TIDMIDH
RNS Number : 4202U
Immunodiagnostic Systems Hldgs PLC
22 November 2019
22 November 2019
Immunodiagnostic Systems Holdings PLC
Unaudited Interim Results for the six-month period ended 30
September 2019
Summary of Group Results
LFL* Change %
GBPm H1 FY20 H1 FY19
H1 FY20 H1 FY19 H1 FY18 v v
H1 FY19 H1 FY18
Group Revenue 18.8 18.5 18.7 0% 0%
Automated Business Revenue 11.0 10.8 11.6 0% (6%)
Manual Business Revenue 5.7 6.1 6.0 (8%) 2%
Technology Business Revenue 2.1 1.6 1.0 32% 51%
Adjusted** EBITDA 2.9 1.9 3.4 49% (44%)
Profit /(Loss) from Operations 0.6 (0.2) 1.1
Closing Cash and Cash
Equivalents 28.1 27.8 29.7
-------------------------------- ---------- ---------- ---------- --------- ---------
* Like for like 'LFL' numbers have been restated to remove the
impact of foreign exchange movements in the period by restating the
prior period results using the exchange rates of the current
period.
** Before exceptional items of GBPnil (H1 FY19: credit of
GBP0.1m; H1 FY18: credit of GBP0.1m) - see reconciliation in the
Financial Review section.
Key Business Developments H1 FY20
Total Group revenue was GBP18.8m in H1 FY20 which represents an
increase of 2% versus H1 FY19. On a constant currency and scope
basis ("LFL"), the revenues were flat versus the comparative
period.
Revenues of the Automated business grew 2% versus H1 FY19 on a
reported basis, however remain unchanged versus the prior period on
a LFL basis, with growth in our speciality assay panels covering
declines in our 25-OH Vitamin D revenues.
Growth in our Technology business of 32% on a LFL basis, offset
LFL declines in our Manual business of 8%.
Adjusted EBITDA, our core metric for measuring underlying
profitability, increased from GBP1.9m to GBP2.9m. This was
favourably impacted by an increase in gross margin, a decline in
operating costs, and a change in our accounting for leases required
by the introduction of a new accounting standard. More details are
provided in the Financial Review.
Key Operational KPIs
IDS's key operational KPIs are summarized below, with further
details provided in the Chief Executive's Statement:
H1 FY20 H1 FY19
Gross Instrument Placements - Direct
Territories [1] 18 15
Instrument Returns (14) (12)
Net Instrument Placements - Direct
Territories 4 3
Instrument Sales - Distribution Territories
[2] 14 13
-------- --------
Total Gross Instrument Sales / Placements
[1]+[2] 32 28
-------- --------
Average Assays Per Instrument 5.4 4.8
New Assay Launches 0 0
Annualised revenue per employee GBP000's 138 130
--------------------------------------------- -------- --------
The KPI's set out above above show positive underlying momentum
versus H1 FY19. The exception was instrument returns, which are
higher than the prior period mainly due to the loss of one
significant customer which ran a single assay across multiple
machines. Consequently, we expect instrument returns to be lower in
H2 than H1.
Two assays are in the latter phases of development and we expect
to launch these with a CE mark in H2 FY20.
Jaap Stuut, CEO of IDS, commented:
"I am pleased to deliver a LFL revenue number in line with the
comparable period last year. We have returned our speciality
Automated business to growth, which is vital for IDS as this is key
to our mid and long-term profitability. Our Manual business
declined mainly due to a significant one-off order in the previous
year, and we expect a stronger second half performance from this
business unit.
Profitability improved significantly versus the comparable
period, mainly due to several operational cost saving projects and
pricing and upsell initiatives within the sales team gaining
traction.
We maintain confidence in achieving our goal of increasing full
year revenue on a LFL basis versus FY19."
Notes:
Immunodiagnostic Systems Holdings PLC ("IDS" or "the Group") is
a specialist producer of manual and automated diagnostic testing
kits and instruments for the clinical and research markets.
For further information:
Immunodiagnostic Systems Holdings PLC Tel : +44 (0)191 519
0660
Jaap Stuut, CEO
Paul Martin, Finance Director
Peel Hunt LLP Tel : +44 (0)20 7418
8900
James Steel/Oliver Jackson
Chief Executive's Statement
Overview
On a reported basis, Group revenue increased by 2%, however on a
LFL basis Group revenue was in line with H1 FY19. Growth in our
Automated and Technology businesses was offset by a decline in our
Manual business.
Below is a discussion of the main developments and actions taken
in our business units during the period:
1. AUTOMATED BUSINESS
1.1 Revenue Performance
LFL Change %
H1 FY20 H1 FY19 H1 FY18 H1 FY20 v H1 FY19
GBP000 GBP000 GBP000 H1 FY19 v
H1 FY18
-------- -------- -------- ---------- ---------
25-OH Vitamin
D 2,325 2,839 3,317 (20%) (12%)
-------- -------- -------- ---------- ---------
Speciality
- IDS 7,059 6,679 6,920 5% (2%)
-------- -------- -------- ---------- ---------
Speciality
- Partners 871 569 488 52% 17%
-------- -------- -------- ---------- ---------
Instrument
Sales & Service 736 714 879 3% (26%)
-------- -------- -------- ---------- ---------
Total 10,991 10,801 11,604 0% (6%)
-------- -------- -------- ---------- ---------
In the current period, revenue remained flat on a LFL basis due
to the following reasons:
25-OH Vitamin D revenue declined by GBP0.5m versus H1 FY19, or
20% on a LFL basis. This is a similar absolute rate of decline as
seen between H1 FY19 and H1 FY18. The decline is due to a reduction
in demand for 25-OH Vitamin D assay volumes in the market and the
impact of "Vitamin D only" instrument returns in the US during the
second half of FY19.
Speciality - IDS revenue grew by 5% LFL versus H1 FY19, with
improved performance across most indication areas, particularly our
bone and growth panels, aided by instrument placements at the end
of FY19 becoming operational. Q2 saw an improvement in growth
trajectory versus Q1, where this business stream declined 2% LFL
versus the prior year. We believe we can improve the growth
trajectory of this segment as we release new endocrinology assays,
which is key to our mid and long-term profitability.
Speciality - Partners revenue encompasses the sales of assays
developed by IDS's partners and sold under the IDS brand. These
consist of 52 assays in the fields of Autoimmunity and Infectious
Disease. Revenue in this segment grew by 52% LFL, a further
acceleration in the growth rate compared to the previous year. The
autoimmunity panel is an area of focus for IDS. When combined with
our legacy endocrinology assays, we have a unique panel in the
market which is of interest to laboratories who previously had to
run autoimmunity and endocrinology tests on different
analysers.
