21 Apr 2009 07:00
| Press Release | 21 April 2009 |
LIDCO GROUP Plc
("LiDCO" or the "Company")
Final results for the year to 31 January 2009
LiDCO (AIM:LID), the cardiovascular monitoring company, today announces its Preliminary Results for the year ended 31 January 2009.
Financial Highlights:
| Revenue up 12% at £4.53m (2007/8: £4.05m) | |
| Product margins maintained at 81% (2007/8: 81%) | |
| Loss from operations reduced by 11% to £1.80m (2007/8: £2.01m) | |
| Loss per share reduced to 1.16p (2007/8: 1.50p) | |
| Cash balance £0.49m (2007/8: £2.23m) | |
| Loan facility replaced with combined overdraft and invoice financing facility with a maximum availability of £1.25m |
Operational Highlights:
| Highest single year increase in installed monitor base. LiDCOplus & rapid monitors installed base up 28% to 1,510 | |
| Successful launch of the LiDCOrapid; 279 monitors sold or placed in first ten months | |
| Follow-on grant of Japanese sales and marketing license and expansion of co-marketing agreement signed with Becton Dickinson | |
| New distributors added for 18 territories. LiDCO products are now available in 47 countries worldwide | |
| Continued progress towards profitability and significant increase in level of recurring revenue | |
| 326 monitors sold or placed in the period up 116% - (2007/8: 151) | |
| Monitor revenue steady at £1.96m (2007/8: £1.93m) | |
| Disposables income growth in all territories up 26% from £1.99m to £2.50m | |
| Selected as technology for two US multi-centre patient outcome studies |
Commenting on the results Terry O'Brien, Chief Executive, said: "This has been a key year for the Group and I am delighted to report that we have achieved what we set out to do at the start of the period. The successful launch of the LiDCOrapid has given us access to the potential US$800 million high-risk surgery market and has significantly enhanced our ability to grow our distribution partners and improve our routes to market. We have doubled the rate of placing monitors and have seen significant increases in recurring revenue in all territories. The foundations are now in place to increase revenues and earnings in the coming years. We have made solid, sustainable progress and are confident that in the coming year we will take our proportionate share of the growing minimally invasive hemodynamic monitoring market."
The investor presentation "LiDCO's Preliminary Results - twelve months ended 31 January 2009" will be available from today on the LiDCO website (www.lidco.com).
For further information, please contact:
| LiDCO Group Plc | |
| Terry O'Brien (CEO) | Tel: +44 (0)20 7749 1500 |
| Paul Clifford (Finance Director) | |
| Theresa Wallis (Chairman) | www.lidco.com |
| FinnCap | |
| Geoff Nash / Marc Young / Stephen Norcross | Tel: +44 (0)20 7600 1658 www.finncap.com |
Media enquiries:
| Abchurch | |
| Heather Salmond / Stephanie Cuthbert | Tel: +44 (0) 20 7398 7718 |
| stephanie.cuthbert@abchurch-group.com | www.abchurch-group.com |
About LiDCO Group Plc
LiDCO is a supplier of minimally invasive hemodynamic monitoring equipment and disposables to hospitals. These products are used primarily for the management of hospital patients requiring critical care or at major cardiovascular risk. LiDCO's computer-based technology significantly reduces the complications (particularly infections) and costs associated with major surgery. The technology was invented in the Department of Applied Physiology based at St Thomas' Hospital, London. LiDCO is based in the UK and its shares are traded on AIM. For more information please see www.lidco.com.
