IDH.L Regulatory News (IDH)

12 Jul 2005 07:01

Immunodiagnostic Systems Hldgs PLC12 July 2005 IMMUNODIAGNOSTIC SYSTEMS HOLDINGS PLC PRELIMINARY RESULTS For the year ended 31 March 2005 Immunodiagnostic Systems Holdings plc ("IDS" or the "Company"), a leadingproducer of diagnostic testing kits for the clinical and research markets,announces its maiden preliminary results since flotation on AIM in December2004. IDS operates in the in-vitro diagnostics ("IVD") market. The Company designs,manufactures and sells immunoassay kits which are used to measure or detectparticular substances within a sample, thus aiding the diagnosis or monitoringof a disease or providing information for research studies. In 2002 theimmunoassay sector of the IVD market was estimated to be worth US$ 3.9bn. Financial Highlights • Turnover up 22.1% to £5.44m (2004: £4.45m) • Gross Profit up 21.5% to £3.39m (2004: £2.79m) • R&D spend up to £697,000 from £479,000 (in line with management expectations) • EBITA up 78.5% to £427,800 (2004: £239,700) • Pre-tax profit of £270,100 (2004: loss £34,100) • £1.12m net funds raised through flotation on AIM - shares placed at 51p Operational Highlights • Direct distribution networks established in US and Germany, with France to follow in current year • Acquisition of Finland-based SBA for a maximum of £1.5m in March 2005 • Receipt of US FDA approval for flagship Vitamin D product • New product launches - non-isotopic 1,25D EIA product and IDS Bone-Specific Alkaline Phosphate kit • Strong R&D pipeline - MRSA product development completed by 2006 In his statement to shareholders, David Evans, Chairman, said: "The Company has made a good start to its new financial year and is benefitingfrom the investment made in its direct distribution capabilities in both the USAand in Germany. The key challenge during the year to March 2006 is to continueto feed that distribution network with a flow of new products either throughorganic development or through acquisition. The benefits of the latter arealready showing through with the comparative year on year growth of the BoneTRAP products acquired from SBA. "Whilst the growth targets for the Group as a whole are ambitious the Board isconfident that we will see continued growth in both turnover and profit and Ilook forward to updating you on progress throughout the year." Contacts: IDS Binns & Co PR Ltd David Evans, Roger Duggan, Paul McManus Chairman Managing Director Tel: 020 7153 1485Tel: 07740 084 452 Mob: 07775 845 511 Mob: 07980 541 893http://www.ids-direct.com About the Company • IDS, based in Boldon, Tyne & Wear, is a world leader in the area ofdiagnostic tests for the clinical and research markets, currently focusing onimmunoassays used in the area of bone disease (e.g. Vitamin D and bone formation/loss markers), and is expanding into other growth areas such as cancer andhospital acquired infections (e.g. MRSA). • Immunoassays measure or detect biomarkers whose presence orconcentration are indicative of a disease state. By exploiting proteomics andrecombinant antibody, IDS will deliver accelerated identification anddevelopment of new disease-related biomarkers. IDS is one of the first companiesto adopt this approach in the IVD market. • The Group's innovative work in the development of a vitamin Dimmunoassay enabled it to win a Queen's Award for Technological Achievement in1999. In June 2004, the US subsidiary IDS Inc, and in December 2004, the Germansubsidiary IDS GmbH, commenced the distribution of IDS and some othermanufactures' products • The Company manufactures its own tests and distributes these, alongwith other manufacturers tests, directly in the UK, Germany (one of Europe'slargest markets) and the US, and through third party distributors in otherterritories. • The Company has a profitable core business and has grown consistentlyin turnover since a management buy-out ("MBO") in 1996. • IDS' profitable cash generative business has funded its internalresearch and development of new products, investing over £1m since the time ofthe MBO. Chairman's Statement I have pleasure in reporting to you Immunodiagnostic Systems Holdings plc'smaiden annual results. The period has been one of considerable achievement andcontinued financial progress. Business Overview The Board of Director's recognised that if the Group was to achieve itsstrategic objectives that it needed to expand its capital base. With thatobjective in mind, in 2004 the Group embarked on a process to float the Group onthe Alternative Investment Market. This objective was achieved in December 2004when the Company raised £1.77m before expenses through the placing of 3.471million shares at 