Last checked at 25 Sep 2013 07:01
25 September 2013
Advanced Oncotherapy Plc
("Advanced Oncotherapy" or the "Company")
Half Year Results for the Six Months Ended 30 June 2013
Advanced Oncotherapy announces its financial results for the six months ended 30th June 2013.
Highlights
· Advanced Oncotherapy completed the purchase of ADAM which firmly establishes the Group as the most cost effective provider of 3 room treatment centres in a growing world market of proton therapy which is expected to treble by 2018*. The Group's new equipment - Linac Image Guided Hadron Technology - LIGHT - has an order pipeline at £200+ million and an anticipated net profit margin of 10% on this future revenue stream.
* MEDraysintell in its new Proton Therapy World Market Report Edition 2013: global Proton Therapy market to reach US$ 2.5 billion in 2030, annual growth of 10%.
· Milestone payments are anticipated from purchasers of the LIGHT equipment, which will make significant contributions to Group's cash flow.
· There has been a slower than expected start in establishing a sales pipeline for ORL, and ORL has begun to see an increasing demand for SD-IORT in early stage breast in a number of leading hospitals throughout the UK, including BMI Healthcare and Spire Healthcare groups.
For further information, please visit www.advancedoncotherapy.com or contact:
Michael Sinclair, Chief Executive | Sandy Jamieson | Jon Levinson/ Lucy Williams | Simon Hudson |
Advanced Oncotherapy Plc | Libertas Capital Corporate Finance Ltd | Peterhouse Corporate Finance | Tavistock Communications |
(NOMAD & Joint Broker) | (Joint Broker) | (Financial PR & IR) | |
+44 20 3617 8739 | +44 20 3697 9495 | +44 20 7469 0930 | +44 20 7920 3150 |
Statement
The first half of the year has seen some significant progress within the Group, and a number of key milestones have been reached.
The figures contained in this report should be read in the context of the excellent underpinning medical technology and sales pipeline that the Group has managed to secure. The Board believes that Advanced Oncotherapy is at the start of a very promising journey, and while there is some delay in securing key positions, reflected by the figures the Directors are confident that an inflection point of the business has been reached that will see the Group through to profitable growth.
During the six month period ended 30 June 2013 the Group had revenues of £18,790 (30 June 2012: £9,433; year to 31 December 2012: £100,000.). The loss on ordinary activities before taxation was £0.78 million (30 June 2012: £1.06 million; year to 31 December 2012: £1.88 million). The comprehensive loss for the period was £0.85 million (30 June 2012: £1.02 million; year to 31 December 2012: £2.74 million.) Total assets at 30 June 2013 were £6.01 million (30 June 2012: £8.82 million; at 31 December 2012: £5.64 million). Net Assets at 30 June 2013 were £0.51 million (2012: £0.54 million; at 31 December 2012: negative £0.14 million).
Acquisition of ADAM SA
Over the course of 2013 to date, significant progress has been made in establishing the Group's in a competitive position within the next generation of cancer treatment, namely proton beam therapy. This has occurred principally through the proposed acquisition of ADAM SA - a CERN spin-off company based on the campus of CERN in Geneva, Switzerland.
Advanced Oncotherapy has today completed the purchase of ADAM. Together with the current shareholders of ADAM, the Group has accelerated the acquisition due to real momentum in the marketplace for affordable proton beam therapy equipment seen over the last six months.
During that period, agreements have been signed to provide eight LIGHT machines - the next generation of proton therapy - to locations in both the UK and the USA. The order pipeline now stands at over £200 million. The anticipated net profit margin is 10% on this future revenue.
The current plan is to commence delivery of the first machines in Q4 2016/Q1 2017. Revenues from these projects are expected to be received by the Company over 2017 and 2018. Milestone related stage payments are anticipated from purchasers of the technology, which will make significant contributions to Group cash flow.
Financing for growth
The market response to LIGHT - the next generation of proton therapy- has resulted in the Board reassessing overall financing plans. A number of new and attractive financing options have been presented, including the provision of scientific grants, and it is hoped that these can be finalised and reported to shareholders during Q1/Q2 2014.
As part of the process of accelerating the completion of the ADAM acquisition, BRAHMA AG, the current owner of ADAM, has waived the Financing Condition in the purchase contract. BRAHMA will be issued with shares in Advanced Oncotherapy to give it a 29.9% holding in the Company on completion.
