Bank Irel13.375 Regulatory News (BOI)

6 Sep 2006 07:01

Biotrace International PLC06 September 2006 For Immediate Release 6 September 2006 BIOTRACE INTERNATIONAL PLC ("Biotrace", "the Company" or "the Group") INTERIM RESULTS for the six months ended 30 June 2006 Biotrace International Plc, a leading manufacturer of industrial microbiologyproducts, today announces its interim results for the six months ended 30 June2006. Highlights Financial • Revenue up 24% to £16.9M (2005: £13.6M) • Pre-tax profit up 27% to £1.7M (2005: £1.4M) • Earnings per share up 31% to 3.15p (2005: 2.40p) • Operational cash flow up 35% to £3.1M (2005: £2.3M) • Interim dividend increased 37% to 0.55p (2005: 0.40p) Operational • Revenues in the period benefited from a full six month contribution from the acquisition of Microsafe in September 2005 and four month contribution from Target Diagnostica which was acquired in March this year • £0.5M profit before tax generated from the sale of the Bridgend HQ property in April this year • Disposal of Ruskinn Life Sciences in February 2006 for £1M and 10% equity in ongoing business • Signed agreement with Pall Corporation in January this year to expand sales in the pharmaceutical sector Commenting on the interim results, Terry Clements, Non-executive Chairman ofBiotrace, said: "I am pleased to report a substantial improvement in the financial performanceof the Group for the first half of the year compared with the correspondingperiod last year. Revenues have grown as a result of focussing the businessthrough acquisitions and disposals, expanding the customer base and broadeningthe product offering. The acquisitions have been aimed at significantlyexpanding the Company's presence in the pharmaceutical market, whilst thedisposal of the Bridgend HQ property announced earlier in the year generated again of £0.5M pre-tax, boosting earnings in the period. This together with thedisposal of the Ruskinn Life Sciences business in February will generate anadditional £1.7M of cash this year. The Company is continuing to make good progress by broadening the business baseand developing a world class global sales channel for industrial diagnostics.Organic growth is beginning to improve despite continuing tough tradingconditions. We are therefore confident in our ability to deliver a good fullyear performance and remain optimistic about the Company's long term prospects." Further information: Biotrace International Plc on the day tel: +44 (0) 207 466 5000 Ian Johnson, Chief Executive Officer thereafter tel: +44 (0) 1656 641 492 Peter Morgan, Finance Director Buchanan Communications tel: +44 (0) 207 466 5000 Tim Anderson/James Strong/Mary-Jane Johnson Analyst meeting: An analyst briefing will be held at 09:30 am today at the offices of BuchananCommunications, 45 Moorfields, London EC2Y 9AE. BIOTRACE INTERNATIONAL PLC INTERIM RESULTS for the six months ended 30 June 2006 Chief Executive's Review: The Company has made steady progress in the first half of the year preparing theway for a solid full year performance. Growth in the period was generated fromthe contributions of MicroSafe which was acquired in September 2005 and TargetDiagnostica, which was acquired by MicroSafe in March this year. Underlyingsales improved during the period, aided by favourable exchange movements toreverse the negative trend over the previous twelve months. The disposal of theRuskinn Life Sciences business has led to more focus on our core industrialmarkets and, coupled with the sale of the HQ property, has reduced the Group'snet debt position. The Group is in a strong position going forward, benefitingfrom a high percentage of revenues generated from own brands, recurring sales ofconsumables and direct sales. Sales increased by 24% to £16.9M (2005: £13.6M) in the first half of 2006compared with the corresponding period last year. Adjusting for acquisitionsand exchange movements, underlying sales declined by £0.2M, largely as a resultof a reduction of £0.4M in defence sales in the period compared to the sameperiod last year. Profit before tax rose 27% to £1.7M (2005: £1.4M); pre-taxprofits excluding the discontinued business were 6% higher than thecorresponding period last year. Operating