26 Aug 2014 07:00
26 August, 2014
Bioquell PLC - 2014 interim results
Bioquell PLC ("Bioquell") (LSE symbol: BQE) - provider of specialist bio-contamination control technologies to the international Healthcare, Life Sciences & Defence markets; and specialist testing services in the UK via its TRaC division, today announces its interim results for the six months ended 30 June, 2014.
Highlights:
§ Group revenues of £20.7 million (2013: £21.2 million) - flat in constant currency terms
§ Profitability held back by challenges previously announced in Bio division - Group loss before tax of £0.1 million (2013: profit before tax of £0.8 million)
§ Further cost reduction programme underway in Bio division, with estimated pro forma annualised savings of £1.4 million
§ Contract awarded in August for 20 Bioquell Pods and associated hydrogen peroxide vapour bio-decontamination equipment from a hospital in the Middle East concerned by the threat from viruses such as MERS-COV and Ebola
§ £3.7 million defence order received from a Middle Eastern customer
§ TRaC trading well with revenues of £8.4 million (2013: £8.7 million) and operating profit of £1.5 million (2013: £1.5 million), against tough prior year comparators
§ TRaC making good progress on building new, complementary test revenues to diversify its service offerings
Commenting on the 2014 interim results, Nigel Keen, Chairman of Bioquell PLC, said:
"As we flagged up in May, the first half of this year has been extremely tough for our Bio division which has faced a number of difficulties. However, we have started a cost reduction programme, adjusted our business model and have made a number of senior management changes which should help us to generate an appropriate financial return from the division's core technology."
"I am particularly encouraged that we are beginning to see demand from hospitals for our unique combination product comprising our (single patient room) Pods and HPV bio-decontamination equipment."
"TRaC continues to trade well and is working on a number of interesting opportunities to enable it to broaden both technologically and geographically the services it offers its clients."
Enquiries:
Nigel Keen Chairman Bioquell PLC 01264 835900
Nick Adams Group Chief Executive
Michael Roller Group Finance Director
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Notes to Editors:
Bioquell is a UK-headquartered, international technology company with two divisions:
§ Bio (www.bioquell.com) which sells specialist biological contamination control products and services into the Healthcare, Life Sciences and Defence sectors, with most of its revenues generated from overseas customers; and
§ TRaC (www.tracglobal.com) which provides specialist Testing, Regulatory and Compliance services - including EMC (electromagnetic compatibility), environmental, safety, ATEX (explosive atmospheres) radio and telecoms testing - principally to UK corporates.
§ Bioquell's bio-contamination control technology is largely based around hydrogen peroxide vapour (HPV) - which is highly efficacious at eradicating micro-organisms such as bacteria and viruses at room temperature - and is subsequently broken down using specialist catalysts to water vapour and oxygen (hence an extremely 'green' technology) at the end of the bio-decontamination process.
§ For the last several years Bioquell has invested substantial sums in developing new products - comprising rental, service and consumables - which have been designed to increase the proportion of the Group's recurring revenues (cf. capital equipment sales).
§ Bioquell's bio-contamination control technology:
Ø is used by bio-pharmaceutical, biotechnology and research institutions to provide sterile equipment and/or sterile facilities;
Ø eradicates "superbugs" from hospitals including Clostridium difficile and carbapenemase producing Enterobacteriaceae (CPE) - sometimes referred to as carbapenem-resistant Enterobacteriaceae (CRE). Independent scientific research from a team at Johns Hopkins, one of America's top hospitals, has demonstrated that 'bioquelling' hospital equipment and facilities resulted in a 64% reduction in the rate of hospital acquired infection;
Ø provides tailor-made single patient rooms to hospitals via its Pod product. Currently many hospitals around the world only have open, multi-bed "Nightingale" ward structures which have been linked to high rates of hospital acquired infection. The Pod provides hospitals with a rapid and cost effective way of providing single patient rooms on open rooms.
Ø includes a wound-care product - BioxyQuell - which has received regulatory approval for use on chronic wounds in the European Union; and
Ø is sold by wholly owned Bioquell subsidiaries in the USA, France, Ireland, Singapore and China.
