782) (22,398)
Reimbursable expenses (7,396) (213) (7,609)
SEGMENT GROSS PROFIT 7,140 10,477 17,617
Selling, general & administration
expenses (19,784)
--------------------------------------------- -------- -------- ------------
Selling, general & administration
expenses comprises:
Other selling, general & administration
expenses (13,555)
Amortisation of acquired fair valued
intangible assets (1,167)
Share-based payment charge (1,033)
Acquisition-related contingent compensation (752)
Change in the fair value of contingent
consideration for acquisitions (2,875)
Acquisition costs (259)
Exceptional items (143)
--------------------------------------------- -------- -------- ------------
Research and development (2,689)
Net impairment of financial and
contract assets 834
Other operating income 118
OPERATING LOSS (3,904)
Investment income 3
Finance costs (546)
LOSS BEFORE TAXATION (4,447)
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment. This is the measure reported to the
Group's Executive Chairman for the purpose of resource allocation
and assessment of segment performance.
Geographical information
The Group's revenue from external customers by geographical
location is detailed below:
2018 Revenue from external customers
CRO PV Total
GBP000s GBP000s GBP000s
UK 5,715 6,854 12,569
Europe, Middle East and Africa 16,913 9,604 26,517
North America 3,715 10,735 14,450
Asia 237 244 481
Australia - 95 95
26,580 27,532 54,112
2017 Revenue from external customers
CRO PV Total
GBP000s GBP000s GBP000s
UK 4,535 5,923 10,458
Europe, Middle East and Africa 13,550 9,292 22,842
North America 6,756 6,992 13,748
Asia 311 153 464
Australia - 112 112
25,152 22,472 47,624
Segment net assets
2018 2017
GBP000s GBP000s
CRO 2,450 12,703
PV 25,913 22,140
Consolidated total net assets 28,363 34,843
For the purposes of monitoring segment performance and
allocating resources between segments, the Group's Executive
Chairman monitors the net assets attributable to each segment. All
assets are allocated to reportable segments.
Other segment information
Depreciation and Additions to
amortisation non-current assets
2018 2017 2018 2017
GBP000s GBP000s GBP000s GBP000s
CRO 1,019 727 780 603
PV 1,515 899 806 822
2,534 1,626 1,586 1,425
Information about major customers
In 2018, the Group had no (2017: one) customers that contributed
10% or more to the Group's revenue. In 2017, revenues of
approximately GBP4,989,000 were recognised from this customer for
clinical research services.
3. GOODWILL IMPAIRMENT
The Group tests goodwill for impairment annually on December 31,
or more frequently, if there are indications that goodwill might be
impaired. Goodwill is impaired if the carrying value of the
cash-generating unit including the goodwill is in excess of the
recoverable amount, which is the higher of the value in use and the
fair value less costs to sell for that cash-generating unit.
The recoverable amounts of the CGUs for Ergomed Virtuoso,
Ergomed CDS, PSR and the PV operating segment are determined from
value in use calculations. The key assumptions for the value in use
calculations are those regarding cash flows, discount rates and
growth rates.
Value in use assumptions
The Group prepares cash flow forecasts for the next five years
for the cash generating units, derived from the most recent
financial budgets approved by the Board, and forecasts revenue for
the following four years based on estimated growth rate, except for
the Ergomed Virtuoso, where revenues are estimated based on
contractual amounts. A standard margin based on historical
experience is then applied to the revenue. The revenue growth rate
does not exceed the average long term growth rate for the relevant
markets. If revenue growth rates (including terminal growth) are
reduced to zero, there would be no impairment to goodwill.
A discount rate of 19% has been used in the assessment, which
reflects current market assessments of the time value of money and
the risks specific to the CGUs.
