Interim Results
March 21 2001 - 2:00AM
UK Regulatory
RNS Number:8053A
Tepnel Life Sciences PLC
21 March 2001
For immediate release
21 March 2001
TEPNEL LIFE SCIENCES PLC ("TEPNEL")
www.tepnel.com
Tepnel's core business is the development and provision of automated systems,
kits and services for the purification of Nucleic Acid in the Life Science
Research, Pharmaceutical, Clinical and AgBio markets.
Highlights
* Tepnel Life Sciences plc is pleased to announce the appointment of
Benjamin Matzilevich as Chief Executive Officer. Mr Matzilevich has
specialised in the development of technology growth companies and has
held senior positions and worked as a consultant with a variety of
pharmaceutical and biotechnology companies;
* Solid, measured growth of revenue-generating businesses;
* Signing of global distribution agreement with Amersham Pharmacia
Biotech (APBiotech) for the Nucleon range of manual kits for nucleic
acid purification;
* Group sales increased by 41% to #729,000 (1999: #518,000);
* Loss before tax increased to #1,209,000 (1999: #987,000);
* 27% increase in R&D investment;
* Credibility of nucleic acid purification service established;
* Launch of first rapid gluten test for home users.
Enquiries:
Tepnel Life Sciences Plc 0161-445-9457
Benjamin Matzilevich, Chief Executive Officer
Mike Billingham, Commercial Director
Carol Smith, Marketing Communications Manager
Hudson Sandler 020-7796-4133
Piers Hooper
Jessica Rouleau
21 March, 2001
CHAIRMAN'S STATEMENT
Tepnel Life Sciences ("the Company")
Interim Results 2001
Introduction
We have made steady progress towards the achievement of our objectives during
this reporting period, with highly satisfactory revenue growth. Our
automation plans remain on target with final stage testing planned for both
potential industrial customers and distribution companies. We have also
established the reputation of our nucleic acid purification service, with a
wide range of sample types now being processed, including whole blood, corneal
samples and cultured cells.
In November last year, we announced the signing of a global distribution
agreement for our Nucleon range of DNA purification kits with international
biotech company Amersham Pharmacia Biotech Limited (APBiotech). As a result of
the agreement, APBiotech has exclusive rights to distribute the Nucleon kits
to the Life Science Research market outside the UK.
We are also pleased to announce that Ben Matzilevich has joined Tepnel as
Chief Executive Officer. Ben has specialised in the development of
technology growth companies and has twenty two years of executive management
experience in the biotech industry. Having worked in senior positions and as
a consultant with a variety of pharmaceutical and biotechnology companies, Ben
will play a key role in Tepnel's continued development.
Our strategic focus continues to be on providing total solutions, comprising
automation, kits and services, to Pharma, Biotech and AgBio customers.
Tepnel continues to make progress in developing its automated nucleic acid
purification systems. These systems will address the needs of customers for
high quality nucleic acid purification.
Results
In the six months to 31 December 2000, turnover increased by over 40 per cent
to #729, 000 (1999: #518, 000). The loss before tax has increased to #
1,209,000 (1999: #987,000) due in large part to investments in R&D and sales &
mrketing. Whilst we continue to control costs, these expenditures have been
necessary to underpin the development of our automated systems. As a result,
the loss per share has increased to 2.3p (1999: 2.0p).
Operational Review
Automation:
Providing our customers with access to automated systems for their DNA
purification needs is the primary focus of our drive to sell a full complement
of DNA products and services. The development of our automated system for
plasmid purification is on track and the system continues to show a number of
competitive advantages. Validation of the system at prospective
distributors' labs is planned for the summer months, with full launch later
this year.
In addition to the plasmid purification system, our prototype bench-top DNA
purification system is now in our laboratories generating excellent data in
PCR analysis. This product is designed for the purification of genomic DNA
from a range of sample types in particular small volumes of whole blood and
will target users in the Life Science Research and Clinical markets.
Kits:
This important part of the business continues to generate solid revenues and
useful information for the development of our automated systems. Tepnel now
has 13 nucleic acid purification (NAP) products on the market, which includes
kits for genomic DNA extraction from whole blood, yeast, tissue and plant
material. The range is distributed in the UK by Tepnel and internationally
through APBiotech. The APBiotech agreement, signed in November 2000, gives
Tepnel important access to global DNA purification markets for Life Science
Research.
Sales of allergen detection kits have been encouraging, in particular the
gluten rapid test launched in 2000. This small device, aimed at Coeliac
Disease sufferers in particular, allows them to test food samples at home or
in the restaurant for gluten (a component of flour) in a fast and easy to use
kit. In addition, we have experienced high and growing demand for meat
speciation kits using both ELISA and DNA assays. Overall, we are confident
that our food testing business will continue to build a solid customer base.
Services:
The service business has continued to expand, showing sound growth potential.
The Nucleon Nucleic Acid Purification service is attracting business from a
wide range of customers. Our AgBio/Food Division, Tepnel BioSystems, has
recently introduced DNA testing for GMOs (Genetically Modified Foods).
Prospects
We are generating solid growth in our existing revenue-generating businesses
and following the proposed launch of our automated plasmid system later this
calendar year, we anticipate a steady growth of sales from our automation
business towards the end of the year. With new management and a strategy in
keeping with the evolution of the industries we serve, we believe that in the
medium term we are ideally positioned to deliver value to shareholders.