TRaC sells its specialist services to the product development departments of a broad range of companies, principally based in the UK, with a particular focus on organisations operating in the aerospace, defence and telecoms sectors. TRaC also has a small team of technical experts located in China.
CHAIRMAN'S STATEMENT
In the six months ended 30 June 2014, Group revenues decreased 2% to £20.7 million (2013: £ 21.2 million) - and were flat in constant currency terms. (Constant currency revenue is calculated by retranslating current period revenues at the average exchange rates ruling in the comparative period.) The Group loss before tax was £0.1 million (2013: profit before tax of £0.8 million). This resulted in a loss per share for the period of 0.3p (2013: earnings per share of 1.6p).
BIO DIVISION: STRATEGIC CHANGES & COST REDUCTION
On 15 May, 2014, we announced in the Group's Interim Management Statement that due to a slow start to the year the Bio division would make an operating loss in the first half of approximately £1 million. In the event, the operating loss was limited to £0.7 million.
Since that announcement we have assessed in detail the performance of our Bio division and reviewed its future strategic direction as well as its cost base.
Notwithstanding the ability of our technologies, many of which are unique, to help combat problems linked to micro-organisms in the Life Sciences and Healthcare sectors, over recent years we have not generated a satisfactory financial return from the Bio division for a number of reasons.
The market in the United Kingdom for our life science product range is small and the number of large Life Sciences facilities in the UK has decreased significantly due to consolidation among international pharmaceutical companies. In addition, in our healthcare business the NHS has been slow to adopt our technologies. However, the international markets for our products and services are significant and accordingly export revenues are extremely important for the Bio division.
Given the financial challenges seen in the first half we have extended the Bio division's cost reduction programme which we started last year. These cost reductions cover a number of areas which include:
§ further reducing our investment in research and development following a period of significant expenditure on new product development;
§ initiating a review of our patent portfolio with a view to reducing expenditure on ongoing patent renewals and related costs;
§ consolidating our four UK-based service businesses into one organisation;
§ decreasing the size of the dedicated technical team focussed on our single patient room 'Pod' product to align our capacity with the subdued uptake in the UK so far this year; and
§ ceasing participation in large defence development contracts (however, we will continue to supply our standard range of defence products) .
As part of this work we have also reviewed the business models deployed within the Bio division and have made a number of changes designed to increase our profitability. For example, we have changed the Bioquell pod from a "rental only" model to a "purchase or rental" product. We have also made changes to the senior management of our Bio division, in the UK as well as in our overseas subsidiaries, to help improve the division's operational and financial performance.
We expect the net impact of the cash costs of implementing these changes and the associated savings to be broadly neutral in the current year - and to give rise to annualised pre-tax cost savings of some £1.4 million per annum.
Although the majority of the Bio division's revenues are currently still generated in the Life Sciences sector, there remains a substantial opportunity for Bioquell in the Healthcare sector as demonstrated by our recent contract for Pods and HPV equipment from a hospital in the Middle East:
§ MRSA and C. difficile continue to create major problems for hospitals around the world;
§ the Gram-negative bacteria are becoming increasingly resistant to all antibiotics in the emerging markets - with the spectre of untreatable bacteria becoming a reality; and
§ the emergence of MERS-COV in the Middle East and Ebola in West Africa are powerful reminders of the problems that viruses can inflict on mankind.
Further information on the changes we are making to our Bio business to increase its profitability is set out below.
GROUP FINANCIAL RESULTS
Revenues
Group revenues decreased 2% to £20.7 million (2013: £ 21.2 million) - and were flat in constant currency terms.
Bio revenues decreased 2% to £12.3 million (2013: £12.5 million) - equivalent to a 2% increase in constant currency terms. Bio equipment revenues decreased 10% (6% in constant currency terms), principally due to weak demand in the USA and China, to £6.3 million (2013: £7.0 million) whereas service-related revenues increased 9% (13% in constant currency terms) to £6.0 million (2013: £5.5 million). TRaC revenues decreased by 3% to £8.4 million (2013: £8.7 million).
Profitability
Gross margin in the period was down 2% in the first half to 43% (2013: 45%) due to changes in product mix in the Bio division and the effects of stronger sterling exchange rates compared to the first half of 2013.
