ABC.L Regulatory News (ABC)

10 Mar 2008 07:02

ABCAM Plc10 March 2008 For immediate release 10 March 2008 ABCAM PLC ("Abcam" or "the Company") Interim Results for the Six Months ended 31 December 2007 Cambridge, UK: Abcam plc (AIM: ABC), the rapidly growing bioscience company which markets antibodies via its own online catalogue, is pleased to announce its interim results for the six months ended 31 December 2007. Highlights •Sales in the half year increased 38.3% to £15.3m (H1 2007: £11.1m) •Underlying pre-tax profits increased 19% to £3.0m (H1 2007: £2.5m as restated following adoption of IFRS) pre potential offer related costs of £0.25m (H1 2007: nil) •Product range expanded by 44% to 40,800 (31 December 2006: 28,300) through organic growth and the completion of new licensing deals •Net cash at 31 December 2007 of £11.6m (31 December 2006:£10.7m) •Proposed interim dividend up 30% to 1.04p per share (H12007: 0.8p) •EPS of 5.55p per share (H1 2007: 5.28p after IFRS restatement). The EPS for H1 2008 uses the weighted average of 34.8m shares (H1 2007: 34.5m shares) Commenting on today's interim results Jonathan Milner, Chief Executive Officer,said: "This has been an important half year for Abcam. At this time last year wereported sales growth of 33.7%, achieving 38.3% growth this half year clearlydemonstrates the potential of the business and how we are continuing ourcommitment to profitable growth and the delivery of healthy returns for ourshareholders. Demand for research antibodies continues to grow in all ourmarkets as does our market penetration. Through our partnerships with trustedsuppliers and increasing in-house production capacity we have been able to growour catalogue significantly during the first half of the year, whilstcontinuing to offer the highest quality products." For further information please contact: Abcam + 44 (0) 1223 696000Jonathan Milner, Chief Executive OfficerJeff Iliffe, Chief Financial Officerwww.abcam.com Numis Securities + 44 (0) 20 7260 1000Michael MeadeNick WestlakeJames Black Buchanan Communications + 44 (0) 20 7466 5000Mark Court / Mary-Jane Johnson / Susanna Gale Notes for editors About Abcam plc Abcam is a producer and distributor of research-grade antibodies headquarteredin Cambridge, UK, with offices in Cambridge, Massachusetts, USA and Tokyo,Japan. Abcam was admitted to AIM in November 2005 and trades under the tickersymbol ABC. The Company produces and distributes its own and third partyproduced antibodies to academic and commercial users throughout the world.Product ordering is available through the Company's website www.abcam.com, wherecustomers are also able to access up-to-date and detailed technical product datasheets. All the antibodies are sold under the Abcam brand name and theCompany's vision is to build the world's largest online resource of high qualityand commercially viable antibodies. Abcam now has an online catalogue of over41,000 products, most of which are antibodies, from over 200 suppliers andemploys 168 staff in its three operating companies. About antibodies Antibodies are proteins produced by white blood cells in response to theintroduction of a foreign body known as an antigen. Antibodies, which have awide variety of uses in research, diagnostics and therapeutics, are used by bioscientists in research into disease and into the human genome, where they areused to mark and identify specific cells and other living matter. The number ofhuman antibodies of use in research is potentially greater than one million. CHAIRMAN'S STATEMENT Overview I am delighted to report another strong period of growth over the six months to31 December 2007, with sales increasing by 38.3% to £15.3m (H1 2007: £11.1m).Investment in the High Throughput Production ("HTP") facility and £0.25m ofcosts associated with the bid process undertaken in the late summer of last yearrestricted the increase in profit before tax to £2.7m (H1 2007 £2.5m), growthof 9.2%. Operational review Sales in the Company's main market, North America, grew by 34% (in localcurrency terms) compared with the same period last year. During the period, ourUS subsidiary has improved its service to customers by extending the latest time by which customers can order for next-day delivery. This means that westcoast customers can order up to 5.00pm (local time) and