1.2 Instrument Placements
An analysis of instrument placements and sales over the previous
five half-year periods is set out below:
H1 FY20 H2 FY19 H1 FY19 H2 FY18 H1 FY18
Direct Gross Placements
[1] 18 22 15 16 18
Direct Returns (14) (12) (12) (16) (9)
Direct Net Placements 4 10 3 0 9
Sales to Distributors
[2] 14 34 13 19 17
Total Analyser
sales [1] +[2] 32 56 28 35 35
-------------------------- -------- -------- -------- -------- --------
Direct instruments are those instruments which are sold or
placed with reagent rental IDS end-user customers in the Group's
core markets of the US, Europe (excluding distributor territories
of Spain and Italy) and Brazil. Returns in H1 FY20 were higher than
H1 FY19 mainly due to the loss of one significant customer which
ran a single assay across multiple machines.
We have set ourselves an ambitious target to achieve 100 gross
new placements (FY19: 84) across our Automated business (direct and
distribution) during FY20, which would be the strongest performance
since FY13. We have visibility on several large deals in our sales
pipeline, which if closed during Q3, should enable us to reach this
target.
1.3 Assays per Instrument
Average assays being run on each instrument stands at 5.4,
versus 4.8 at 30 September 2018. This reflects uptake of our
enlarged assay portfolio which now includes Autoimmune, Infectious
Disease and Allergy panels. The greater variety of assays run on
our analysers will increase their "stickiness" in laboratories and
help to minimise instrument returns in the future. If we continue
our current upselling trend, we are on target to achieve our goal
of having an average of seven assays per instrument by the end of
FY21.
1.4 Sales Process
As noted in our Annual Report & Accounts 2019, we have
focused our attention on enhancing our European sales organisation.
This new team has bedded into the organisation and have had a
number of successes in upselling assays to our existing customers,
as well as retaining a number of key accounts whose contracts were
retendered during the period. In addition, 16 of the 18 gross
placements in H1 FY20 were generated in Europe, and we look forward
to continued success in this region in H2.
In the US, we continue to face challenges to improve automated
sales performance. This is mainly due to the lack of assays in our
portfolio, however we gained FDA approval for an additional assay
in the US during H1. We are focusing on expanding our assay menu in
the US over the long-term to enable us to reach a menu with
critical mass.
1.5 Assay Development and Product Registration
We did not release any new IDS Speciality (Endocrinology) assays
during the period, however the R&D team delivered a successful
performance improvement to a key existing assay. We have targeted
the release of two new assays in the second half of the year, one
of which will be developed by a partner. Over the last two years we
have improved our underlying development processes, however still
need to improve in terms of adhering to development schedules and
deliverables. Moving forward our focus will be on ensuring our
R&D team has the technical skill set to develop high quality
specialised assays, along with the project management skillset to
ensure deadlines are met.
On the product registration side, we received FDA approval for
one additional assay, however we do not expect
any further FDA approvals during FY20. We anticipate at least two further approvals in FY21.
The table below shows the assays available on the IDS analyser
range under the IDS brand, split by the main regulatory
approvals:
Sep 19 Sep 18
Endocrinology - CE approved 22 22
------- -------
Endocrinology - FDA approved 11 10
------- -------
Endocrinology - NMPA approved 4 4
------- -------
Autoimmune - CE approved 29 29
------- -------
Infectious Disease - CE approved 23 22
------- -------
Allergy - CE approved 60 59
------- -------
Total - CE approved 134 132
------- -------
2. MANUAL BUSINESS
LFL Change %
H1 FY20 H1 FY19 H1 FY18 H1 FY20 v H1 FY19
GBP000 GBP000 GBP000 H1 FY19 v
H1 FY18
-------- -------- -------- ---------- ---------
25-OH Vitamin
D 604 556 660 6% (15%)
-------- -------- -------- ---------- ---------
Speciality - IDS 2,446 2,524 2,495 (5%) 2%
-------- -------- -------- ---------- ---------
Speciality - Purchased 872 987 924 (14%) 9%
-------- -------- -------- ---------- ---------
Diametra 1,816 2,069 1,932 (13%) 6%
-------- -------- -------- ---------- ---------
Total 5,738 6,136 6,011 (8%) 2%
-------- -------- -------- ---------- ---------
2.1 Revenue Performance
The Manual business saw a decline of 8% LFL versus H1 FY19. Our
goal is to improve the revenue trajectory of this business as we
move through the second half of the year.
2.2 Sales Process, Portfolio Development
Our Manual business unit team continues to make progress in
developing our global distribution network. During H2, focus will
be on leveraging this network to improve performance. A second
direction for improving the quality of the Manual business is an
upgrade of the assay portfolio with speciality/niche assays, thus
reducing competition and pricing pressure in the mass market part
of our product portfolio. The upgrade of the portfolio will come
either through internal development or "OEM in" deals with
partners.
3. TECHNOLOGY BUSINESS
LFL Change %
H1 FY20 H1 FY19 H1 FY18 H1 FY20 H1 FY19
GBP000 GBP000 GBP000 v v
H1 FY19 H1 FY18
-------- -------- -------- --------- ---------
Royalty Income - 35 69 (99%) (42%)
-------- -------- -------- --------- ---------
Technology Income 2,062 1,523 973 36% 57%
-------- -------- -------- --------- ---------
Total 2,062 1,558 1,042 32% 51%
-------- -------- -------- --------- ---------
3.1 Revenue Performance
Our Technology business - comprising the sale of instruments and
ancillaries to OEM partners - continues to grow, with LFL growth of
32% versus H1 FY19, generated mainly from two active OEM partners.
Revenues from this business have doubled since H1 FY18.
3.2 Sales Process
We are currently pursuing several leads which would result in
additional partners using the IDS analyser technology on an OEM
basis, and successful conclusion of these deals will allow us to
diversify and continue to grow this business.
Financial review
Group revenues were GBP18.8m, an increase of 2% compared to the
revenues of GBP18.5m recorded in H1 FY19. LFL revenues remained
constant from the prior half year.
Adjusted EBITDA (before exceptional items) was GBP2.9m, an
increase of GBP1.0m compared to H1 FY19. This increase in adjusted
EBITDA was mainly driven by an improved gross margin, due to sales
upselling and cost control initiatives, as well as a reduction in
research and development costs.
Adjusted EBITDA was also favourably impacted by GBP0.3m due to
the change in lease accounting policy mandated by IFRS 16 'Leases',
which is described in Section A1 below.