The Company's manufacturing facility is in Hoxton, London, and its current products are:
* LiDCOplus is a computer-based platform monitor used in the Intensive Care Unit for real-time continuous display of hemodynamic parameters including cardiac output, oxygen delivery and fluid-volume responsiveness (PPV% and SVV%)
* LiDCOrapid: our new cardiac output monitor designed specifically for use in the Operating Theatre for fluid and drug management at the point of care. The monitor features many clinical benefits. These enable acute-care physicians to get accurate and immediate feedback on the patient's fluid and hemodynamic status - a key measure of overall well-being during and after surgery. These benefits are:
| Early and rapid warning of change | |
| Clear indication of therapeutic route: fluid or drug | |
| Quantification of hemodynamic response, particularly stroke volume | |
| Permits more effective delivery of fluids - the right amount at the right time | |
| Advanced hemodynamic care has been shown to contribute to: - Reduced morbidity and complications - Reduced length of stay - Reduced overall cost of care |
* LiDCO single-patient-use disposables used in conjunction with the LiDCOplus and LiDCOrapid Monitors.
* LiDCOview: an easy-to-use graphical display of historical LiDCOplus hemodynamic data. Both clinical researchers and routine users can view beat-to-beat hemodynamic data collected with the LiDCOplus. LiDCOviewSE is the standard version of this tool and is available for free, allowing anyone to download and access data from the LiDCOplus. LiDCOviewPRO is the Professional version, allowing users to analyse, export and report the LiDCOplus data. A free trial of LiDCOviewPRO is available for evaluation purposes prior to purchase
LiDCO Distribution Network:
The Company sells direct to hospitals in the UK, and elsewhere predominantly through a worldwide network of speciality critical care and anesthesia distributors.
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
This last year has been highly significant for LiDCO, with the Company successfully achieving its goals, which were to:
| 1 | continue to grow income and progress toward profitability |
| 2 | strengthen the product range and address the surgery market |
| 3 | accelerate the growth of the installed user base |
| 4 | significantly broaden the network of distributors |
Broadening LiDCO's product range - the launch of the LiDCOrapid
One year on from the launch of the LiDCOrapid I am delighted to report that there has been an excellent initial market acceptance. The launch of this product allows LiDCO, and our distribution partners, to address an additional market that we estimate to be potentially worth US$800m per annum. From April 2008 to January 2009, 279 LiDCOrapid Monitors have been sold or placed with distributors and hospital customers. The number of patients undergoing high risk surgery is higher than the numbers of patients admitted to the intensive care unit, thus the surgical market represents the biggest potential revenue stream for our technology.
The Company now has products to access two markets - the intensive care patient with the LiDCOplus technology and the high-risk surgery patient with the LiDCOrapid. Accordingly, looking at the last year we have seen the biggest yearly increase in our monitor installed-base since we started trading. Strong demand for our new surgery product means that our installed base of both types of our monitors stands at 1,510 units at the year-end.
Broadening our network of distributors - improving the channels to market
LiDCO's strategy is to increase sales by predominantly using a distribution route to market, rather than increasing its own sales force. During the year we have added 13 new distributors, covering 18 countries and have considerably increased the number of sales personnel now selling our technology. As planned, we have added distributors in all our major markets including North America, Continental Europe, the Middle East and Asia. Our distribution partners are major players in their respective markets and LiDCO products are now available in 47 countries worldwide. Selling our technology is attractive to distributors due to the market growth rate, potential and product margin.
The launch of the LiDCOrapid significantly increased the market potential for our products. As anticipated, we then saw an increased interest in selling or co-promoting our products from a number of distributors in new territories and from a major corporation (Becton Dickinson). With the expansion of our product line and the growing global interest in better fluid management and targeted oxygen delivery, our sales partners are showing an increasing commitment to investing the time and resources necessary to develop their respective markets. Following the launch of the LiDCOrapid and appointment of the new distributors in the first half of the year, we saw second half revenues increase over the first half by 24%. Distributors accounted for 76% of the 279 LiDCOrapid Monitors sold or placed since April. We anticipate an increasing distribution sales revenue contribution as the full effect of the increased distributor appointments starts to be seen.
One of the most important appointments made was in July when we announced that LiDCO had signed an exclusive distribution agreement with KOL Bio Medical Instruments (KOL) for the sale of the LiDCOrapid Monitor in the eastern side of the US. As a result, including our own direct sales force, we now have access to around 40% of US hospitals. KOL is establishing a strong pipeline of customers.