Total overheads amounted to £8.9 million, including £2.0 million on Research & Development and Engineering ("R&DE") costs. (2013: total overheads of £8.5 million, including £0.4 million of re-configuration costs and R&DE costs of £1.2 million.)
Loss before tax was £0.1 million (2013: profit before tax of £0.8 million). The Bio division recorded an operating loss of £0.7 million (2013 operating profit of £0.2 million). TRaC made an operating profit of £1.5 million (2013: £1.5 million).
Capital expenditure
In the first half, purchases of tangible fixed assets totalled £1.3 million (2013: £1.3 million) - of which Bio amounted to £0.5 million (2013: £0.8 million) and TRaC amounted to £0.8 million (2013: £0.5 million). Depreciation in the period was £1.4 million (2013: £1.6 million).
Capitalised expenditure on product development in the Bio division was sharply down at £0.5 million (2013: £1.5 million) reflecting the reduction in investment in product development referred to above.
Total capital additions decreased substantially for the Bio division: £0.9 million (2013: £2.2 million) and increased for TRaC: £0.8 million (2013: £0.5 million). We will continue to invest in TRaC when we see attractive opportunities supported by attractive anticipated financial returns.
Product development and expenditure on R&D and engineering
The investment in product development and the expenditure on ongoing engineering costs comprises an amount capitalised and an amount charged to the income statement. The tables below provide further information:
£ millions | H1 2014 | H1 2013 | |
Product development: amount capitalised | 0.5 | 1.5 | |
R&D and engineering cash costs charged to the income statement | 1.3 | 0.6 | |
Total cash cost of R&D, product development and engineering | 1.8 | 2.1 | |
£ millions | H1 2014 | H1 2013 | |
R&D and engineering: cash costs charged to the income statement | 1.3 | 0.6 | |
Amortisation of capitalised development costs | 0.7 | 0.6 | |
Total charge to income statement for R&D and engineering | 2.0 | 1.2 |
Balance sheet
We continue to have a strong balance sheet with net assets of £31.7 million (2013: £30.4 million) and net cash of £1.5 million (2013: £1.4 million) at the period end.
We had significant unutilised debt facilities at 30 June 2014 of approximately £7.5 million.
BIO DIVISION
Life Sciences
Life Sciences revenues in the period were £9.8 million (2013: £10.3 million).
Our new QUBE product performed well in Europe where we also saw strong sales of Bioquell HPV equipment to original equipment manufacturers. We are also beginning to see QUBE sales for applications beyond sterility test and hospital pharmacy - with novel applications in cell biology important for many new 'personalised medicine' therapies.
RBDS - our unique room bio-decontamination service business - performed well in most regions in the period.
Equipment revenues in the USA and China were subdued in the first half. We have made changes to the management of our subsidiaries in these regions which we believe will help to address their ongoing performance. However, we are also seeing a general softness in the Chinese market where capital equipment sales into the Life Sciences markets currently appear to be slow.
Notwithstanding slow equipment sales which are a driver of consumable usage, revenues from our higher margin consumable products continue to grow. These consumables have been designed to generate a higher proportion of recurring revenues for the division. The consumables comprise hydrogen peroxide cartridges as well as biological and chemical indicators.
Healthcare
Although revenues from our healthcare business were subdued in the first half at £1.7 million (2013: £1.7 million), we are beginning to see increasing and encouraging demand for the Pod internationally following the change in our Pod business model.
The Bioquell Pod comprises a tailor-made single patient room with filtered air and specialist lighting. The combination of the Bioquell Pod with HPV bio-decontamination technologies is unique. This combination product, which is sold both in the UK and overseas, represents an attractive and practical solution for hospitals which are facing major problems from antibiotic resistant bacteria or viruses. These problems are often due to the structure of the hospitals' open, multi-bed critical care units.
We have recently secured a significant contract originating from a hospital in the Middle East which is concerned about the threat to its patients from viruses such as MERS-COV and Ebola. Currently the hospital has an open, multi-bed intensive care unit. The hospital has ordered 20 Pods and four sets of HPV bio-decontamination equipment. The combination of the rapid supply of bespoke hospital single occupancy rooms as well as highly effective bio-decontamination technology is unique.
