19 Apr 2007 07:00
For immediate release 19 April 2007 LIDCO GROUP PLC ("the Company" or "LiDCO") PRELIMINARY RESULTS - 12 months to January 2007
LiDCO, the UK-based, AIM-traded cardiovascular monitoring company, announces its Preliminary Results for the 12 months ended 31 January 2007.
Financial Highlights
* Turnover remains steady at ‚£3.44m despite tough trading conditions (2005/6: ‚£3.42m) * Gross margin is maintained at 77% (excluding fees paid for monitors placed through financing arrangements) * Cash outflow before financing improved 28% to ‚£1.60m (2005/6: ‚£2.21m) * Cash balance up 55% from ‚£0.95m to ‚£1.47m excluding the convertible loan of ‚£1m * Pre-tax operating loss up 17% at ‚£2.59m (2005/2006: ‚£2.21m) * Loss per share of 2.10p Current Trading Highlights * Encouraging revenue growth for the first two months of the current financial year with monitor consumable revenue up by 35% * Installed base growth restored - increased by 88 monitors in last 6 mths v's 45 monitors in the prior 6 mths * Higher monitor placements driving consumable revenue growth: up by 35% over the equivalent period and 15% up over the last quarter * Total revenue for first two months up by 62% on prior year period
Corporate Highlights
* Roll-out begun of the LiDCOplus monitor version 4.0 software with enhanced fluid management platform and intra- thoracic blood volume parameter * Launch of the LiDCOview PC based software for clinical research and audit applications * First successful demonstration of the LiDCOlive - remote monitoring product in Japan and the Czech Republic * Regulatory approval for the lithium injection in Switzerland * Placing of 17,500,000 new Ordinary Shares at 20p to raise ‚£3.5 million before expenses in May 2006
Commercial Highlights
* Sensor sales: volumes up 8% to 24,316 units ; sales value up 14% at ‚£1.93 million * Installed monitors worldwide base: up 12% from 923 to 1,035 units * Slowness in export markets revenue balanced by 31% growth in domestic UK sales * Med-Dynamix: contract signed to distribute technically - leading complementary urine monitoring product
For more information please contact:
LiDCO Group Plc Tel: +44 (0)20 7749 1500 - Terry O'Brien (CEO), Rob Lamb (Company Secretary)
Buchanan Communications Tel: +44 (0)20 7466 5000 - Tim Anderson, James Strong, Simon Potter
There will also be a conference call at 11:00am today to go through the presentation and there will be time available at the end so that you may ask the management questions.
To dial in to the conference please call:
0808 109 1498 from the UK
+44 (0) 208 609 1435 outside the UK
Passcode: 657313#
Please click on the following link to view the presentation: http:// www.buchanan.uk.com/pages/webcast/lidco.pdf
After the results the investor presentation `LiDCO's Preliminary Results - Twelve months ended 31st January 2007' will be available on the LiDCO website ( www.lidco.com).
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
Expectations for last year were high following on from 2005/2006 in which revenues increased by more than 50% (annualised). Disappointingly however, sales progress was slowed by a combination of disruptive competition and a temporary capital equipment freeze in the UK. As a result, turnover for the year was virtually unchanged from the previous year, while losses increased marginally, mostly due to non-recurring items. Nevertheless, LiDCO still made substantial progress and a healthy growth rate has now resumed at the beginning of 2007. Of particular note, despite the NHS capital freeze for a substantial part of the year, the Company increased UK sales revenue by 31%. This growth was supported by further outcome studies like the St George's study - which continue to influence positively the presentation of our clinical and business cases. Last year our world-wide installed base of monitors increased from 923 to 1,035 units with a substantial increase in placements seen in the second half of the year that are now contributing to growing disposable sales.