More recently, in April we announced a significant expansion of our existing marketing collaboration with Becton Dickinson ("BD"), a multi-billion dollar global medical technology company. BD has made an upfront payment for a license to sell (following registration and reimbursement) the LIDCOrapid in Japan. In addition, we have expanded our co-marketing arrangements with BD beyond the original UK agreement, to cover a number of export territories. This marketing partnership aims to enhance sales coverage for BD's and LiDCO's product lines. BD is one of the world's biggest global suppliers of medical disposables to the surgery and critical care market. BD is a very important and influential corporate partner for us. The reputation of the LiDCO brand amongst our customers was a key factor in BD's decision to extend this exclusive collaboration. Their increased commitment to working with us is reflective of a growing belief within the medical device industry that hemodynamic monitoring is a market with strong growth potential.
Market trends / Prospects for sales
The worldwide market for hemodynamic monitoring products continues to experience significant growth. We estimate sales revenues (worldwide) for minimally invasive hemodynamic monitoring products grew by 28% from £68m to £87m during 2008. This followed growth of 33% in reported revenues in the prior year. The move away from the use of the older, invasive catheter products towards the newer, less invasive devices reflects a shift in attitude of both hospitals and insurers. Dr David Green at King's College Hospital, London recently reported to the Portuguese national anesthetists' meeting that he had been able to more than halve his use of central venous catheters from 85% to 35% of his high-risk surgery patients by using the LiDCOrapid. LiDCO is therefore well placed to benefit from the USA's Medicare decision to no longer pay hospitals for the cost of treatment of catheter and surgery related complications and infections. Not only can the technology be used to reduce the requirement to insert a central catheter for fluid management - we have also demonstrated that use of oxygen delivery targeting using LiDCOplus technology on high-risk surgery patients can reduce:
| complications by more than one third1 | |
| costs by £4,800 on average per patient | |
| hospital stay per patient by an average of 12 days |
These benefits have been estimated to save a single hospital up to £2m per year.
Although the world economy is in a significant downturn, healthcare is one of the most defended expenditures made by developed societies. Healthcare expenditure in the USA rose to $2.4 trillion in 2008 according to figures released by the Centers for Medicare and Medicaid Services (CMS). This represents a 6.1% increase, outpacing economic growth in the US, which was 3.5% in 2008. Healthcare expenditure is projected (March 2009, Clinica) to increase by 5.5% in 2009. Our expectation is that, despite recessionary pressures, the hemodynamic monitoring market will continue to grow in 2009. Hospitals are increasingly looking to improve profitability through improved efficacy of treatments and reduced complications. Patients with complications tend to require extended hospital stay and this costs a disproportionate amount. However, while anticipating continued growth for the minimally invasive hemodynamic monitoring market, we are seeing a significant shift regarding how hospitals propose to pay for the adoption of this technology. Revenue budgets will be progressively more used, as capital equipment purchase budgets will be put on hold. We have therefore prudently made an allowance for this trend in our sales forecasting. There will be significantly more product placements (where the monitor is given to a hospital at no cost but the disposables incur a higher charge) and use of revenue budget streams this year, than has been the case in the last few years. We started to see this happening towards the end of 2008 and this will impact on capital sales revenue in our direct and distributor markets, particularly in the USA.
The strong LiDCO brand strengths of safety, minimally invasive monitoring, accuracy and ease-of-use, are increasingly being accepted by the clinical community. This is evidenced by the choice of our technology for use in key outcome studies and the continued expansion of our customer base. With the launch of the LiDCOrapid and expansion of distribution partners we have the products, structure and sales resources to progress further during 2009.