The Group generated free cash flow to equity, being cash flow
before returns to shareholders, of GBP0.4m (H1 FY19: GBP1.1m). The
reasons for this decrease, despite the increased EBITDA, is
explained in section D below.
A. SUMMARY OF INCOME STATEMENT
H1 FY20 H1 FY19 FY19
GBP000 GBP000 GBP000
------------------------------------- ---------- ---------- ---------
Revenue 18,791 18,495 38,513
------------------------------------- ---------- ---------- ---------
Gross profit 8,411 7,892 16,696
Gross margin 44.8% 42.7% 43.4%
Sales and marketing (4,403) (4,553) (9,075)
Research and development (893) (1,274) (2,444)
General and administrative expenses (2,473) (2,331) (4,837)
------------------------------------- ---------- ---------- ---------
Total operating costs (7,769) (8,158) (16,356)
Exceptional items - 43 89
------------------------------------- ---------- ---------- ---------
Profit/ (loss) from operations 642 (223) 429
Add back
Depreciation and amortisation 2,215 2,159 4,457
Exceptional items - (43) (89)
------------------------------------- ---------- ---------- ---------
Adjusted EBITDA 2,857 1,893 4,797
------------------------------------- ---------- ---------- ---------
A1 Change in Accounting Policy
The introduction of IFRS 16 'Leases' means that leases held by
IDS, which were previously defined as operating leases, are now
deemed to be finance leases. This means that costs previously
classified as rental expenditure are now included within
depreciation and interest, and as a result EBITDA is favourably
impacted by GBP279k in H1 FY20, with depreciation increasing by a
similar amount. As a result, the introduction of IFRS 16 did not
materially impact operating profit.
Full disclosure as to the impact of adopting IFRS 16 is given in
Note 1 of the Interim Results. The H1 FY19 results have not been
restated to reflect the impact of adopting IFRS 16.
A2 Foreign Exchange
The average exchange rates used to translate Euros and US
Dollars to Pounds Sterling are as follows:
Average exchange rates H1 FY20 H1 FY19 FY19
---------------------------- -------- -------- -----
Pounds Sterling: US Dollar 1.26 1.34 1.32
Pounds Sterling: Euro 1.13 1.13 1.13
---------------------------- -------- -------- -----
The movement in FX rates favourably impacted reported revenue by
2% but had a negligible impact on EBITDA and operating profit.
In the period, 68% (H1 FY19: 65%) of the Group's revenues were
denominated in Euros, and 20% (H1 FY19: 21%) were denominated in US
Dollars.
A3 Gross Profit
Gross profit was GBP8.4m (H1 FY19: GBP7.9m) implying a gross
margin of 44.8% (H1 FY19: 42.7%).
As we noted in the Annual Report & Accounts 2019, our margin
had previously declined as the result of a shift in revenue from
higher margin direct business to lower margin distribution
territories. During H1 FY20 distribution revenues increased to
around 24% of Group revenues (H1 FY19: 22%). During the period, a
number of controls were put in place to ensure that in all
territories we are valuing our product offering appropriately and
this led to improved gross margins.
Several cost initiatives to reduce wastage in our main automated
assay manufacturing plant in Liege have been successfully
implemented and we are continuing to pursue these initiatives to
generate further efficiencies. Additionally, we realised further
economies of scale in our Pouilly instrument production site, which
produced 69 analysers in H1 FY20 versus 46 in the comparative
period with a largely unchanged team.
As a result of the ongoing implementation of these efficiency
projects, as well as the leverage effect we expect to see from
increased sales volumes, we believe IDS can achieve gross margins
in excess of 50% in the medium term.
A4 Operating costs
The Group's total operating costs (before exceptional items)
comprise:
H1 FY20 % revenue H1 FY19 % revenue
GBP000 GBP000
---------------------------------- ------- --------- ------- ---------
Sales and marketing (4,403) 23.4% (4,553) 24.6%
Research and development (893) 4.8% (1,274) 6.9%
General and administrative
expenses (2,473) 13.2% (2,331) 12.6%
Operating costs (pre-exceptional) (7,769) 41.3% (8,158) 44.1%
---------------------------------- ------- --------- ------- ---------
Total spend on operating costs has declined to GBP7.8m (H1 FY19:
GBP8.2m), and as a result operating costs have reduced to 41.3% of
revenue (H1 FY19: 44.1%).
The reduction is mainly due to lower spend in research and
development arising due to the timing of project related spend with
third parties.
Revenue per headcount, our key measure of operational
efficiency, improved by 6% to GBP138k per employee, up from GBP130k
per employee in H1 FY19. However, this still lags well behind best
in class competitors, such as Diasorin, who achieve over GBP300k of
revenue per employee.
A5 Exceptional items
Exceptional items during the current and previous financial
periods comprise:
H1 FY20 H1 FY19
GBP000 GBP000
--------------------------- --------
Restructuring income - 43
----------------------- --- --------
There were no exceptional items in H1 FY20. In H1 FY19 the
exceptional income related to the release of an unused redundancy
provision for the closure of our sales offices in FY18.
A6 Finance expense
Net finance expense was GBP0.9m (H1 FY19: GBP0.3m) and relates
mainly to foreign exchange losses on intercompany loans, hence they
have no cash flow impact. We are looking at a strategy to net down
a number of these intercompany balances to reduce our exposure to
such fluctuations in the future.
A7 Taxation
The Group's effective tax rate for the current period is based
on an estimate of the rate for the full financial year and is 107%
(H1 FY19: 42%) giving a tax credit of GBP0.2m (H1 FY19: GBP0.2m).
Before exceptional items, prior year adjustments and the effect of
rate changes on deferred tax balances, the effective rate is 60%
(H1 FY19: 48%).
A8 Earnings per share
Basic earnings per share improved to 0.1p (H1 FY19: -1.0p).
A9 Business Unit Performance
An analysis of the financial performance of each business unit
is provided below:
H1 FY20 GBP000 Automated Manual Technology Total
Revenue 10,991 5,738 2,062 18,791
---------- ------- ----------- -------
Gross Profit 5,318 2,378 715 8,411
---------- ------- ----------- -------
Adjusted EBITDA 1,612 1,044 201 2,857
---------- ------- ----------- -------
Adjusted EBITDA
% 14.7% 18.2% 9.7% 15.2%
---------- ------- ----------- -------
H1 FY19 GBP000 Automated Manual Technology Total
Revenue 10,801 6,136 1,558 18,495
---------- ------- ----------- -------
Gross Profit 4,943 2,499 450 7,892
---------- ------- ----------- -------
Adjusted EBITDA 768 1,064 61 1,893
---------- ------- ----------- -------
Adjusted EBITDA
% 7.1% 17.3% 3.9% 10.2%
---------- ------- ----------- -------
Encouragingly EBITDA in our Automated business was GBP1.6m, more
than double the comparable period, for the reasons set out in
section A3 and A4 above.