Haemostatix
The Group acquired Haemostatix in 2016 and recognised goodwill
of GBP2,143,000 and in process R&D for ReadyFlow and Peprostat
of GBP15,200,000. Haemostatix is a separate cash-generating unit
for the purposes of goodwill impairment. During 2018, the Group
shifted strategy away from co-development arrangements and
development of Haemostatix to focus on provision of services. The
Group has continued to make incremental investment in Haemostatix
during 2018 so as to protect the intellectual property and to
maintain readiness for Phase III trials but the Group considers the
'value in use' of the Haemostatix assets to be nil. In parallel, in
late 2018 the Company appointed external advisers to find a partner
(or partners) to fund Phase III trials and manufacturing scale-up.
Negotiations with interested parties are progressing but management
does not consider they are sufficiently advanced, nor providing
sufficient certainty to support a fair value less costs to sell for
the purposes of the goodwill impairment. Consequently, the goodwill
and intangible assets within the Haemostatix cash-generating unit
have been impaired to the recoverable amount of nil resulting in an
impairment of goodwill of GBP2,143,000 and an impairment of
intangibles of GBP15,200,000 as of 31 December 2018.
As a consequence of this impairment, certain onerous contract
costs committed as of 31 December 2018 amounting to GBP216,000 and
the impairment charges of GBP18,222,000, have been included in
exceptional items in 2018. R&D expenses associated with the
development of Peprostat and ReadyFlow in 2019 are expected to be
no more than GBP400,000.
4. FINANCE COSTS
2018 2017
GBP000s GBP000s
Finance charge for contingent consideration for
acquisitions (619) (581)
Other (3) 35
(622) (546)
5. TAXATION
2018 2017
GBP000s GBP000s
Current tax
UK corporation tax credit for the year (92) -
Overseas corporation tax 503 426
Adjustment in respect of prior years (383) (31)
Current tax charge 28 395
Deferred tax
Origination and reversal of timing differences (2,718) (338)
Effect of changes in tax rates 902 -
Tax (credit)/charge on loss (1,788) 57
In addition to the amounts charged to the income statement and
other comprehensive income, the following amounts have been
recognised directly in equity:
2018 2017
GBP000s GBP000s
Deferred tax
Change in estimated excess tax deductions related
to share-based payments 16 (60)
Total income tax debit/(credit) recognised directly
in equity 16 (60)
6. LOSS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data:
2018 2017
GBP000 GBP000
Loss for the purposes of basic earnings per share
being net profit attributable to owners of the
Company (8,980) (4,504)
Earnings for the purposes of diluted earnings
per share (8,980) (4,504)
2018 2017
Number Number
Number of shares
Weighted average number of ordinary shares outstanding 44,693,699 41,086,201
Shares to be issued 158,810 101,163
Weighted average number of ordinary shares for
the purposes of basic earnings per share 44,852,509 41,187,364
Weighted average number of ordinary shares for
the purposes of diluted earnings per share 44,852,509 41,187,364
LOSS PER SHARE
Basic (20.0)p (11.0)p
Diluted (20.0)p (11.0)p
The following potential outstanding shares have been excluded
from the weighted average number of ordinary shares for the
purposes of diluted earnings per share because they are
anti-dilutive:
2018 2017
Number Number
Share options 5,397,874 2,056,583
Deferred consideration in shares 67,371 111,870
7. ACQUISITION OF SUBSIDIARY
Harefield Pharmacovigilance Ltd (Harefield
Pharmacovigilance)
On 7 September 2018, the Group acquired 100% of the issued share
capital of Harefield Pharmacovigilance Ltd, a company providing PV
services based in the UK for cash consideration of GBP259,000. The
amount provisionally recognised in respect of the identifiable
assets acquired and liabilities assumed was GBP221,000 resulting in
goodwill of GBP38,000.
Deferred consideration represents the provisional fair valuation
of the additional consideration payable which could be between
GBPnil and an aggregate maximum undiscounted amount of GBP500,000,
subject to the future performance of the business.
Pharmacovigilance Services Ltd (Pharmacovigilance Services)
On 31 October 2018, the Group acquired 100% of the issued share
capital of Pharmacovigilance Services Ltd, a company providing PV
services based in the UK for total consideration of GBP673,000,
comprising cash consideration of GBP593,000 and shares in Ergomed
plc of GBP80,000. The amounts provisionally recognised in respect
of the identifiable assets acquired and liabilities assumed was
GBP273,000 resulting in goodwill of GBP400,000.