1 Early goal-directed therapy after major surgery reduces complications and duration of hospital stay. A randomised, controlled trial, Critical Care 2005, 9:R687-R693 doi:10.1186/cc3887
Sales and trading
Revenues were up 12% to £4.53m (2007: £4.05), this increase understates the much more pronounced growth in the monitor installed base and underlying disposables income growth. Disposable revenue growth and higher numbers of monitors placed have been driven by the launch of the LiDCOrapid and by our expanded distribution network. The focus necessary to launch and promote the LiDCOrapid had a knock-on effect on the growth and capital revenues from sales of our ICU product - the LiDCOplus Monitor. As a result the LiDCOplus Monitor installed base continued to grow, but at a slower rate compared to 2008. Due to the price differential between the LiDCOrapid Monitor and the more expensive LiDCOplus Monitor, the modest increase in monitor revenues (1%) across the period belies the considerable increase (up 116% at 326 units compared with 151 units in 2007/8) in units sold and placed. Better, and still emerging, evidence of the underlying good commercial progress was seen in the associated disposables income which was up 26% to £2.5m (2007/8 £1.99m), as smart card income from the LiDCOrapid base starts to augment existing LiDCOplus sensor income.
Business Review - Summary Table
| Year to 31 Jan 2009 | Year to 31 Jan 2008 | Increase/ (decrease) | Increase/ (decrease) | |
| Revenue by type (£'000) | ||||
| - Monitors | 1,958 | 1,934 | 24 | 1% |
| - Sensors/cards | 2,495 | 1,986 | 509 | 26% |
| - Fee per Use & Rentals | 78 | 78 | (0) | 0% |
| - Licence Fees | 0 | 53 | (53) | (100)% |
| - Total Revenues | 4,532 | 4,051 | 608 | 12% |
| Monitors (Units) Sold Placed | 326 310 16 | 151 150 1 | 175 160 15 | 116% |
| Sensor and Fee per Use Sales (Units) | 30,125 | 26,081 | 4,044 | 16% |
| Installed Base (year end) | 1,510 | 1,184 | 326 | 28% |
These results underplay the full impact that the launch of the LiDCOrapid and increase in the distributor sales force are likely to have in the future on disposables sales. We anticipate that our products will exhibit higher disposable usage, as the monitors are transferred from distributors and ultimately into full use in hospitals. LiDCOrapid Smart Card sales should produce a fast growing and secure income stream. LiDCO is well placed to benefit from the shift away from invasive catheter-based hemodynamic monitoring. We now have the sales reach to ensure we are more adequately represented when hospitals are making this decision.
Geographic segmental sales reporting
Revenues were up by between 18 - 25% in the UK, Continental Europe and the Rest of the World territories. Disposables revenues were up in all territories by between 14 - 56%. All territories showed significant increases in the LiDCO monitor installed base. However, in the USA revenues were down, despite a rise of 14% in recurring disposables income. This was a consequence of hospitals acquiring the LiDCOrapid, rather than the more expensive LiDCOplus Monitor, and simultaneously more customers requiring monitor placements, rather than exclusively following a capital purchase route. This resulted in a reduction in reported capital sales revenues (£0.46m vs. 2007/8 £0.75m). Despite this revenue reduction, in the USA the installed base increased more strongly than in the prior year, by 77 monitors, which was almost double (up 93%) the increase seen in the prior year.
We are expecting good sales revenue growth in all territories during 2009, as the installed base begins to contribute further to disposable revenues augmented by an additional income stream from our new distributors.