51p. Direct Distribution Network A key reason for strengthening the capital base was to enable the Group tocontinue to expand its own direct distribution capability. This has led to theestablishment of IDS GmbH based in Frankfurt followed the termination, at ourrequest, of our distribution agreement with the Nichols Institute. The firstsales were made in Germany in February 2005 and I am pleased to report that theteam in Germany, headed by Tony Wilks, has achieved considerable success inretaining the key customers with no erosion of margins. The decision to takecontrol of our own distribution was further justified in the new financial yearwhen in June 2005 Nichols products were taken off market for a number of weeks.We will continue to expand our direct distribution capability with theestablishment of IDS France during the current financial year. The progress made in the USA has seen continued growth in both the number ofcustomers and the order value. The opportunities presented for distribution ofboth our own products and for other companies remains substantial as evidencedby the continued sales growth going into the new financial year. Acquisition The opportunity of acting as a distributor of third party products led us tomake our first acquisition. In February of this year we acquired SuomenBioanalytica Oy (SBA), based in Finland. The acquisition of SBA was completed in March 2005 for a sum of £941,700inclusive of deferred consideration of £208,300. Costs associated with theacquisition amounted to £100,800. This acquisition broadens the portfoliooffering and represents a significant growth opportunity in the bone area.Additional profitability will be generated with both the transfer of productionto Boldon and also by gaining access to the German market which is currentlybeing served under an exclusive relationship with another company. R&D Pipeline The future value of the Group is dependent upon leveraging the value of both ourown distribution network by offering a ready conduit to market for smallerdiagnostic players and by bringing through new products through our R&Dpipeline. Our R&D pipeline is established to provide support for existing products,including new variants, together with developing novel products. The principalnew product in development is a molecular assay for MRSA and the developmentwork is progressing well with a view to completing the development work by theend of the calendar year. The Board is also seeking to deliver value from itsspin-out relationships with Pyrronostics, PalindromX and Perinatal Diagnostics -success with any one of these could represent substantial upside to the Group. Overall the Group is at an exciting stage of its development and continuedprogress at the same pace is anticipated going forward. Financial Overview Turnover for the year to 31 March 2005 was £5.43m, with the acquisitions of SBAand IDS GmbH contributing £179,400. On a pro-forma basis this represented anoverall increase in turnover of 22.05% compared to 2004 (£4.45m). Overall Gross Profit increased by 21.5% from £2.79m in 2004 to £3.39m in 2005with a decrease in the overall gross margin percentage from 62.7% to 62.4%reflecting the increased profit generated through our own distribution network. The Group's overhead base increased by 15% to £3.07m from £2.66m in 2004reflecting both the increase in expenditure on Research and Development up from£479,000 in 2004 to £697,000 (45.5%) and in Distribution Costs from £561,000 to£868,000 (54.7%) The Amortisation of the Intangible Fixed Assets gave rise to a charge of£101,800 (2004: £98,000) which, when excluded from the overheads, gives rise toan EBITA of £427,800 (2004: £239,700) before the deduction of exceptional itemsand share of operating loss in associates (£39,600 in 2005 and £304,200 in 2004)giving rise to a post-exceptional EBITA of £388,200 (2004 loss £64,500). The Operating Profit for the year was £286,400 (2004: loss £162,500) and theProfit on Ordinary activities before Taxation £270,100 (2004: loss £34,100) Taxation for the year amounted to £57,800 (2004 £1,900) giving rise to a profitafter taxation of £212,300 (2004: loss £36,000). The Board is pleased with the increase in overall core profitability beforeaccounting for items deemed necessary to comply with increasingly complexregulation and in my opinion, merely obfuscate the underlying financialperformance and position of the Group to no meaningful end. The Group Balance Sheet has benefited from the flotation on AIM and at the yearend the Group's cash balances were £446,700 (2004: £100,200). As the Group has continued to expand the working capital demands of the businesshave increased as