Prior year and current trading
Given LiDCO's continuing revenue growth in the UK, the slowing of sales experienced during the period was confined to our export markets. The majority of the sales shortfall against expectations related to delayed revenue from our installed base and sales pipeline in the US market. Sensor sales from our existing installed base and new evaluations of our products were delayed and prolonged by a major US competitor seeking the trialing of its products. This had the effect of both slowing the completion of new equipment sales and temporarily suppressing disposable sales in existing accounts while customers evaluated the new product offering.
I am pleased to say that, although disruptive to our business in 2006, these activities have not resulted in the permanent loss of a material amount of our US business. Indeed, by the end of the year US sensor unit sales were only down 5% over the prior period. Looking beyond the US, despite experiencing similar delays in monitor sales/placements, sensor disposable sales revenues were significantly up in all other territories (17% UK, 23% Europe and 53% ROW). Pricing remained strong over the period with gross margin maintained at 77% (excluding fees paid for monitors placed through financing arrangements).
The Company expects the factors that held back growth in 2006/7 to be of less significance in 2007/8 and has already seen a substantial increase in monitor placements feeding through to growth in the recurring disposable income. Trading in the first two months of this year has seen a 62% increase in total revenue compared to February and March in 2006. Monitor consumables revenue over the same period are up by 35% and sales growth in the USA have increased 68%, admittedly a figure which flatters because of the disappointment of the prior year. Although it is just a little early to know whether these trends will continue throughout the year - LiDCO starts the current year on an optimistic note. A clearer picture should emerge by the time of our Annual General Meeting.
Market trends and LiDCO's response
In 2004 the USA spent $1.9 trillion on healthcare or 16% of GDP (Rothschild's market report). Healthcare spending is estimated to be $4.0 trillion by 2015. This is $6,300 per person in 2004 and predicted to be $12,300 by 2015. In 2004 US healthcare provided 13.5 million jobs and 19% or 3.6 million new employment positions will be in healthcare - more than any other industry. The ageing population, coupled to physician and nursing shortages means that hemodynamic monitoring will benefit from this increasing expenditure as a growing number of monitored beds will be required by hospitals. In tandem we are seeing demand for integrated clinical information and patient management solutions to increase efficiency of staff, reduce hospital errors and facilitate clinical review and audit. Customers are also beginning to request further improvements in the functionality of the LiDCOplus Monitor and associated software products that allow patient monitoring by a physician at a site remote from the intensive care unit.
Given the above macroeconomics it is not surprising that overall the transition to minimally invasive hemodynamic monitoring is continuing apace. During the year, we estimate the minimally invasive cardiovascular monitoring market grew by more than 50%, from US$40 million to approximately US$67 million per annum (summary of company published data). The underlying market dynamics, therefore, remain very encouraging for sales of our leading-edge minimally invasive hemodynamic monitoring technology.
The clinical and business case for adoption of our products continues to grow. This past year has seen the conclusion and subsequent presentation of two additional clinical outcome studies using LiDCO's technology. These studies showed reductions in mortality, length of stay and complications in surgery and shock patients. Given the market dynamics it is not surprising that the market leader for the declining traditional invasive catheter based approach has responded with its own minimally invasive product and that customers would at least want to evaluate this technology. We know from our own experience that this first phase of the roll-out of a new technology will be crucial as customers compare the new technology to existing standards of care. We believe that accuracy is crucial to the care of both critically ill patients and the provision of Early Goal Directed Therapy (EGDT) to surgery patients. LiDCO has the only calibrated arterial pressure waveform monitor that has been shown to improve outcomes and reduce hospital stay in high risk surgery patients. This is a crucial and increasingly important marketing edge. Avoiding complications in this group of patients can drastically reduce hospital's costs. Complications from critically ill patients can cost hospitals a disproportionate amount. The LiDCO system helps reduce those complications and costs. This is important as we are now living in an era where hospital revenues are largely fixed, so the costs and complications of surgery have necessarily come under considerable scrutiny. A case in point is St George's Hospital, London who showed that they had saved on average ‚£4,800 per patient treated using LiDCO products to implement EGDT and are now treating all such patients through use of our technology. We have worked hard to provide an accurate and effective product that can materially lower a hospital's costs when treating high-risk surgery patients. Hospitals purchasing our technology are buying into a proven strong clinical case coupled with a very compelling business proposition. It is for the competition to match the existing standards set by our technology.