receive goods thefollowing morning before 10.30am. This higher level of service has beencombined with a new sales and marketing programme to maintain a high rate ofgrowth in what is a competitive US market. Growth in the period has been particularly strong in the Asia-Pacific region.Our Japanese subsidiary has made an important transition and is now handlingour largest accounts directly rather than through our local distributor. Salesinto Japan (in local currency terms) have risen by 94% compared with the sameperiod last year and this move will both help us to increase margins andprovide more direct support for our key customers. Sales growth into Europe in local currency terms has also been outstanding atmore than 50% ahead of the same period last year - particularly into Germanywhere we have had a specific marketing initiative based on the growth potentialwe see there. Europe is a highly attractive market and we are well placed forfurther penetration, building on the initiatives already in place such aslanguage specific virtual offices. Our distribution capability enables us to continue to attract leading antibodymanufacturers as suppliers and in October 2007 we concluded another majordistribution agreement, bringing 2,700 products into the catalogue. During the first half of the year, the HTP facility has been principallyproducing new and existing polyclonal antibodies, which contribute 16%of our sales, while HTP staff have been developing the new automationprocess for monoclonal antibody production. We have been particularlypleased with the first sales from the new HTP-produced monoclonalantibodies, which have shown a higher uptake by our customers thanexpected. However, we have adjusted down our initial planned rate ofincrease of monoclonal antibodies output in order to ensure that we areable to hit target production efficiencies. Sales of our in-house produced antibodies continue to be the most popular,outselling those sourced externally by over four times and the transition tomonoclonal output will allow us both to meet increasing production demand more easily and derive ownership over the clone that produces the antibody. Theseantibodies will increasingly complement the existing ranges of excellentantibodies that we obtain from our trusted suppliers. Financial review These are the first results of the Group to be stated under InternationalFinancial Reporting Standards (IFRS) as discussed in Accounting standardsbelow. The gross margins for the period under review were 58.8% against 59.4% for thesame period last year. This reduction is attributable to the impact of changesin exchange rates and the lower margins in the early stages of the exclusiveproduct line acquisition deals. Expenses have risen as a percentage of sales in the period due to higher levelsof costs associated with the development of the production processes at the newHTP facility and £0.25m of costs incurred in relation to discussions withpotential offerors for the Company as announced to the market on 27 July 2007.These costs are included under administrative expenses in the ConsolidatedIncome Statement. The comparative profit before tax for the period ended 31 December 2006 has beenincreased by £0.12m on the adoption of IFRS, for forward cover currencycontracts in existence at the period end. This adjustment reverses in the fullyear comparatives. The Company's cashflow continues to be strong, with £4.2m (H1 2007: £2.4m) beinggenerated from operations in the period. A total of £1.7m was spent in theperiod on capital equipment, mostly in connection with the HTP facility, and £0.1m was spent on the licensing of exclusive distribution rights. The tax rate in the income statement for the current year is expected to beapproximately 29.4% since the potential offer related costs of £0.25m aredisallowable for tax. A relatively high number of options were exercised in the period, which results in a tax credit for the Company. However whilst thiscredit will reduce the actual tax payable for the year, in order to comply withIFRS, £84k has been added back to the tax charge in the income statement. This amount will be released back to reduce the reported tax charge in future in linewith the IFRS 2 charge made for options issued. Earnings per share (EPS) were 5.55p. (H1 2007: 5.28p). The EPS for H1 2008 usesthe