evidenced by increased levels of Trade Debtors (2005:£922,800, 2004:£669,400) and Stocks (2005: £762,600, 2004: £435,000). The Company increased its borrowings in the year, primarily to finance theacquisition of SBA, and bank borrowings overall were £785,291 (2004: £261,400) Board and Management The Board of Directors was strengthened on flotation with the appointment ofWill Dracup of Nonlinear Dynamics Limited and Dr Eddie Blair of IntegratedMedicines Limited. Both have added to the expertise and experience available tothe Group. The Board has still to appoint a Chief Scientific Officer to replace Dr GeraldAllen who left in October 2004. The Board have identified his replacement andare currently dealing with the Home Office to secure the necessary work permitbefore a formal announcement can be made. Outlook The Company has made a good start to its new financial year and is benefitingfrom the investment made in its direct distribution capabilities in both the USAand in Germany. The key challenge during the year to March 2006 is to continueto feed that distribution network with a flow of new products either throughorganic development or through acquisition. The benefits of the latter arealready showing through with the comparative year on year growth of the BoneTRAP products acquired with SBA. Whilst the growth targets for the Group as a whole are ambitious the Board isconfident that we will see continued growth in both turnover and profit and Ilook forward to updating you on progress throughout the year. David Evans Chairman Managing Director's Review In our first set of preliminary results since floating on AIM in December 2004 Iam pleased to report that the company continues to grow in size, stature andperformance, in a challenging but invigorating commercial environment. Themarket for the major products of the company is buoyant and the advance intomajor geographic markets with new direct distribution channels promises todeliver substantial increases in both sales and margins. Key achievementsthroughout FY 2004/5 include: • Successful flotation on AIM, providing funds for targeted growth • Receipt of US FDA 510(k) status for flagship 1,25-Dihydroxy Vitamin D kit (1,25D) • Launch of IDS Bone-Specific Alkaline Phosphatase kit, technology licensed from Beckman Coulter Inc • Establishment of IDS GmbH (Frankfurt) • Acquisition of SBA (Finland) and associated IP • Launch of non-isotopic 1,25D EIA product, and submission for 510(k) FY2004/5 saw sustained sales growth in both domestic and export sales, up 22%from £4.45m to £5.43m. The company's flagship products, immunoassay kits forthe determination of vitamin D status and associated biomarkers, increased theirshare of the global market, as did domestic sales of Distributed (third party)Products. Vitamin D in the spotlight The company is fortunate that Vitamin D is currently enjoying a period of greatprominence in both scientific and clinical circles, even to the extent ofspilling into the public domain. Whilst once the preserve of the ClinicalBiochemist, the debate regarding vitamin D status is now frequently seen in themedia: - "What level of vitamin D is essential for good health? What is vitaminD deficiency, insufficiency and sufficiency, and what are their consequences?".The debate is set to continue, with advocates of vitamin D arguing for greaterexposure of young and old to sunshine (UV light stimulates the production ofvitamin D in the skin), and dermatologists arguing for more protection from thesun to minimise the incidence of melanoma. It is now broadly accepted that poor vitamin D status is associated with anincreased predisposition to numerous pathologies, including cancer (breast,prostate and colorectal cancers). Recent publications go further, linking lowvitamin D with rheumatoid arthritis, muscular dystrophy and autoimmune disease.This has fuelled demand for more determination of vitamin D status, and IDS iswell-situated to benefit from this uplift. Direct Distribution - USA The USA remains the largest global market for In Vitro Diagnostic (IVD)products, and with the modest investment made in establishing IDS Inc inFountain Hills, Arizona (January 2003; trading from July 2003), we have set thescene for rapid growth in sales of our most prestigious products into what hashitherto been an almost virgin market for IDS. The addition of highlycomplementary 'bone & skeletal' assay kits from Orion Diagnostica (Finland) andSBA (Suomen Bioanalytica Oy, Finland) to the product offering made IDS Inc themost prominent source of such specialist products in the USA. Kenneth Gibbs,CEO of IDS Inc, is confident of continued growth as his customer base expands