Development and sales / marketing strategy
Our development strategy continues to be to respond quickly to market opportunities providing solutions that differentiate ourselves from the competition through providing the most highly evolved hemodynamic monitoring products. The development of the version 4.0 software and the new LiDCO PC products LiDCOview (launched) and LiDCOlive (in development)are LiDCO's response to these customer-led market requirements. The LiDCOplus Monitor consequently has always commanded a premium price and we expect that our product developments will ensure that this continues to be the case.
Our challenges and risks for 2007/8 are therefore not so much on the technical front but rather to ensure that we participate in the revenue that is increasingly being spent as the market transitions to minimally invasive hemodynamic monitoring. We have spent significant energies in 2006/7 securing business, building our sales pipeline and developing new software products. In 2007/8, we should see the fruits from our investment in our business and existing relationships to both grow existing business and expand into new hospitals. However, we do not have the same sales and marketing resources as our larger competitors so we have to be more efficient and targeted in our activities. While recognizing we need additional sales resource in our export territories, last year 53% of our sales came from the UK market, where we have a strong direct sales force. We estimate the market for hemodynamic monitoring products in the UK to be around ‚£7m per annum. We have annual UK sales of ‚£2m so there is a very significant amount of existing business for us to take in a territory where we compete on a more equal footing with the competition.
In the USA we are clearly still under resourced to fully access the market opportunity. Nevertheless, the US is our second biggest market and we expect to make good progress this year. We have to be highly focused on regions where we have sales people and where we can expect that our established base of opinion leading university hospital accounts will have the maximum impact. Of course we will continue to seek sales partnerships in this most important market.
In European export markets we are seeing increasing commitment from our distribution partners. In most cases they are gaining confidence as the market grows and a number are employing extra sales staff specifically to promote our products. We still have weaknesses in some European territories - notably in Germany where we and our distributor partner are under-resourced to compete in such a large market against a heavily entrenched local competitor. In the rest of the world we expect the main development during the coming year to be the appointment of more distributors in the Middle East, where we expect to find significant demand in the considerable hospital expansion that is occurring.
Product Quality
Commercial success has to be underpinned by manufacturing excellence. Once again I am delighted to report that our product quality and customer feedback continues to be first-rate. Furthermore, our in-house manufacturing automation and partnerships with our component suppliers will continue to reduce the cost of sales and help improve margins.
TRADING REVIEW
UK
* Overall sales revenue up 31% to ‚£2,012,000 (2005/6: ‚£1,535,000) * Monitor sales revenue up 53% to ‚£921,000 (2005/6: ‚£603,000) * Sensor, fee for use & rental sales up 17% to ‚£1,091,000 (2005/6: ‚£932,000) * Sensor, fee for use units up 16% at 11,041 (2005: 9,521)
As in the USA, sales in the UK continue to be made by our direct sales force. 2006/7 was a particularly challenging year for NHS finances so achieving an increase in revenues of 31% was an excellent result. A number of university hospitals converted to our technology. In particular, we were delighted that in September 2006 the new cardiothoracic surgery department at Southampton University Healthcare Trust Hospital chose to purchase six of our LiDCOplus monitors, taking the total number of monitors at this hospital to 14.
Despite the UK being one of the most developed and hence competitive market for hemodynamic monitoring we remain optimistic that the UK market will continue to grow at a brisk pace within both the high risk surgery and intensive care settings.