Despite the decline in Manual business revenue, EBITDA of
GBP1.0m remained broadly consistent with the previous year, due to
higher gross margins arising as a result of several targeted price
increases in distribution territories where our prices were deemed
too low.
Finally, profitability improved in our Technology business which
returned EBITDA of GBP0.2m, due to the leverage impact of the
higher revenues versus the comparable period.
B. HEADCOUNT
A summary of IDS headcount by function is given below:
Headcount (FTE basis) 30 Sep 19 31 Mar 30 Sep
19 18
Operations 125 130 126
Sales and marketing 75 78 81
thereof field sales force 23 24 25
Research and development 38 40 45
General and administrative 35 35 34
Total 273 283 286
-------------------------------- ---------- ------- -------
Annualised revenue per employee for H1 FY20 increased to
GBP138,000 per FTE (H1 FY19: GBP130,000).
C. SUMMARY OF BALANCE SHEET
C1 Equity
The Group's net assets at 30 September 2019 are GBP56.7m (30
September 2018: GBP55.5m).
C2 Working Capital
The Group net working capital increased to GBP11.3m from
GBP10.1m at 30 September 2018. This equates to 30% (30 September
2018: 27%) of annualised revenue.
The increase has been driven by higher stock levels of analysers
and related raw materials, which we expect will be sold or placed
during the second half of the year.
D. SUMMARY OF CASH FLOW STATEMENT
A summary of the Group's cashflow is set out below:
H1 FY20 H1 FY19 FY19
GBP000 GBP000 GBP000
----------------------------------- -------- -------- --------
(Loss)/profit before tax (230) (523) 842
Depreciation and amortisation 2,215 2,159 4,457
Income taxes received 331 1,052 838
Other adjusting items 885 136 (589)
Movements in working capital (564) 149 232
----------------------------------- -------- -------- --------
Cash generated from operating
activities 2,637 2,973 5,780
Cash used in investing activities (1,929) (1,822) (4,426)
Cash used in financing activities (486) (1,932) (2,019)
----------------------------------- -------- -------- --------
Net increase/(decrease) in cash
and cash equivalents 222 (781) (665)
----------------------------------- -------- -------- --------
Add back
Share buy back - 1,358 1,358
Dividend 201 500 500
----------------------------------- -------- -------- --------
Free cash flow to equity 423 1,077 1,193
----------------------------------- -------- -------- --------
Cash generated from operating activities fell to GBP2.6m (H1
FY19: GBP3.0m). The lower cash generated is mainly due to a lower
income tax credit in H1 FY20 as well as an outflow due to the
increase in working capital explained earlier. The "other adjusting
items" line mainly reflects the non-cash impacting foreign exchange
losses as explained in section A6.
As a result, free cash flow to equity decreased to GBP0.4m (H1
FY19: GBP1.1m).
During the period the Group returned GBP0.2m (H1 FY19: 1.9m) to
shareholders by way of dividends and share buy backs.
As at 30 September 2019, the Group's cash and cash equivalents
are GBP28.1m (30 September 2018: GBP27.8m; 31 March 2019:
GBP27.7m).
E. BREXIT
We have now had two "practise runs" at preparing for a no deal
Brexit, firstly at the end of March 2019 and recently at the end of
October 2019. While these preparations have not led to significant
additional costs, they have absorbed significant amounts of time
and resources which could have been spent productively
elsewhere.
While we hope the risk of a no deal Brexit is receding, the
Brexit risks remain as stated in our Annual Report & Accounts
2019.
F. OUTLOOK
The results for H1 FY20 are in line with our expectations, and
we continue to target full year LFL revenue growth when compared to
FY19.
Unaudited consolidated interim income statement
For the six-month period to 30 September 2019
6 Months 6 Months Year ended
ended ended 31 March
30 Sep 30 Sep 2018 2019
2019
Note GBP000 GBP000 GBP000
2,
Revenue 3 18,791 18,495 38,513
Cost of sales (10,380) (10,603) (21,817)
Gross profit 8,411 7,892 16,696
Sales and marketing costs (4,403) (4,553) (9,075)
Research and development costs (893) (1,274) (2,444)
General and administrative expenses (2,473) (2,331) (4,837)
----- --------- ------------ -----------
Operating costs pre-exceptional
items (7,769) (8,158) (16,356)
Restructuring income - 43 89
Total exceptional items 4 - 43 89
------------------------------------- ----- --------- ------------
Operating costs (7,769) (8,115) (16,267)
Profit/(loss) from operations 642 (223) 429
Finance income 108 69 495
Finance costs (980) (369) (82)
(Loss)/profit before tax (230) (523) 842
Income tax credit/(charge) 6 246 218 (46)
Profit/(loss) for the period
attributable to owners of the
parent 16 (305) 796
===== ========= ============ ===========
Earnings/(loss) per share
From continuing operations
Basic 5 0.1p (1.0p) 2.7p
Diluted 5 0.1p (1.0p) 2.7p
Unaudited interim statement of other comprehensive income
For the six-month period to 30 September 2019
6 Months 6 Months Year ended
ended ended 31 March
30 Sep 30 Sep 2019
2019 2018
GBP000 GBP000 GBP000
Profit/(loss) for the period 16 (305) 796
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Currency translation differences 1,575 780 (505)
Other comprehensive income/(expense)
to be reclassified to profit or loss
in subsequent periods, before and
after tax 1,575 780 (505)
Other comprehensive expense not to
be reclassified to profit or loss
in subsequent periods:
Remeasurement of defined benefit
plan (39) (56) (40)
Other comprehensive expense not to
be reclassified to profit or loss
in subsequent periods, before tax (39) (56) (40)
Tax relating to other comprehensive
income not to be reclassified to
profit or loss in subsequent periods - 14 14
--------- --------- -----------
Other comprehensive income/(expense),
net of tax 1,536 738 (531)
--------- --------- -----------
Total comprehensive income for the
period
attributable to owners of the parent 1,552 433 265
========= ========= ===========
Unaudited consolidated interim balance sheet
As at 30 September 2019
30 Sep 30 Sep 31 March
2019 2018 2019
Restated
Note GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 8,500 7,191 6,852
Other intangible assets 11,123 11,138 11,177
Deferred tax assets 284 328 70
Other non-current assets 110 357 283
20,017 19,014 18,382
Current assets
Inventories 9,043 8,308 7,819
Contract assets 402 321 380
Trade and other receivables 8,016 7,410 8,958
Income tax receivable 2,528 2,523 2,667
Cash and cash equivalents 28,148 27,752 27,713
48,137 46,314 47,537