margins, excluding the discontinued business, remained steady atapproximately 10%. Earnings per share increased to 3.15p (2005: 2.40p) including the one-off HQdisposal profit and to 3.45p excluding the discontinued activity. The Directors have declared an increased interim dividend of 0.55p per share(2005: 0.40p), which will be paid on 9 October 2006 to shareholders on theregister as at 15 September 2006. Industrial: Industrial sales accounted for 95% of Group turnover in the period and grew 26%to £16.0M (2005: £12.6M). The food and environmental segment accounted for 73% of Industrial revenues inthe first half. Sales increased 3% to £11.7M (2005: £11.4M), benefiting from a£0.4M contribution from Target Diagnostica, which offset a small decline inunderlying sales, predominantly from lower revenues of hygiene and Tecraproducts. The Group has responded well to the tough trading conditions andpricing pressures in this sector and continues to expand the customer base, byproviding high quality products and excellent customer service. The pharmaceutical, personal care and cosmetics segment grew by 227% over thesame period last year with revenues of £3.5M (2005: £1.1M), accounting for 22%of industrial revenues. MicroSafe contributed £2.6M to the growth bybroadening the Group's product offering and increasing the customer base. Duringthe period, MicroSafe secured an order worth over £0.8M from a majorpharmaceutical company, which will boost second half sales. With the growing incidence of hospital acquired infections, the Biotrace rapidhygiene kits are beginning to be used to assess hospital cleanliness andsurgical instrument cleanliness. This emerging business together with sales ofproducts to educational and research institutions grew 38% to £0.8M (2005:£0.6M), accounting for 5% of Industrial revenues. Defence: Sales of defence products have in previous years been predominantly to the UKMoD, however, since the acquisition of MicroSafe in September last year, thecustomer base has expanded to include the Italian Army and the national firedepartments, who have the responsibility for first response to civilianincidents involving possible biological agents. More recently the Companyannounced that MicroSafe had also been awarded a NATO contract, worth £1.2M, tosupply three NBC mobile laboratories. This latter order is scheduled to bedelivered in the fourth quarter of this year. Revenues in the first half were £0.4M, down 16% on the corresponding period lastyear (2005: £0.5M). MicroSafe contributed £0.3M in the period with UK MoD salesfalling to £0.1M from £0.5M last year. It is anticipated that defence revenueswill improve significantly in the second half, benefiting particularly from theNATO order. Life sciences: As announced in February this year, the Ruskinn Life Sciences business was soldto management for £1M with the Company retaining 10% of the new business.Biotrace agreed to manufacture product for Ruskinn until the end of the currentyear, consequently, the Group has recognised the £0.5M of revenues generatedfrom Ruskinn in the period as a discontinued activity (2005: £0.4M). Financial: Profit before tax increased by 27% to £1.7M (2005: £1.4M) benefiting from animprovement in operating profit and a profit arising on the disposal of theBridgend property in our joint venture, Mansford Biotrace Limited. Operatingprofit increased by £0.2M to £1.6M (2005: £1.4M) with this profit being struckafter a charge for intangible asset amortisation of £0.4M (2005: £0.2M). Theoperating profit before intangible asset amortisation was up 18% compared withthe corresponding period in 2005 despite the benefit in 2005 of £0.1M of grantincome which was not repeated in 2006. Gross margin percentage for the period was 47% (2005: 53%) due mainly to theinclusion of MicroSafe and Target at lower gross margins than those earnedwithin the Group prior to these acquisitions being made. In addition, productmix changes through lower defence sales in the UK combined with a small declinein hygiene margins and the low margin derived from the subcontract manufactureof Ruskinn workstations included in discontinued activities, reduced overallgross margins of the Group. However, continuing