The problems associated with highly antibiotic resistant or untreatable bacteria continue to grow and have been highlighted a number of times so far this year. For example, the World Health Organisation published a report in April 2014 entitled "Antimicrobial Resistance - Global report on surveillance" and in July the UK's Prime Minister called for global action to tackle the threat of growing resistance to antibiotics.
In February a group from the University of Minnesota published a paper demonstrating the efficacy of Bioquell's HPV technology against viruses. (S.M. Goyal et al., "Evaluating the virucidal efficacy of hydrogen peroxide vapour", Journal of Hospital Infection 86 (2014) 255-259.)
We are currently seeing an upsurge in enquiries from around the world for our Pod and HPV technologies from hospitals working on action plans to manage the admission of patients suspected of being infected with Ebola. At this stage the enquiries relate to emergency preparedness and it is too early to assess how the current outbreak will develop - or whether these enquiries will convert into orders. However, it is clear that the situation is causing real concern for healthcare systems around the world - and again highlights the importance of having, among other things, the availability of single patient rooms and effective bio-decontamination technology.
Work continues on the commercialisation of BioxyQuell, our novel wound-care product.
Defence
We were awarded a £3.7 million defence contract for Chemical, Biological, Radiological and Nuclear ("CBRN") filtration equipment from a Middle Eastern customer in the first half. This contract was awarded later than had been expected and this resulted in relatively subdued defence revenues in the period of £0.8 million, although they were ahead of the previous year (2013: £0.5 million).
We continue to see a number of opportunities for our CBRN and environmental control systems, particularly from the Middle East.
In the first half we were involved in a contractual dispute with a prime contractor relating to a UK Ministry of Defence product development programme. We have concluded that notwithstanding 50 years of working in this area, the risks now outweigh the potential rewards for such contracts and we will cease carrying out defence development programmes. We estimate that this contract cost us approximately £0.3 million in the first half.
TRaC DIVISION: Testing, Regulatory and Compliance
TRaC generated revenues of £8.4 million (2013: £8.7 million) in the first half. The TRaC year on year comparator is challenging due to a particularly strong performance in the first half of 2013 relating to a substantial aerospace contract.
TRaC continues to see strong demand from clients in a broad range of sectors; however, the aerospace sector remains a significant and important part of TRaC's business.
TRaC has made good progress this year in diversifying its business beyond its core testing activities, of which electromagnetic compatibility and environmental testing are currently the two most important sources of revenues. TRaC is also beginning to build its international revenues which are principally related to its complementary consulting activities. Such consulting activities are attractive as they require substantially lower capital expenditure investment whilst drawing upon the expertise of TRaC's highly specialist test engineers.
ZigBee is a relatively new wireless technology developed as an open global standard to address the needs of low-cost, low-power wireless 'machine-to-machine' networks. TRaC's expertise in ZigBee testing is increasingly recognised internationally. ZigBee test revenues continue to grow - both in the UK and overseas.
TRaC's business continues to be positively affected by the increasing regulatory requirements emanating from European regulatory bodies as well as aerospace and military regulations. We do not anticipate any slow-down in the onerous nature of many of these regulatory changes.
OUTLOOK AND PROSPECTS
TRaC is well positioned for further growth as it continues to expand its services and the territories it operates in, and we are anticipating a good second half performance .
The Bio division is undergoing significant changes designed to improve financial returns from its substantial and unique technology base, including modifications to its senior management, business models and a programme of cost reductions.
Although the Life Sciences sector currently remains key to our Bio division, in our Healthcare business the recent order for 20 Bioquell Pods and associated HPV bio-decontamination equipment from a Middle Eastern hospital concerned by viruses is an encouraging first step in developing international markets for these products. The underlying drivers for the Bio division should be compelling due to the continuing problems posed by micro-organisms and the breadth of Bioquell's unique portfolio of solutions to combat such microbes.
Overall the Group is on track to meet the Board's expectations for the full year.