UK
| Total sales revenue up 25% to £2.16m (2007/8: £1.72m) | |
| Monitor sales revenue up 36% to £0.71m (2007/8: £0.52m) | |
| Sensor, Smart Card and fee for use sales up 20% to £1.45m (2007/8: £1.20m) | |
| Installed base up by 35 (15%) to 266 (2007/8: 231) |
USA
| Total sales revenue down by 17% to £1.03m (2007/8: £1.24m) | |
| Monitor sales decreased by 39% to £0.45m (2007/8: £0.74m) | |
| Sensor, smart card, fee for use sales up 14% at £0.57m (2007/8: £0.50m) | |
|
| Installed base up by 77 (16%) to 546 (2007/8:469) |
Continental Europe
| Total sales revenue up 25% to £1.09m (2007/8: £0.87m) | |
| Monitor sales up 8% to £0.59m 2007/8: £0.55m) | |
| Sensor, smart card sales up 56% to £0.50m (2007/8: £0.32m) | |
| Installed base up by 158 (53%) to 458 (2007/8: 300) |
Rest of World & Other Income
| Total sales revenue up 18% to £0.25m (2007/8: £0.21m) | |
| Monitor sales up 70% to £0.20m (2007/8: £0.12m) | |
| Sensor and smart card sales up 26% to £50,317 (2007/8: £40,000) | |
| No license fees income in the period (2007/8: £52,000) | |
| Installed base up by 56 (30%) to 240 (2007/8: 184) |
FINANCIAL REVIEW
Operating results
Turnover increased by 12% to £4.53m (2007/08: £4.05m). Operating losses decreased by 11% to £1.8m (2007/08: £2.01m) and the loss per share was reduced to 1.16 pence (2007/08: 1.50 pence).
The installed base of monitors increased in the year by 326 units (2007/08: 151 units) to 1,510 units (2007/8: 1,184 units), representing an increase of 28%. Similarly the sales of disposables increased by 26% from £1.99m to £2.50m.
The average product margin across all products against external procurement costs has been maintained at 81%. For LiDCOplus monitors this product margin improved slightly to 80% albeit on lower volumes than usual due to displacement by the LiDCOrapid. The product margin on LiDCOplus sensors was maintained at 87%. The strategy of selling the new LiDCOrapid Monitor for less than half the price of the LiDCOplus Monitor came with a margin reduction although this was still very respectable at 70%. Conversely, the LiDCOrapid Smart Card produces the highest product margin, which bodes well for the future as we anticipate significant volume growth in this area. The overall gross margin on sales after allowing for Med One costs was 67%, up from 64% in 2007/08. Med One payments in the year amounted to £587,000 (2007/08: £444,000).
Sales of LiDCOrapid smart cards are expected to be an important and growth revenue stream in future years. It is far too early to establish the average smart card usage per monitor but within the months since launch, usage rates in individual hospitals have been as high as 11 per month in the UK. During the year, whilst increasing turnover by 12% and incurring the costs of introducing the LiDCOrapid, the administrative and distribution expenses increased by just £200,000 (4%) from £4.62m to £4.82m and employee numbers remained static at 39.
Taxation
As the Group is still at the pre-profit stage there was no tax charge for the year and in addition the Group has a deferred tax asset of £6m although this has not been recognised in the accounts. In the UK, the Group qualifies for research and development tax credits, which are estimated as £120,000 in 2008/09 and are shown in the income statement.
Cash, financing and working capital
The net cash outflow of £1.8m before financing activities was the same as the operating loss. There were no untoward movements in working capital items although year end stock increased by £214,000 from launching the LiDCOrapid as an additional mainstream product during the year. Stock at the year end was £1.05m and as a percentage of turnover increased slightly from 21% to 23%. Expenditure on fixed assets in the year was broadly similar to the charge for depreciation and amortization.
The Laurus US$ convertible loan facility was repaid at the end of its three year term in August 2008. On repayment, the amount outstanding was £553,000 and was replaced with facilities from Royal Bank of Scotland. The facility with Royal Bank of Scotland comprises a £250,000 overdraft and an invoice discount financing facility of up to £1m although this latter facility is geared to the outstanding sales invoices at any time and has yet to be made fully available.
At the year end the cash balances amounted to £487,000. Together with the facilities detailed above the Board anticipates that this should be sufficient to see the Company through to profitability and positive cashflow. However the Board consider that given the current credit environment, reducing reliance on such banking facilities would be prudent and is therefore considering further strengthening the balance sheet if and when it is appropriate to do so.