business gross margins were 48%. Overheads, excluding development expenditure, increased from £5.2M to £5.8M as aresult of the acquisition of MicroSafe and Target adding £1.0M of expensesoffset by savings following the disposal of the Ruskinn business. The Groupcontinues to invest in technology and product development, incurring R&D costsin the period of £0.5M (2005: £0.6M) which have been reduced through thecapitalisation of £0.1M of development expenditure on certain products whichsatisfied the criteria specified by IFRS. A strong feature of the business remains the cash flow with cash generated fromoperations up 35% to £3.1M (2005: £2.3M). This was augmented by a dividendreceived and other balances repaid from Mansford Biotrace amounting to £0.6M anda £0.6M cash inflow arising from the disposal of Ruskinn. A final payment of£0.5M from the Ruskinn disposal is contracted to be received in December 2006.The net cash generated from the Group after investing activities was £2.5M andthis was applied to decrease net borrowings by £2.1M and pay shareholders adividend of £0.4M. The tax charge for the period was £0.5M, with the Group benefiting from £0.1M oftax relief arising on R&D expenditure. This charge represents an expectedeffective rate of 32%. Outlook: Management is continuing to focus on developing a global sales channel forindustrial diagnostics by expanding direct customer access in its core businesssegments and delivering a broad and expanding product range of innovativeproducts that meet or exceed customer expectations. As a result of restructuring initiatives taken in 2005, the business now hasdirect control of many of its major markets with a more predictable revenuestream from which to continue to implement its plans. Further opportunities lieahead to continue building the Group, enabled by the significant cash generationfrom the high level of recurring consumables sales. With the uplift anticipated from defence and pharmaceutical orders alreadyreceived, the Group is confident of showing further progress. Ian JohnsonChief Executive Officer 6 September 2006 Consolidated Income Statementfor the six months ended 30 June 2006 Continued Discontinued Unaudited Unaudited Activities Activity 6 months to 6 months to 12 months to 30 June 30 June 30 June 30 June 31 December Note 2006 2006 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 Revenue (2) 16,442 434 16,876 13,559 29,336Cost of sales (8,625) (390) (9,015) (6,350) (14,655) Gross profit 7,817 44 7,861 7,209 14,681Selling, marketing andadministrative costs before restructuring (5,772) (55) (5,827) (5,058) (10,327)Restructuring costs (7) - - - (132) (337) Total selling, marketing andadministrative costs (5,772) (55) (5,827) (5,190) (10,664) Research and development costs (390) (76) (466) (581) (1,215) Total costs (6,162) (131) (6,293) (5,771) (11,879) Operating profit (2) 1,655 (87) 1,568 1,438 2,802 Financial income - interest 45 - 45 19 38receivable and other incomeFinancial expenses - interest (248) - (248) (120) (298)payable and other charges Net financing costs (203) - (203) (101) (260)Share of profit and loss injoint venture and associate (12) 366 - 366 31 64 Profit before income tax 1,818 (87) 1,731 1,368 2,606 UK tax (47) 26 (21) (191) (240)Overseas tax (440) - (440) (253) (663) Income tax expense (3) (487) 26 (461) (444) (903)Loss on sale of discontinued - (57) (57) - -operations after taxationProfit for the period 1,331 (118) 1,213 924 1,703 Attributable to:Equity of the holders of the 1,354 (118) 1,236 932 1,711parent CompanyMinority interests (23) - (23) (8) (8) 1,331 (118) 1,213 924 1,703 Earnings per ordinary share (5)- basic 3.45p (0.30)p 3.15p 2.40p 4.39p- diluted 3.44p (0.30)p 3.14p 2.39p 4.37pDividend per share (4) 1.15p 1.15p 1.55pDividends declared (£'000) 446 447 619 Consolidated Balance Sheetfor the six months ended 30 June 2006 Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 Notes £'000 £'000 £'000AssetsIntangible assets 16,402 14,285 17,971Property, plant and equipment 2,330 2,664 2,561Investments in joint venture and associate 152 160 380Deferred tax asset 159 335 171Other receivables 30 100 100 Total non current assets 19,073 17,544 21,183 Inventories 5,108 4,579 