When the financing mentioned above has been completed as anticipated, in Q1/Q2 2014, BRAHMA will be issued with additional Advanced Oncotherapy shares to provide it with a maximum 25.1% shareholding in the enlarged share capital of the Company.
Women's Cancer Centre in Folkestone
Advanced Oncotherapy owns a building established for medical purposes in a prime location in Folkestone.
When it was initially decided to develop this property it was pre-let to a Dental Company with financial backing from Lehman Brothers. The demise of Lehman forced the Group to review plans for the building, which has a mortgage from Bank of Ireland against it.
Having investigated a number of healthcare services options, it has been decided to operate the premises as a Women's Cancer Centre. This activity is consistent with the Group's overall strategy, and local market research supports its future viability. Once fully operational it is intended to refinance the building by way of a sale and lease back. This plan creates the best opportunity to realise the value derived from the medical planning use of the building. Alternative uses, such as office or commercial, would not support a rental level necessary to maintain the carrying value of the property in the Balance Sheet.
Oncotherapy Resources Ltd ("ORL")
While there has been a delay in establishing a sales pipeline for ORL, it is pleasing to report that treatment for breast cancer has now commenced in a number of leading hospitals throughout the UK, including the key relationships with BMI Healthcare and Spire Healthcare groups.
These relationships facilitate the adoption of the SD-IORT s within these hospital groups, and combined with the appointment of an additional radiographer to help promote the service, there is a strong flow of patients being booked in for this single dose radiation treatment for early stage breast cancer.
Furthermore, the service is being adopted by veterinarians for use in small animal cancers. Using a designated Xoft machine and consumables, key vet cancer centres are utilising ORL's managed service as an option to purchasing other forms of radiation equipment. This sector is potentially high volume, with reimbursement rates that provide healthy profit margins, and it is hoped to further grow and develop this service.
Consolidated statement of comprehensive income | ||||
For the period ended 30 June 2013 | ||||
Interim | Group | Interim | Group | |
June-13 | 2012 | June-12 | 2011 | |
£ | £ | £ | £ | |
Revenue | 18,790 | 100,000 | 9,433 | 71,000 |
Cost of sales | (41,154) | (713) |
| |
Gross Profit | (22,364) | 99,287 | 9,433 | 71,000 |
Administrative expenses | (664,869) | (1,159,024) | (913,466) | (1,642,626) |
Development costs written off |
| (504,779) | - | (300,000) |
Operating loss | (687,233) | (1,564,516) | (904,033) | (1,871,626) |
Finance income |
| 3,723 | - | - |
Finance costs | (89,790) | (322,940) | (156,900) | (694,091) |
Loss on ordinary activities before taxation | (777,023) | (1,883,733) | (1,060,934) | (2,565,717) |
Taxation | - | - | - | 288,066 |
Loss after taxation from continuing operations | (777,023) | (1,883,733) | (1,060,934) | (2,277,651) |
Discontinued operations | ||||
Loss for the period from discontinued operations | (47,539) | (852,997) | 36,108 | (4,452,108) |
Loss after discontinued operations | (824,562) | (2,736,730) | (1,024,826) | (6,729,759) |
Loss for the period | ||||
Attributable to equity shareholders | (822,185) | (2,713,612) | (1,024,826) | (6,493,895) |
Non-controlling interests | (2,377) | (23,118) | - | (235,864) |
(824,562) | (2,736,730) | (1,024,826) | (6,729,759) | |
Other comprehensive income | ||||
Exchange differences on translation of foreign operations | (24,243) | - | - | 56,537 |
Total comprehensive loss for the year net of tax | (848,805) | (2,736,730) | (1,024,826) | (6,673,222) |