weighted average of 34.8m shares (H1 2007: 34.5 m shares). Accounting standards These are the first results of the Group to be stated under InternationalFinancial Reporting Standards (IFRS) and consequently there are a number ofchanges to both presentation and content of these unaudited statements. The principal impact of IFRS has been the implementation of hedge accounting on theforeign exchange contracts outstanding at the end of the period and thetreatment of deferred tax arising on the outstanding share options. The effectof these adjustments on the results, income statement, balance sheet and equityof the Group, including the restatement of comparative figures, is show in note8 to the financial information. Dividend The Company's Directors intend to propose a 30% increase in the interim dividendin respect of the current year to 1.04p (2007: 0.8p). At the time of thepreliminary statement of last year's results the Board indicated that the dividend distribution would be increased to 33% of annual post tax profits andthe final dividend for the year was increased accordingly. In the Board's viewthis now means that the split of the annual dividend is unduly weighted towardsthe final dividend and this increase goes some way to redressing this. Therecord date will be 25 March 2008, and the dividend will be paid on 18 April2008. Foreign exchange The value of sales reported in sterling has been reduced by approximately £0.5mafter allowing for the weakening of the dollar and the strengthening of theEuro compared to the same period last year. Around half of the impact of the reduced sales on the current period's profitability was compensated for throughgains made on foreign exchange contracts. Outlook The strength of the business model is demonstrated with these results and theCompany is well placed to continue growth through: the addition of more quality products to the catalogue from new and existing suppliers; the production and sale of polyclonal antibodies from the HTP facility; the optimisation of the monoclonal antibody production process through the next financial year and the transition in new antibody production at the HTP towards mainly monoclonal antibodies in the subsequent periods; and further penetration in our key markets of North America, Europe and Japan with new marketing strategies. I would like to thank the Company's shareholders, customers and suppliers fortheir continued support, and once again to highlight the key contribution madeby our staff. David CleevelyChairman10 March 2008 ABCAM PLC CONSOLIDATED INCOME STATEMENTSix months ended 31 December2007 Six Six Year months months ended ended ended 31.12.07 31.12.06 30.6.07 Restated Restated * * Note £000's £000's £000's REVENUE 15,318 11,079 24,519Cost of sales (6,307) (4,496) (10,020)Gross profit 9,011 6,583 14,499 Administrative (6,560) (4,337) (9,461)expenses 2,451 2,246 5,038Other operating income - 11 -OPERATING PROFIT 2,451 2,257 5,038 Investment income 285 248 495PROFIT ON ORDINARY ACTIVITIES BEFORE 2,736 2,505 5,533TAXATIONTax on profit on ordinary 3 (804) (680) (1,472)activities PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 1,932 1,825 4,061 EARNINGS PER SHARE Basic earnings 4 5.55 p 5.28 p 11.74 p Fully diluted 4 5.44 p 5.13 p 11.43 p *Restated to reflect the adoption of IFRS asper note 8 ABCAM PLC CONSOLIDATED BALANCE SHEET31 December 2007 31.12.07 31.12.06 30.6.07 Restated Restated * * Note £000's £000's £000'sNON-CURRENT ASSETSIntangible assets 1,664 1,660 1,691Property, plant and 3,967 1,606 2,832equipmentDeferred tax - 222 -assets 5,631 3,488 4,523CURRENT ASSETSInventories 3,446 2,897 3,102Trade and other 3,614 3,185 4,327receivablesDerivative financial - 289 168instrumentsCash deposit 9,000 9,000 8,500Cash and cash equivalents 2,623 1,692 2,209 18,683 17,063 18,306CURRENT LIABILITIESTrade and other payables (3,662) (3,132) (3,368)Derivative financial (123) - -instruments (3,785) (3,132) (3,368) NET CURRENT ASSETS 14,898 13,931 14,938 TOTAL ASSETS LESS CURRENT LIABILITIES 20,529 17,419 19,461 NON-CURRENT LIABILITIESDeferred creditor (377) (635) (386)Deferred tax (384) - (188)liabilities NET ASSETS 19,768 16,784 18,887 EQUITYShare capital 350 346 346Share premium account 10,803 10,603 10,619Translation (38) (28) (36)reserveShare based compensation reserve 358 157 251Hedging