TIDMLMT
RNS Number : 4406R
Lombard Medical Technologies PLC
23 August 2010
Press Information
Interim results for the six months ended 30 June 2010
London, UK, 23 August 2010 - Lombard Medical Technologies PLC ("Lombard
Medical", "LMT" or "the Company"), a medical device company focused on device
solutions for the $1 billion per annum abdominal aortic aneurysm ("AAA") repair
market, today announces its interim results for the six months ended 30 June
2010.
Operational highlights
* Aorfix(TM) sales up 79% in main EU markets to GBP622,000 (H1 2009: GBP348,000)
* US trial on track for final pre-market approval ("PMA") submission to be made in
H1 2011
*
* PMA Module 3 approved by FDA
* Senior management team changes complete
*
* Sales and marketing team in focus areas expanded
* Development projects initiated aimed at widening the scope, ease of use and cost
of Aorfix(TM)
* Study presented at Charing Cross Symposium shows iliac limb occlusion rates with
Aorfix(TM) are reduced to 0% (7% without Aorfix(TM))
Financial highlights
* Commercial revenues increased 38% to GBP1,343,000 (H1 2009: GBP976,000)
* Operating loss up GBP0.3 million to GBP4.2 million (H1 2009: GBP3.9 million)
reflecting increased investment in sales and marketing and R&D
* Total loss for the period down 1% to GBP3.7 million (H1 2009: GBP3.8 million)
* R&D tax credits of GBP0.9 million received (H1 2009: GBP1.2 million)
* GBP12.1 million net of expenses received in February 2010 from placing and
subscription of shares
* Net cash of GBP10.3 million as at 30 June 2010, in line with expectations
Commenting on the results, Simon Neathercoat, Chairman of Lombard Medical, said:
"During the first half of this year we concentrated on building our teams and
increasing focus on the largest market opportunities for the Company. The
results show that our plans are working and we are pleased with the progress to
date. Key additional members of the management team have been hired, focused
sales efforts in the main markets in Europe are bearing fruit, our US PMA
submission is on track, we have initiated two promising R&D projects to enhance
Aorfix(TM) and we have re-organized our operations to make the most efficient
use of the Company's facilities."
About Lombard Medical
Lombard Medical Technologies PLC (AIM: LMT), is a medical device company focused
on device solutions for the $1 billion dollar per annum abdominal aortic
aneurysm (AAA) repair market. AAA's are a balloon-like enlargement of the aorta
which, if left untreated, may rupture and cause death. Approximately 4.5
million people are living with AAA's in the developed world and each year
600,000 new cases are diagnosed. The market for endovascular stent grafts for
this application is expected to grow to $1.6 billion by 2015. The Company's
lead product, Aorfix(TM), is an endovascular stent graft which has been
specifically designed to solve the problems that exist in treating complex
tortuous anatomy which is often present in advanced AAA disease. Aorfix(TM) is
currently being commercialised in the EU, with a pivotal clinical trial ongoing
in the USA.
The Company is headquartered in Oxfordshire, with operations in Ayrshire and
Phoenix, USA.
Further background on the Company can be found at www.lombardmedical.com.
For further information:
+---------------------------------------+------------------------+
| Lombard Medical Technologies PLC | |
+---------------------------------------+------------------------+
| John Rush, Chief Executive Officer | Tel: 01235 750 800 |
| Tim Hall, Finance Director | |
+---------------------------------------+------------------------+
| Evolution Securities Limited | |
+---------------------------------------+------------------------+
| Barry Saint/Esther lee | Tel : 020 7071 4300 |
+---------------------------------------+------------------------+
| Financial Dynamics | |
+---------------------------------------+------------------------+
| Jonathan Birt | Tel : 020 7831 3113 |
+---------------------------------------+------------------------+
Chief Executive's Review
Since successfully completing the raising of GBP12.1 million net of expenses on
1 February 2010 the Company has made good progress with its main strategic goals
we set at that time:
* Increasing sales by focusing on our largest European market opportunities
* Obtaining FDA regulatory approval for Aorfix(TM)
* Developing a next generation delivery system for Aorfix(TM)
* Delivering operational efficiency improvements
Revenue
Europe represents 28% of the $1 billion per annum worldwide market for
endovascular AAA repair ("EVAR"). Lombard Medical's main objective within
Europe is to increase market share for Aorfix(TM) in the five largest European
markets (France, Germany, Italy, Spain and the UK) as these offer the greatest
opportunity for sales growth.
Over the last six months the Company has begun to invest in these markets by
adding three new sales executives in the UK and two new sales executives in
Germany to sell Aorfix(TM) directly. Most of these new additions joined us well
into the second quarter and therefore had little impact on revenue in the first
half of the year but will be expected to contribute to growth as their tenure
matures.
Aorfix(TM) sales in the main European markets increased by 79% during the
period, a solid result as we continue to build our sales and marketing presence.
We are changing the geographic mix of our business as we focus on the major
commercial markets in Europe where we have regulatory approval and healthy
economic conditions to enable the achievement of our growth targets.