----- ------- --------- ---------
Total assets 68,154 65,328 65,919
----- ------- --------- ---------
Liabilities
Current liabilities
Short-term portion of long-term
borrowings 554 81 82
Trade and other payables 5,974 5,856 6,511
Contract liabilities 166 44 278
Income tax payable 348 284 369
Provisions 7 47 60 46
Deferred income 28 85 33
7,117 6,410 7,319
----- ------- --------- ---------
Net current assets 41,020 39,904 40,218
----- ------- --------- ---------
Non-current liabilities
Long-term portion of long-term
borrowings 2,062 1,176 1,092
Employee benefit obligations 403 395 363
Provisions 7 884 839 846
Deferred tax liabilities 947 1,049 996
4,296 3,459 3,297
Total liabilities 11,413 9,869 10,616
----- ------- --------- ---------
Net assets 56,741 55,459 55,303
===== ======= ========= =========
Total equity
Called up share capital 8 589 589 589
Share premium account 8 32,345 32,345 32,345
Other reserves 6,235 5,945 4,660
Retained earnings 17,572 16,580 17,709
Equity attributable to owners
of the parent 56,741 55,459 55,303
======= ======= =======
Unaudited consolidated interim cash flow statement
For the six-month period to 30 September 2019
6 Months 6 Months Year ended
ended ended 31 March
30 Sep 30 Sep 2019
2019 2018
GBP000 GBP000 GBP000
(Loss)/profit before tax (230) (523) 842
Adjustments for:
Depreciation of property, plant
and equipment 1,185 1,055 2,187
Amortisation of intangible assets 1,030 1,104 2,270
Loss on disposal of property, plant
and equipment 2 8 36
Share-based payment charge 11 12 24
Finance income (108) (69) (495)
Finance costs 980 369 82
Other exceptional items - (43) (89)
Operating cash flows before movements
in working capital 2,870 1,913 4,857
(Increase)/decrease in inventories (910) 208 1,012
Decrease/(increase) in receivables 1,182 755 (959)
(Decrease)/increase in payables,
provisions and deferred income (836) (814) 179
Cash generated by operations 2,306 2,062 5,089
Cash outflow related to exceptional
costs - (141) (147)
Income taxes received 331 1,052 838
Net cash from operating activities 2,637 2,973 5,780
--------- --------- -----------
Investing activities
Purchases of other intangible assets (922) (1,221) (2,492)
Purchases of property, plant and
equipment (1,115) (822) (2,122)
Disposals of property, plant and
equipment - 152 26
Interest received 108 69 162
Net cash used by investing activities (1,929) (1,822) (4,426)
--------- --------- -----------
Financing activities
Repayments of borrowings (215) (41) (79)
Interest paid (70) (33) (82)
Dividends paid (201) (500) (500)
Purchase of own shares - (1,358) (1,358)
Net cash used by financing activities (486) (1,932) (2,019)
--------- --------- -----------
Net increase/(decrease) in cash
and cash equivalents 222 (781) (665)
Effect of exchange rate differences 213 - (155)
Cash and cash equivalents at beginning
of period 27,713 28,533 28,533
--------- --------- -----------
Cash and cash equivalents at end
of period 28,148 27,752 27,713
========= ========= ===========
Unaudited consolidated statement of changes in equity
Share Share Other Retained Total
capital premium reserves earnings
account
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2019 589 32,345 4,660 17,709 55,303
Change in accounting
policy (note 1) - - - 76 76
Restated as at 1 April
2019 589 32,345 4,660 17,785 55,379
Profit for the period - - - 16 16
Other comprehensive
income
Foreign exchange translation
differences on foreign
currency net investment
in subsidiaries - - 1,575 - 1,575
Remeasurement of defined
benefit plan - - - (39) (39)
Total comprehensive
income - - 1,575 (23) 1,552
Transactions with
owners
Share-based payments - - - 11 11
Dividends paid - - - (201) (201)
At 30 September 2019 589 32,345 6,235 17,572 56,741
======== ======== ========= ========= ========
At 1 April 2018 589 32,345 5,165 18,773 56,872
Loss for the period - - - (305) (305)
Other comprehensive
income
Foreign exchange translation
differences on foreign
currency net investment
in subsidiaries - - 780 - 780
Remeasurement of defined
benefit plan - - - (56) (56)
Tax effect on remeasurement
of defined benefit
plan - - - 14 14
Total comprehensive
income - - 780 (347) 433
Transactions with
owners
Share-based payments - - - 12 12
Dividends paid - - - (500) (500)
Purchase of own shares - (1,358) (1,358)
At 30 September 2018 589 32,345 5,945 16,580 55,459
======== ======== ========= ========= ========
Share Share Other Retained Total
capital premium reserves earnings
account
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2018 589 32,345 5,165 18,773 56,872
Profit for the year - - - 796 796
Other comprehensive income
Foreign exchange translation
differences on foreign
currency net investment
in subsidiaries - - (505) - (505)
Remeasurement of defined
benefit plan - - - (40) (40)
Tax effect on remeasurement
of defined benefit plan - - - 14 14
Total comprehensive (expense)/income - - (505) 770 265
Transactions with owners
Share-based payments - - - 24 24
Dividends paid - - - (500) (500)
Purchase of own shares - - - (1,358) (1,358)
At 31 March 2019 589 32,345 4,660 17,709 55,303
======== ======== ========= ========= ========
Notes to the Interim Financial Statements
For the six month period to 30 September 2019
1 Basis of preparation
The unaudited condensed financial statements for the six months
ended 30 September 2019 have been prepared in accordance with IAS
34, 'Interim Financial Reporting', as adopted by the European
Union. They do 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 31 March 2019. The unaudited condensed financial information
has been prepared using the same accounting policies and methods of
computation used to prepare the Group's Annual Report &
Accounts for the year ended 31 March 2019 that are described on
pages 58 to 67 of that report which can be found on the Group's
website at www.idsplc.com. The annual financial statements of the
Group are prepared in accordance with IFRS as adopted by the
European Union.
New standards or interpretations not yet effective for the
financial year ending 31 March 2020 are as follows: -
-- IAS 1 - Presentation of Financial Instruments - Amendments to the definition of material;
-- IAS 8 - Accounting Policies, Changes in Accounting Estimates
and Errors - Amendments to the definition of material;
-- IFRS 3 - Business Combinations - Amendments to clarify the definition of a business;
-- IFRS 17 - Insurance Contracts; and
-- IFRS 9 - Financial Instruments - Amendments regarding
pre-replacement issues in the context of the IBOR reform.