Consolidated statement of financial position | ||||
As at 30 June 2013 | Interim | Group | Interim | Group |
June-13 | 2012 | June-12 | 2011 | |
£ | £ | £ | £ | |
Non-current assets | ||||
Investment properties | 3,049,357 | 3,049,357 | 3,049,357 | 3,049,357 |
Development properties | - | - | 1,961,192 | 2,384,258 |
Plant and equipment | 901,780 | 205,422 | - | 10,160 |
Trade & Other Receivables | 872,441 | 872,441 | - | 168,000 |
Investments | 50,234 | - | 13,431 | - |
4,873,813 | 4,127,220 | 5,023,980 | 5,611,775 | |
Current Assets | ||||
Amounts receivable on contracts | - | - | 2,547,887 | 1,123,066 |
Trade and other receivables | 383,486 | 1,451,961 | 1,245,407 | 315,722 |
Stock | 39,060 | - | - | - |
Cash and cash equivalents | 717,697 | 57,767 | 3,366 | 24,158 |
1,140,243 | 1,509,728 | 3,796,660 | 1,462,946 | |
Total assets | 6,014,056 | 5,636,948 | 8,820,640 | 7,074,721 |
Current liabilities | ||||
Trade and other payables | (1,798,060) | (1,972,217) | (3,974,682) | (2,793,800) |
Borrowings | (3,709,084) | (3,804,013) | (4,310,001) | (3,801,871) |
(5,507,144) | (5,776,230) | (8,284,683) | (6,595,671) | |
Non-current liabilities | ||||
Borrowings | - | - | - | - |
Deferred tax | - | - | - | - |
Total liabilities | (5,507,144) | (5,776,230) | (8,284,683) | (6,595,671) |
Net assets | 506,911 | (139,282) | 535,957 | 479,050 |
Equity | ||||
Share capital | 3,844,104 | 2,594,104 | 1,634,104 | 767,541 |
Share premium reserve | 1,910,998 | 1,665,998 | 1,612,670 | 1,397,500 |
Share option reserve | 581,333 | 581,333 | 557,996 | 557,996 |
Reverse acquisition reserve | 11,038,204 | 11,038,204 | 11,038,204 | 11,038,204 |
Exchange movements reserve | (388,330) | (388,330) | (388,330) | (388,330) |
Accumulated losses | (16,479,398) | (15,630,591) | (13,918,687) | (12,893,861) |
Equity attributable to shareholders of the Parent Company | 506,911 | (139,282) | 535,957 | 479,050 |
Non-controlling interests | - | - | - | - |
Total equity | 506,911 | (139,282) | 535,957 | 479,050 |
These consolidated financial statements have been approved and were authorised for issue by the Board | ||||
of Directors on 23 September 2013 | ||||
Dr Mike Sinclair, Chief Executive Officer | Registered number: 05564418 | |||
Consolidated statement of cash flows | ||||||||||||
For the period ended 30 June 2013 | Group | Group | Group | Group | Group | Group | Group | Group | ||||
continuing | discontinued | continuing | discontinued | continuing | discontinued | continuing | discontinued | |||||
operations | operations | Group | operations | operations | Group | operations | operations | Group | operations | operations | Group | |
June-13 | June-13 | June-13 | 2012 | 2012 | 2012 | June-12 | June-12 | June-12 | 2011 | 2011 | 2011 | |
£ | £ | £ | £ | £ | £ | £ | £ | £ | £ | £ | £ | |
Cash flow from operating activities | ||||||||||||
Loss after taxation | (777,023) | (71,782) | (848,805) | (1,883,733) | (852,997) | (2,736,730) | (1,060,934) | 36,108 | (1,024,826) | (2,277,651) | (4,452,108) | (6,729,759) |
Adjustments: | ||||||||||||
Taxation | - | - | - | - | - | - | - | - | - | (288,066) | - | (288,066) |
Finance costs | 88,915 | 7,647 | 96,562 | 322,972 | 28,992 | 351,964 | 156,900 | 3,379 | 160,280 | 696,495 | 726,381 | 1,422,876 |
Finance income | - | - | - | (3,723) | - | (3,723) | - | - | - | - | (403) | (403) |
Net portfolio losses / (gains) | - | - | - | - | 244,516 | 244,516 | - | - | - | - | 5,649,762 | 5,649,762 |
Depreciation | 33,408 | - | 33,408 | - | - | - | 1,364 | - | 1,364 | 98,977 | - | 98,977 |
Loan Cost Amortisation | 875 | 875 | ||||||||||
Write-off of development costs incurred | - | - | - | 504,779 | 610,774 | 1,115,553 | - | - | - | 300,000 | - | 300,000 |
Share based payments | - | - | - | 23,340 | - | 23,340 | - | - | - | - | - | - |