8. ACQUISITION-RELATED CONTINGENT CONSIDERATION
2018 2017
GBP000s GBP000s
PSR - 1
PharmInvent 972 751
972 752
The terms of the acquisitions of PSR Group BV and European
Pharminvent Services sro (now PrimeVigilance sro) included
consideration payable in cash and in equity that is contingent upon
the continued employment of the vendors and, in accordance with
IFRS 3, is charged through the income statement. The above amounts
relate to the element of consideration that is reimbursable in cash
and contingent on the continued employment of the vendors. The
element re-payable in equity that was contingent on the continued
employment of the vendors is included as part of share-based
payments in accordance with IFRS 2.
9. ACQUISITION COSTS
2018 2017
GBP000s GBP000s
Acquisition of PSR - 218
Acquisition of Harefield Pharmacovigilance 3 -
Acquisition of Pharmacovigilance Services 7 -
Other M&A activities 164 41
174 259
10. EXCEPTIONAL ITEMS
2018 2017
GBP000s GBP000s
Establishment of pharmacoepidemiology business 356 -
Cost reduction programme 760 -
Business reorganisation 557 -
Impairment of Haemostatix goodwill 2,143 -
Impairment of Haemostatix in process research 15,200 -
and development
Impairment of Haemostatix other assets 834 -
Change in the fair value of Haemostatix contingent -
consideration (11,617)
Onerous contract provision relating to Haemostatix -
activities 216
Impairment of joint venture 45 -
Severance costs relating to former CEO - 143
8,494 143
In line with the way the Board and chief operating decision
makers review the business, large one-off exceptional costs are
separately identified and shown as exceptional costs.
In the year ended 31 December 2018, these related to the
establishment of the pharmacoepidemiology business, reorganisation
expenses associated with the combining of the PrimeVigilance and
PharmInvent businesses, the cost reduction program to increase
operating efficiency and improve overall profitability, the
impairment of the Haemostatix business and onerous contract costs
relating to Haemostatix.
In the full year of 2017, these were directly related to the
severance costs regarding the former CEO.
11. DEFERRED AND CONTINGENT CONSIDERATION
2018 2017
GBP000s GBP000s
Due within one year
Harefield 57 -
Pharmacovigilance Services 62 -
Haemostatix - 1,957
119 1,957
Due after one year
Haemostatix - 9,168
PSR 544 636
544 9,804
663 11,761
The above amounts represent the fair value of consideration
payable in respect of the acquisitions of Harefield
Pharmacovigilance, Pharmacovigilance Services, Haemostatix and
PSR.
The contingent consideration for Haemostatix comprises
milestones of up to GBP4.0 million at start of Phase III (provided
the Company's market capitalisation exceeds GBP100.0 million); plus
GBP16.0 million sales-based milestone payments and an additional
sum in the event that the Enlarged Group is able to utilise certain
existing tax losses that are currently available to Haemostatix. As
of 31 December 2018, the fair value of contingent consideration
relating to the acquisition of Haemostatix has been reduced to
nil.
12. RELATED PARTY TRANSACTIONS
Ergomed d.o.o., a company registered in Croatia, is under the
control of Dr. Miroslav Reljanović, who is a Director and
shareholder of the Company. During the year the Company and its
subsidiaries were charged GBP64,000 (2017: GBP266,000) by Ergomed
d.o.o. and its subsidiaries in respect of clinical research costs
and other administrative services. At 31 December 2018 a balance of
GBP64,000 was owed by the Company and its subsidiaries to Ergomed
d.o.o. and its subsidiaries in respect of these costs (2017:
GBP40,000).
Tortuga Energy Services Limited is a company part-owned by
Stuart Jackson, who is a Director of the Ergomed plc. During the
year, the Company was charged consultancy fees of GBP16,667 (2017:
GBPnil) in relation to the services of Stuart Jackson prior to his
appointment as a director. At 31 December 2018, amounts payable to
Tortuga Energy Services Limited in relation to such consultancy
services and associated expenses were GBP16,667 (2017: GBPnil).