Adoption of IFRS 15
IFRS 15 'Revenue from Contracts with Customers' became effective
for the financial year ending 31 March 2019, thus was adopted in
the Group's Annual Report & Accounts for the year ended 31
March 2019. Adoption resulted in the reclassification of amounts
invoiced in advance and in arrears relating to customer reagent and
service revenue. The impact of adoption on the balance sheet for
the six months ended 30 September 2018 is set out below. The income
statement for the six months ended 30 September 2018 is
unchanged.
Before IFRS 15 After
reclassification reclassification reclassification
30 September 2018 GBP000 GBP000 GBP000
--------------------------------- ----------------- ----------------- -----------------
Assets
Non-current assets
Property, plant and equipment 7,191 7,191
Other intangible assets 11,138 11,138
Deferred tax assets 328 328
Other non-current assets 357 357
19,014 19,014
Current assets
Inventories 8,308 8,308
Contract assets - 321 321
Trade and other receivables 7,731 (321) 7,410
Income tax receivable 2,523 2,523
Cash and cash equivalents 27,752 27,752
46,314 46,314
--------------------------------- ----------------- ----------------- -----------------
Total assets 65,328 65,328
----------------- ----------------- -----------------
Liabilities
Current liabilities
Short-term portion of long-term
borrowings 81 81
Trade and other payables 5,856 5,856
Contract liabilities - 44 44
Income tax payable 284 284
Provisions 53 53
Deferred income 129 (44) 85
6,403 6,403
--------------------------------- ----------------- ----------------- -----------------
Net current assets 39,911 39,911
----------------- ----------------- -----------------
Non-current liabilities
Long-term portion of long-term
borrowings 1,176 1,176
Employee benefit obligations 395 395
Provisions 846 846
Deferred tax liabilities 1,049 1,049
3,466 3,466
Total liabilities 9,869 9,869
----------------- ----------------- -----------------
Net assets 55,459 55,459
================= ================= =================
Total equity
Called up share capital 589 589
Share premium account 32,345 32,345
Other reserves 5,945 5,945
Retained earnings 16,580 16,580
Equity attributable to
owners of the parent 55,459 55,459
================= ================= =================
Adoption of IFRS 16
In the period ended 30 September 2019, the Group has applied
IFRS 16 'Leases' for the first time.
The Group has adopted IFRS 16 retrospectively from 1 April 2019
but has not restated comparatives for the FY19 reporting period, as
permitted under the specific transitional provisions in the
standard. The reclassifications and adjustments arising from the
adoption of IFRS 16 have therefore been recognised in the opening
balance sheet on 1 April 2019.
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified as
operating leases. These liabilities were measured at the present
value of the remaining lease payments, discounted using the Group's
incremental borrowing rate as of 1 April 2019. The incremental
borrowing rate applied to the lease liabilities on 1 April 2019 was
3.00%. The associated right-of-use assets were measured on a
retrospective basis as if the new rules had always been
applied.
The change in accounting policy affected the following items in
the balance sheet on 1 April 2019:
- Property, plant and equipment - increased by GBP1,489,000
- Short-term portion of long-term borrowings - increased by
GBP322,000
- Long-term portion of long-term borrowings - increased by
GBP1,091,000
The net impact on retained earnings on 1 April 2019 was an
increase of GBP76,000.
In applying IFRS 16 for the first time, the Group has used the
following practical expedients permitted by the standard:
- The use of a single discount rate to a portfolio of leases
with reasonably similar characteristics;
- The accounting for operating leases with a remaining lease
term of less than 12 months as at 1 April 2019 as short-term
leases;
- The use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease; and
- The accounting for operating leases with remaining total
contractual payments of less than $5,000 as at 1 April 2019 as
short-term leases.
Until the year ended 31 March 2019, leases of property, plant
and equipment were classified as either finance or operating
leases. Payments made under operating leases were charged to profit
or loss on a straight-line basis over the period of the lease.
From 1 April 2019, leases are recognised as a right-of-use asset
and a corresponding lease liability at the date at which the leased
asset is available for use by the Group. Each lease payment is
allocated between the liability and finance cost. The finance cost
is charged to profit or loss over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of
the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the
lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
- Fixed payments, less any incentives receivable,
- Variable lease payments that are based on an index or a
rate,
- Amounts expected to be payable by the lessee under residual
value guarantees,
- The exercise price of a purchase option if the lessee is
reasonably certain to exercise that option; and
- Payment of penalties for terminating the lease, if the lease
term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be determined, the
lessee's incremental borrowing rate is used, being the rate that
the lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the
following:
- The amount of the initial measurement of the lease
liability;
- Any lease payments made at or before the commencement date,
less any lease incentives received;
- Any initial direct costs; and
- Restoration costs.
Payments associated with short-term leases and leases of
low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a
lease term of 12 month or less. Low-value assets comprise small
items of furniture or equipment.
The impact on profit or loss for the six-month period ended 30
September 2019 was the following:
- Depreciation charge - increased by GBP256,000
- Finance costs - increased by GBP21,000
- Lease rental expense - decreased by GBP279,000
As the Group has adopted this accounting policy change using the
modified retrospective approach in the current period comparatives
have not been restated.
The financial information for the six months ended 30 September
2019 is not reviewed by PricewaterhouseCoopers LLP and accordingly
no opinion has been given. The comparative financial information
for the year ended 31 March 2019 has been extracted from the Annual
Report & Accounts 2019. The financial information contained in
this interim report does not constitute statutory accounts as
defined in section 435 of the Companies Act 2006 and does not
reflect all of the information contained in the Group's Annual
Report & Accounts 2019. The annual financial statements for the
year ended 31 March 2019, which were approved by the Board of
Directors on 18 June 2019, received an unqualified audit report,
did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006 and have been filed with the Registrar of
Companies.