Cash flows from operations before changes in working capital | (653,825) | (64,135) | (717,960) | (1,036,364) | 31,285 | (1,005,079) | (902,669) | 39,487 | (863,182) | (1,470,245) | 1,923,632 | 453,387 |
Change in amounts receivable on contracts | - | - | - | - | 204,115 | 204,115 | - | (1,103,093) | (1,103,093) | - | 666,582 | 666,582 |
Change in trade and other receivables | (176,525) | - | (176,525) | (230,320) | (142,500) | (372,821) | 101,839 | (863,525) | (761,686) | (718,862) | 369,073 | (349,789) |
Change in Stock | (39,060) | - | (39,060) | - | - | - | - | - | - | - | - | - |
Change in trade and other payables | (485,053) | (4,940) | (489,993) | (276,244) | 172,020 | (104,224) | 105,532 | 998,842 | 1,104,374 | 429,767 | (340,117) | 89,650 |
Cash (used) / generated from operations | (1,354,463) | (69,075) | (1,423,538) | (1,542,928) | 264,919 | (1,278,009) | (695,298) | (928,290) | (1,623,587) | (1,759,340) | 2,619,170 | 859,830 |
Interest paid | (160,383) | - | (160,383) | (70,225) | (28,992) | (99,217) | (80,393) | (3,379) | (83,772) | (463,815) | (726,381) | (1,190,196) |
Costs associated with disposal of companies | - | - | - | - | - | - | - | - | - | - | (443,828) | (443,828) |
Cash flows from operating activities | (1,514,846) | (69,075) | (1,583,921) | (1,613,153) | 235,927 | (1,377,226) | (775,691) | (931,669) | (1,707,359) | (2,223,154) | 1,448,961 | (774,193) |
Cash flows from investing activities: | ||||||||||||
Disposal of investment properties | - | - | - | - | - | - | - | - | 22,903,434 | 22,903,434 | ||
Disposal of development properties | - | - | - | - | - | - | - | - | 711,124 | 711,124 | ||
Loss on disposal of investment and development property | - | - | - | - | - | - | - | - | 844,388 | 844,388 | ||
Disposal of subsidiary | - | 1,550,000 | 1,550,000 | - | ||||||||
Cash disposed with subsidiary | - | - | - | - | (5,292) | (5,292) | - | - | - | - | ||
Investment in acquisition | (50,234) | - | (50,234) | - | ||||||||
Capital expenditure on development properties | - | - | - | - | (485,809) | (485,809) | 101,338 | 101,338 | - | (322,621) | (322,621) | |
Capital expenditure on plant and machinery | (350,109) | - | (350,109) | (190,983) | - | (190,983) | (1,907) | (1,907) | (11,530) | - | (11,530) | |
Interest received | - | - | - | - | - | - | 403 | 403 | ||||
Cash flows from investment activities | (400,343) | 1,550,000 | 1,149,657 | (190,983) | (491,101) | (682,084) | (1,907) | 101,338 | 99,431 | (11,530) | 24,136,728 | 24,125,198 |
Cash flows from financing activities: | ||||||||||||
Amounts raised through new equity | 1,495,000 | - | 1,495,000 | 1,318,885 | - | 1,318,885 | 496,889 | - | 496,889 | - | - | - |
Development loans | - | - | - | - | - | - | - | - | - | - | (1,524,120) | (1,524,120) |
Repayment of loans | - | - | - | - | - | - | 579,033 | 579,033 | (75,726) | (22,645,824) | (22,721,550) | |
Other short term loans | (400,669) | - | (400,669) | 1,127,247 | - | 1,127,247 | (79,454) | 644,419 | 564,965 | 804,250 | - | 804,250 |
Intra group cash transfers | 1,480,925 | (1,480,925) | - | (234,538) | 234,538 | 0 | 413,518 | (413,518) | - | 1,288,177 | (1,288,177) | - |
Cash flows from financing activities | 2,575,256 | (1,480,925) | 1,094,331 | 2,211,594 | 234,538 | 2,446,132 | 830,953 | 809,934 | 1,640,887 | 2,016,701 | (25,458,121) | (23,441,420) |
Decrease in cash and cash equivalents | 660,066 | - | 660,066 | 407,458 | (20,636) | 386,822 | 53,356 | (20,397) | 32,959 | (217,983) | 127,568 | (90,415) |
Cash and cash equivalents at 01 January 2013 | 57,632 | - | 57,632 | (349,826) | 20,636 | (329,190) | (349,826) | 20,636 | (329,190) | (131,843) | (106,932) | (238,775) |
Cash and cash equivalents at 30 June 2013 | 717,697 | - | 717,697 | 57,632 | - | 57,632 | (296,470) | 239 | (296,231) | (349,826) | 20,636 | (329,190) |