Nigel Keen
Chairman
Bioquell PLC
26 August, 2014
Consolidated income statementUnaudited results for the six months ended 30 June 2014
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to 31 December 2013 £'000 | |
Revenue | 20,727 | 21,157 | 44,637 |
Cost of sales | (11,893) | (11,630) | (24,034) |
Gross profit | 8,834 | 9,527 | 20,603 |
Gross profit margin | 43% | 45% | 46% |
Operating expenses: | |||
Sales and marketing costs | (4,189) | (4,279) | (8,329) |
Administration costs | (2,722) | (3,013) | (6,344) |
R&D and engineering costs | (2,001) | (1,233) | (3,027) |
(Loss)/profit from operations | (78) | 1,002 | 2,903 |
Investment revenues | - | 1 | 302 |
Finance costs | (47) | (191) | (124) |
(Loss)/profit before tax | (125) | 812 | 3,081 |
Tax charge on profit on ordinary activities | 9 | (144) | (30) |
(Loss)/profit for the period attributable to equity holders of the parent | (116) | 668 | 3,051 |
Earnings per share - basic | (0.3p) | 1.6p | 7.3p |
- diluted | (0.3p) | 1.6p | 7.2p |
All amounts are derived from continuing operations.
Notes
1. The financial information for the six months ended 30 June 2014 and the comparative figures for the six months ended 30 June 2013 have not been reviewed or audited by the Group's auditors and have been prepared on the basis of the accounting policies adopted by the Group under IFRS. The same accounting policies and methods of computation are followed in the interim financial report as were published by the Company on 11 April 2014 in its annual financial statements, which are available on the Company's website on www.bioquellplc.com.
2. The comparative figures for the twelve months to 31 December 2013 have been prepared under IFRS. They do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The unqualified audited accounts for the twelve months ended 31 December 2013 have been filed with the Registrar of Companies and they did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
3. The tax credit shown on the income statement represents a combined corporation tax charge and deferred tax liability. The charge is based on the Group's anticipated effective tax rate for the full year.
4. (Loss)/earnings per share for the half year have been calculated on the (loss)/profit on ordinary activities after taxation divided by the weighted average number of ordinary shares in issue during the period. The Group's diluted earnings per share are calculated by including dilutive share options in the denominator.
5. There have been no related party transactions during the first six months of the financial year that have materially affected the financial position or performance of the Group during that period and there have been no changes in the related party transactions described in the last Annual Report that could do so.
6. Copies of this statement will be available to members of the public at the Company's registered office: 52 Royce Close, West Portway, Andover, Hampshire SP10 3TS and on the Group's website at www.bioquellplc.com.
Principal risks and uncertainties
The Board believes that the principal risks and uncertainties facing the Group have not changed materially from those described in the 2013 Annual Report, including the summary of risks and uncertainties set out on pages 10 to 12. The Group provides complex equipment and specialist services to a large number of clients in the UK and internationally. Accordingly the Group is subject to a broad range of strategic, operational and financial risks and uncertainties, including but not limited to: competition, technological, regulatory, reliance on suppliers, loss of key personnel, currency and credit risks.
Going concern
The Group has sufficient financial resources to cover budgeted future cash flows, together with contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Directors confirm that they have a reasonable expectation that the Group has adequate financial resources to continue to trade for the foreseeable future. Thus, they continue to adopt the going concern basis in preparing the financial statements.
