Angle Regulatory News (AGL)

27 Jul 2006 07:02

Angle PLC27 July 2006 For Immediate Release 27 July 2006 ANGLE plc ('ANGLE' or the 'Company') Preliminary Results for the year ended 30 April 2006 ANGLE plc, the intellectual property and technology commercialisation company,announces its preliminary results for the year ended 30 April 2006. Highlights • Strong progress in developing Progeny(R) companies(1). • Value of Progeny(R) companies at 30 April 2006 (excluding controlled investments): £6.5 million (2005: £3.3 million). • Expenditure on controlled investments(2) of £2.2 million during the year (2005: £0.2 million). • Portfolio of 11 Progeny(R) companies at 30 April 2006 (2005: 8). • Successful flotation of one Progeny(R) company during year (2005: none). • Loss before tax of £2.7 million (2005: £2.9 million). • Loss before controlled investments and tax of £0.5 million (2005: £2.7 million). • Cash balance at 30 April 2006 of £8.2 million (2005: £5.5 million). • Placing raising £8.1 million before expenses. • Progeny(R) Partnership programme developed and launched. • 20 year exclusive Progeny(R) Partnership agreed with The University of Reading (signed in July 2006). Hance Fullerton, Chairman, commented: "During the year, ANGLE laid the groundwork for future growth of the business.The Progeny(R) company portfolio has developed strongly and the flotation ofProvexis was a further demonstration of the value created by ANGLE's Progeny(R)process. The establishment of the Progeny(R) Partnership programme and thestrengthening of the institutional shareholder base provides ANGLE with a majorplatform for long term value generation." (1) Progeny(R) Companies are businesses established by ANGLE to commercialiseintellectual property (IP) using ANGLE's proprietary Progeny(R) process. 2 Controlled investments are Progeny(R) companies where the Group owns acontrolling equity position. Under IFRS, these are consolidated and the relevantcosts are charged to the income statement rather than placed on the balancesheet as under the previous UK GAAP accounting policy. Enquiries:ANGLE plc 01483 295830Andrew Newland, Chief ExecutiveIan Griffiths, Finance Director Buchanan Communications 020 7466 5000Richard Darby, Amy Rajendran A presentation for analysts will take place today at 10:00am at the offices ofBuchanan Communications, 45 Moorfields, London, EC2Y 9AE. Please call BuchananCommunications for more details. Notes to Editors Founded in 1994, ANGLE is an international venture management and consultinggroup focusing on the commercialisation of technology and the development oftechnology-based industry. ANGLE creates, develops and advises technologybusinesses on its own behalf and for its clients. ANGLE is listed on AIM(AGL.L); further information can be found on www.ANGLEplc.com CHAIRMAN'S STATEMENT I am pleased to report that in the second year of operation since flotation inMarch 2004, ANGLE's business has progressed significantly. The portfolio ofProgeny(R) companies has been expanded to eleven with the addition of three newcompanies in the year. The Progeny(R) process was further validated with theflotation of Provexis during the year. ANGLE has now moved into the next phase of its development, which is to scale upand capitalise on its assets and opportunities. Pipeline partnerships In a major strategic development during the year, responding to universitydemand and the changing market for intellectual property (IP) commercialisationfrom universities, ANGLE has developed and launched its Progeny(R) Partnershipprogramme for long term partnership agreements with major researchestablishments. Partners see this as a key development addressing the criticalissue of early stage management, which is the primary limitation oncommercialisation. The benefit to ANGLE is certainty of access to high qualityIP on pre-agreed terms, reduced costs of IP search and engagement with IPowners, and the option value of long term exclusive agreements. We are delighted today to announce the first Progeny(R) Partnership, a 20 yearexclusive agreement with The University of Reading, which, according to the mostrecent government Research Assessment Exercise, has twenty research departmentsrated as 5 or 5*, denoting international excellence in research activity. The University of Reading has world-class research departments in meteorology,systems engineering, food science and plant science. ANGLE