reserve (117) - 168Retained earnings 8,412 5,706 7,539 TOTAL EQUITY 19,768 16,784 18,887 *Restated to reflect the adoption of IFRSas per note 8 ABCAM PLC CONSOLIDATED STATEMENT OF CHANGESIN EQUITYRestated*Six months ended 31December 2007 Share Share Translation Share-based Hedging Retained Total capital premium reserve compensation reserve earnings reserve £000's £000's £000's £000's £000's £000's £000's Balance as at 1 345 10,573 (8) 89 4,068 15,067July 2006 Change in 169 169accounting policyforrecognition of derivativeinstruments*Tax effect of change in (51) (51)accounting policyfor derivativeinstruments*Tax effect of share 290 290basedpaymentcompensation* Balance as at 1 345 10,573 (8) 89 - 4,476 15,475July 2006restated Exchange differences on (28) (28)translating foreignoperationsShare-based 162 162compensationDeferred tax on outstanding (30) (30)share optionsDeferred tax onrecognition ofderivativeinstrumentsProfit for the year 4,061 4,061 Total income and - - (28) 162 - 4,031 4,165expense for theyear Issue of share 1 46 47capitalMovement on hedging 168 168reserve forthe adoption ofhedge accountingPayment of (968) (968)dividends Balance as at 30 346 10,619 (36) 251 168 7,539 18,887June 2007 Exchange differences on (2) (2)translating foreignoperationsShare-based 107 107compensationDeferred tax on outstanding 57 57share optionsProfit for the 1,932 1,932period Total income and - - (2) 107 - 1,989 2,094expense for theperiod Issue of share 4 184 188capitalMovement on hedging (285) - (285)reservePayment of (1,116) (1,116)dividends Balance as at 31 350 10,803 (38) 358 (117) 8,412 19,768December 2007 *Restated toreflect theadoption of IFRS asper note 8 ABCAM PLC CONSOLIDATED CASH FLOW STATEMENTSix months ended 31 December 2007 Six Six Year months months ended ended ended 31.12.07 31.12.06 30.6.07 Restated Restated * * Note £000's £000's £000's Net cash inflow from operating 5 3,400 1,666 3,441activities Investing activitiesInterest received 285 248 495Payments to acquire tangible fixed (1,696) (757) (2,316)assetsPayments to acquire intangible fixed (145) (1,669) (1,848)assetsReceipts from sales of tangible - - 2fixed assets Net cash used in investing (1,556) (2,178) (3,667)activities Financing activitiesDividends paid 7 (1,116) (691) (968)Proceeds on issue of shares 188 31 47(Increase)/decrease in cash deposit (500) 2,000 2,500 Net cash (used in)/from financing (1,428) 1,340 1,579activities Net increase in cash and cash 416 828 1,353equivalents Cash and cash equivalents at the beginning 2,209 884 884of period Effect of foreign exchange rate (2) (20) (28)changes Cash and cash equivalents at the end 6 2,623 1,692 2,209of the period *Restated to reflect the adoption of IFRSas per note 8 ABCAM PLC NOTES TO THE FINANCIAL INFORMATIONSix months ended 31 December 2007 1.Basis of preparation The Group's previous financial statements have been prepared under UK GenerallyAccepted Accounting Principles (UK GAAP). For the financial year ending 30 June2008, the Group is required to prepare its annual consolidated financialstatements in accordance with IFRS as adopted by the European Union (EU) andimplemented in the UK. The Group's date of transition to IFRS was 1 July 2006 at which date the Groupprepared its opening IFRS balance sheet. The financial information for the sixmonths ended 31 December 2007 is unaudited and has been prepared in accordancewith the Group's accounting policies based on IFRS standards that are expectedto apply for the financial year 2008.The financial information for the sixmonths ended 31 December 2006 is also unaudited and has been restated underIFRS. The presentation of financial information under IFRS is governed by IFRS1. Insome cases that will require the item in a different position, or the use of adifferent description in the IFRS income statement or balance sheet to thatadopted in the UK GAAP profit and loss account or balance sheet. Thesereclassifications have been described in the explanatory notes. An explanation of how the transition from UK GAAP to IFRS has affected theGroup's results and income statements for the period ended 31 December 2006 andthe year ended 30 June 2007 and the equity balance sheets as at 1 July 2006 (thedate of transition), 31 December 2006 and 30 June 2007 is set out in note 8. The interim financial information has not been