toinclude 'Blue Chip' Reference Laboratories and Clinical Research Organisationsconducting clinical trials on behalf of their pharmaceutical clients, alongsidesmaller academic researchers and physicians' practices. Direct Distribution - Germany IDS GmbH (Frankfurt) is in its' infancy, having been established in November2004 and becoming active in February 2005, but the dynamism of the German marketand the expertise of our Geshaftsfuhrer, Tony Wilks, and his experienced teamhave succeeded in securing the business previously enjoyed by a corporatepartner (Nichols Institute Diagnostics (NID), CA, USA) offering own-badgedversions of IDS vitamin D products. IDS GmbH is now also making good progressin the introduction of other IDS products into the biggest single Europeanmarket, a territory previously under-exploited by an appointed distributor. Acquisition of SBA The early success of SBA products in the US market in the hands of IDS Inc ledus to seek the acquisition of SBA in early 2005. This successful acquisition notonly secured IDS' growing sales of SBA's patent-protected products in the USA,but also heralded their introduction to other major territories barely addressedto date. In Germany, where they have been contract manufactured and exclusivelymarketed by Medac GmbH, sales have grown steadily. Following the acquisition,this business will move to IDS, and agreement has been reached with Medac for astructured transfer of all business to IDS by the end of 2005. Direct Distribution - France Plans are progressing to establish IDS SA in Paris in September 2005, withongoing discussions with identified key personnel. An early transfer of vitaminD business from NID France to IDS SA is scheduled, and will for the first timeenable IDS to offer the whole range of IDS products throughout France. Thecomplementary nature of this range of products, available from a singlesupplier, facilitates the investigation of metabolic bone diseases such asosteoporosis. Distribution Network Our distribution network is under renewed scrutiny following an enhancement ofSales & Marketing and Export activities. Visits have been made to Scandinavia,Benelux, Spain, Italy, Austria, Poland and Australia to consult with existingdistributors, to plan future activities, and to agree achievable targets. SouthKorea and Japan are scheduled for July. The contribution of well-motivated,well-trained and successful distributors in far-flung territories has been thereward of longstanding relationships built on quality, trust and fairness, andwill be broadened and strengthened as we go forward. A new domestic sales and marketing initiative introduced by Tony Wilks, now alsoinstalled as IDS Sales & Marketing Director, will see a more focused approach toUK sales, with greater emphasis on IDS-manufactured products, and arationalisation of third party products to focus more closely uponcomplementarity, saleability and contribution. New Product Development New product development goes on apace, despite the loss of our TechnicalDirector in the months running up to the flotation. Our decision at that timewas to take stock, to seek and appoint a person with an abundance of the skillsand experience needed by IDS to achieve the goals laid out in the Prospectus.These goals were ones of both technology development and acquisition, and ofanalyte discovery and development. This has proven to be no easy task, but I ampleased to report that such an individual has been found, an offer has been madeand accepted, and an announcement will be made in due course of our new MedicalDirector and Chief Scientific Officer, who will join the company in September2005. Products launched on or near schedule this year were a non-isotopic1,25-dihydroxy vitamin D EIA, complementing our best-selling radioactiveimmunoassay system. This will bring the analyte within reach of thoselaboratories unable or unwilling to obtain the necessary licences to store, workwith and dispose of radioactive isotopes. A 510(k) submission was made to theUS FDA in April 2005, and following a recent call from the offices of the FDA,we believe achievement of 510(k) status will be forthcoming in the very nearfuture. HS (High-Sensitivity) Corticosterone EIA was launched April 2005, and iscurrently being evaluated in a number of laboratories worldwide. Marketresearch suggests that this product may be of interest and utility as a markerof stress in the poultry industry, as well as those research laboratoriesworking with reptiles and amphibians. Testing for MRSA Good progress has been made in the commercialisation of Nucleic Acid Technologyin the development of rapid, laboratory-based, non-PCR testing