is already workingwith the University to evaluate opportunities arising from these and otherareas. This deal is the first of a number of Progeny(R) Partnership agreementsproviding exclusive right of first refusal that we expect to be able to announceover the next 18 months. Outlook for the year ending 30 April 2007 The combination of our consulting relationships with collaborative relationshipsand now long term Progeny(R) Partnership agreements provides ANGLE with uniqueaccess to world class IP. This IP access combined with our established management team, investment trackrecord and proprietary Progeny(R) process, is designed to deliver long termvalue to our shareholders. During the year ending 30 April 2007, we expectstrong progress in both our existing portfolio and our pipeline. I would like to thank all members of the ANGLE team for their efforts indelivering a strong performance in our second year as a public company. We havean exceptional team and I am grateful for all their hard work, enthusiasm andcommitment to the business. I would like to reiterate my thanks to former members of the Board, Dawson Buckand Iain Ross, for their service to the Board since 2000 and 2004 respectively. Hance FullertonChairman26 July 2006 CHIEF EXECUTIVE'S STATEMENT The year ended 30 April 2006 has been a year of expansion for ANGLE. We endedthe year with a strengthened IP pipeline, a larger and more valuable portfolioof Progeny(R) companies, a stronger institutional shareholder base and increasedcash resources. Results for the year ended 30 April 2006 During the year ended 30 April 2006, ANGLE made a loss before tax of £2.7million (2005: £2.9 million. This comprised a substantially reduced loss beforecontrolled investments and tax of £0.5 million (2005: £2.7 million) andexpenditure on controlled investments (where relevant costs are charged to theincome statement), increased by nine times to £2.2 million (2005: £0.25million). As the ventures programme was expanded, net operating costs to establish,develop and create value in Progeny(R) companies increased by 52% to £2.4million (2005: £1.6 million). The change in fair value of investments comprises gains and losses as follows: 2006 2005 £'000 £'000 Fair value gains 2,862 681Fair value losses (484) (2,265) ------- -------Change in fair value 2,378 (1,584) ======= ======= The largest fair value gain was achieved on the successful flotation of Progeny(R) company Provexis in June 2005. Overall the value of Progeny(R) companies(excluding controlled investments) increased by £3.2 million, a 95% increase, to£6.5 million (2005: £3.3 million). Consulting and Management Following the deferment of business and planned investment in expansion in thefirst half, the Consulting and Management business returned to profitability inthe second half as planned. The Consulting and Management business is designed to deliver key benefits tothe Ventures business including access through consulting relationships to IPopportunities, market credibility with IP owners, and a strong managementresource for commercialisation activities. During the year, Consulting and Management activities delivered revenue of £4.0million, which was maintained from 2005, itself a record year. Business in Qataris developing particularly well, where the follow-on contract worth in excess of£6.0 million over three years is now established. This revenue is a contributorto the Group's infrastructure costs enabling ANGLE's Ventures activities to beundertaken more cost effectively. The Consulting and Management business also provides a route into new markets.Progeny(R) companies are now being developed in the United States following sixyears of Consulting and Management development there. Pipeline partnerships ANGLE has a strong set of relationships with major research establishments inthe UK and US founded on our consulting relationships with over 80 universities,government research laboratories and major corporates. Progeny(R) companies haveso far been established based on IP from the University of Bristol, theUniversity of Cambridge, New York University, the University of Virginia, theUniversity of York, Dstl Porton Down (UK Government's biological and chemicaldefence research organisation), the Rowett Institute (Europe's leading nutritionresearch institute), and British Telecom. In 2005, ANGLE added to its IP pipeline by signing a collaborative deal with BenFranklin