2 Revenue
An analysis of the Group's revenue split by the key product
types is as follows:
H1 FY20 Recognised Recognised Total
on delivery over time
GBP000 GBP000 GBP000
------------------------------ ------------- ----------- --------
25-OH Vitamin D 2,325 - 2,325
Speciality - IDS 7,059 - 7,059
Speciality - partners 871 - 871
Instrument sales 469 267 736
------------------------------ ------------- ----------- --------
Total automated 10,724 267 10,991
------------------------------ ------------- ----------- --------
Automated revenue comprises:
Operating lease rental - 1,601 1,601
Reagent revenue 9,390 - 9,390
------------------------------ ------------- ----------- --------
25-OH Vitamin D 604 - 604
Speciality - IDS 2,446 - 2,446
Speciality - purchased 872 - 872
Diametra 1,816 - 1,816
------------------------------ ------------- ----------- --------
Total manual 5,738 - 5,738
Technology 1,813 249 2,062
Total revenue 18,275 516 18,791
------------------------------ ------------- ----------- --------
H1 FY19 Recognised Recognised Total
on delivery over time
GBP000 GBP000 GBP000
------------------------------ ------------- ----------- --------
25-OH Vitamin D 2,839 - 2,839
Speciality - IDS 6,679 - 6,679
Speciality - partners 569 - 569
Instrument sales 504 210 714
------------------------------ ------------- ----------- --------
Total automated 10,591 210 10,801
------------------------------ ------------- ----------- --------
Automated revenue comprises:
Operating lease rental - 1,612 1,612
Reagent revenue 9,189 - 9,189
------------------------------ ------------- ----------- --------
25-OH Vitamin D 556 - 556
Speciality - IDS 2,524 - 2,524
Speciality - purchased 987 - 987
Diametra 2,069 - 2,069
------------------------------ ------------- ----------- --------
Total manual 6,136 - 6,136
Technology 1,504 54 1,558
Total revenue 18,231 264 18,495
------------------------------ ------------- ----------- --------
FY19 Recognised Recognised Total
on delivery over time
GBP000 GBP000 GBP000
------------------------------ ------------- ----------- --------
25-OH Vitamin D 5,537 - 5,537
Speciality - IDS 13,737 - 13,737
Speciality - partners 1,332 - 1,332
Instrument sales 1,605 424 2,029
------------------------------ ------------- ----------- --------
Total automated 22,211 424 22,635
------------------------------ ------------- ----------- --------
Automated revenue comprises:
Operating lease rental 3,226 3,226
Reagent revenue 19,409 19,409
------------------------------ ------------- ----------- --------
25-OH Vitamin D 1,061 - 1,061
Speciality - IDS 5,179 - 5,179
Speciality - purchased 2,058 - 2,058
Diametra 4,024 - 4,024
------------------------------ ------------- ----------- --------
Total manual 12,322 - 12,322
Technology 3,449 107 3,556
Total revenue 37,982 531 38,513
------------------------------ ------------- ----------- --------
Operating lease rental relates to contracts implicit in
agreements for the placing of IDS-iSYS instruments with customers
and the related sale of reagents, and is estimated based on
averages. The IFRIC 4 imputed revenue has been restated for the
period ending 30 September 2018 from GBP2,460,000 to GBP1,612,000.
This change is due to a revised methodology which excludes directly
placed customer machines which have been sold and adjusts for iSYS
machines where the annual revenue is lower than the average per
machine imputed IFRIC 4 operating lease rental.
Contract assets
H1 FY20 H1 FY19 FY19
GBP000 GBP000 GBP000
----
Current contract assets relating to
automated reagent sales 402 321 380
---------------------------------------- -------- -------- ----
Contract liabilities
H1 FY20 H1 FY19 FY19
GBP000 GBP000 GBP000
Current contract liabilities relating
to instrument sales 166 44 278
----------------------------------------- -------- -------- --------
3 Segmental information
The Group applies IFRS 8 Operating Segments. IFRS 8 requires
provision of segmental information for the Group on the basis of
information reported internally to the chief operating
decision-maker for decision-making purposes. The Group considers
that the role of chief operating decision-maker is performed by the
Board of Directors.
Analysis of revenue is prepared and monitored on a geographical
and business unit basis. Operational performance is monitored on a
business unit basis by the Board of Directors. All balance sheet
and cash flow information received and reviewed by the Board of
Directors is prepared at a Group level.
H1 FY20 Automated Manual Technology Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------- -------- ----------- ---------
Revenue 10,991 5,738 2,062 18,791
Cost of Sales (5,673) (3,360) (1,347) (10,380)
---------------------------------- ---------- -------- ----------- ---------
Gross profit 5,318 2,378 715 8,411
Sales and marketing (3,347) (841) (215) (4,403)
Research and development (803) - (90) (893)
General and administrative
expenses (1,502) (732) (239) (2,473)
---------------------------------- ---------- -------- ----------- ---------
Operating costs pre-exceptional
items (5,652) (1,573) (544) (7,769)
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (334) 805 171 642
---------------------------------- ---------- -------- ----------- ---------
Exceptional items
Restructuring costs -
---------------------------------- ---------- -------- ----------- ---------
Total exceptional items -
---------------------------------- ---------- -------- ----------- ---------
EBIT 642
Finance income 108
Finance costs (980)
---------------------------------- ---------- -------- ----------- ---------
Loss before tax (230)
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (334) 805 171 642
Add: Depreciation & amortisation 1,946 239 30 2,215
Adjusted EBITDA 1,612 1,044 201 2,857
---------------------------------- ---------- -------- ----------- ---------
H1 FY19 Automated Manual Technology Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------- -------- ----------- ---------
Revenue 10,801 6,136 1,558 18,495
Cost of Sales (5,858) (3,637) (1,108) (10,603)
---------------------------------- ---------- -------- ----------- ---------
Gross profit 4,943 2,499 450 7,892
Sales and marketing (3,483) (877) (193) (4,553)
Research and development (1,261) - (13) (1,274)
General and administrative
expenses (1,388) (747) (196) (2,331)
---------------------------------- ---------- -------- ----------- ---------
Operating costs pre-exceptional
items (6,132) (1,624) (402) (8,158)
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (1,189) 875 48 (266)
---------------------------------- ---------- -------- ----------- ---------
Exceptional items
Restructuring credit 43
---------------------------------- ---------- -------- ----------- ---------
Total exceptional items 43
---------------------------------- ---------- -------- ----------- ---------
EBIT (223)
Finance income 69
Finance costs (369)
---------------------------------- ---------- -------- ----------- ---------
Loss before tax (523)
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (1,189) 875 48 (266)
Add: Depreciation & amortisation 1,957 189 13 2,159
Adjusted EBITDA 768 1,064 61 1,893
---------------------------------- ---------- -------- ----------- ---------
FY19 Automated Manual Technology Total
GBP000 GBP000 GBP000 GBP000
---------------------------------- ---------- -------- ----------- ---------
Revenue 22,635 12,322 3,556 38,513
Cost of Sales (12,581) (6,738) (2,498) (21,817)
---------------------------------- ---------- -------- ----------- ---------
Gross profit 10,054 5,584 1,058 16,696
Sales and marketing (6,920) (1,761) (394) (9,075)
Research and development (2,333) - (111) (2,444)
General and administrative
expenses (2,947) (1,456) (434) (4,837)
---------------------------------- ---------- -------- ----------- ---------
Operating costs pre-exceptional
items (12,200) (3,217) (939) (16,356)
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (2,146) 2,367 119 340
---------------------------------- ---------- -------- ----------- ---------
Exceptional items
Restructuring credit 89
---------------------------------- ---------- -------- ----------- ---------
Total exceptional items 89
---------------------------------- ---------- -------- ----------- ---------
EBIT 429
Finance income 495
Finance costs (82)
---------------------------------- ---------- -------- ----------- ---------
Profit before tax 842
---------------------------------- ---------- -------- ----------- ---------
Adjusted EBIT (2,146) 2,367 119 340
Add: Depreciation & amortisation 4,044 388 25 4,457
Adjusted EBITDA 1,898 2,755 144 4,797
---------------------------------- ---------- -------- ----------- ---------
4 Exceptional items
The Group incurred a number of exceptional items during the
previous financial period:
H1 FY20 H1 FY19 FY19
GBP000 GBP000 GBP000
------------------------------ -------- --------
Restructuring income - 43 89
Total exceptional items - 43 89
-------------------------- --- -------- --------
In H1 FY20, exceptional items were nil.