A significant portion of Lombard Medical's sales in H1 2009 were generated from
areas which are no longer part of our commercial focus, and are declining in
revenue. In particular, in H1 2009, US clinical trial revenues and Aorfix(TM)
sales in Greece accounted for 29% of our total revenues. Sales in these two
areas in H1 2010 are down 63% (GBP231,400) vs. H1 2009. In the US our clinical
trial is intentionally winding down as we prepare for final FDA submission, and
in Greece the well known challenging economic conditions have made it difficult
to conduct business, at least in the near-term.
Overall, Lombard Medical commercial sales increased 38% to GBP1.3 million,
driven primarily by our success in the main European countries and supplemented
by strong contributions for the period from Russia, Czech Republic and Poland.
Our continued focus on the five main European markets will change the geographic
mix of where we derive revenues from and position Lombard Medical for the
maximum growth potential moving forward. This strategy is working with the
proportion of the Company's total revenue coming from Aorfix(TM) commercial
sales and in particular those in the main European markets increasing
significantly over the last year, which should help accelerate total revenue
growth in future.
Clinical proof to drive continued growth
The clinical message being delivered to customers is strengthening as we gain
more experience. Aorfix(TM) is the only endovascular stent graft licensed in
Europe to treat AAAs with neck angulations up to and including 90 degrees, and
our body of clinical data continues to grow in our own Retrospective Aorfix(TM)
Data Retrieval ("RADAR") Registry as well as from individual centre studies
which demonstrate the product's superior efficacy in patients with tortuous
anatomy.
One such study performed at the Royal United Hospital in Bath, UK, evaluated the
use of Aorfix(TM) on the rate of iliac limb occlusion (a blockage of the iliac
artery which can lead to subsequent corrective procedures). In the control
group of 93 patients, none of whom were treated with Aorfix(TM), seven patients
developed iliac limb occlusions of which five required additional intervention.
In the study group of 168 patients, Aorfix(TM) was used in 40 of the most
severely angulated cases and no patients developed iliac limb occlusions. Dr
Hardman, who presented the data at the 32nd International Charing Cross
Symposium in April 2010, stated that:
"In our experience, having Aorfix(TM) available allows us to treat more patients
with an endovascular approach. Furthermore, we have seen a dramatic improvement
in our iliac limb occlusion rates when utilising the Aorfix(TM) stent graft."
Management re-organisation
The Company has undergone significant change in the senior management team with
a number of important new appointments. In each case these appointments have
brought a wealth of experience to Lombard Medical which will serve us well
moving forward. The ability of the Company to attract such talent reinforces
the belief that in Aorfix(TM), the Company has an outstanding product which will
successfully compete in the large and growing AAA market. Our appointments
include:
* Maher (Mack) Michael - Vice President of Regulatory and Clinical Affairs. Mack
is a medical doctor who has spent the last 20 years working in the medical
device industry helping companies establish clinical proof and achieve
regulatory approval for novel new technologies. Mack has extensive experience
in dealing with the FDA, and was instrumental in gaining US approval for
silicone breast implants while leading the regulatory and clinical efforts at
Mentor Corporation.
* Simon Hubbert - Vice President of Sales and Marketing, International. Simon
brings a wealth of experience to the Company in building successful medical
device sales and marketing organizations across Europe. Simon has highly
relevant experience having worked at successful companies in similar roles,
including J&J and Medtronic in Europe.
* Clay Herzwurm - Vice President of Sales and Marketing, North America. Clay has
taken the lead in the US as we become more focused on building a commercial
presence in North America. Clay has led the successful scale up of sales and
marketing teams in the US for a number of medical device companies and he has
extensive experience in marketing endovascular devices having worked at
Schneider, Boston Scientific and MicroTherapeutics in sales and marketing
leadership roles.
* Luis Berga - Full-time Operations Consultant. Luis brings extensive operational
knowledge to the team having been a senior leader in Operations for large and
small medical device companies for many years. Luis has led the ramp up of
various operations from start-up operations to managing over 1,000 employees in
manufacturing. His experience will serve us well as we prepare internally for
the growth we expect in product demand over the coming years.
* These new appointments complement Peter Phillips who is the co-developer of
Aorfix(TM) and who was leading Lombard Medical's presence in the US. Peter has
now relocated to the UK as the Company's Chief Technology Officer, with a
wide-ranging brief which includes interaction with physician key opinion leaders
worldwide, significant involvement in our new product development efforts and
the preparation of our PMA modules for the Aorfix(TM) submissions for US FDA
approval.