Technology Partners of Southeastern Pennsylvania. The terms of thisagreement made ANGLE the preferred commercialisation partner for technologiesfrom universities, colleges and related institutions in the region, whichattracts more than $1 billion of research funding per annum. In a major strategic development during the year, ANGLE developed and launchedits own Progeny(R) Partnership programme for long term partnership agreementswith major research establishments. The first such partnership signed in July 2006, following collaboration duringthe year, is a 20 year exclusive agreement with The University of Reading.Reflecting the value enhancing potential of ANGLE's proprietary Progeny(R)process, ANGLE has secured market leading terms for commercialisation asfollows: • the exclusive right of first refusal to invest in all University IP that is commercialised. Where ANGLE exercises this right, it will invest under a set formula obtaining an equity stake of 60% in each Progeny(R) company for an investment of up to £0.5 million. ANGLE will drive development of these businesses utilising its proprietary Progeny(R) process and expects to invest at least £3.0 million over the first five years of the agreement. • a 15% share in all commercial returns from University intellectual property (IP), both licensing and spin-out, in which ANGLE does not invest. ANGLE will provide consultancy support to the University on IP commercialisation. The Progeny(R) Partnership programme provides a complete system and legalframework for turn-key venture establishment with the IP partner. We believe itcombines the benefits of existing investment models with a unique approach toaddressing the fundamental management issue which limits the ability of IPowners to achieve commercialisation. Progeny(R) Partnerships has been well received by other major universities andwe are in active discussions to establish long term Progeny(R) Partnerships withother universities. Portfolio During the year, ANGLE increased its expenditure on controlled investments to£2.2 million (2005: £0.2 million). Controlled investments are Progeny(R)companies where the Group has control, typically through owning more than fiftyper cent. of the equity. At the beginning of the year, ANGLE had a portfolio of eight Progeny(R)companies. During the year ended 30 April 2006, ANGLE founded three newcompanies taking the total portfolio to eleven companies. The movement in numberof Progeny(R) companies is set out below: -------------------Investments------------------- Controlled Non-controlled Non-controlled Unquoted Unquoted Quoted TotalNumber of Progeny(R)companiesAt 1 May 2005 4 3 1 8Progeny(R) companies founded 3 - - 3Companies floated during theyear - (1) 1 - ======== ========== ========= ======At 30 April 2006 7 2 2 11 ======== ========== ========= ====== Fair value on the Balance Sheet £ million £ million £ million £ million 30 April 2006 N/A 1.6 4.9 6.530 April 2005 N/A 2.5 0.8 3.3 At 30 April 2006, ANGLE's quoted investments were valued at £4.9 million (2005:£0.8 million). At 30 April 2006, ANGLE had 9 unquoted investments. Of these 7 were controlledinvestments and 2 non-controlled. Non-controlled investments are recorded on thebalance sheet at fair value of £1.6 million (2005: £2.5 million). The controlled investments are consolidated and their value is not shown on thebalance sheet. At 30 April 2006, ANGLE's cumulative expenditure on thesecontrolled investments was £2.5 million (2005: £0.2 million). During the year, our portfolio of Progeny(R) companies achieved key commercialmilestones. As a result, the portfolio has made progress towards major cashrealisation opportunities. Notable successes during the year were the: • launch of its software testing product and initial sales by Aberro; • launch of rapid MRSA test and initial sales by Acolyte Biomedica; • development of computer games graphics product by Geomerics; • establishment of clinical trials for its in vitro fertilisation (IVF) product by Novocellus; • launch of product and initial sales to beta sites by Synature; • flotation of Provexis followed by the launch of heart-health juice drink Sirco in Tesco and Waitrose, US patent granted, Heart UK product endorsement, GRAS (Generally Recognised as Safe) status achieved in the US, collaboration agreement for Crohn's disease. In addition, work was completed to establish three new Progeny(R) companies,broadening