Responsibility statement
We confirm that to the best of our knowledge: (i) the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting; (ii) the financial statements give a true and fair view of the assets, liabilities, financial position and profit of the undertakings included in the consolidation as a whole as required by DTR 4.2.4R; (iii) the Interim Management Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and a description of principal risks and uncertainties for the remaining six months of the year); and (iv) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
NicK Adams MICHAEL ROLLER
Group Chief Executive Group Finance Director
26 August 2014
Consolidated statement of comprehensive incomeUnaudited results for the six months ended 30 June 2014
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to31 December 2013£'000 | ||
(Loss)/profit for the period | (116) | 668 | 3,051 | |
Exchange differences on translation of foreign operations * | (150) | 112 | (37) | |
Total recognised (loss)/income for the period | (266) | 780 | 3,014 | |
* May be reclassified subsequently to profit or loss in accordance with IFRS
Consolidated statement of changes in equity
Unaudited results for the six months ended 30 June 2014
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to31 December 2013£'000 | |
(Loss)/profit for the period | (116) | 668 | 3,051 |
Exchange differences | (150) | 112 | (37) |
Total comprehensive (loss)/income in the period | (266) | 780 | 3,014 |
Other movements in the period: | |||
Issued share capital | 10 | 11 | 64 |
Issued share premium | 89 | 81 | 502 |
Credit to equity reserve for share-based payments | 72 | 113 | 231 |
Charge to equity on exercise of share options under the SARS scheme | - | (1) | - |
Movement in deferred tax charged to equity | - | 12 | - |
Final dividend for year ended 31 December 2013/2012 | (1,404) | (1,282) | (1,282) |
Net increase in equity shareholders' funds | (1,499) | (286) | 2,529 |
Equity shareholders' funds at beginning of period | 33,259 | 30,730 | 30,730 |
Equity shareholders' funds at end of period | 31,760 | 30,444 | 33,259 |
Consolidated balance sheetUnaudited results at 30 June 2014
30 June 2014 £'000 |
30 June 2013 £'000 | 31 December 2013£'000 | |
Non-current assets | |||
Goodwill | 691 | 691 | 691 |
Other intangible assets | 13,100 | 12,742 | 13,318 |
Property, plant and equipment | 14,676 | 13,526 | 14,788 |
Deferred tax assets | 175 | 175 | 175 |
28,642 | 27,134 | 28,972 | |
Current assets | |||
Inventories | 3,289 | 2,663 | 2,512 |
Trade and other receivables | 9,453 | 11,267 | 9,832 |
Derivative financial instruments | 280 | - | 293 |
Current tax asset | - | 188 | - |
Cash and cash equivalents | 3,458 | 2,455 | 3,550 |
16,480 | 16,573 | 16,187 | |
Total assets | 45,122 | 43,707 | 45,159 |
Current liabilities | |||
Trade and other payables | (8,448) | (8,923) | (7,370) |
Derivative financial instruments | - | (158) | - |
Borrowings | (224) | (105) | (224) |
Current tax liabilities | (57) | - | (75) |
Provisions | (91) | (76) | (77) |
Net current assets | 7,660 | 7,311 | 8,441 |
Non-current liabilities | |||
Deferred tax liabilities | (2,845) | (3,060) | (2,845) |
Other non-current liabilities | (1,697) | (941) | (1,309) |
Total liabilities | (13,362) | (13,263) | (11,900) |
Net assets | 31,760 | 30,444 | 33,259 |
Equity | |||
Share capital | 4,253 | 4,190 | 4,243 |
Share premium account | 801 | 291 | 712 |
Equity reserve | 1,959 | 1,820 | 1,892 |
Capital reserve | 255 | 255 | 255 |
Translation reserve | (263) | 36 | (113) |
Retained earnings | 24,755 | 23,852 | 26,270 |
Equity attributable to equity holders of the parent | 31,760 | 30,444 | 33,259 |
Consolidated cash flow statementUnaudited results for the six months ended 30 June 2014
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to31 December 2013£'000 | |
Net cash from operating activities | 1,258 | 2,099 | 7,506 |
Investing activities | |||
Proceeds on disposal of property, plant and equipment | - | - | 24 |
Purchases of property, plant and equipment | (1,325) | (1,275) | (3,940) |
Purchases of intangible asset | - | - | (494) |
Expenditure on product development | (471) | (1,481) | (2,270) |
Net cash used in investing activities | (1,796) | (2,756) | (6,680) |
Financing activities | |||
Proceeds on issue of ordinary shares | 99 | 92 | 566 |
Dividends paid on ordinary shares | - | - | (1,282) |
New borrowings | 527 | - | 595 |
Repayment of borrowings | (139) | (27) | (135) |
Net cash from financing activities | 487 | 65 | (256) |