Aorfix(TM) Regulatory Approval in the USA
A key value driver for the Company is to obtain FDA approval for Aorfix(TM) in
the US, which is the largest single market for EVAR and estimated to be worth
more than $500 million. The FDA has agreed for the PMA for Aorfix(TM) to be
filed in the following series of six modules:
+----------------------------------+--------------------+
| Module | Status |
+----------------------------------+--------------------+
| 1. Biological testing | Approved |
+----------------------------------+--------------------+
| 2. Non-clinical laboratory | Approved |
| studies | |
+----------------------------------+--------------------+
| 3. Sterilisation and packaging | Approved |
| | |
+----------------------------------+--------------------+
| 4. Engineering, bench testing | To be filed H2 |
| and shelf-life | 2010 |
+----------------------------------+--------------------+
| 5. Manufacturing, design and | To be filed H2 |
| quality assurance | 2010 |
+----------------------------------+--------------------+
| 6. Clinical data | To be filed H1 |
| | 2011 |
+----------------------------------+--------------------+
The study protocol requires the Company to submit 30-day and 12-month safety and
efficacy data on 120 patients with high-angle-neck aneurysms. To date the
Company has enrolled 144 such patients, 111 of whom have reached the 12-month
follow-up period. The Company remains on track to submit the clinical data
module in H1 2011.
Development
During the last six months the Company has initiated two major development
projects with respect to Aorfix(TM). The first of these is to expand the
current size range of Aorfix(TM) so that the product can be used to treat an
estimated additional 5% of patients who currently have aortas either too large
or too small for the current size range. The second project entails the
development of a new, improved Aorfix(TM) treatment system which will reduce the
profile and cost of our current system and improve the ease of use of the
Aorfix(TM) delivery device.
Manufacturing Operations
Management has recently made the strategic decision to move the stent graft
production currently performed at Didcot to the Company's facility in Prestwick,
Scotland. This move will increase capacity at Didcot for the assembly and
loading of the delivery device. Although in the short-term there will be some
duplication of costs as extra personnel taken on in Prestwick are trained in
stent graft production, in the longer term the clear division of
responsibilities between the two sites will ensure the most efficient use of the
two facilities and will reduce costs and increase capacity accordingly.
Summary
Over the last six months senior management's focus has been to put the people
and plans in place to deliver the four main strategic goals (as described
above). With this now achieved, the focus has moved to ensuring the plans are
properly implemented on schedule. To date progress has been encouraging in all
focus areas:
* Strong sales growth in the main European markets
* Company on track to make final FDA submission in H1 2011
* Principal development projects progressing to plan
* Key decisions taken to improve operational efficiency and capacity
Outlook
Lombard Medical has had a very good start to 2010 with solid progress towards
delivering our strategic goals. We expect this momentum to continue during the
remainder of the year as our strengthened management team remains focused on
completing our US PMA submission, executing on our development projects to
deliver the next generation of Aorfix(TM) products, and ensuring a smooth
transition of stent graft production to our facilities in Prestwick. We expect
to continue to experience strong revenue growth in Europe where we have focused
our efforts on the largest market opportunities.
However, we expect revenues from our US clinical trial to decline as we wind
down our trial in preparation for final PMA submission. This temporary US
impact, combined with the fact that a significant proportion of our historical
sales revenues have come from certain European regions which are facing economic
difficulties such as Greece, results in our expectation of slower growth overall
than previously anticipated in the near term.
We continue to believe strongly in the Aorfix(TM) growth story driven by success
in major markets. We will maintain our focus on the significant opportunity we
have in the main European markets and we expect to see exciting growth rates in
these markets that is similar to the growth that we experienced here in H1 2010.
We look forward with great anticipation to the opportunity ahead of us in the
US marketplace once we have completed the product approval process on which we
are making good progress.
Finance Director's Review
Total revenues for the period increased 16% to GBP1,445,000 (H1 2009:
GBP1,246,000).
Total revenues consisted of commercial revenues that increased 38% to
GBP1,343,000 (H1 2009: GBP976,000) and US clinical trial revenues that declined
62% to GBP102,000 (H1 2009: GBP270,000) as recruitment slowed towards the end of
the trial.
Aorfix(TM) commercial revenues increased by 33% to GBP1,153,000 (H1 2009:
GBP865,000) driven by strong growth of 79% in the main European countries,
offsetting a 66% fall in sales to Greece due to cuts in spending by the Greek
government. Other commercial revenues increased by 71% to GBP190,000 (H1 2009:
GBP111,000) primarily due to a 77% increase in contract service revenues
recorded by Culzean Medical Devices Limited as its major customer rebuilt
inventory levels that had declined during 2009.
The gross profit of GBP667,000 (H1 2009: GBP550,000) represented a gross margin
of 46% (H1 2009: 44%). The positive impact of larger production volumes and
efficiency improvements on the gross margin were in part offset by the reduction
in high margin direct sales into the US trial.
Selling, marketing and distribution expenses increased by GBP0.4 million to
GBP1.1 million (H1 2009: GBP0.7 million) as four new sales executives were
appointed together with the VP Sales and Marketing, International, and the
Company increased promotional activity in its target markets.
Research and development expenditure increased by 7% to GBP2.5 million (H1 2009:
GBP2.3 million) as the Company continued to invest in various activities
required to obtain FDA approval of Aorfix(TM) in the US and commenced two
development projects designed to expand the range of patients that may be
treated with Aorfix(TM).