USA
* Overall sales revenue down 32% to ‚£767,000 (2005/6: ‚£1,123,000) * Monitor sales revenue down 54% to ‚£263,000 (2005/6: ‚£572,000) * Sensor, fee for use & rental sales down 9% to ‚£504,000 (2005/6: ‚£551,000) * Sensor, fee for use units down 6% at 8,250 (2005/6: 8,741)
Our sales in the US are made through a direct sales force of six people. The market was clearly very competitive in the US in 2006/7. Sales in the US were delayed by more protracted evaluations as a result of targeted defensive action by our main US-based competitor demanding that their products should also be evaluated by our prospective customers. This is the inevitable consequence of both a developing market opportunity and our successes in the US market. We are still the only non - US company to make any significant headway in the market while competing against a very strong domestic market leader. As mentioned we have had a good start to monitor sales and placements since January and we have not lost any significant customer. We expect to see a return of US sales growth in 2007.
Continental Europe
* Overall sales revenue down 7% to ‚£511,000 (2005/6: ‚£550,000) * Monitor sales revenue down 29% to ‚£225,000 (2005/6: ‚£317,000) * Sensor, fee for use & rental sales up 23% to ‚£286,000 (2005/6: ‚£233,000) * Sensor, fee for use units up 17% at 4,260 (2005/6: 3,650)
The reduction in monitor sales was mostly a consequence of variances in capital stocking orders to distributors between the periods. We are still effectively rolling out the product in Europe, so revenue variances will arise. Additionally, as in the US, competitive activities effectively held back sales by a few months. Nevertheless, the disposable sales increase demonstrates good usage from the installed base of monitors. Our distributors are motivated and excited by the revenue possibilities that our technology offers them. We have more work to do in Europe in particular in Germany, Holland and Belgium where we would like to improve on our distribution support. We expect 2007 will see a return to significant revenue growth in the European market.
Rest of the World (`ROW')
* Overall sales revenue down 28% to ‚£153,000 (2005/6: ‚£213,000) * Monitor sales revenue down 69% to ‚£34,000 (2005/6: ‚£111,000) * Sensor, fee for use & rental sales up 53% to ‚£49,000 (2005/6: ‚£32,000) * Sensor, fee for use units up 21% at 765 (2005/6: 630)
This is our smallest territory and is highly influenced by the phasing of monitor sales to distributors. We anticipate growth in this territory both through sales to existing partners and the appointment of additional distributors in 2007.
Sales progress in Japan through our distributor has been disappointing. Japan is the second biggest market in the world for hemodynamic monitoring products. Crucial to success in this territory is achieving hospital reimbursement for our product. Our distributor is selling or rent/leasing our product to hospitals without this benefit at the moment. Whilst there has been some adoption of LiDCO technology and a favorable technical reception we are in discussions on ways to resolve this slow progress.
Clinical Outcome Data
In March, the University of Iowa presented the results of their clinical outcome audit, where our technology's effects on patient outcome were compared to those achieved with more traditional monitoring products. The results of this study were presented at the International Society of Intensive Care and Emergency Medicine (ISICEM ) meeting in Brussels in March. When compared to the outcome for patients treated with the older more traditional invasive technology (pulmonary artery catheter) the use of our technology reduced the mortality rate of patients in shock treated in intensive care from 32% to 12%. This result is a demonstration of the potential of our technology to not only improve results in surgical patients but also in shock patients, who are a much more complex and difficult to treat group. This study will be of great interest to the intensive care community in the USA and further afield.
Also in March at the ISICEM we announced that a surgery patients study was presented by the Division of Critical Care, Faculdade de Medicina de sģo Josĩ do Rio Preto, Brazil. LiDCO's technology was used to optimize hemodynamics both during the surgery itself, as well as for eight hours post operatively. The additional surgical period of optimization was undertaken in order to see if the excellent results seen in the previous UK St George's study could be taken one step further by even earlier intervention. This study demonstrated that LiDCOplus monitor mediated EGDT reduced hospital length of stay by half (six days versus 13) in the control group and also reduced mortality, only two patients (6%) dying against seven (27%) in the non treated historical controls. Complications in the EGDT treated patients were also halved.