Decrease in cash and cash equivalents | (51) | (592) | 570 |
Cash at beginning of period | 3,550 | 3,010 | 3,010 |
Effect of foreign exchange rate changes | (41) | 37 | (30) |
Cash at end of period | 3,458 | 2,455 | 3,550 |
Notes to the cash flow statementUnaudited results for the six months ended 30 June 2014
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to31 December 2013£'000 | |
(Loss)/profit from operations | (78) | 1,002 | 2,903 |
Adjustments for: | |||
Depreciation of property, plant and equipment | 1,442 | 1,566 | 2,888 |
Amortisation of intangible assets | 683 | 645 | 1,351 |
Share-based payments | 67 | 113 | 231 |
Loss on disposal of fixed assets | - | - | 55 |
Decrease in provisions | 14 | - | 1 |
Operating cash flows before movements in working capital | 2,128 | 3,326 | 7,429 |
Decrease/(increase) in inventories | (777) | 89 | 240 |
Decrease/(increase) in receivables | 280 | (1,098) | 99 |
(Decrease)/increase in payables | (326) | (177) | (288) |
Cash generated by operations | 1,305 | 2,140 | 7,480 |
Income tax received | - | - | 150 |
Investment revenues | - | 1 | - |
Interest paid | (47) | (42) | (124) |
Net cash from operating activities | 1,258 | 2,099 | 7,506 |
Business segments
Segment information about these businesses is presented below:
Six months ended 30 June 2014 | BIO £'000 | TRaC £'000 | Consolidated £'000 |
Revenue | |||
Total revenue | 12,281 | 8,446 | 20,727 |
Result | |||
Segment result | (749) | 1,509 | 760 |
Unallocated head office costs | (838) | ||
Loss from operations | (78) | ||
Finance costs and investment revenues | (47) | ||
Loss before tax | (125) | ||
Tax | 9 | ||
Loss for the period | (116) | ||
Revenue geographically (market) | |||
UK | 3,160 | 7,645 | 10,805 |
EU | 3,646 | 304 | 3,950 |
ROW | 5,475 | 497 | 5,972 |
12,281 | 8,446 | 20,727 | |
Other information | |||
Capital additions | 947 | 849 | 1,796 |
Total capital additions | 1,796 | ||
Depreciation and amortisation | 1,593 | 511 | 2,104 |
Unallocated corporate depreciation | 22 | ||
Total depreciation and amortisation | 2,126 |
For management purposes the Group is currently organised into two operating divisions: BIO and TRaC (Testing, Regulatory and Compliance). These divisions are consistent with the internal reporting as reviewed by the Chief Executive. These reportable divisions remain unchanged from the 31 December 2013 consolidated accounts.
Six months ended 30 June 2013 | BIO £'000 | TRaC £'000 | Consolidated £'000 |
Revenue | |||
Total revenue | 12,484 | 8,673 | 21,157 |
Result | |||
Segment result | 220 | 1,510 | 1,730 |
Unallocated head office costs | (728) | ||
Profit from operations | 1,002 | ||
Finance costs and investment revenues | (190) | ||
Profit before tax | 812 | ||
Tax | (144) | ||
Profit for the period | 668 | ||
Revenue geographically (market) | |||
UK | 2,497 | 7,597 | 10,094 |
EU | 3,797 | 508 | 4,305 |
ROW | 6,190 | 568 | 6,758 |
12,484 | 8,673 | 21,157 | |
Other information | |||
Capital additions | 2,224 | 532 | 2,756 |
Total capital additions | 2,756 | ||
Depreciation and amortisation | 1,542 | 647 | 2,189 |
Unallocated corporate depreciation | 22 | ||
Total depreciation and amortisation | 2,211 |
Year ended 31 December 2013 | BIO £'000 | TRaC £'000 | Consolidated £'000 |
Revenue | |||
Total revenue | 27,866 | 16,771 | 44,637 |
Result | |||
Segment result | 1,045 | 3,363 | 4,408 |
Unallocated head office costs | (1,505) | ||
Profit from operations | 2,903 | ||
Finance costs and investment revenues | 178 | ||
Profit before tax | 3,081 | ||
Tax | (30) | ||
Profit for the year | 3,051 | ||
Revenue geographically (market) | |||
UK | 20,165 | ||
EU | 8,816 | ||
ROW | 15,656 | ||
44,637 | |||
Other information |
| ||
Capital additions | 3,815 | 2,894 | 6,709 |
Total capital additions | 6,709 | ||
Depreciation and amortisation | 3,009 | 1,204 | 4,213 |
Unallocated corporate depreciation | 43 | ||
Total depreciation and amortisation | 4,256 |
Dividends
6 months to 30 June 2014 £'000 | 6 months to 30 June 2013 £'000 | 12 months to31 December 2013£'000 | |
Amounts recognised as distributions to equity holders in the period: | |||
Final dividend for the year ended 31 December 2012 of 3.06 pence per ordinary share | - | 1,282 | 1,282 |
Final dividend for the year ended 31 December 2013 of 3.86 pence per ordinary share | 1,404 | - | - |
The final dividend for the year ended 31 December 2013 was approved by shareholders at the Annual General Meeting held on 13 May 2014 and is therefore included in current liabilities in the balance sheet.