Administrative expenses decreased 8% to GBP1.3 million (H1 2009: GBP1.4 million)
as an increase in share option expenses to GBP174,000 (H1 2009: GBP3,000) was
more than offset by an absence of redundancy costs (H1 2009: GBP350,000).
Interest receivable increased 45% to GBP32,000 (H1 2009: GBP22,000) due to
higher average cash balances. In H1 2009 finance costs of GBP152,000 arose from
the accelerated write-off of issue costs relating to the Convertible Loan Notes
2009. As these loan notes were converted into equity in February 2009 no similar
costs were incurred in H1 2010.
The tax credit of GBP471,000 (H1 2009: GBP545,000) consisted of an estimate of
GBP350,000 for the R&D tax credit arising in the period (H1 2009: GBP300,000),
plus an adjustment of GBP121,000 (H1 2009: GBP245,000) for an underestimate of
the R&D tax credit in the prior year accounts.
The loss after taxation for continuing activities increased 7% to GBP3.7 million
(H1 2009: GBP3.5 million) primarily as a result of the increase in operating
expenses of GBP461,000 that was partly offset by the increase in gross profit
and lower finance costs.
In November 2009 the Company sold its Polymer Coatings business which incurred a
net loss of GBP310,000 in H1 2009. The total loss for the period including this
discontinued business decreased 1% to GBP3.7 million (H1 2009: GBP3.8 million)
The net cash outflow from operating activities increased 7% to GBP3.3 million
(H1 2009: GBP3.0 million) principally due to lower R&D tax credit receipts of
GBP0.9 million (H1 2009: GBP1.2 million).
Net cash flows from investing activities were GBP13,000 compared with GBP291,000
in H1 2009 which included GBP305,000 of deferred consideration received in
February 2009 from the sale of the Company's shares in EndoArt SA in February
2007.
Net cash flows from financing activities of GBP12,150,000 (H1 2009:
GBP5,950,000) arose from the placing and subscription of shares announced in
January 2010 that raised a total of GBP13.3 million before expenses of GBP1.2
million.
The net cash balance held at 30 June 2010 of GBP10.3 million (H1 2009: GBP4.0
million) is in line with management's expectations and as such the Directors
continue to believe that the Company will have sufficient cash to fund it up to
Q4 2011. In light of this the Board of Lombard Medical regards it as
appropriate that these interim financial statements are prepared on a going
concern basis.
Consolidated Statement of Comprehensive Income
for the six months ended 30
June 2010 (unaudited)
+----------------------------------+------+---------+----------------+----------+
| | | 6 | 6 | Year |
| | | months | months | ended 31 |
| | | ended | ended | December |
| | | 30 | 30 | 2009 |
| | | June | June | |
| | | 2010 | 2009 | |
+----------------------------------+------+---------+----------------+----------+
| |Note | GBP'000 | | GBP'000 |
| | | | GBP'000 | |
+----------------------------------+------+---------+----------------+----------+
| Continuing operations | | | | |
+----------------------------------+------+---------+----------------+----------+
| Revenue | 2 | 1,445 | 1,246 | 2,351 |
+----------------------------------+------+---------+----------------+----------+
| Cost of sales | | (778) | (696) | (1,356) |
+----------------------------------+------+---------+----------------+----------+
| Gross profit | | 667 | 550 | 995 |
+----------------------------------+------+---------+----------------+----------+
| Selling, marketing and | | (1,115) | (710) | (1,582) |
| distribution expenses | | | | |
+----------------------------------+------+---------+----------------+----------+
| Research and development | | (2,494) | (2,333) | (4,706) |
| expenses | | | | |
+----------------------------------+------+---------+----------------+----------+
| Administrative expenses | | (1,273) | (1,378) | (2,379) |
+----------------------------------+------+---------+----------------+----------+
| Total operating expenses | | (4,882) | (4,421) | (8,667) |
+----------------------------------+------+---------+----------------+----------+
| Operating loss | | (4,215) | (3,871) | (7,672) |
+----------------------------------+------+---------+----------------+----------+
| Finance income - interest | | 32 | 22 | 30 |
| receivable | | | | |
+----------------------------------+------+---------+----------------+----------+
| Finance costs | | - | (152) | (152) |
+----------------------------------+------+---------+----------------+----------+
| Loss before taxation from | 2 | (4,183) | (4,001) | (7,794) |
| continuing operations | | | | |
+----------------------------------+------+---------+----------------+----------+
| Taxation | 3 | 471 | 545 | 995 |
+----------------------------------+------+---------+----------------+----------+
| Loss after taxation from | | (3,712) | (3,456) | (6,799) |
| continuing operations | | | | |
+----------------------------------+------+---------+----------------+----------+
| Discontinued operation | | | | |
+----------------------------------+------+---------+----------------+----------+
| (Loss)/profit from discontinued | | - | (310) | 600 |
| operation | | | | |
+----------------------------------+------+---------+----------------+----------+
| Total loss for the period | | (3,712) | (3,766) | (6,199) |
| attributable to equity | | | | |