audited and does not constitutestatutory financial information within the meaning of Section 240 of theCompanies Act 1985. The Company's statutory accounts for the year ended 30 June2007, prepared under UK GAAP, have been delivered to the Registrar of Companies;the auditors report on those accounts was unqualified and did not contain astatement under section 237 (2) or (3) of the Companies Act 1985. ABCAM PLC NOTES TO THE FINANCIAL INFORMATIONSix months ended 31 December 2007 2 SIGNIFICANT ACCOUNTING POLICIES The financial information is prepared in accordance with International Financial Reporting Standards (IFRS). The particular accounting policies, which have been applied consistently, are described below. Accounting convention The financial information is prepared under the historical cost convention, except for the revaluation of certain financial instruments. Tangible fixed assets Tangible fixed assets are stated at cost less depreciation and any provision for impairment. Depreciation is provided at cost in equal instalments over the estimated lives of the fixed assets. The depreciation rates generally used are shown below: Office equipment, fixtures and fittings 20% per annum Laboratory equipment 20% per annum Computer equipment 33% per annum Depreciation is accelerated if assets are deemed to have been impaired or there is a change in the residual economic life. Intangible assets Expenditure on research activities is recognised as an expense in the period in which it is incurred. Payments made to acquire distribution rights from certain suppliers are capitalised and are amortised over the period of the agreement. The Group acquires hybridomas for generating monoclonal antibodies either by licensing them in or by developing them itself. The up-front fees paid for licensing in hybridomas and the cost of developing hybridomas are capitalised in line with IAS 38. An internally-generated asset can be recognised only if all of the following conditions are met: -an asset is created that can be identified -it is probable that the asset created will generate future economic benefits -the development cost of the asset can be measured reliably These assets are amortised over their estimated minimum useful lives of 3 years. Investments Investments held as fixed assets are stated at cost less provision for any impairment in value. Inventories Stocks are stated at the lower of cost and net realisable value. The cost of Abcam own manufactured stock includes material, direct labour and an attributable portion of production overheads based on normal levels of activity. Net realisable value is based on the estimated selling price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow moving or defective items where appropriate. Trade and other receivables Trade receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in the profit and loss account when there is objective evidence that the asset is impaired. Derivative financial instruments The Group uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate movements. The Board has a policy of hedging some of the exposure reflected in the foreign currency net monetary assets arising on Euro and Dollar sales and purchases in order to reduce the short term exposure to currency risk. The Chief Financial Officer and the Audit Committee monitor the level of hedges and may execute additional hedges if the anticipated exposure changes significantly. The Group has a policy of hedge accounting where the forwards can be designated in a qualifying cash flow hedge relationship. The Group does not hold or issue derivative financial instruments for speculative purposes. Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement,except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Pensions The Group operates a defined contribution pension scheme in the UK, which is open to all employees and directors of the company. The amount charged to the income statement in respect of pension costs is the contribution payable in the year. Any differences between contributions payable in the year, and contributions actually paid are shown either as accruals or prepayments in the balance sheet. Research and development Research and development expenditure, other than the development costs for internally produced hybridomas (see intangible assets