In H1 FY19, an exceptional credit of GBP43k was recorded,
relating to the reversal of a portion of certain redundancy
provisions booked in FY18.
In FY19, there was an exceptional credit of GBP0.1m due to the
reversal of restructuring provisions related to our France and
Italy operations which were not utilised.
5 Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group has dilutive
potential ordinary shares relating to contingently issuable shares
under the Group's share option scheme. At 30 September 2019, the
performance criteria for the vesting of the awards under the option
scheme had been met and consequently the shares in question are
included in the diluted EPS calculation.
The calculations of earnings per share are based on the
following profits and numbers of shares.
6 Months 6 Months Year ended
ended ended 31 March
30 Sep 2019 30 Sep 2018 2019
GBP000 GBP000 GBP000
Profit/(loss) on ordinary
activities after tax 16 (305) 796
============ ============ ===========
Number Number Number
Weighted average no of
shares:
For basic earnings per
share 28,784,097 29,284,981 29,034,539
Effect of dilutive potential
ordinary shares:
-Share Options 14,112 24,697 16,806
For diluted earnings per
share 28,798,209 29,309,678 29,051,345
============ ============ ===========
Basic earnings /(loss)
per share 0.1p (1.0p) 2.7p
Diluted earnings/(loss)
per share 0.1p (1.0p) 2.7p
6 Taxation
The estimated tax rate for FY20 of 107% (H1 FY19: 39%) has been
applied to the profit before tax for the six months to 30 September
2019.
The Group's tax rate is substantially impacted by the claims for
R&D relief in certain territories.
7 Provisions
Onerous
Leavers Warranty Dilapidation lease Restructuring
provision provision provision provision provision Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2019 357 46 489 - - 892
Foreign exchange movement 12 1 - - - 13
Reassessment in the period 26 - - - - 26
At 30 September 2019 395 47 489 - - 931
============ ============ ============== ============ =============== ========
At 1 April 2018 271 7 479 89 147 993
Foreign exchange movement 4 - - 1 2 7
Utilised during the period (2) - - (90) (178) (270)
Release in the period (1) - - - 98 97
Reassessment in the period 88 - - - (16) 72
At 30 September 2018 360 7 479 - 53 899
============ ============ ============== ============ =============== ========
At 1 April 2018 271 7 479 89 147 993
Foreign exchange movement (6) - - (2) (3) (11)
Release in the year - - - (20) (43) (63)
Utilised during the year - - - (67) (101) (168)
Unwind of discount - - 10 - - 10
Reassessment in the year 92 39 - - - 131
============ ============ ============== ============ =============== ========
At 31 March 2019 357 46 489 - - 892
============ ============ ============== ============ =============== ========
At 30 September 2019
Included in current liabilities - 47 - - - 47
non-current
liabilities 395 - 489 - - 884
395 47 489 - - 931
============ ============ ============== ============ =============== ========
At 30 September 2018
Included in current liabilities - 7 - - 53 60
non-current
liabilities 360 - 479 - - 839
360 7 479 - 53 899
============ ============ ============== ============ =============== ========
At 31 March 2019
Included in current liabilities - 46 - - - 46
non-current
liabilities 357 - 489 - - 846
357 46 489 - - 892
============ ============ ============== ============ =============== ========
When employees leave Dia.Metra S.r.l, by law the company is
required to pay to that employee an amount equal to one month's
salary for each year they have worked at the Company. The scheme is
Trattamento di Fine Rapporto ('TFR'). A provision for this
obligation is recognised in the balance sheet, but there is
considerable uncertainty over the timing of the settlement due to
lack of forward visibility of employees leaving service. The
present value of the potential liability to current employees as at
30 September 2019 is GBP395,000.
The warranty provision relates to warranties given for the first
year of operation of IDS-iSYS systems. This is reassessed each
year. It is expected that these costs will be incurred in line with
normal warranty terms of one year from the placements of the
instrument.
The dilapidations provision relates to one leased building in
Boldon, UK. At its earliest it will be required to be settled in
July 2020, at the first 5-year break point in a 15-year lease. The
discounted expected future cash flows to restore the remaining
leased building amounted to GBP489,000 at the balance sheet
date.
The onerous lease provision related to the leased sales office
in Paris following the restructure in IDS France in the year ending
31 March 2017 and the subsequent vacation of this office in the
year ending 31 March 2018. The office was vacated in May 2018 and
the provision was fully utilised in the previous financial
year.
The restructuring provision related to unpaid settlements from
the restructure of the IDS business actioned in FY18, which have
now been settled.
8 Share Capital
30 Sep 2019 30 Sep 2018 31 March 2019
GBP000 GBP000 GBP000
Equity Shares
Authorised:
75,000,000 Ordinary Shares of GBP0.02 each at
30 September 2019, 31 March 2019 and 30
September
2018 1,500 1,500 1,500
======================== ======================== =================
Share Capital
Allotted, called up and fully paid:
28,784,097 (30 September 2018: 28,784,097, 31
March 2019: 28,784,097) Ordinary shares of 2p
each (excluding own shares held) 576 576 576
Own shares held of 2p each 666,078 (30
September 2018: 666,078, 31 March 2019:
666,078) 13 13 13
589 589 589
======================== ======================== =================
Share Premium
Balance carried forward 32,345 32,345 32,345
======================== ======================== =================
9 Financial assets and financial liabilities
The carrying value of the financial assets and liabilities are
not materially different from their fair value.
10 Interim results
These results were approved by the Board of Directors on Friday
22 November 2019. Copies of this unaudited interim report will be
available to the public from the Group's registered office and
www.idsplc.com.
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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