| shareholders | | | | |
+----------------------------------+------+---------+----------------+----------+
| Basic and diluted loss per share | | | | |
| (pence) | | | | |
+----------------------------------+------+---------+----------------+----------+
| From continuing operations only | 4 | (0.19) | (0.51) | (0.88) |
+----------------------------------+------+---------+----------------+----------+
| From continuing and discontinued | 4 | (0.19) | (0.56) | (0.80) |
| operation | | | | |
+----------------------------------+------+---------+----------------+----------+
Consolidated Balance Sheet
as at 30 June 2010 (unaudited)
+----------------------------------+------+----------+----------+----------+
| | | 30 June | 30 | 31 |
| | | 2010 | June | December |
| | | | 2009 | 2009 |
+----------------------------------+------+----------+----------+----------+
| |Note | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+------+----------+----------+----------+
| Assets | | | | |
+----------------------------------+------+----------+----------+----------+
| Intangible assets | | 2,339 | 2,384 | 2,361 |
+----------------------------------+------+----------+----------+----------+
| Property, plant and equipment | | 142 | 233 | 156 |
+----------------------------------+------+----------+----------+----------+
| Financial assets - available for | | 850 | 850 | 850 |
| sale | | | | |
+----------------------------------+------+----------+----------+----------+
| Non-current assets | | 3,331 | 3,467 | 3,367 |
+----------------------------------+------+----------+----------+----------+
| Inventories | | 1,490 | 1,489 | 1,447 |
+----------------------------------+------+----------+----------+----------+
| Trade and other receivables | | 867 | 604 | 714 |
+----------------------------------+------+----------+----------+----------+
| Taxation recoverable | | 350 | 300 | 750 |
+----------------------------------+------+----------+----------+----------+
| Cash and cash equivalents | | 10,253 | 3,984 | 1,349 |
+----------------------------------+------+----------+----------+----------+
| Current assets | | 12,960 | 6,377 | 4,260 |
+----------------------------------+------+----------+----------+----------+
| Total assets | | 16,291 | 9,844 | 7,627 |
+----------------------------------+------+----------+----------+----------+
| Liabilities | | | | |
+----------------------------------+------+----------+----------+----------+
| Trade and other payables | | (2,191) | (1,898) | (2,139) |
+----------------------------------+------+----------+----------+----------+
| Current liabilities | | (2,191) | (1,898) | (2,139) |
+----------------------------------+------+----------+----------+----------+
| Total liabilities | | (2,191) | (1,898) | (2,139) |
+----------------------------------+------+----------+----------+----------+
| Net assets | | 14,100 | 7,946 | 5,488 |
+----------------------------------+------+----------+----------+----------+
| | | | | |
+----------------------------------+------+----------+----------+----------+
| Equity | | | | |
+----------------------------------+------+----------+----------+----------+
| Capital and reserves attributable to equity holders of the Company |
+--------------------------------------------------------------------------+
| Called up share capital | 5 | 26,331 | 12,997 | 12,997 |
+----------------------------------+------+----------+----------+----------+
| Share premium account | 5 | 37,101 | 38,285 | 38,285 |
+----------------------------------+------+----------+----------+----------+
| Other reserves | 5 | 11,118 | 11,118 | 11,118 |
+----------------------------------+------+----------+----------+----------+
| Accumulated loss | | (60,450) | (54,454) | (56,912) |
+----------------------------------+------+----------+----------+----------+
| Total equity | | 14,100 | 7,946 | 5,488 |
+----------------------------------+------+----------+----------+----------+
Consolidated Cash Flow Statement
for the six months ended 30 June 2010
(unaudited)
+---------------------------------+------+---------+---------+----------+
| | | 6 | 6 | Year |
| | | months | months | ended 31 |
| | | ended | ended | December |
| | | 30 June | 30 | 2009 |
| | | 2010 | June | |
| | | | 2009 | |
+---------------------------------+------+---------+---------+----------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+------+---------+---------+----------+
| Net cash outflow from operating | 6 | (3,259) | (3,032) | (6,657) |
| activities | | | | |
+---------------------------------+------+---------+---------+----------+
| Cash flows from investing | | | | |
| activities | | | | |
+---------------------------------+------+---------+---------+----------+
| Interest received | | 32 | 21 | 30 |
+---------------------------------+------+---------+---------+----------+
| Purchase of property, plant and | | (19) | (35) | (18) |
| equipment | | | | |
+---------------------------------+------+---------+---------+----------+
| Proceeds from the sale of | | - | 305 | 305 |
| investments | | | | |
+---------------------------------+------+---------+---------+----------+
| Net proceeds from the sale of | | - | - | 964 |
| assets of discontinued activity | | | | |
+---------------------------------+------+---------+---------+----------+
| Net cash flows from investing | | 13 | 291 | 1,281 |