OUTLOOK and PROSPECTS
We are pleased to have more than doubled the rate of selling/placing monitors and have seen significant increases in recurring revenue in all territories. The foundations are now in place to significantly increase revenues and earnings in the coming years. We have made solid, sustainable progress and are confident that in the coming year we will take our proportionate share of the minimally invasive hemodynamic monitoring market. We look to future with confidence.
PRODUCT DEVELOPMENT
The product development activities in 2008 centred around existing product support and enhancements, along with the market expansion to surgery with the launch of the LiDCOrapid. The broad development aims for 2009 are not only to further refine and differentiate the LiDCOrapid user interfaces, but also improve and simplify customer use of our technology. This includes making it easier to set up an interface with the patient (universal pressure waveform module) and further work on language localization to simplify interpretation and use.
LiDCOrapid user interface enhancements
Since launch of the LiDCOrapid, customer feedback has been very positive regarding the product's ease of setup, user interface and utility. In line with our strategy of continuous product improvement our aim is to further evolve this product by adding more user options, without adding complexity to setup and use. I am pleased to say that a follow-on software release containing additional user interface improvements is at an advanced stage and planned for release in the first half of 2009. These features include longer display periods for the fluid monitoring parameters and the addition of history and charting screens further differentiating the product from the competition and enhancing functionality.
Universal pressure waveform module
Easier access to arterial blood pressure data should allow fuller market penetration for both of our monitoring products. Development of a universal waveform acquisition module simplifies the acquisition of the raw arterial data stream. This will allow the use of our products in situations where access to the blood pressure waveform is difficult, or involves the additional purchase of expensive cabling, or where on occasion the primary patient monitor does not provide the necessary analogue arterial pressure output. For example this module will allow the LiDCOplus and LiDCOrapid to be connected to patients in new locations of use, such as the trauma department where existing primary patient monitors may not have the arterial pressure analogue output function we require. This project was initiated in 2008 and has progressed well. It is planned for release in late 2009/early 2010.
LiDCOview & live
LiDCOview Pro continues to be a successful tool for customers involved in research and training on hemodynamic monitoring. We are seeing increasing numbers of customers becoming familiar with our proprietary software.
LiDCOlive has been developed to prototype demonstration stage. We believe that this product will be useful for clinicians in both the intensive care unit and operative room. Customer feedback is always very positive and the concept of remote monitoring is easy to convey. LiDCOlive will require an IT investment by hospitals and we shall be seeking to partner with a few hospitals with the aim of developing and demonstrating a business case for its adoption.
Development of supportive clinical & business cases
Our ambition is to be able to present customers with a compelling clinical and business case linked to the use of our products. To that end improved outcomes have already been demonstrated in two different intensive care populations:
| in a post-operative surgical intensive care setting, where treated patients' hospital stay was reduced by 12 days and complications by more than one third; | |
| in severely ill patients with shock and sepsis, where the use of LiDCO technology substantially reduced mortality to 12% of patients treated, compared with 32% in the invasive catheter treated group. |
In the Interim announcement I was pleased to report that LiDCO had been selected as the technology for use in two further significant multi-centre outcome trials in the USA. Both studies will be coordinated by doctors working at the University of Pittsburgh and will use LiDCOplus monitors. They are summarised below:
Prospective trial improving outcomes in high-risk surgery
The first study is a 200 patient randomised controlled trial looking at the application of oxygen delivery mediated, goal-directed therapy in high-risk surgery patients. This takes the treatment protocol previously established in the original St George's hospital trial and goes one step further. Patients in the trial will be hemodynamically managed both during and after surgery with the LiDCOplus technology.