The results of this trial and the Iowa data are very supportive to our US and other export markets, showing, as already demonstrated in the UK, that use of our accurate and minimally invasive monitoring product will produce considerable clinical and cost benefits for the patient and hospital. Benefits of hemodynamic monitoring clearly outweigh the investment required to adopt this approach.
RESEARCH AND DEVELOPMENT AND PRODUCT APPLICATIONS
LiDCOplus Monitor Software Version 4.0, LiDCOview, LiDCOlive & LiDCOlite
2006 to March 2007 was a very productive period for us. At our research day at St Thomas' Hospital we demonstrated our new version 4.0 software and clinical research / clinical audit software (LiDCOview). This version comprises an enhanced fluid management platform and enables measurement of a new parameter, intra thoracic blood volume (ITBV). This and our other new software products are designed to increase usability within the existing intensive care patient market, and also enhance use within an emerging high risk surgery patient market where fluid management and the targeting of oxygen delivery is important. In order to help hospitals implement Early Goal Directed Therapy (EGDT), St George's Hospital's high risk surgery protocol, the clinician/nurse is now able to set a visual and patient specific oxygen delivery target on the monitor's Graph Screen. Following implementation of the treatment protocol, the patient's LiDCOview file can then be downloaded and used on a PC with Windows software to fully evaluate the treatment given. This has the benefit of allowing hospitals implementing EGDT to achieve a quantitative analysis/audit of the hemodynamic parameters, in particular the time taken to achieve the oxygen delivery goals and average oxygen delivery achieved post operatively. Achieving specific goals for oxygen delivery has been shown to reduce hospital stay by an average of 12 days.
LiDCOlive remote patient viewing software allows hemodynamic data to be exported real-time to a computer at a remote location via the internet. In March we demonstrated that the LiDCOplus Monitor can export real-time hemodynamic data via the internet direct to a computer at a remote location. A patient being treated at Frimley Park Hospital in England was monitored in real time by physicians attending a meeting in Kobe, Japan and similarly a patient in the University Hospital in Olomouc, Czech Republic, was remotely monitored at a meeting in Brno. The doctors attending the meetings could see exactly the same data and trending data display via our product LiDCOlive as did the nurses looking after the patient. The ability of a senior physician to see the same data as the nurse, without having to always attend the ward, is a much more efficient use of a highly trained and increasingly stretched clinical resource. Potentially this enables a physician to monitor the hemodynamic status of several patients in different locations. The LiDCOlive software product will be of great interest to hospitals that are looking to find ways of coping with the growing shortage of critical care staff. We expect that this product will be ready for launch towards the end of 2007 to early 2008.
LiDCO's anesthesia offering
Hospitals can now start to see the additional advantages of an investment in the LiDCOplus monitor and the associated LiDCO software products. These are targeted at producing both clinical and productivity improvements that are not available from our competitors. The majority of our customers are working in intensive care locations, however, we are increasingly seeing requests and actual usage during anesthesia. Accordingly, we are developing a new product that is specifically designed for use in the operating room by anesthetists. The objective is to produce a simple to set up product with new user screens that focus on fluid management and optimization of blood flow. We will keep the market informed of developments in this anesthesia market.
Further applications for LiDCO's Minimally Invasive Monitoring System
Important progress has been made in taking LiDCO's technology into a number of niche markets. During the year a number of presentations and papers were published on the LiDCO technology in the obstetric and veterinary arenas.
In January 2007, LiDCO announced the publication of a study conducted by the Department of Pediatrics at Baylor College of Medicine, Texas. The study investigated the accuracy of the LiDCO arterial waveform power approach (LiDCO's PulseCO software) to continuously measure cardiac output in children undergoing cardiac catheterization. This technique had not been previously validated in pediatric patients. The study, published in Pediatric Critical Care Medicine 2006 (Volume 7: Issue 6 Pages 532-535) stated that: "Arterial pulse wave analysis by the PulseCO system provided a novel, minimally invasive method of determining real-time cardiac output in children". Until now it has been difficult and risky to measure cardiac output in sick children. This study therefore demonstrates a new clinical application for our technology and we are very excited about the possibility of our technology being used to enable EGDT in children. Our technology is licensed to be used in children above the weight of 40 kgs but this paper has encouraged us to consider a US application for extension of our technology's use to children below 40kgs in weight.