| activities | | | | |
+---------------------------------+------+---------+---------+----------+
| Cash flows from financing | | | | |
| activities | | | | |
+---------------------------------+------+---------+---------+----------+
| Proceeds from issue of ordinary | | 13,334 | 5,882 | 5,882 |
| shares | | | | |
+---------------------------------+------+---------+---------+----------+
| Share issue expenses | | (1,184) | (432) | (432) |
+---------------------------------+------+---------+---------+----------+
| Proceeds from issue of | | - | 500 | 500 |
| convertible loan notes | | | | |
+---------------------------------+------+---------+---------+----------+
| Net cash flows from financing | | 12,150 | 5,950 | 5,950 |
| activities | | | | |
+---------------------------------+------+---------+---------+----------+
| Increase in cash and cash | | 8,904 | 3,209 | 574 |
| equivalents | | | | |
+---------------------------------+------+---------+---------+----------+
| Cash and cash equivalents at | | 1,349 | 775 | 775 |
| beginning of period | | | | |
+---------------------------------+------+---------+---------+----------+
| Cash and cash equivalents at | | 10,253 | 3,984 | 1,349 |
| end of period | | | | |
+---------------------------------+------+---------+---------+----------+
Consolidated Statement of Changes in Equity
for the six months ended 30 June
2010 (unaudited)
+---------------------+---------+---------+----------+-------------+---------+
| | Share | Share | Other | Accumulated | Total |
| | Capital | Premium | Reserves | Loss | Equity |
+---------------------+---------+---------+----------+-------------+---------+
| | GBP'000 | GBP'000 | | | GBP'000 |
| | | | GBP'000 | GBP'000 | |
+---------------------+---------+---------+----------+-------------+---------+
| At 1 January 2009 | 5,946 | 37,728 | 11,342 | (50,691) | 4,325 |
+---------------------+---------+---------+----------+-------------+---------+
| Loss after taxation | - | - | - | (3,766) | (3,766) |
| attributable to | | | | | |
| equity shareholders | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Share-based | - | - | - | 3 | 3 |
| compensation | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Conversion of | 669 | 1,083 | (224) | - | 1,528 |
| convertible loan | | | | | |
| notes 2009 to | | | | | |
| equity | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Issue of ordinary | 6,382 | - | - | - | 6,382 |
| shares | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Share issue | - | (526) | - | - | (526) |
| expenses | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| At 30 June 2009 | 12,997 | 38,285 | 11,118 | (54,454) | 7,946 |
+---------------------+---------+---------+----------+-------------+---------+
| Loss after taxation | - | - | - | (2,433) | (2,433) |
| attributable to | | | | | |
| equity shareholders | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Share-based | - | - | - | (25) | (25) |
| compensation | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| At 31 December 2009 | 12,997 | 38,285 | 11,118 | (56,912) | 5,488 |
+---------------------+---------+---------+----------+-------------+---------+
| Loss after taxation | - | - | - | (3,712) | (3,712) |
| attributable to | | | | | |
| equity shareholders | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Share-based | - | - | - | 174 | 174 |
| compensation | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Issue of ordinary | 13,334 | - | - | - | 13,334 |
| shares | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| Share issue | - | (1,184) | - | - | (1,184) |
| expenses | | | | | |
+---------------------+---------+---------+----------+-------------+---------+
| At 30 June 2010 | 26,331 | 37,101 | 11,118 | (60,450) | 14,100 |
+---------------------+---------+---------+----------+-------------+---------+
Notes to the Financial Information
1. Basis of Preparation of Interim Financial Information
The unaudited interim financial statements have been prepared in accordance with
International Financial Reporting Standards and International Accounting
Standards (collectively IFRS) as adopted by the EU including those applicable to
accounting periods ending 31 December 2010 and the accounting policies set out
in Lombard Medical Technologies PLC's Annual Report for the year ended 31
December 2009. These interim financial statements have been prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting". They do not include all the statements required for full annual
financial statements, and should be read in conjunction with the consolidated
financial statements of the Group as at 31 December 2009.
The interim financial statements have been prepared on the going concern basis,
which assumes that the Group will continue in operational existence for the
foreseeable future.
The financial information contained in this interim financial statement is
unaudited and does not constitute statutory accounts as defined in section 434
of the Companies Act 2006. The financial information for the year ended 31
December 2009 has been extracted from the Group's published financial statements
for that year. Those accounts that have been delivered to the Registrar of
Companies were audited and the audit report was unqualified and did not contain
a statement under section 498 of the Companies Act 2006.