5,380Trade and other receivables 7,601 4,938 7,627Cash and cash equivalents 734 724 466Total current assets 13,443 10,241 13,473Total assets (2) 32,516 27,785 34,656 EquityIssued share capital 3,925 3,887 3,925Share premium 10,221 9,921 10,221Other reserves 535 1,077 1,243Retained earnings 4,846 3,288 3,932 Total equity attributable to shareholders of 19,527 18,173 19,321the parentMinority interest share in net assets 182 469 205 Total Equity 19,709 18,642 19,526 LiabilitiesInterest bearing loans and borrowings 3,211 2,594 4,289Deferred tax liabilities 425 629 356Other payables - deferred consideration 1,883 - 1,200Provisions 224 135 120 Total non current liabilities 5,743 3,358 5,965 Trade and other payables 4,134 3,606 5,181Interest bearing loans and borrowings 1,596 1,138 2,534Current tax liabilities 137 41 247Derivative financial instruments - 71 23Provisions 1,197 929 1,180 Total current liabilities 7,064 5,785 9,165Total liabilities (2) 12,807 9,143 15,130 Total equity and liabilities 32,516 27,785 34,656 Consolidated Statement of Changes in Equityfor the six months ended 30 June 2006 Attributable to equity holders of the parent company Share Other reserves Retained Minority Total capital (see below) earnings Total interest equity JUNE 2006 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 3,925 11,464 3,932 19,321 205 19,526Recycled to the income statement - 23 - 23 - 23Transferred to retained earnings - (89) 89 - - -Revaluation reserve released - (29) - (29) - (29)Fair value gains on hedging - 19 - 19 - 19Currency translation - (632) - (632) - (632) Net income recognised directly in - (708) 89 (619) - (619)equityProfit for the year - - 1,236 1,236 (23) 1,213 Total income and expense for the year - (708) 1,325 617 (23) 594 Dividends paid - - (446) (446) - (446)Equity settled transactions - - 35 35 - 35 Balance at 30 June 2006 3,925 10,756 4,846 19,527 182 19,709 Share Revaluation Merger Translation Hedging Total other premium reserve reserve reserve Reserve ReservesOther reserves - June 2006 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 10,221 29 390 847 (23) 11,464Recycled to the income statement - - - - 23 23Transferred to retained earnings - - (89) - - (89)Revaluation reserve released - (29) - - - (29)Fair value gains on hedging - - - - 19 19Currency translation - - - (632) - (632) Net income recognised directly in - (29) (89) (632) 42 (708)equity Balance at 30 June 2006 10,221 - 301 215 19 10,756 Attributable to equity holders of the parent company Share Other reserves Retained Minority Total capital (see below) earnings Total interest equity June 2005 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2005 3,887 10,622 2,766 17,275 483 17,758Opening balance IAS 39 adjustment - 20 - 20 - 20Revised balance at 1 January 2005 3,887 10,642 2,766 17,295 483 17,778Recycled to the income statement - (20) - (20) - (20)Fair value losses on hedging - (71) - (71) - (71)Currency translation - 447 - 447 (6) 441 Net income recognised directly in - 356 - 356 (6) 350equityProfit for the year - - 932 932 (8) 924 Total income and expense for the year - 356 932 1,288 (14) 1,274 Dividends paid - - (447) (447) - (447)Equity settled transactions - - 37 37 - 37 Balance at 30 June 2005 3,887 10,998 3,288 18,173 469 18,642 Share Revaluation Merger Translation Hedging Total other premium reserve reserve reserve Reserve ReservesOther reserves - June 2005 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2005 9,921 29 390 282 - 10,622Opening balance IAS 39 adjustment - - - - 20 20Revised balance at 1 January 2005 9,921 29 390 282 20 10,642Recycled to the income statement - - - - (20) (20)Fair value losses on hedging - - - - (71) (71)Currency translation - - - 447 - 447 Net income recognised directly in - - - 447 (91) 356equity Balance at 30 June 2005 9,921 29 390 729 (71) 10,998 Attributable to equity holders of the parent company Share Other reserves Retained Minority Total capital (see below) earnings Total interest equity DECEMBER 2005 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2005 3,887 10,622 2,766 17,275 483 17,758Opening balance IAS 39 adjustment - 20 - 20 - 20 Revised balance at 1 January 2005 3,887 10,642 2,766 17,295 483 17,778Recycled to