PETER RAYMOND
Chairman
March 2001
Consolidated Profit and Loss Account
Six months ended 31 December 2000
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 December 31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Turnover 729 518 1,130
Cost of sales (407) (260) (646)
---------- ---------- ----------
Gross Profit 322 258 484
Research and development (841) (659) (1,103)
Sales and marketing (465) (278) (570)
Administrative expenses (276) (343) (828)
---------- ---------- ----------
Total administrative
expenses (1,582) (1,280) (2,501)
---------- ---------- ----------
Operating loss (1,260) (1,022) (2,017)
Interest payable (1) - (2)
Interest receivable 52 35 74
---------- ---------- ----------
Loss on ordinary activities before
and after taxation (1,209) (987) (1,945)
---------- ---------- ----------
Basic loss per share 2.3p 2.0p 3.9p
---------- ---------- -----------
Fully diluted loss per share 2.3p 2.0p 3.9p
---------- ---------- -----------
The results for all periods include all recognised gains and losses.
Consolidated Balance Sheet
At 31 December 2000
Unaudited Unaudited Audited
31 December 31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Fixed assets
Intangible assets 1,597 1,435 1,622
Tangible assets 532 541 545
---------- ---------- ----------
2,129 1,976 2,167
---------- ---------- ----------
Current assets
Stocks 323 419 356
Debtors and prepayments 518 324 492
Investments 20 25 20
Cash at bank and in hand 922 902 2,037
---------- ---------- ----------
1,783 1,670 2,905
---------- ---------- ----------
Current liabilities
Creditors (723) (654) (674)
---------- ---------- ----------
Net current assets 1,060 1,016 2,231
---------- ---------- ----------
Total assets less
current liabilities 3,189 2,992 4,398
---------- ---------- ----------
Capital and reserves
Called up share capital 520 498 520
Share premium account 18,572 16,230 18,572
Profit and loss account (15,903) (13,736) (14,694)
---------- ---------- ----------
Shareholders' funds 3,189 2,992 4,398
---------- ---------- ----------
All items under capital and reserves are equity.
Consolidated Cash Flow Statement
Six months ended 31 December 2000
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 December 31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Reconciliation of operating loss
to net cash flow from operating
activities
Operating loss (1,260) (1,022) (2,017)
Depreciation 88 93 196
Amortisation 24 14 33
Provision against
current asset investments - - 5
Decrease in stocks 33 32 138
Increase in debtors (26) (45) (213)
Increase in creditors 52 123 129
Profit on disposal of
fixed assets - - (5)
---------- ---------- ----------
Net cash outflow from
operating activities (1,089) (805) (1,734)
---------- ---------- ----------
Cash flow statement
Net cash outflow from operating
activities (1,089) (805) (1,734)
Returns on investments
- interest received 51 35 72
Acquisitions - (358) (431)
Investing activities (75) (284) (292)
---------- ---------- ----------
Net cash outflow
before financing (1,113) (1,412) (2,385)
Management of
liquid resources 838 1,241 396
Financing (3) 250 2,358
---------- ---------- ----------
(Decrease)/increase
in cash (278) 79 369
---------- ---------- ----------
Reconciliation of net cash flow to
movements in net funds
(Decrease)/increase
in cash (278) 79 369
Cash inflow from
short term deposits (838) (1,241) (396)
Cash outflow from decrease
in lease financing 3 - 6
---------- ---------- ----------
Change in net funds resulting from
cash flow (1,113) (1,162) (21)
New finance leases - - (20)
Net funds at beginning
of period 2,023 2,064 2,064
---------- ---------- ----------
Net funds at end
of period 910 902 2,023
---------- ---------- ----------
Notes:
1. The Interim Report for the six months ended 31 December 2000 is
unaudited and was approved by the directors. The financial
information set out above does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The
information as at 30 June 2000 has been extracted from the statutory
accounts for the year ended 30 June 2000 which have been delivered
to the Registrar of Companies and contained an unqualified auditors'
report.
2. The directors do not recommend the payment of an interim dividend.
3. The operating loss is arrived at after writing off research and
development expenditure to the profit and loss account in the period
in which it is incurred.
4. The accounting policies used are consistent with those
applied in the latest published company accounts.
5. Turnover
Turnover by Geographical Destination
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 December 31 December 30 June
2000 1999 2000
#'000 #'000 #'000
UK 442 394 815
Rest of Europe 194 93 237
Americas 45 22 55
Asia 30 6 7
Rest of World 18 3 16
---------- ---------- ----------
729 518 1,130
---------- ---------- ----------
Turnover by Geographical Origin
UK 729 518 1,130
---------- ---------- ----------
6. The basic loss per share has been calculated on the following basis:
6 months to 6 months to Year to
31 December 2000 31 December 1999 30 June 2000
Weighted Average Weighted Average Weighted Average
Loss Number of Loss Number of Loss Number of
Ordinary Ordinary Ordinary
#'000 Shares #'000 Shares #'000 Shares
Basic (1,209) 51,988,999 (987) 48,881,423 (1,945) 49,943,395
In the current period the average number of ordinary shares is the same on a
diluted basis.
7. Copies of this statement are being sent to all Shareholders and
will be available to the public at the Company's Registered Office at
Scotscroft Building, Towers Business Park, 856 Wilmslow Road,
Didsbury, Manchester, M20 2RY.
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