USA "Monitor" multi- centre randomised transplantation donor optimization study
The second trial for which we have been chosen is in the field of organ transplantation. The trial has been funded by the US Government and is known as MOnIToR (Monitoring Organ donors to Improve Transplantation Results). The background to this study is that despite efforts to increase organ donation, there remains a critical shortage in both the numbers of organ donors and the numbers of organs procured per donor. Early research has shown that donors who are adequately fluid resuscitated with LiDCO's technology provided a significantly higher number of organs per donor (3.7 compared with 2) that were deemed suitable for transplant. Donors who had inadequate volume resuscitation had a higher inflammatory response and patients transplanted with organs from poorly resuscitated patients had higher readmission rates back to hospital after surgery.
Significant funding has now been awarded to the University of Pittsburgh in order to conduct a much expanded USA multi-centre randomised transplantation donor optimisation study, using our technology in 960 subjects. In this study donors will be resuscitated conventionally, or with a protocol targeting fluids and cardiac output using the LiDCOplus Monitor. Success will be judged as a 0.5 increase in the numbers of organs per donor transplanted as compared to the control group. Nevertheless, if only successful in harvesting 0.5 extra organs per donor and implemented throughout the USA, this would represent a 17% increase in the numbers of organs available - from around 22,500 to 26,250 per annum.
REGULATORY AFFAIRS and QUALITY
LiDCO was successfully audited against the requirements of ISO13485:2003, ISO9001:2000, the EC Medical Devices Directive and the Health Canada Medical Device Regulations.
In October 2008, U.K. Medicines & Healthcare products Regulatory Agency carried out a Statutory Pharmacovigilance Inspection of LiDCO Ltd. All LiDCO's responses to the findings were to the Inspector's satisfaction.
Health Canada issued the Medical Device Licence for the LiDCOrapid and the Australian TGA listed the LiDCOrapid on the Australian Register of Therapeutic Goods.
Terry O'Brien
Chief Executive Officer
21 April 2009
CONSOLIDATED INCOME STATEMENT
For the year ended 31 January 2009
| Year ended 31 January 2009 £'000 | Year ended 31 January 2008 £'000 | |
| Revenue Cost of sales | 4,532 (1,511) | 4,051 (1,442) |
| Gross profit Distribution costs Administrative expenses | 3,020 (107) (4,709) | 2,609 (93) (4,526) |
| Loss from operations Finance income Finance expense | (1,796) 57 (31) | (2,010) 49 (25) |
| Loss before tax Income Tax | (1,770) 120 | (1,986) 120 |
| Loss for the year attributable to equity holders of the parent | (1,650) | (1,866) |
| Loss per share (basic and diluted) (p) | (1.16) | (1.50) |
All transactions arise from continuing operations.
There were no recognised gains or losses other than the loss for the financial year.
CONSOLIDATED Balance Sheet
At 31 January 2009
| 2009 £'000 | 2008 £'000 | |
| Non-current assets Property, plant and equipment Intangible assets | 671 746 | 833 747 |
| 1,417 | 1,580 | |
| Current assets Inventory Trade and other receivables Current tax Cash and cash equivalents | 1,053 1,686 120 487 | 839 1,329 120 2,234 |
| 3,346 | 4,522 | |
| Current liabilities Trade and other payables Deferred income Borrowings | (905) (37) (618) | (707) (41) (563) |
| (1,560) | (1,311) | |
| Net current assets | 1,786 | 3,211 |
| Total assets less current liabilities | 3,203 | 4,791 |
| Equity attributable to equity holders of the parent Share Capital Share premium Merger reserve Retained earnings | 710 22,531 8,513 (28,575) | 710 22,550 8,513 (27,016) |
| Total equity | 3,179 | 4,757 |
| Non-current liabilities Finance lease liability | 24 | 34 |
| Total non-current liabilities | 24 | 34 |
| Total equity and non-current liabilities | 3,203 | 4,791 |
consolidated Cash flow Statement
For the year ended 31 January 2009
| Year ended 31 January 2009 £'000 | Year ended 31 January 2008 £'000 | |
| Operating loss Depreciation and amortisation charges Share based payments (Increase)/decrease in inventories (Increase)/decrease in receivables Increase/(decrease) in payables Finance expense Income tax credit received | (1,796) 688 91 (214) (357) 294 (31) 121 | (2,010) 611 88 241 (50) (96) (25) 142 |
| Net cash outflow from operating activities | (1,204) | (1,099) |
| Cash flows from investing activities Purchase of property, plant & equipment Purchase of intangible fixed assets Interest received | (209) (446) 57 | (170) (467) 49 |