above), is charged to the income statement as incurred. Leases Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Foreign Exchange The results of the operations of the Company's overseas subsidiaries, Abcam Inc and Abcam KK, are translated at the average rate of exchange during the period and their balance sheets at the rates ruling at the balance sheet date. Exchange differences arising on the translation of the opening net assets and results of operations are classified as equity and recognised in the group's foreign currency translation reserve. All other exchange differences are included in the income statement. Revenue Recognition Revenue represents the amounts derived from the provision of goods and services which fall within the Group's ordinary activities after deduction of trade discounts and value added tax. Revenue is recognised on despatch to the customer which is when the risks and rewards of ownership pass. Share Based Payments The Group issues equity-settled share based payments to certain employees. Equity-settled share based payments are measured at the fair value at the date of the grant. The fair value determined at the grant date of the equity- settled share based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of the number of shares that will eventually vest. There are both market and non-market based performance conditions attached to the vesting and exercising of equity instruments. Fair value is measured by the use of the Monte Carlo Simulation. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. Charges made to the income statement in respect of share-based payments are credited to retained earnings. 3 TAXATION Income tax for the six month period is charged at 29.4% (six months ending 31 December 2006:27.1%; year ended 30 June 2007: 26.6%), representing the best estimate of the average annual effective income tax rate expected for the full year, applied to the pre-tax income for the six month period. 4 EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of shares in issue during the period. The calculations for the periods are: Six months Six months Year ended ended ended 31.12.07 31.12.06 30.6.07 Restated* Restated* Profit after tax £000's 1,932 1,825 4,061 Weighted average number of shares in issue 34,771,594 34,548,274 34,572,810 Basic earnings per share 5.55 p 5.28 p 11.74 p Diluted earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of shares in issue during the period taking account any shares that the Company could be called under to issue under the Group's share option schemes to the extent that they are dilutive. Fully diluted weighted average number of 35,526,434 35,600,661 35,516,484 shares Fully diluted earnings per share 5.44 p 5.13 p 11.43 p 5 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended ended 31.12.07 31.12.06 30.6.07 Restated* Restated* £000's £000's £000's Operating profit 2,451 2,257 5,038 Depreciation and amortisation 731 321 795 Share based compensation charge 107 68 162 (Decrease)/Increase in derivative financial 6 (120) 41 instruments Increase in stocks (343) (539) (745) Decrease/(Increase) in debtors 713 (423) (1,565) Increase in creditors 563 868 1,188 Cash generated by operations 4,228 2,432 4,914 Income taxes paid (828) (766) (1,473) Net cash from operating activities 3,400 1,666 3,441 *Restated to reflect the adoption of IFRS as per note 8 6 ANALYSIS OF NET FUNDS At Cash At 01.07.07 flow 31.12.07 £000's £000's £000's Cash and cash 2,209 414 2,623 equivalents Cash deposit 8,500 500 9,000 Total 10,709 914 11,623 7 DIVIDENDS Six Six Year months months ended ended ended 31.12.07 31.12.06 30.6.07 £000's £000's £000's Ordinary dividend: Dividends paid 1,116 691 968 8. Explanation of thetransition to IFRS This is the first period that the company has presented its financialinformation under IFRS.The following disclosures are required in the year of transition. Thelast financial statements under UK GAAP were for the year ended 30 June 2007 and the date of transition to IFRS was therefore 1 July 2006. The principal impact of IFRS on these interim financial statements hasbeen in relation to the following:a.The scope of IAS 32 and IAS 39, Financial Instruments:Presentationand Financial Instruments:Recognition and measurement respectively.The Group designates foreign exchange contracts as cash flow hedges