the income statement - (20) - (20) - (20)Fair value losses on hedging - (23) - (23) - (23)Currency translation - 565 - 565 (5) 560 Net income recognised directly in - 522 - 522 (5) 517equityProfit for the year - - 1,711 1,711 (8) 1,703 Total income and expense for the year - 522 1,711 2,233 (13) 2,220 Dividends paid - - (619) (619) - (619)Minority interest purchased - - - - (265) (265)Equity settled transactions - - 74 74 - 74Shares issued 38 300 - 338 - 338 Balance at 31 December 2005 3,925 11,464 3,932 19,321 205 19,526 Share Revaluation Merger Translation Hedging Total other premium reserve reserve reserve Reserve ReservesOther reserves - December 2005 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2005 9,921 29 390 282 - 10,622Opening balance IAS 39 adjustment - - - - 20 20 Revised balance at 1 January 2005 9,921 29 390 282 20 10,642Recycled to the income statement - - - - (20) (20)Fair value losses on hedging - - - - (23) (23)Currency translation - - - 565 - 565 Net income recognised directly in - - - 565 (43) 522equityShares issued 300 - - - - 300 Balance at 31 December 2005 10,221 29 390 847 (23) 11,464 Consolidated Cash Flow Statementfor the six months ended 30 June 2006 Unaudited Unaudited 6 months 6 months 12 months to at 30 June 2006 at 30 June 2005 31 December 2005 £'000 £'000 £'000 Profit for the period 1,213 924 1,703Adjustments for:Depreciation 418 465 1,047Amortisation 377 209 531Equity settled transactions 35 37 74Foreign exchange losses/(gains) 24 6 (93)Financial income (45) (19) (38)Financial expenses 248 121 298Share in joint venture and associate results (366) (7) (64)Gain on sale of property, plant and equipment 57 2 16Income tax expense 461 444 903 Operating profit before changes inworking capital and provisions 2,422 2,182 4,377Decrease in accounts receivable 1,108 194 (308)Decrease/(Increase) in inventories 187 (547) (885)(Decrease)/Increase in accounts payable and provisions (638) 451 741 Cash generated from operations 3,079 2,280 3,925Interest paid (156) (121) (298)Income tax paid (588) (460) (1,175) Net cash from operating activities 2,335 1,699 2,452 Investing activitiesAcquisition of subsidiary, net of cash acquired (256) (369) (3,147)Receipts from sale of subsidiary 398 - -Receipts from joint venture 447 - -Acquisition of minority interest share in subsidiary - - (474)Payments to acquire property, plant and equipment (349) (386) (708)Receipts from sales of property, plant and equipment 34 43 53Payments to acquire intangible assets (152) - (156)Interest received 45 18 38 Net cash used in investing activities 167 (694) (4,394) Financial activitiesProceeds from borrowings - - 2,793Repayments of borrowings (958) (585) (1,341)Payment of finance lease liabilities (17) (12) (18)Dividend paid to equity shareholders (413) (447) (625) Net cash used in financing activities (1,388) (1,044) 809 Net cash inflow/(outflow) 1,114 (39) (1,133) Net cash inflow/(outflow) 1,114 (39) (1,133)Cash and cash equivalents at start of year (375) 758 758Effect of exchange rate fluctuations on cash held (5) 5 - Cash and cash equivalents at end of year 734 724 (375) Cash and cash equivalents consist of: 734 724 466Cash and cash equivalents - - (841)Overdrafts 734 724 (375) Notes to the Interim Accounts for the six months ended 30 June 2006 1. ACCOUNTING POLICIES a. Basis of preparation This interim financial information has been prepared applying the accountingpolicies and presentation that were applied in the preparation of the company'spublished consolidated financial statements for the year ended 31 December 2005. The interim accounts included in this financial information are not audited anddo not constitute full statutory accounts within the meaning of section 240 ofthe Companies Act 1985. The comparative figures for the financial year ended 31December 2005 are not the Company's statutory accounts for that financial year.Those accounts, which were prepared under UK GAAP, have been reported on by theCompany's Auditors and delivered to the registrar of companies. The report ofthe Auditors was unqualified and did not contain statements under section 237(2)or (3) of the Companies Act 1985. 