and strengthening the portfolio as follows: • InnoMatica: developing products for the US$1.2bn per annum global market for percussive power tools reducing operator exposure to vibration, the principal cause of medical conditions such as Vibration White Finger (VWF). The technology has been developed over ten years by a team of leading engineers, academics from the University of Cambridge and members of the power tools industry. • Kaloptics: commercialising innovative technology developed at the Media Research Lab in the Computer Science Department of New York University for the rapid capture and recreation of photo-realistic surface images. The technology has a wide range of commercial applications in multi-billion dollar industries, including special effects, animation, computer gaming and medical devices. • Parsortix: developing products for the US$0.6bn per annum global market for prenatal diagnostics allowing the separation of foetal cells from maternal blood, eliminating the need for maternal invasive procedures such as amniocentesis. The technology, developed in private laboratories in both the US and Europe, is also applicable to bone marrow transplant procedures used for the treatment of cancer. None of the value of these companies is shown on the balance sheet since theyare all controlled investments. Work is at an advanced stage in developing additional portfolio companies. Cash At the year end, ANGLE had strengthened its cash position to £8.2 million (2005:£5.5 million). Planned expenditure on development of the Progeny(R) companies portfolio wasmore than offset by a placing in March 2006 raising £8.1 million of additionalfunds (gross). We were delighted with the strong support from existinginstitutional shareholders and the quality of the additional institutionalplacees. This strengthening of the shareholder base will support the Group'sgrowth plans to develop the existing Progeny(R) company portfolio and exploitopportunities from the pipeline. In addition to cash balances, ANGLE held quoted investments valued at £4.9million at the year end (2005: £0.8 million). ANGLE's integrated business model benefits from consulting revenues which covera substantial proportion of the Group's overhead as well as providing keystrategic and operational benefits. Outlook for the year ending 30 April 2007 The Consulting and Management sold order book remains strong at £7.8 million(2005: £9.0 million) but lower due to delivery of significant contracts won inearlier years. Over the next year, we are looking forward to returning to higherlevels of profitability in the Consulting and Management business, although theVentures business will remain the primary focus. We expect strong developments in the Progeny(R) company portfolio during theyear as the existing Progeny(R) companies mature and new Progeny(R) companiesare founded. In particular we are looking forward to working with The Universityof Reading to deliver some high growth Progeny(R) companies based on their IP. A major emphasis will be placed on building substantial value in our IP pipelinethrough the measured roll-out of our Progeny(R) Partnership programme securinglong term partnerships with further top-rated institutions. Overall, we expect another year of continuing growth. Andrew NewlandChief Executive26 July 2006 ANGLE PLC CONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 30 APRIL 2006 2005 2006 (Restated) £ £ TurnoverConsulting and Management 4,022,092 3,897,714Ventures 60,000 234,437Controlled investments 10,775 - ---------- ---------- 4,092,867 4,132,151 InvestmentsChange in fair value 2,377,772 (1,583,636) Operating costsConsulting and Management (3,995,530) (3,389,197)Ventures (2,471,626) (1,804,138)Controlled investments (2,217,568) (247,691)Share based payments (381,884) (283,490)Restructuring charges (203,740) - ---------- ---------- (9,270,348) (5,724,516) Operating profit / (loss) (2,799,709) (3,176,001) Net finance income 131,969 242,184 ---------- ----------Profit / (loss) before tax (2,667,740) (2,933,817)---------------------------------------------- ---------- ----------Loss before controlled investments and tax (460,946) (2,686,126)Controlled investments (2,206,794) (247,691)---------------------------------------------- ---------- ---------- Tax 142,023 47,890 ---------- ----------Profit / (loss) for the year (2,525,717) (2,885,927) ========== ========== Earnings / (loss) per