Under the terms of the acquisition of European PharmInvent
Services sro (now PrimeVigilance sro), Dr Jan Petracek, who was a
shareholder of that company and became a Director during the year
and is a shareholder of the Company, was entitled to deferred
consideration. During the year GBP607,000 (2017: GBP472,000) was
charged to the income statement in relation to this deferred
consideration and was payable in cash and equity at 31 December
2018.
All transactions with related parties take place on an arm's
length basis.
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
13. EBITDA AND EBITDA (adjusted)
2018 2017
GBP000s GBP000s
Operating loss (10,446) (3,904)
Adjust for:
Depreciation and amortisation charges
within Other Selling, general & administration
expenses 1,248 459
Amortisation of acquired fair valued intangible
assets 1,286 1,167
EBITDA (7,912) (2,278)
Share-based payment charge 758 1,033
Acquisition-related contingent compensation (note
8) 972 752
Change in the fair value of contingent consideration
for acquisitions (233) 2,875
Acquisition costs 174 259
Exceptional items 8,494 143
EBITDA (adjusted) 2,253 2,784
The Directors make certain adjustments to EBITDA to derive
adjusted EBITDA, which they consider more reflective of the Group's
underlying trading performance and enables comparisons to be made
with prior periods. Certain items, such as share-based payment
charge, revaluation of deferred consideration for acquisition and
write-back of deferred consideration for acquisition are non cash
items and reflect adjustments to expected future deferred
consideration payments.
Deferred consideration for acquisitions expense relates to the
cash component of deferred consideration which is payable
contingent on the continued employment of the vendors. These costs,
together with acquisition costs and exceptional items, are all cash
costs but are not considered trading items and therefore not
included in adjusted EBITDA.
14. ADJUSTED EARNINGS PER SHARE
2018 2017
GBP000s GBP000s
Loss for the purposes of basic earnings per share
being
net profit attributable to owners of the Company (8,980) (4,504)
Loss for the purposes of diluted loss per share (8,980) (4,504)
Adjust for:
Amortisation of acquired fair valued intangible
assets 1,286 1,167
Share-based payment charge 758 1,033
Acquisition-related contingent compensation (note
8) 972 752
Change in the fair value of contingent consideration
for acquisition (11,850) 2,875
Acquisition costs 174 259
Exceptional items 8,494 143
Unrealised gains on equity investments (277) -
Tax effect of adjusting items (1,323) -
Adjusted earnings for the purposes of basic and
diluted adjusted earnings per share 871 1,725
ADJUSTED EARNINGS PER SHARE
Basic 1.9p 4.2p
Diluted 1.9p 4.0p
15. RESTATEMENT OF PRIOR YEAR INCOME STATEMENT
There has been a re-allocation of costs between Cost of sales
and Selling, general and administration expenses resulting in a
restatement of the income statements for the year-ended 31 December
2017. This change in allocation arises as a result of improved
systems and visibility on personnel utilisation and associated
costs, and is required to enable comparisons between the current
and prior periods.
Due to the adoption of IFRS 9, the reversal of impairment losses
on financial assets (trade receivables) of GBP834,000 has been
presented on a separate line in the income statement.