2 SEGMENTAL ANALYSIS Segmental information is presented in the condensed consolidated interimfinancial statements in respect of the Group's geographical segments which arethe primary basis of segmental reporting. a. Geographical analysis The results below are allocated based on the region from which the businessesare located; this reflects the Group's management and internal reportingstructure. Inter segment pricing is determined on an arms length basis. Segment resultsinclude items directly attributable to a segment as well as those that can be allocated on a reasonable basis. For the purposes of this analysis the following definitions are used: Europe - includes all of Europe, Middle East, Africa and RussiaAmericas - includes all of North and South America and the CaribbeanAPAC (Asia Pacific region) includes Australasia, New Zealand, China, India, Far East, Asia (apart from Russia) Corporate - includes the activities of the Directors of the Company and certaincentral finance and marketing costs not attributable to the individual regions. 6 months to 30 June 2006 Europe Americas APAC Corporate Eliminations Group £'000 £'000 £'000 £'000 £'000 £'000Revenue - external 8,894 6,876 1,106 - - 16,876 - Intra-segment 1,993 222 1,142 - (3,357) - Total segment revenue 10,887 7,098 2,248 - (3,357) 16,876 Operating profit 937 1,067 162 (598) - 1,568Share of profit in associates and 366joint venturesNet financing costs (203) Profit before income tax 1,731Income tax (461)Loss on sale of discontinued (57)activities Profit for period 1,213 Included in the above:Depreciation 236 76 106 - - 418Amortisation 204 - 173 - - 377 Balances at 30 June 2006 Europe Americas APAC Corporate Eliminations Group £'000 £'000 £'000 £'000 £'000 £'000 Segment assets 16,320 7,260 7,669 381 - 31,630Investment in associates and joint 152ventureUnallocated assets 734 Total assets 32,516 Segment liabilities (4,910) (734) (1,173) (1,183) - (8,000)Unallocated liabilities (4,807) Total liabilities (12,807) Capital expenditure - property, plant and equipment 73 160 60 - - 293 - intangible 520 - 97 - - 617 Europe Americas APAC Corporate Eliminations Group 6 months to 30 June 2005 £'000 £'000 £'000 £'000 £'000 £'000Revenue - external 6,174 6,166 1,219 - - 13,559 - Intra-segment 3,112 1,625 1,517 - (6,254) - Total segment revenue 9,286 7,791 2,736 - (6,254) 13,559 Operating profit 1,254 760 392 (968) - 1,438Share of profit in associates and 31joint venturesNet financing costs (101) Profit before income tax 1,368Income tax (444) Profit for period 924 Included in the aboveDepreciation 282 87 96 - - 465Amortisation 37 - 172 - - 209 Balances at 30 June 2005Segment assets 3,987 9,271 2,186 12,181 - 27,625Investment in associates and joint 160venturesUnallocated assets - Total assets 27,785 Segment liabilities (2,167) (4,628) (1,405) (943) - (9,143)Unallocated liabilities - Total liabilities (9,143) Capital expenditure - property, plant and equipment 195 34 157 - - 386 - intangible - - 22 - - 22 2 SEGMENTAL ANALYSIS (continued) b. Market sector analysis The results below are allocated based on the market sector to which thebusinesses sell - the Life Sciences business has been completely integrated intothe balance sheets of our Industrial companies, so these balances are no longerseparately identifiable. Industrial Life Science Defence Group £'000 £'000 £'000 £'0002006Revenue from external customers 15,969 458 449 16,876Balances at 30 June 2006Segment assets 30,981 421 228 31,630Investment in joint venture 152Unallocated assets 734 Total assets 32,516 Liabilities (7,835) - (165) (8,000)Unallocated liabilities (4,807) Total liabilities (12,807) Capital expenditure- property, plant and equipment 293 - - 293- intangible 617 - - 617 2005Revenue from external customers 12,646 379 534 13,559Balances at 30 June 2005Assets 27,183 - 442 27,625Investment in joint venture 160 - - 160Unallocated assets - Total assets 27,785 Liabilities (9,118) - (25) (9,143)Unallocated liabilities - Total liabilities (9,143) Capital expenditure- tangible 384 2 - 386- intangible 22 - - 22 3 TAXATION Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 UK taxation at 30% (63) 191 240Overseas taxation 453 131 597Deferred taxation 71 122 66 461 444 903 4 DIVIDENDS The dividends declared in the relevant