shareBasic (pence per share) (14.36) (17.28)Diluted (pence per share) (14.36) (17.28) ANGLE PLC CONSOLIDATED BALANCE SHEETFOR THE YEAR ENDED 30 APRIL 2006 2006 2005 (Restated) £ £ASSETSNon-current assetsInvestments 1,642,051 2,515,517Property, plant and equipment 147,414 81,250Intangible assets 3,575 4,763Trade and other receivables - 239,570 ----------- -----------Total non-current assets 1,793,040 2,841,100Current assetsInvestments 4,868,077 818,819Trade and other receivables 1,224,658 857,741Cash and cash equivalents 8,234,853 5,534,888 ----------- -----------Total current assets 14,327,588 7,211,448 ----------- -----------Total assets 16,120,628 10,052,548 =========== =========== EQUITY AND LIABILITIESEquityIssued capital 2,713,293 1,670,648Share premium account 13,701,935 7,381,864Share based payment reserve 918,876 536,992Other reserves 2,553,356 2,553,356Translation reserve (73,159) (42,990)Retained earnings (5,312,955) (2,787,238)Own shares (20,000) - ----------- -----------Total equity 14,481,346 9,312,632 ----------- ----------- LiabilitiesNon-current liabilitiesObligations under finance leases 27,363 1,316Current liabilitiesTrade and other payables 1,592,362 733,562Obligations under finance leases 19,557 5,038 ----------- -----------Total current liabilities 1,611,919 738,600 ----------- -----------Total liabilities 1,639,282 739,916 ----------- -----------Total equity and liabilities 16,120,628 10,052,548 =========== =========== ANGLE PLC CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 30 APRIL 2006________________________________________________________________________________ 2005 2006 (Restated) £ £ Operating activitiesOperating profit / (loss) (2,799,709) (3,176,001)Depreciation of property, plant and equipment 49,294 25,652Amortisation of intangible assets 1,707 2,202(Profit) / loss on disposal of property 1,059 -Exchange differences (30,295) (42,664)(Increase) / decrease in trade and other receivables (431) (223,574)Increase / (decrease) in trade and other payables 855,183 (237,526)Change in fair value of investments (2,377,772) 1,583,636Share based payments 381,884 283,490 ---------- ----------Net cash from operating activities (3,919,080) (1,784,785) Investing activitiesPurchase of property, plant and equipment (61,242) (76,093)Purchase of intangible assets (820) (6,964)Purchase of investments (698,018) (508,036)Provision of convertible loans (100,000) (500,000)Purchase of own shares (20,000) -Net interest received 136,312 243,674 ---------- ----------Net cash used in investing activities (743,768) (847,419) Financing activitiesNet proceeds from issue of share capital 7,376,972 (69,241)Capital elements of finance lease contracts (14,159) (10,538) ---------- ----------Net cash from financing activities 7,362,813 (79,779) Net increase / (decrease) in cash and cash 2,699,965 (2,711,983)equivalents Cash and cash equivalents at start of period 5,534,888 8,246,871 ---------- ----------Cash and cash equivalents at end of period 8,234,853 5,534,888 ========== ========== ANGLE PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 APRIL 2006 Share based Issued Share payment Other Translation Retained Own Total capital premium reserve reserves reserve earnings shares equity £ £ £ £ £ £ £ £At 1 May 2004 (restated) 1,669,648 7,375,518 253,502 2,553,356 - 98,689 - 11,950,713For the period to 30 April 2005 Consolidated profit/(loss) (42,990) (2,885,927) (2,928,917)Share based payments 283,490 283,490Issue of share capital (net) 1,000 6,346 7,346 ---------- ---------- -------- --------- ------- ---------- -------- -----------At 30 April2005(restated) 1,670,648 7,381,864 536,992 2,553,356 (42,990) (2,787,238) - 9,312,632For the period to 30 April 2006 Consolidated profit/(loss) (30,169) (2,525,717) (2,555,886)Share based payments 381,884 381,884Issue of share capital (net) 1,042,645 6,320,071 7,362,716 Own shares (20,000) (20,000) ---------- ---------- -------- --------- ------- ---------- -------- ----------- At 30 April2006 2,713,293 13,701,935 918,876 2,553,356 (73,159) (5,312,955) (20,000) 14,481,346 ========== ========== ======== ========= ======= ========== ========= =========== Share based payment reserve The share based payment reserve account is used for the corresponding entry tothe share based payments charged through the income statement. Transfers aremade from this reserve to retained earnings as the related share options