2. Operating Segment Analysis
+------------------------------------+---------+---------+----------+
| | 6 | 6 | Year |
| | months | months | ended |
| | ended | ended | 31 |
| | 30 | 30 | December |
| | June | June | 2009 |
| | 2010 | 2009 | |
+------------------------------------+---------+---------+----------+
| Business Analysis | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+---------+---------+----------+
| Revenue: | | | |
+------------------------------------+---------+---------+----------+
| Continuing operations | | | |
+------------------------------------+---------+---------+----------+
| Cardiovascular devices and medical | 1,445 | 1,246 | 2,351 |
| fabrics | | | |
+------------------------------------+---------+---------+----------+
| Continued operations | 1,445 | 1,246 | 2,351 |
+------------------------------------+---------+---------+----------+
| Discontinued operation | - | 8 | 9 |
+------------------------------------+---------+---------+----------+
| | 1,445 | 1,254 | 2,360 |
+------------------------------------+---------+---------+----------+
| Loss before taxation: | | | |
+------------------------------------+---------+---------+----------+
| Continuing operations | | | |
+------------------------------------+---------+---------+----------+
| Cardiovascular devices and medical | (3,217) | (3,042) | (6,011) |
| fabrics | | | |
+------------------------------------+---------+---------+----------+
| Unallocated | (998) | (829) | (1,661) |
+------------------------------------+---------+---------+----------+
| Continued operations | (4,215) | (3,871) | (7,672) |
+------------------------------------+---------+---------+----------+
| Discontinued operation | - | (345) | (399) |
+------------------------------------+---------+---------+----------+
| Operating loss before investment | (4,215) | (4,216) | (8,071) |
| related items by segment | | | |
+------------------------------------+---------+---------+----------+
| Profit on disposal of discontinued | - | - | 964 |
| business | | | |
+------------------------------------+---------+---------+----------+
| Operating loss | (4,215) | (4,216) | (7,107) |
+------------------------------------+---------+---------+----------+
| Net finance income/(expense) | 32 | (130) | (122) |
+------------------------------------+---------+---------+----------+
| Loss before taxation | (4,183) | (4,346) | (7,229) |
+------------------------------------+---------+---------+----------+
| Less discontinued operations | - | 345 | (565) |
+------------------------------------+---------+---------+----------+
| Loss before taxation from | (4,183) | (4,001) | (7,794) |
| continuing operations | | | |
+------------------------------------+---------+---------+----------+
| | | | |
+------------------------------------+---------+---------+----------+
| Revenue by destination: | | | |
+------------------------------------+---------+---------+----------+
| United Kingdom and Europe | 1,098 | 764 | 1,552 |
+------------------------------------+---------+---------+----------+
| United States of America | 108 | 276 | 455 |
+------------------------------------+---------+---------+----------+
| Rest of World | 239 | 206 | 344 |
+------------------------------------+---------+---------+----------+
| | 1,445 | 1,246 | 2,351 |
+------------------------------------+---------+---------+----------+
Analyses by operating segment are based on the reports used by the executive
board members in taking operating decisions.
Discontinued operation represents the Polymer Coatings business sold on 30
November 2009. There were two segments in 2009 but only one in 2010. The
unallocated costs have been split out in the table above to show comparability
with 2009.
3. Taxation on Loss on Ordinary Activities
+------------------------------------+-----------+--------+----------+
| | 6 | 6 | Year |
| | months | months | ended |
| | ended | ended | 31 |
| | 30 | 30 | December |
| | June 2010 | June | 2009 |
| | | 2009 | |
+------------------------------------+-----------+--------+----------+
| Utilisation of UK tax losses from | | | |
| research and development | | | |
| expenditure to reclaim payroll | | | |
| taxes: | | | |
+------------------------------------+-----------+--------+----------+
| - for prior year | 121 | 245 | 245 |
+------------------------------------+-----------+--------+----------+
| - for current year | 350 | 300 | 750 |
+------------------------------------+-----------+--------+----------+
| | 471 | 545 | 995 |
+------------------------------------+-----------+--------+----------+
4. Loss per Share
Basic loss per share is calculated by dividing the loss attributable to ordinary
shareholders by the weighted average number of ordinary shares. The diluted
earnings per ordinary share are identical to those used for the basic earnings
per ordinary share as the exercise of share options and warrants would have had
the effect of reducing the loss per ordinary share and are therefore not
dilutive.
Reconciliations of the losses and weighted average number of shares used in the
calculations are set out below:
+------------------------------------+-----------+------------------+----------------+
| | 6 | 6 | Year |
| | months | months | ended |
| | ended | ended | 31 |
| | 30 | 30 | December |
| | June | June | 2009 |
| | 2010 | 2009 | |
+------------------------------------+-----------+------------------+----------------+
| Continuing operations | | | |
+------------------------------------+-----------+------------------+----------------+
| Loss for the period (GBP'000) | (3,712) | (3,456) | (6,799) |
+------------------------------------+-----------+------------------+----------------+
| Weighted average number of | 1,937,242 | 678,151 | 774,498 |
| ordinary shares ('000) | | | |
+------------------------------------+-----------+------------------+----------------+
| Basic and diluted loss per share | (0.19) | (0.51) | (0.88) |
| (pence) | | | |
+------------------------------------+-----------+------------------+----------------+
| Discontinued operation | | | |
+------------------------------------+-----------+------------------+----------------+
| (Loss)/profit for the period | - | (310) | 600 |
| (GBP'000) | | | |
+------------------------------------+-----------+------------------+----------------+
| Weighted average number of | 1,937,242 | 678,151 | 774,498 |
| ordinary shares ('000) | | | |
+------------------------------------+-----------+------------------+----------------+
| Basic and diluted (loss)/profit | - | (0.05) | 0.08 |
| per share (pence) | | | |
+------------------------------------+-----------+------------------+----------------+
5. Equity
On 1 February 2010 a general meeting of the Company approved:
1. The deletion of references to authorised share capital from the Company's
memorandum and articles of association; and
2. The issue of 1,333,390,207 new ordinary shares of 1 pence each for a
consideration of GBP13,334,000 before expenses of GBP1,184,000.