andhas implemented hedge accounting.b.The scope of IAS12: Income taxesThis deferred tax asset arising on the outstanding options has been fullyaccounted for. Reconciliation of income statement for the six months ended 31 December2006 UK GAAP IFRS IFRS adjustment £000's £000's £000'sRevenue 11,079 - 11,079Cost of sales (4,496) - (4,496)Gross profit 6,583 - 6,583 Administrative a (4,457) 120 (4,337)expenses 2,126 120 2,246Other operating 11 - 11incomeOPERATING PROFIT 2,137 120 2,257 Investment income 248 - 248PROFIT ON ORDINARY ACTIVITIES BEFORE 2,385 120 2,505TAXATIONTax on profit on ordinary b (667) (13) (680)activities -PROFIT ON ORDINARY ACTIVITIES AFTER 1,718 107 1,825TAXATION Reconciliation of income statement for the year ended 30 June2007 UK GAAP IFRS IFRS adjustment £000's £000's £000'sREVENUE 24,519 - 24,519Cost of sales (10,020) - (10,020)Gross profit 14,499 - 14,499 Administrative a (9,293) (168) (9,461)expenses Other operating - - -incomeOPERATING PROFIT 5,206 (168) 5,038 Investment income 495 - 495PROFIT ON ORDINARY ACTIVITIES BEFORE 5,701 (168) 5,533TAXATIONTax on profit on ordinary b (1,554) 82 (1,472)activities PROFIT ON ORDINARY ACTIVITIES AFTER 4,147 (86) 4,061TAXATION Reconcilation of equity as at1 July 2006,31 December 2006 and 30 June2007 01.07.06 31.12.06 30.06.07 Total Equity under 15,067 16,168 18,427UK GAAPLoss/gains arising a 118 324 204on derivativesin a designated cashflow hedgeLoss/gains arising b 290 292 256on deferredtax on outstandingoptions Total Equity under 15,475 16,784 18,887IFRS Reconciliation of balance sheet presentation at 1July 2006 UK GAAP IFRS IFRS adjustment £000's £000's £000'sNON-CURRENT ASSETSIntangible assets 77 - 77Property, plant and 1,094 - 1,094equipment 1,171 - 1,171CURRENT ASSETSInventories 2,358 - 2,358Trade and other 2,762 - 2,762receivablesDerivative financial a - 169 169instrumentsCash deposit 11,000 - 11,000Cash and cash 884 - 884equivalents 17,004 169 17,173CURRENT LIABILITIESTrade and other a (3,023) (51) (3,074)payables NET CURRENT ASSETS 13,981 118 14,099 TOTAL ASSETS LESS CURRENT 15,152 118 15,270LIABILITIES NON-CURRENTLIABILITIESDeferred creditor - - -Deferred tax b (85) 290 205liabilities NET ASSETS 15,067 408 15,475 EQUITYShare capital 345 - 345Share premium 10,573 - 10,573accountTranslation reserve 89 - 89Share based compensation (8) - (8)reserveRetained earnings a,b 4,068 408 4,476 TOTAL EQUITY 15,067 408 15,475 Reconciliation of balance sheet presentation at 31December 2006 UK GAAP IFRS IFRS adjustment £000's £000's £000'sNON-CURRENT ASSETSIntangible assets 1,660 - 1,660Property, plant 1,606 - 1,606and equipment 3,266 - 3,266CURRENT ASSETSInventories 2,897 - 2,897Trade and other 3,185 - 3,185receivablesDerivative a - 289 289financialinstrumentsCash deposit 9,000 - 9,000Cash and cash 1,692 - 1,692equivalents 16,774 289 17,063CURRENTLIABILITIESTrade and other a (3,168) 36 (3,132)payables NET CURRENT ASSETS 13,606 325 13,931 TOTAL ASSETS LESS CURRENT 16,872 325 17,197LIABILITIES NON-CURRENTLIABILITIESDeferred creditor (635) - (635)Deferred tax b (69) 291 222liabilities NET ASSETS 16,168 616 16,784 EQUITYShare capital 346 - 346Share premium 10,603 - 10,603accountTranslation (28) - (28)reserveShare based compensation 157 - 157reserveRetained earnings a,b 5,090 616 5,706 TOTAL EQUITY 16,168 616 16,784 Reconciliation of balance sheet presentation at 30June 2007 UK GAAP IFRS IFRS adjustment £000's £000's £000'sNON-CURRENT ASSETSIntangible assets 1,691 - 1,691Property, plant 2,832 - 2,832and equipment 4,523 - 4,523CURRENT ASSETS -Inventories 3,102 - 3,102Trade and other 4,327 - 4,327receivablesDerivative a 168 168financialinstrumentsCash deposit 8,500 - 8,500Cash and cash 2,209 - 2,209equivalents 18,138 168 18,306CURRENTLIABILITIESTrade and other a (3,404) 36 (3,368)payablesNET CURRENT ASSETS 14,734 204 14,938 TOTAL ASSETS LESS CURRENT 19,257 204 19,461LIABILITIES NON-CURRENTLIABILITIESDeferred creditor (386) - (386)Deferred tax b (444) 256 (188)liabilities NET ASSETS 18,427 460 18,887 EQUITYShare capital 346 - 346Share premium 10,619 - 10,619accountTranslation (36) - (36)reserveShare based compensation 251 - 251reserveHedging reserve a - 168 168Retained earnings a,b 7,247 292 7,539 TOTAL EQUITY 18,427 460 18,887 This information is provided by RNS The company news service from the London Stock Exchange