areexercised, lapse or expire. Translation reserve The translation reserve account comprises cumulative exchange differencesarising on consolidation from the translation of the financial statements ofinternational operations. Under IFRS this is separated from retained earnings. Own shares The own shares account relates to shares purchased by the ANGLE Employee ShareOwnership Trust. The financial information set out above does not constitute the Company'sstatutory financial statements for the year ended 30 April 2006 within themeaning of section 240 of the Companies Act 1985 but are derived from theaudited financial statements for that year. The auditors have reported on theseaccounts and their report was unqualified and did not contain statements unders237(2) or (3) of the Companies Act 1985. 1 Basis of preparation Following the adoption of International Financial Reporting Standards (IFRS),the financial information in this announcement has been prepared on the basis ofthe accounting policies as set out in the interim financial statements for thesix months ended 30 October 2005. The 2005 financial information is restated asa result of adopting IFRS. The 2005 statutory accounts have been delivered tothe Registrar of Companies and the auditor's report on those accounts wasunqualified. The 2006 statutory accounts will be delivered to the Registrar ofCompanies following the Company's Annual General Meeting. 2 Compliance with accounting standards While the financial information included in this preliminary announcement hasbeen computed in accordance with IFRS, this announcement does not itself containsufficient information to comply with IFRS. At the date of authorisation of these financial statements the followingStandards and Interpretations which have not been applied in these financialstatements were in issue but not yet effective: IFRS 6 Exploration for and Evaluation of Mineral ResourcesIFRS 7 Financial instruments: Disclosures; and the related amendment to IAS 1 on capital disclosuresIFRIC 4 Determining whether an Arrangement contains a LeaseIFRIC 5 Rights to Interest Arising from Decommissioning, Restoration and Environmental Rehabilitation FundsIFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary EconomiesIFRIC 8 Scope of IFRS 2 Share-based PaymentIFRIC 9 Reassessment of Embedded DerivativesIFRIC 10 Interim Financial Reporting and Impairment. The directors anticipate that the adoption of these Standards andInterpretations in future periods will have no material impact on the financialstatements of the Group when the relevant standards and interpretations comeinto effect. 3 Tax The Group is eligible for and takes advantage of the substantial shareholdingsrelief UK corporation tax exemption. This results in the gain from any disposalsof UK investments where the Group has an equity stake greater than 10%, andsubject to certain other tests, being free of corporation tax. Tax is thereforebased on the net of profits in the Consulting and Management businesses asrelieved by losses incurred in the establishment and development of newventures. 4 Earnings per share The basic and fully diluted earnings per share is calculated on an after taxloss of £2.53 million (2005: loss £2.89 million). The basic earnings per share is based on 17,584,521 weighted average ordinary10p shares (2005: 16,697,500). Share options are non-dilutive for the yearbecause of the loss. The fully diluted earnings per share is based on 17,584,521weighted average ordinary 10p shares (2005: 16,697,500). 5 Shareholder communications Copies of this announcement are posted on the Company's website www.ANGLEplc.comand are available from Buchanan Communications. The Annual General Meeting of the Company will be held at 2:00 pm on 7 September2006 at ANGLE's offices, Surrey Technology Centre, The Surrey Research Park,Guildford, GU2 7YG. Notice of the meeting will be enclosed with the auditedstatutory financial statements. The audited statutory financial statements for the year ended 30 April 2006 areexpected to be distributed to shareholders by 14 August 2006 and willsubsequently be available on the Company's website or from the registeredoffice, Surrey Technology Centre, Surrey Research Park, Guildford, GU2 7YG. This preliminary announcement was approved by the Board on 26 July 2006. -------------------------- This information is provided by RNS The company news service from the London Stock Exchange