periods are as follows: Amount Payment Total dividend Based onDividend description per share date £'000 register dated Final dividend 2004 1.15p 16/05/05 446 15/04/05Interim dividend 2005 0.40p 11/10/05 155 16/09/05Final dividend 2005 1.15p 15/05/06 451 18/04/06Interim dividend 2006 0.55p 09/10/06 216 15/09/06 5 EARNINGS PER SHARE Earnings per share is based on the profit on ordinary activities after taxationand minority interests and on 39.3 million ordinary shares in issue during theperiod (30 June 2005: 38.9 million; 31 December 2005: 39.0 million). Dilutedearnings per share is based on the profit after taxation and minority interestsand 39.1 million (30 June 2005: 39.0 million; 31 December 2005: 39.1 million)ordinary shares. The Group has calculated an undiluted earnings per share beforerestructuring costs and amortisation in order to inform shareholders of theunderlying performance of the Group. The adjusted earnings per share arecalculated in the following ways: Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000Earnings before restructuring costsProfit for the period attributable to equity 1,236 932 1,711holdersAdd: restructuring costs (see note 7) - 132 337Less: tax on restructuring costs - (40) (101) 1,236 1,024 1,947 Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000Earnings before restructuring costs andamortisationProfit for the period before restructuring costs 1,236 1,024 1,947Add: amortisation of intangibles 377 209 531Less: tax on amortisation (113) (63) (159) 1,500 1,170 2,319 Weighted average number of ordinary shares No. of shares No. of shares No.of shares Issued ordinary shares at the end of the period 39,252,627 38,865,149 39,252,627Issued ordinary shares at the start of the period 39,252,627 38,865,149 38,865,149Weighted average number of shares in period 39,252,627 38,865,149 38,978,738Diluted number of shares in period 39,347,147 39,033,267 39,124,737 Pence Pence PenceEarnings per ordinary share per share per share per share - basic 3.15 2.40 4.39- diluted 3.14 2.39 4.37- before restructuring costs 3.15 2.63 5.00- before restructuring cost and amortisation 3.82 3.01 5.95 6 PROPERTY, PLANT AND EQUIPMENT Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Additions 293 386 726Acquired through business combinations 6 - 467Net book value of asset disposals (40) (45) (135)Commitments for purchase of assets 79 - 159 7 RESTRUCTURING COSTS There were no restructuring costs incurred in the period (2005: £0.1m). 8 ACQUISITION Target Diagnostica srl On 8 March 2006 the Company, through its Italian subsidiary company BiotraceMicrosafe srl ("Microsafe") acquired the remaining share capital of TargetDiagnostica srl ("Target") for £0.3m. Previously Microsafe held 39% of theordinary shares of Target as an associate. The provisional fair value of theassets acquired with the company were: Book Value Adjustments Fair value £'000 £'000 £'000Property, plant and equipment 9 - 9Other intangible 21 - 21Inventory 68 - 68Receivables 498 - 498Payables (439) - (439)Cash acquired (13) - (13) 144 - 144Goodwill 435 579 Satisfied by the following consideration:Deferred consideration 343Shares already owned at fair value 214Acquisition costs 22 579 Target's operating profits in 2006 are set out below: Post acquisition Pre acquisition 8 March - 1 January - 30 June 2006 8 March 2006 £'000 £'000 Revenue 427 239Cost of sales (256) (147) Gross profit 171 92Selling and administrative expenses (153) (74) Operating profit 18 18 9 DISPOSAL Disposal of Ruskinn Technology Ltd On 9 February 2006 the Group announced the disposal of Ruskinn Technology Ltdincluding the IPR relating to the AC-TIVE development and the assets and tradeof the Ruskinn anaerobic work station business. £'000Consideration:Cash received 457Cash due in December 2006 473Shares in Ruskinn (10% of the equity capital in Ruskinn Life Sciences Ltd and 117Ruskinn Holdings Ltd)Transaction costs (59) 988Net book value assets sold including intangibles (1,069) Loss on disposal of subsidiary and Ruskinn business (81) In addition to the amounts noted above, inter company balances of £120,000 owingto other Group companies were repaid as part of the transaction. Following the disposal of the business, the Group continues to manufactureRuskinn products for the Ruskinn Group, this contract is due to end in December2006. 