| Net cash used in investing activities | (598) | (588) |
| Net cash outflow before financing | (1,802) | (1,687) |
| Cash flows from financing activities Issue of ordinary share capital Convertible loan repayment Invoice discounting financing facility | - (553) 364 | 1,945 502 - |
| Net cash (outflow)/inflow from financing activities | (189) | 2,447 |
| Net (decrease)/increase in cash and cash equivalents | (1,991) | 760 |
| Opening cash and cash equivalents | 2,234 | 1,474 |
| Closing cash and cash equivalents | 243 | 2,234 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the year ended 31 January 2009
| Share capital | Share premium | Merger reserve | Retained earnings | Total equity | |
| At 1 February 2007 Issue of share capital Share based payment expense Loss and total recognised loss for the year | 592 118 - - | 20,723 1,827 - - | 8,513 - - - | (25,240) - 90 (1,866) | 4,588 1,945 90 (1,866) |
| At 31 January 2008 Issue of share capital Share based payment expense Loss and total recognised loss for the year | 710 - - - | 22,550 (19) - - | 8,513 - - - | (27,016) - 91 (1,650) | 4,757 (19) 91 (1,650) |
| At 31 January 2009 | 710 | 22,531 | 8,513 | (28,575) | 3,179 |
The share premium account represents the excess over the nominal value for shares allotted. The charge to the share premium account is in respect of costs relating to the issue of shares in the year ended 31 January 2008.
The merger reserve represents a non distributable reserve arising from historic acquisitions.
NOTES TO THE FINANCIAL STATEMENTS
NATURE OF THE FINANCIAL INFORMATION
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and under the historical cost convention and were approved by the Board on 20 April 2009. They are presented in sterling, which is the functional currency of the parent company. The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
These results are audited, however the financial information does not constitute statutory accounts as defined under section 240 of the Companies Act 1985. The auditors report is modified to include an emphasis of matter paragraph on going concern. The financial information for the year ended 31 January 2008 has been derived from the Group's statutory accounts for that year, as filed with the Registrar of Companies. The auditors' report on the statutory accounts for the year ended 31 January 2008 was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985.
The financial statements have been prepared on the going concern basis, which assumes that the Group will have sufficient funds to continue in operational existence for the foreseeable future. The Group has continued to invest in the development of its operations and in particular its direct and indirect sales channels during the year and in a new product offering. As a result the Group has continued to trade at a loss during the year ended 31 January 2009.
The Group finances its operations through a mixture of shareholders funds' and loan facilities. During the year a 3 year US dollar based convertible loan facility came to the end of its term and was replaced by a combined sterling based overdraft and invoice discount financing facility. The directors have approved forecasts for the foreseeable future, which indicate that the Group will have sufficient funds to trade during that period. The forecasts assume a certain level of drawdown from the invoice discount financing facility and include projections for new sales about which there is a degree of uncertainty. If such a level of drawdown and/or new sales revenues are not realised, the directors believe that there are sufficient opportunities available to them to obtain additional funding to enable the Group to continue to develop its operations and to meet its liabilities as they fall due. Given the current credit environment the Board is considering strengthening the balance sheet. The financial statements do not include any adjustments that would be required in the event that the Company had insufficient funding available.
2. DIVIDENDS
It remains the Company's policy that no dividends will be paid until future operations have provided appropriate levels of distributable profits and cash.
3. DISTRIBUTION
Copies of this statement will be available for collection free of charge from the Company's registered office at 16 Orsman Road, London N1 5QJ. An electronic version will be available on the Company's website, www.lidco.com.
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