i) Share capital
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| | 30 June 2010 | 30 June 2009 | 31 December |
| | | | 2009 |
+--------------------+---------------------+---------------------+---------------------+
| | Number | Nominal | Number | Nominal | Number | Nominal |
| | of | Value | of | Value | of | Value |
| | shares | GBP'000 | shares | GBP'000 | shares | GBP'000 |
| | 000s | | 000s | | 000s | |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| Allotted, called | | | | | | |
| up and fully paid | | | | | | |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| Ordinary shares of | 2,174,695 | 21,747 | 841,305 | 8,413 | 841,305 | 8,413 |
| 1p each | | | | | | |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| A deferred shares | 373,857 | 3,223 | 373,857 | 3,223 | 373,857 | 3,223 |
| of 0.862p each | | | | | | |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| B deferred shares | 136,186 | 1,361 | 136,186 | 1,361 | 136,186 | 1,361 |
| of 1p each | | | | | | |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
| | 2,684,738 | 26,331 | 1,351,348 | 12,997 | 1,351,348 | 12,997 |
+--------------------+-----------+---------+-----------+---------+-----------+---------+
ii) Share Premium Account
This consists of the proceeds from the issue of shares in excess of their par
value less associated issue costs.
iii) Other Reserves
This arose on the conversion of convertible preference shares to ordinary shares
and represents the difference between the fair value of the preference shares
and the nominal value of the ordinary shares issued.
6. Reconciliation of Loss before Taxation to Net Cash Outflow from Operating
Activities
+------------------------------------+-----------+---------+----------+
| | 6 | 6 | Year |
| | months | months | ended |
| | ended | ended | 31 |
| | 30 | 30 | December |
| | June 2010 | June | 2009 |
| | | 2009 | |
+------------------------------------+-----------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+-----------+---------+----------+
| Continuing operations | | | |
+------------------------------------+-----------+---------+----------+
| Loss before taxation | (4,183) | (4,001) | (7,794) |
+------------------------------------+-----------+---------+----------+
| Depreciation and amortisation of | 55 | 156 | 238 |
| licences | | | |
+------------------------------------+-----------+---------+----------+
| Share-based compensation | 174 | 3 | (22) |
| expense/(credit) | | | |
+------------------------------------+-----------+---------+----------+
| Net finance (income)/expense | (32) | 130 | 122 |
+------------------------------------+-----------+---------+----------+
| (Increase)/decrease in inventories | (43) | 6 | 48 |
+------------------------------------+-----------+---------+----------+
| (Increase)/decrease in receivables | (153) | 233 | 101 |
+------------------------------------+-----------+---------+----------+
| Increase/(decrease) in payables | 52 | (486) | (193) |
+------------------------------------+-----------+---------+----------+
| Net cash used in continuing | (4,130) | (3,959) | (7,500) |
| operations | | | |
+------------------------------------+-----------+---------+----------+
| Research and development tax | 871 | 1,145 | 1,145 |
| credits received | | | |
+------------------------------------+-----------+---------+----------+
| Net cash used in continuing | (3,259) | (2,814) | (6,355) |
| operating activities | | | |
+------------------------------------+-----------+---------+----------+
| Discontinued operation | | | |
+------------------------------------+-----------+---------+----------+
| (Loss)/profit before taxation | - | (345) | 565 |
+------------------------------------+-----------+---------+----------+
| Depreciation | - | 24 | 24 |
+------------------------------------+-----------+---------+----------+
| Profit on disposal of business | - | - | (964) |
+------------------------------------+-----------+---------+----------+
| Decrease in inventories | - | 3 | 3 |
+------------------------------------+-----------+---------+----------+
| Decrease in receivables | - | 28 | 50 |
+------------------------------------+-----------+---------+----------+
| Increase/(decrease) in payables | - | 37 | (15) |
+------------------------------------+-----------+---------+----------+
| Net cash used in discontinued | - | (253) | (337) |
| operation | | | |
+------------------------------------+-----------+---------+----------+
| Research and development tax | - | 35 | 35 |
| credits received | | | |
+------------------------------------+-----------+---------+----------+
| Net cash used in discontinued | - | (218) | (302) |
| operating activity | | | |
+------------------------------------+-----------+---------+----------+
| Net cash used in all operating | (3,259) | (3,032) | (6,657) |
| activities | | | |
+------------------------------------+-----------+---------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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