10 SHARE BASED PAYMENTS No share options were granted during the six months ended 30 June 2006. Thefair value charge for the period of £35,000 (2005: £37,000) relates to thecharge arising on options issued in previous periods. 11 FINANCIAL INSTRUMENTS a. Hedging fluctuations in foreign currency The Group is exposed to foreign currency risk on sales, purchases and borrowingsthat are denominated in a currency other than Pound Sterling. The currenciesgiving rise to this risk are primarily US Dollars, Australian Dollars and Euros. The Group uses forward exchange contracts to hedge its foreign currency risk.The forward exchange contracts have maturities of less than one year after thebalance sheet date. In respect of other monetary assets and liabilities held in currencies otherthan Sterling, the Group ensures that the net exposure is kept to an acceptablelevel by buying or selling foreign currencies at spot rates where necessary toaddress short term imbalances. The principal repayment amounts of the Group's US Dollar bank loans arenaturally hedged by trading cash flows. b. Forecasted transactions The Group classifies its forward exchange contracts hedging forecastedtransactions as cash flow hedges and measures them at fair value. The net fairvalue of forward exchange contracts used as hedges of forecasted transaction at30 June 2006 was £19,000 asset. c. Recognised assets and liabilities Changes in the fair value of forward exchange contracts that economically hedgemonetary assets and liabilities in foreign currencies and for which no hedgeaccounting is applied are recognised in profits or loss. Both the changes infair value of the forward contracts and the foreign exchange gains and lossesrelating to the monetary items are recognised as part of "net financing costs".The fair value of forward exchange contracts used as economic hedges of monetaryassets and liabilities in foreign currencies at 30 June 2006 was nil (31December 2005: £nil) recognised in fair value derivatives. d. Fair values The carrying amount of financial instruments is shown below. The fair value ofthese instruments approximates to the carrying value because of the shortmaturity of the deposits and borrowings and because the interest rates are basedon floating money market rates in the USA and UK. To estimate the fair values of forward exchange contracts, they are marked tomarket either using listed market prices or by discounting the contractualforward price and deducting the current spot rate. Unaudited Unaudited 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005Financial Instruments £'000 £'000 £'000 Cash and cash equivalents 734 724 466Bank overdrafts - - (841)Loans - due within 1 year (1,596) (1,138) (1,676)Loans - due after more than 1 year (3,211) (2,594) (4,289)Finance lease liabilities - (12) (17)Loan with joint venture - 100 100 Net debt (4,073) (2,920) (6,257) Trade and other receivables 7,601 4,938 7,627Trade and other payables (4,134) (3,606) (5,181) (606) (1,588) (3,811) 12 RELATED PARTY TRANSACTIONS Mansford Biotrace Ltd The Directors consider the material transactions undertaken by the Group duringthe year with Mansford Biotrace Ltd were as follows: Vale of transaction Balance owed by/(to) related party at 30 June 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Rental charges (73) (68) - -Loan stock held - repaid in 2006 139 - - 139Long term debtor - repaid in 2006 100 - - 100Interest payable on loan stock and 26 - - -long term debtorDividends receivable 359 - 50 - During the period, the leasehold of the building owned by Mansford Biotrace Ltd(and occupied by Biotrace Ltd) was sold to Simrock Plc. The profits from thissale have been distributed and it is expected that the joint venture companywill be closed in due course. The effect of these transactions on the profit and loss of the Group is asfollows:- 2006 £'000 Share of profits on sale of leasehold to Simrock Plc 509Share of other trading results in Mansford Biotrace Ltd (11) 498Share of income tax (132) 366 This information is provided by RNS The company news service from the London Stock Exchange