Last checked at 30 Jan 2007 13:51
Avacta Group plc
Interim results for the 6 months ended 31 October 2006
Avacta Group plc ("Avacta" or the "Company") announces its first set of results since the acquisition of Avacta Limited by Readybuy plc ("Readybuy") during August 2006 and since the change of name of Readybuy to Avacta. Avacta provides advanced biophysics technology and services to the biopharmaceutical, pharmaceutical, defence, security, and clinical diagnostics sectors.
KEY POINTS
* Successful reversal of Avacta into Readybuy during August 2006, together with a placing of new ordinary shares in the capital of the Company to raise ‚£638,000, net of expenses (the "Placing") * Development of the two broad technology platforms to proof of concept stage * Identification of several end user defined applications employing these two technology platforms * Laboratory bench prototype of one device successfully trialled at the MOD * Three year Master Service Agreement signed with UCB Celltech for the provision of a broad range of biopharma analytical services * IP protection programme is being actively progressed
Alastair Smith, Chief Executive Officer, commented:
"I am delighted with the progress that Avacta has made during the period since admission to AIM.
"Avacta's technology development programme continues apace and I am particularly pleased with the involvement of end users, such as UCB Celltech, who play a key role in driving the process.
"In addition, the strong growth of Avacta's analytical services business, driven by the launch of new service products to solve critical problems faced by biopharmaceutical developers, is key to the Group moving forward. I believe we are becoming well recognised for our expertise in this area. "
30 January 2007Enquiries:Avacta Group plc Tel: 0870 835 4367 Alastair Smith, Chief Executive Officer Tim Sykes, Chief Financial Officer Nexus Financial Limited Tel: 020 7451 7050 Nicholas Nelson/Kathy Boate Nicholas.nelson@nexusgroup.co.uk WH Ireland Limited Tel: 0161 832 2174 David Youngman
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REPORT
I am delighted to report our maiden interim results following the successful reversal of Avacta Limited into Readybuy on 8 August 2006. These results cover the 6 month period ended 31 October 2006. As the transaction has been accounted for using reverse acquisition accounting, these results include six months of trading for Avacta Limited and 12 weeks of trading for Readybuy since the date of the reverse takeover.
In the admission document dated 13 July 2006 ("the Admission Document") we set out the following key strategic objectives which would be funded from the proceeds of the Placing:
* To further the development of the detection technology platforms to proof of concept stage; * To finance the protection of Avacta's intellectual property; * To finance the development of Avacta's analytical services business by funding marketing and promotional activity; and * To demonstrate the advantages of Avacta's technology to support potential additional fund raising in due course.
We are pleased to report good progress against all these objectives. The Group's key achievements during the period from the reverse takeover to 31 October 2006 and in the period since include:
The continued development of the detection technology platforms to proof of concept stage - Development continues to meet the planning milestones and we have moved sufficiently far along the product development pipeline to have identified six application opportunities for the two broad technology platforms: Spectratech and Nanoscreen. Both platforms have now reached proof of concept stage for several applications and one prototype device has successfully undergone a testing phase with the MOD. As stated in the Admission Document, the directors of Avacta anticipate that additional funding will be required to complete the development of this and other prototype devices and eventually bring them to market.
The protection and funding of Avacta's intellectual property - Solid progress has been made in this highly technical area. One patent application has progressed to PCT stage and is awaiting examination, a further two UK patent applications have been filed. New IPR is continually being identified and we are working closely with our patent attorneys to protect these innovations at an early stage.
The development of Avacta's analytical services business by funding marketing and promotional activity - A business development programme is underway and our team has been successful in raising the profile of the services of Avacta Analytical Limited ("Avacta Analytical"), a subsidiary company, which has been reflected in the sales pipeline. The Group has enjoyed a long term relationship with UCB Celltech which was further crystallised during December 2006 with the announcement of a three year Master Service Agreement to provide a broad spectrum of biophysical analytical services. The launch of new analytical services products for the biopharmaceutical industry is a strong driver for the pipeline and Avacta Analytical expects to launch further new service products in the near future.
The demonstration of the advantages of Avacta's technology to support potential additional fund raising - The development of laboratory prototypes is an essential step in demonstrating the advantages of Avacta's technologies and this process is continuing rapidly. The potential of Avacta's technology is reflected in the formation of collaborative partnerships with end users such as UCB Celltech.
Financial Overview
The Group has adopted the principles of reverse acquisition accounting. This requires that the results be presented as if Avacta Limited had acquired Readybuy and that the results of Readybuy be consolidated from the date of that acquisition.
Accordingly, the results for the half year ended 31 October 2006, provide for six months of trading for Avacta Limited and 12 weeks of trading for Readybuy since the Company's ordinary shares were re-admitted to trading on AIM on 8 August 2006 ("Admission").
The operating loss before the costs of Admission and the Placing was ‚£498,000 (6 months ended 31 October 2005 - loss ‚£48,000). This reflects the investment in the development of our broad detection platforms to proof of concept stage and our further development of the specific devices, along with our investment in marketing of our analytical services. The costs of the Admission were ‚£388,000 of which ‚£239,000 was taken to the profit and loss account and ‚£149,000 was taken to the share premium account.
At 31 October 2006 the Group had cash of ‚£838,000 and was debt free.
Employees
The directors would like to thank all management and staff at Avacta for their dedication and commitment without which, of course, the substantial progress would not have been possible.