Restatement of prior year Consolidated Income Statement
2017 2017
Previously
reported Adjustment Restated
GBP000s GBP000s GBP000s
Net service revenue 39,645 - 39,645
Licence revenue 370 - 370
Reimbursement revenue 7,609 - 7,609
REVENUE 47,624 - 47,624
Cost of sales (25,394) 2,996 (22,398)
Reimbursable expenses (7,609) - (7,609)
GROSS PROFIT 14,621 2,996 17,617
Selling, general & administration expenses (15,954) (3,830) (19,784)
------------------------------------------- ----------- ------------ ---------
Selling, general & administration expenses
comprises:
Other selling, general & administration
expenses (9,725) (3,830) (13,555)
Amortisation of acquired intangible assets (1,167) - (1,167)
Share-based payment charge (1,033) - (1,033)
Contingent consideration for acquisitions
expense (752) - (752)
Change in the fair value of contingent
consideration (2,875) - (2,875)
Acquisition costs (259) - (259)
Exceptional items (143) - (143)
------------------------------------------- ----------- ------------ ---------
Research and development (2,689) - (2,689)
Net impairment losses on financial and
contract assets - 834 834
Other operating income 118 - 118
OPERATING LOSS (3,904) - (3,904)
Investment revenues 3 - 3
Finance costs (546) - (546)
LOSS BEFORE TAXATION (4,447) - (4,447)
Taxation (57) - (57)
LOSS FOR THE PERIOD (4,504) - (4,504)
16. IMPACT OF IFRS 15
The impact of adopting IFRS 15 on the opening consolidated
balance sheet as of 1 January 2018 compared to the revenue
determined in accordance with IAS 18, Revenue (IAS 18) is as
follows:
As previously
Under IFRS Adjustments reported
15 GBP000s GBP000s
GBP000s
Non-current assets
Goodwill 15,269 - 15,269
Other intangible assets 20,229 - 20,229
Property, plant and equipment 1,078 - 1,078
Investments 754 - 754
Deferred tax asset 1,613 - 1,613
38,943 - 38,943
Current assets
Trade and other receivables 16,807 - 16,807
Other current assets 502 - 502
Accrued income 2,836 (393) 2,443
Cash and cash equivalents 3,218 - 3,218
23,363 (393) 22,970
Total assets 62,306 (393) 61,913
Current liabilities
Borrowings (12) - (12)
Trade and other payables (10,717) - (10,717)
Deferred and contingent consideration (1,957) - (1,957)
Deferred revenue (3,587) 2,611 (976)
Current tax liability (201) (201)
Total current liabilities (16,474) 2,611 (13,863)
Net current assets 6,889 2,218 9,107
Non-current liabilities
Borrowings (6) - (6)
Deferred and contingent consideration (9,804) - (9,804)
Deferred tax liability (3,411) 14 (3,397)
Total liabilities (29,695) 2,625 (27,070)
Net assets 32,611 2,232 34,843
Equity
Share capital 428 - 428
Share premium account 20,616 - 20,616
Merger reserve 11,008 - 11,008
Share-based payment reserve 2,674 - 2,674
Translation reserve 762 - 762
Retained earnings (2,877) 2,232 (645)
Total equity 32,611 2,232 34,843
The impact of adopting IFRS 15 on the consolidated balance sheet
for the year ended 31 December 2018 compared to the revenue
determined in accordance with IAS 18, Revenue (IAS 18) is as
follows:
As Reported Adjustments Under IAS
GBP000s GBP000s 18
GBP000s
Non-current assets
Goodwill 13,659 - 13,659
Other intangible assets 3,740 - 3,740
Property, plant and equipment 1,344 - 1,344
Equity investments (fair value through
profit and loss) 2,065 - 2,065
Deferred tax asset 581 - 581
21,389 - 21,389
Current assets
Trade and other receivables 16,429 - 16,429
Accrued income 3,857 (651) 3,206
Cash and cash equivalents 5,189 - 5,189
25,475 (651) 24,824
Total assets 46,864 (651) 46,213
Current liabilities
Borrowings (6) - (6)
Trade and other payables (10,989) - (10,989)
Deferred and contingent consideration (119) - (119)
Deferred revenue (5,651) 3,746 (1,905)
Current tax liability (422) - (422)
Total current liabilities (17,187) 3,746 (13,441)
Net current assets 8,288 3,095 11,383
Non-current liabilities
Provisions (216) - (216)
Deferred and contingent consideration (544) - (544)
Deferred tax liability (554) 42 (512)
Total liabilities (18,501) 3,788 (14,713)