forMethicillin-Resistant Staphylococcus aureus (MRSA). This is set to deliver amodern and molecular based test for MRSA in sample swabs taken from suspectedMRSA victims, their families and recent contacts, doctors and nurses, and wheremore forward-looking reconnaissance is adopted, from patients admitted tohospital for elective surgery and similar procedures. We believe that this willrepresent a viable and cost-effective alternative to existing broth andagar-plate culture methods spawned from mid-20th century practices. The productis scheduled for Q4 2005/Q1 2006. Technology transfer remains an important business activity, and this isprogressing satisfactorily. An ongoing programme to format our 25-hydroxyvitamin D technology for installation on an automated platform of one of the 'Top Ten' global IVD companies is in its' second year and approaching firstexternal clinical exposure (August 2005). Heads of Terms have been agreed withanother client company for the licensing of IDS IP and transfer of know-how tothem to achieve the same objective on another such automated platform, and yetanother has been mooted. The value of IDS' depth and breadth of knowledge inthe analytically difficult area of vitamin D determination is therefore widelyrecognised, and will be a source of further beneficial collaborations in thefuture. Outlook In our first year as a public traded company, I see a burgeoning renewed organicgrowth rising beneath us, lifting sales and profitability; and a plethora ofopportunities before us, with the wherewithal to realistically achieve what wecan accurately qualify and prosecute. I have no doubt that ImmunodiagnosticSystems Holdings plc is consolidating its' foundations, creating tomorrows'winning Team, and is now poised for a step change in growth and development thatwill deliver impressive growth in shareholder value. Dr Roger Duggan Managing Director Financial Review Financial Highlights We believe that the successful flotation of the company on the AlternativeInvestment Market (AIM) in December 2004 and the additional cash this hasgenerated can significantly accelerate the growth of the company. This willallow us to continue our investment in research and development projectsdesigned to generate future revenues and profits to the group and will helpenhance our sales and distribution channels to market. Turnover Turnover increased by 22.05% to £5,435,000 (2004 £4,453,000). Direct sales intoboth the USA and Germany contributed significantly to this year's growth. Gross Margin The gross margin decreased to 62.41% (gross profit £3,392,000) from 62.74% in2004 (gross profit £2,794,000). This decrease reflects change in the product mixwithin our sales and an increase in distribution of third party products. Operating Costs and Profits We continue to invest in R&D and our spending in 2005 rose sharply, in line withexpectations, to £697,000 from £479,000 - an increase of 45.5%. We expect thislevel of R&D expenditure to continue throughout 2006 as we look to bring ourSMART (signal mediated amplification of RNA technology) to market, with thelaunch of an MRSA detection product. Distribution and Administrative expensesincreased by £410,000 to £3,066,000 compared to £2,656,000 in 2004. The chargefor depreciation and amortisation of intangibles, including goodwill was£226,000 compared to £230,000 in 2004. EBITDA The group reports an increase in earnings before interest, tax, depreciation andamortisation (EBITDA) from £207,000 in 2004 to £512,000. Turnover by Product Area Year ending 31st March: 2005 2004 Change £'000 £'000 % Vitamin D 2,756 2,438 13.04Octeia 410 274 49.64Gamma B 228 192 18.75Other 104 84 23.81Total of IDS Products 3,498 2,988 17.07 Distribution of third party sales 1,937 1,465 32.22 Total Turnover 5,435 4,453 22.05 Cash Flow During the period £1,120,000 of net funds were raised through flotation on theAlternative Investment Market. The positive EBITDA provided cash for investmentin both R&D projects and enhancing our sales and distribution channels.Increased R&D expenditure together with increased working capital led to a netcash outflow from operating activities of £248,000 (2004: inflow £328,000).Capital expenditure decreased to £82,000 (2004: £419,000), this was offset by anincrease in cash flow due to acquisitions of £760,000 (2004: £198,000). Thesetogether with net interest received of £7,000 (2004: £3,000) led to an increaseof cash of £357,000 and a net cash position of £447,000 as at 31st March 2005. Balance Sheet The Group's fixed assets at 31st March 2005 were £1,684,000 (2004: £892,000),which consisted of tangible assets of £603,000, intangible assets of £1,065,000and investments