Outlook
World demand for molecular analysis and detection capabilities should continue to rise, driven by acute problems faced by biological drug developers, the threat of natural outbreaks such as pandemic flu, the continuing potential for terrorist attacks using biological and chemical pathogens and the move towards point of care medical testing. Consequently, the benefits of Avacta's technologies and services, particularly for biopharmaceutical analysis, are rapidly becoming recognised.
Through the identification of end user problems in these high value sectors and the provision of technologies and services to solve them, Avacta has marked out a clear path for continued development and growth in the coming year.
Gwyn Humphreys Alastair SmithChairman Chief Executive OfficerAvacta Group plc
Consolidated Profit and Loss Account
For the six month period ended 31 October 2006
Unaudited Unaudited Unaudited 6 months 6 months Year ended ended ended 31 October 31 October 31 July 2006 2006 2005 Note ‚£000 ‚£000 ‚£000 Turnover 41 31 241 Operating costs (778) (79) (459) Operating loss before (498) (48) (218)Admission costs Admission costs 2 (239) - - Operating loss (737) (48) (218) Net interest receivable 9 1 8 Loss before taxation (728) (47) (210) Taxation 5 - 5 Retained loss (723) (47) (205) Earnings per share Basic 3 (0.11p) (0.01p) (0.03p) Basic before exceptional (0.07p) (0.01p) (0.03p)items
The group's trading activities recommenced during August 2006, when Avacta Limited reversed into Readybuy. The principles of reverse acquisition accounting have been adopted in the preparation of this interim statement and this requires that the results of Avacta Limited be presented with the results of Readybuy included from the date of acquisition. The comparative figures are the consolidated results of Avacta Limited. All of the above activities during the 6 month periods ended 31 October 2006 and 31 October 2005 and the year ended 31 July 2006 are classified as continuing.
The company's accounting reference date has been changed to 31 July and, accordingly, the annual comparative figures presented are for the year ended 31 July 2006.
Avacta Group plcConsolidated balance sheet
For the six month period ended 31 October 2006
Unaudited Unaudited Unaudited 31 October 31 October 31 July 2006 2006 2005 Note ‚£000 ‚£000 ‚£000 Fixed assets Goodwill 4 3,563 - - Tangible fixed assets 51 3 37 3,614 3 37 Current assets Debtors 38 75 50 Cash at bank 838 326 175 876 401 226 Creditors : Amounts falling due within one (206) (87) (67)year Net current assets 670 314 159 4,284 317 196 Capital and reserves Called up share capital 747 747 747 Share premium 2,368 2,368 2,368 Reverse acquisition 1,944 (2,780) (2,734)reserve Profit and loss account (525) (18) (185) Equity shareholders' 4,284 317 196funds Avacta Group plc
Consolidated Cashflow Statement
For the six month period ended 31 October 2006
Unaudited Unaudited Unaudited 6 months ended 6 months ended Year ended 31 October 31 October 31 July 2006 2006 2005 ‚£000 ‚£000 ‚£000 Operating loss (737) (48) (218) Depreciation and 2 1 3amortisation (Increase) / decrease in 284 (74) -working capital Net cash outflow from operating (451) (121) (215)activities Net cash inflow from servicing of 9 1 8finance Net cash inflow from taxation 5 - 5 Net cash inflow from acquisitions 1,038 - - Net cash outflow from capital (39) (2) (37)expenditure Net cash outflow before use of liquid resources and 562 (122) (239)financing Issue of ordinary share capital 15 381 381 Net cash inflow / (outflow) from 15 381 381financing Increase / (decrease) in cash in 577 259 142the period Analysis of net cash Cash at bank and in hand 838 326 175 Avacta Group plcInterim accounts
For the six month period ended 31 October 2006
Notes
1. The unaudited results for the six month period ended 31 October 2006 have
been prepared using the principles of reverse acquisition accounting. These principles require that the accounting reflects the substance of the transaction rather than the legal form of the transaction. As such, the reverse acquisition by Avacta Limited of Readybuy has been recognised rather than the legal transaction that actually took place, being the acquisition of Avacta Limited by Readybuy via a share for share exchange. Further, the historic consolidated profit and loss account, consolidated balance sheet and consolidated cash flow statement of Avacta Limited are presented rather than those of Readybuy. The balance sheet reflects the share capital and share premium of the legal parent, Readybuy, at 31 October 2006. In order to provide meaningful comparables for shareholders, this share capital and share premium has also been recognised at 31 October 2005 and 31 July 2006. These unaudited results do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. 2. Admission costs Unaudited Unaudited Unaudited 6 months 6 months Year ended ended ended 31 October 31 October 31 July 2006 2006 2005 ‚£000 ‚£000 ‚£000 Charges relating to the 239 - -Admission
3. The calculation of earnings per share for the period is based on the loss
after taxation divided by the weighted average number of ordinary shares in issue. Because of the reverse acquisition, it is necessary to use the total number of shares in issue at 31 October 2006 as the base for the earnings per share calculation for each period in order to present a meaningful comparison. Accordingly, the number of issued ordinary shares as at 31 October 2006, being 669,327,344, has been used as the number of shares in issue throughout each period.
4. During the period, Readybuy legally acquired the entire issued ordinary
share capital of Avacta Limited. However, the Group has adopted the principles of reverse acquisition accounting and has reflected the substance of the transaction rather than the legal form. Hence, the Group has accounted for the acquisition as though Avacta Limited had acquired Readybuy. The assets and liabilities arising from the acquisition are as follows : Provisional fair value ‚£000 Cash at bank and in hand 1,038 Net current assets 61 Net assets acquired 1,099 Purchase consideration, settled in 4,662shares Provisional goodwill 3,563 Cash inflow on acquisition 1,038
AVACTA GROUP PLC