Financial Instruments
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts within 70 to 80% of the exposure generated. The Group also enters into forward foreign contracts to manage the risk associated with anticipated sales and purchase transactions out to six months within 40 to 50% of the exposure generated. Forward exchange contracts are carried at fair value through profit and loss.
At the balance sheet date the total notional amount of outstanding forward foreign exchange contracts that the Group has committed are as below:
30 June 2014 £'000 |
30 June 2013 £'000 | 31 December 2013£'000 | |
Forward foreign exchange contracts | 3,051 | 3,692 | 6,059 |
At 30 June 2014, the fair value of the Group's forward foreign exchange contracts is estimated to be approximately £280,000 (2013: £(158,000)). The fair value has been calculated as the present value of future expected cash flows at market related rates, which are current at the balance sheet date. The value is calculated using readily available market data and represents a level 2 measurement in the fair value hierarchy under IFRS 7.
Other financial assets
30 June 2014 £'000 |
30 June 2013 £'000 | 31 December 2013£'000 | |
Financial assets carried at fair value through profit and loss | 280 | (158) | 293 |
Analysis of net cash
30 June 2014 £'000 |
30 June 2013 £'000 | 31 December 2013£'000 | |
Cash | 3,458 | 2,455 | 3,550 |
Mortgage & loans - due within one year | (224) | (105) | (224) |
- due after one year | (1,197) | (941) | (1,309) |
Finance leases | (500) | - | - |
Net cash | 1,537 | 1,409 | 2,017 |
BIO DIVISION LOCATIONS
BIOQUELL UK
52 Royce CloseWest PortwayAndover SP10 3TSUKT: +44 (0)1264 835835F: +44 (0)1264 835836
BIOQUELL Inc
702 Electronic DriveSuite 200Horsham PA 19044USAT: +1 215 682 0225F: +1 215 682 0395
BIOQUELL France
153 Quai du Rancy94380 Bonneuil sur MarneParisFranceT: +33 1 4378 1594F: +33 1 4378 1584
BIOQUELL Ireland
Unit E4Eastway Business ParkBallysimon RoadLimerickRepublic of IrelandT: +353 61 603622F: +353 61 603627
BIOQUELL Asia Pacific
207 Henderson Road #01-05Henderson Industrial Park159550SingaporeT: +65 6592 5145F: +65 6227 5878
BIOQUELL China
Room 102Qingyi Photoelectricity BuildingNo.8, Langshan 2nd RoadNorth Section ofHigh-Tech ParkNanshan DistrictShenzhenP.R.C. 518057T: +86 755 8631 0348F: +86 755 8631 0211
TRac division locations
MALVERN
100 Frobisher Business ParkLeigh Sinton RoadMalvernWorcestershire WR14 1BXUKT: +44 (0)1684 571700F: +44 (0)1684 571701
HULL
Unit ESouth Orbital Trading ParkHedon RoadHull HU9 1NJUKT: +44 (0)1482 801801F: +44 (0)1482 801806
NORTH WEST
Unit 1Pendle PlaceSkelmersdaleWest Lancs WN8 9PNUKT: +44 (0)1695 556666F: +44 (0)1695 557077
WARWICK
Rothwell RoadWarwick CV34 5JXUKT: +44 (0)1926 478478F: +44 (0)1926 478479
SOUTH
74-78 Condor Close Woolsbridge Industrial ParkThree Legged CrossWimborneDorset BH21 6SUUKT +44 (0)1202 811700F +44 (0)1202 811701
WATFORD
8 Century CourtTolpits LaneWatfordHertfordshire WD18 9RSUKT: +44 (0)1923 229818F: +44 (0)1923 226261