of £16,000. The intangible assets principally relate to thepatents and intellectual property acquired on acquisitions. Stocks have increased to £763,000 (2004: £435,000) and debtors have increased to£1,271,000 (2004: £895,000) while current creditors have increased to £1,508,000(2004: £1,315,000). Creditors due after one year have increased to £582,000(2004: £171,000), the main increase in creditors is the 900,000 euro loan forthe acquisition of SBA, Finland. Paul Hailes Finance Director Consolidated Profit and Loss Account For the year ended 31 March 2005 2005 2004 £ £ TurnoverContinuing operations 5,255,239 4,453,070 Acquisitions in year 179,406 - 5,434,645 4,453,070 Cost of sales (2,043,024) (1,659,097)Gross profit 3,391,621 2,793,973 Distribution costs (867,972) (560,638)Administrative expenses (2,197,651) (2,095,427)Other operating income - 3,800 OPERATING PROFIT/(LOSS)Continuing operations 357,968 141,708 Acquisitions in year (31,970) - 325,998 141,708Exceptional item - diminution in value of goodwill in associate (23,351) (277,206)Share of operating loss in associates (16,297) (26,990) Total operating profit/(loss) 286,350 (162,488) Interest receivable 7,440 2,604Share of interest receivable in associates 280 65Amounts written off investments - 137,495 294,070 (22,324) Interest payable and similar charges (23,956) (11,795) PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 270,114 (34,119) Taxation (57,831) (1,857) PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 212,283 (35,976) Dividends - 6,718 RETAINED PROFIT/(LOSS) FOR THE FINANCIAL YEAR 212,283 (42,694) EARNINGS PER SHARE Basic 6.440p 74.273p Diluted 6.440p 74.273p Statement of total recognised gains and losses For the year ended 31 March 2005 2005 2004 £ £ Profit/(loss) for the financial year 212,283 (42,694) Total recognised gains and losses relating to the year 212,283 (42,694)Foreign exchange translation differences on foreign currency net investmentin subsidiaries 1,113 - Total recognised gains and losses since the last financial statements 213,396 (42,694) Consolidated Balance Sheet As at 31 March 2005 2005 2004 £ £ FIXED ASSETSIntangible assets 1,065,355 226,055Tangible assets 603,269 637,682Investments 234 -Investment in associates 15,286 28,148 1,684,144 891,885 CURRENT ASSETSStocks 762,602 435,042Debtors due within one year 1,271,256 895,214Cash at bank and in hand 446,675 100,160 2,480,533 1,430,416CREDITORSAmounts falling due within one year (1,508,285) (1,314,607) NET CURRENT ASSETS 972,248 115,809 TOTAL ASSETS LESS CURRENT LIABILITIES 2,656,392 1,007,694 CREDITORSAmounts falling due after more than one year (581,601) (171,258) 2,074,791 836,436 PROVISIONS FOR LIABILITIES AND CHARGESOther provisions 271,272 276,523Share of associates net liabilities 14,310 16,365Deferred income 28,256 32,195 1,760,953 511,353 CAPITAL AND RESERVESCalled up share capital 266,913 196,666Share premium account 965,957 -Other reserves 582,999 582,999Profit and loss account 177,090 (36,306) 1,992,959 743,359Own shares (232,006) (232,006) SHAREHOLDERS' FUNDS 1,760,953 511,353 Consolidated CASH flow statement For the year ended 31 March 2005 2005 2004 £ £ Net cash flow from operating activities (248,230) 327,736 Returns on investments and servicing of finance (16,516) (9,191) Taxation (68,268) (83,954) Capital expenditure and financial investment (82,150) (418,791) Acquisitions (760,380) (198,178) (1,175,544) (382,378) Equity dividends paid - 20,722 CASH OUTFLOW BEFORE FINANCING (1,175,544) (403,100) Financing 1,532,268 219,409 INCREASE/(DECREASE) IN CASH IN THE YEAR 356,724 (183,691) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2005 2004 £ £ Increase/(decrease) in cash in the year 356,724 (183,691) Net cash inflow from bank loans (536,644) (248,647)Cash outflow/(inflow) in respect of hire purchase 40,580 (10,061) MOVEMENT IN NET DEBT IN THE YEAR (139,340) (442,399) NET (DEBT)/FUNDS AT 1 APRIL 2004 (218,121) 224,278 NET DEBT AT 31 MARCH 2005 (357,461) (218,121) Notes to the Financial Statements For the Year Ended 31 March 2005 1. TURNOVER The turnover and profit before tax are attributable to the one principalactivity of the group. An analysis of turnover by destination is given below: 2005 2004 £ £ United Kingdom 1,845,805 1,718,872Overseas 3,588,840 2,734,198 5,434,645 4,453,070 2. EARNINGS PER ORDINARY SHARE The calculations of earnings per share are based on the following profits andnumbers of shares. 2005 2004 £ £ Profit for the financial year 212,283 103,735 No No Weighted average no of shares: For basic earnings per share 3,296,513 139,666 For diluted earnings per share 3,296,513 139,666 3. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS GROUP 2005 2004 £ £ Profit for the financial year 212,283 (35,976)Dividends - (6,718)Foreign exchange translation differences on foreign currency net investment 1,113 -in subsidiaries 213,396 (42,694)Issue of shares 1,036,204 - Net addition to funds 1,249,600 (42,694) Transfer of non-equity shares to equity 57,000 - Opening equity shareholders' funds 454,353 729,053Consideration paid for the company's own shares - (232,006) Opening equity shareholders' funds as restated 454,353 497,047 Closing shareholders' equity funds 1,760,953 454,353 NON-EQUITY SHAREHOLDERS' FUNDS Opening shareholders' non-equity funds 57,000 57,000Non-equity shares converted to equity (57,000) - Closing shareholders' non-equity funds - 57,000 TOTAL SHAREHOLDERS' FUNDS 1,760,953 511,353 At 31 March 2005, the Immunodiagnostics Systems Holdings plc had an investmentin its own shares via the Employee Benefit Trust following a share for shareexchange with its subsidiary Immunodiagnostics Systems Limited the company, andit is now deemed to be the sponsoring employer company. The number of ownshares held at 31 March 2005 was 446,250 ordinary shares (2004 - 21,466 sharesin Immunodiagnostics Systems Limited). The market value of the shares at theyear which had not unconditionally vested in employees was £307,912. COMPANY 2005 £ Profit for the financial period 6,154Issue of shares 1,232,870 Net addition to funds 1,239,024Consideration paid for the company's own shares (232,006)Opening shareholders' equity funds - TOTAL SHAREHOLDERS' FUNDS 1,007,018 4. CASH FLOWS a Reconciliation of operating profit to net cash inflow from operating activities 2005 2004 £ £ Operating profit 325,998 141,708Amortisation of intangible fixed assets 101,828 97,946Depreciation of tangible fixed assets 124,071 131,832Loss/(profit) on disposal of fixed assets 88 (424)Amounts written off loans - 137,495Amortisation of government grants (3,939) (6,345)Increase in stocks (285,896) (160,292)Increase in debtors (146,154) (144,743)(Decrease)/increase in creditors (358,975) 168,912Decrease in provisions (5,251) (38,353) Net cash (outflow)/inflow from operating activities (248,230) 327,736 b Analysis of cash flows for headings netted in the cash flow Returns on investment and servicing of finance Interest received 7,440 2,604Interest paid (21,356) (9,738)Interest element of hire purchase (2,600) (2,057) Net cash outflow from returns on investments and servicing of finance (16,516) (9,191) Taxation Taxation (68,268) (83,954) Capital expenditure and financial investment Payments to acquire intangible fixed assets (31,017) (3,952)Payments to acquire tangible fixed assets (92,426) (604,861)Receipts from sale of fixed assets 6,000 190,022Grant received 35,293 - Net cash outflow for capital expenditure and financial investment (82,150) (418,791) Acquisitions Purchase of subsidiary undertakings (750,731) -Cash acquired with subsidiary 35,317 -Acquisition of investments in associated undertakings (44,966) (198,178) Net cash outflow from acquisitions (760,380) (198,178) Financing 2005 2004 £ £ Issue of shares 1,036,204 -New bank loans 624,957 278,000Repayment of bank loans (88,313) (29,353)Capital element of hire purchase (40,580) (29,238) Net cash inflow from financing 1,532,268 219,409 c Analysis of net debt At 1 Cash flows Other changes At 31 Apr 2004 Mar 2005 £ £ £ £ Cash in hand and at bank 100,160 346,515 - 446,675Overdrafts (12,773) 10,209 - (2,564) 87,387 356,724 - 444,111 Debt due within 1 year (93,252) 93,252 (206,160) (206,160)Debt due after 1 year (155,395) (629,896) 206,160 (579,131)Hire purchase agreements (56,861) 40,580 - (16,281) (305,508) (496,064) - (801,572) Total (218,121) (139,340) - (357,461) 6. These results which have been extracted from the full audited accounts forthe year to 31 March 2005 do not amount to full accounts within the meaning ofSection 240 of the Companies Act 1985. 7. The auditors have issued an unqualified report in the full accounts whichwill be distributed to shareholders and delivered to the Registrar of Companiesin due course. The comparative figures for the year to 31 March 2004 have beentaken from but do not constitute the Company's statutory financial statementsfor that financial year. Those financial statements have been reported on bythe auditors and delivered to the Registrar of Companies. The report of theauditors was unqualified. Further copies of the Preliminary Results areavailable at the Company's Registered Office: Immunodiagnostic Systems Holdings PLC 10 Didcot Way Boldon Business Park Boldon Tyne & Wear NE35 9PD This information is provided by RNS The company news service from the London Stock Exchange