Net assets 28,363 3,137 31,500
Equity
Share capital 452 - 452
Share premium account 24,458 - 24,458
Merger reserve 11,329 - 11,329
Share-based payment reserve 3,115 - 3,115
Translation reserve 882 49 931
Retained earnings (11,873) 3,088 (8,785)
Total equity 28,363 3,137 31,500
The impact of adopting IFRS 15 on the consolidated income
statement for the year ended 31 December 2018 compared to the
revenue determined in accordance with IAS 18 is as follows:
2018 2018
As reported Adjustments Under IAS
GBP000s GBP000s 18
GBP000s
Net service revenue 54,112 (7,261) 46,851
Reimbursement revenue - 8,091 8,091
REVENUE 54,112 830 54,942
Cost of sales (26,788) - (26,788)
Reimbursable expenses (8,070) - (8,070)
Gross profit 19,254 830 20,084
Selling, general & administration expenses (28,152) - (28,152)
------------------------------------------- ------------ ------------- ----------
Selling, general & administration expenses
comprises:
Other Selling, general & administration
expenses (16,701) - (16,701)
Amortisation of acquired fair valued
intangible assets (1,286) - (1,286)
Share-based payment charge (758) - (758)
Contingent consideration for acquisitions
expense (972) - (972)
Change in the fair value of contingent
consideration for acquisitions 233 - 233
Acquisition costs (174) - (174)
Exceptional items (8,494) - (8,494)
------------------------------------------- ------------ ------------- ----------
Research and development (1,578) - (1,578)
Net impairment losses on financial and
contract assets (9) - (9)
Other operating income 39 - 39
OPERATING LOSS (10,446) - (9,616)
Investment income 23 - 23
Unrealized gains on equity investments 277 - 277
Finance costs (622) - (622)
LOSS BEFORE TAXATION (10,768) 830 (9,938)
Taxation 1,788 26 1,814
LOSS FOR THE YEAR (8,980) 856 (8,124)
LOSS PER SHARE
Basic (20.0)p - (18.1)p
Diluted (20.0)p - (18.1)p
The impact of adopting IFRS 15 on the consolidated income
statement for the year ended 31 December 2018 compared to the
revenue determined in accordance with IAS 18 is as follows:
2018 2018
As reported Adjustments Under IAS
GBP000s GBP000s 18
GBP000s
Cash flows from operating activities
Loss before taxation (10,768) 830 (9,938)
Adjustment for:
Amortisation and depreciation 2,534 - 2,534
Impairment of goodwill, intangibles
and other assets 18,222 - 18,222
Gain on disposal of fixed assets 33 - 33
Share-based payment charge 758 - 758
Equity investments received in exchange
for services provided (1,054) - (1,054)
Change in the fair value of contingent
consideration for acquisitions (11,617) - (11,616)
Investment income (300) - (300)
Finance costs 622 - 622
Operating cash flow before changes in
working capital and provisions (1,570) 830 (740)
Increase in trade and other receivables (505) 266 (239)
Increase in other current assets (248) (248)
Increase in trade and other payables 3,221 (1,096) 2,125
Cash generated from operations 898 - 898
Taxation paid 146 - 146
Net cash inflow from operating activities 1,044 - 1,044
Investing activities
Investment income received 5 - 5
Acquisition of intangible assets (753) - (753)
Acquisition of property, plant and equipment (834) - (834)
Receipts from sale of property, plant
and equipment 7 - 7
Acquisition of subsidiaries, net of
cash acquired (410) - (410)
Acquisition related earn-out paid (751) - (751)
Net cash outflow from investing activities (2,736) - (2,736)
Financing activities
Issue of new shares 3,973 - 3,973
Expenses of fundraising (183) - (183)
Finance costs paid (4) - (4)
Repayment of borrowings (12) - (12)
Net cash inflow from financing activities 3,774 - 3,774
Net increase in cash and cash equivalents 2,082 - 2,082
Effect of foreign currency on cash balances (111) (111)
Cash and cash equivalents at start of
the year 3,218 - 3,218
Cash and cash equivalents at end of
year 5,189 - 5,189
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
FR UKRARKAASRUR
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