REGULATORY AFFAIRS
In June 2006, approval of the LiDCO System lithium chloride injection was received from the Swiss regulatory body Swissmedic. This latest registration now provides LiDCO with full marketing approval in 14 European countries.
Dr Terry O'BrienChief Executive OfficerLiDCO Group Plc19 April 2007FINANCIAL REVIEW
Turnover was steady at ‚£3,443,000, up 1% on the previous 12 months (2005/6: ‚£ 3,421,000). Within this total, sales of monitors through financing arrangements, for placements in hospitals reduced by 9% to ‚£399,000 in 2006/7 down from ‚£437,000 sold in 2005/06.
The gross profit margin excluding fees paid for monitors sold through financing arrangements remained constant at 77% for both 2006/7 and 2005/6.
Total costs of monitors sold through financing arrangements and placed in hospitals were ‚£314,000, up from ‚£62,000 in 2005/6. This has contributed to a reduction in the gross profit margin (including financing costs) to 67% in 2006 /7 from 75% in 2005/6.
Administration expenses at ‚£4,939,000 in 2006/7 increased moderately by 4% from ‚£4,771,000 in 2005/6. The increase is mainly attributable to one-off costs; a non-cash FRS 20 Share Option charge of ‚£66,000, premises costs of ‚£65,000 and professional fees of ‚£90,000. Underlying administration expenses have not increased over the previous year.
Loss per share for the 12 months period is 2.10p up 3% from 2.04p in 2005/6. Loss on ordinary activities after taxation is ‚£2,385,000 up 17% on the previous 12 months (2005/6: ‚£2,035,000).
The tax charge continues to be nil, whilst the Group remains at the pre-profit stage. Substantial tax losses have been accumulated both in the UK and USA, which will permit significant deferral of future tax charges once profitability is reached. In the UK, the Group qualifies for research and development (R&D) tax credits and these are reported within the tax line in the profit and loss account. The year under review included R&D tax credits of ‚£142,000 relating to 2006/7 and ‚£62,000 relating to prior years.
The proceeds of the May 2006 Placing have been used in part to increase expenditure on R&D after capitalisation by 15% to ‚£247,000 (2005/6: ‚£215,000)
Cash outflow before financing of ‚£1,596,000 represents a reduction in net outflow of 28% from ‚£2,214,000 in 2005/6. This is partly due to an improvement of 28% in debtors' collection days, down from 160 days in 2005/6 to 115 days in 2006/7. This contributed to a reduction in trade debtors' balances to ‚£ 1,088,000 in 2006/7 from ‚£1,508,000 in 2005/6.
Creditors' payment days have reduced to 45 days in 2006/7 down from 55 days in 2005/6, while trade creditors' balances have reduced 7% to ‚£415,000 in 2006/7, down from ‚£444,000 in 2005/6.
Stock as a percentage of turnover has reduced to 31% in 2006/7 from 33% in 2005 /6.
Group Cash balances at 31 January 2007 are ‚£1,474,000 as compared with ‚£951,000 at 31 January 2006.
On 26 May 2006, the Company announced it had placed 17,500,000 shares at a price of 20p per share raising ‚£3.5m before expenses with Institutions and a number of private investors.
A drawdown of ‚£1,074,000 against the Laurus loan facility was repaid on 26 May 2006 out of proceeds of the 2006 placing. The Group saved interest payable on the loan and made an exchange gain of ‚£64,000. The amount currently outstanding is ‚£51,000 and the balance of up to ‚£1 million of the loan facility remains available to meet future cash requirements.
The placement of monitors increased by 12% to 1,035 units in 2006/7 up from 923 units in 2005/6. This increase is below the budgeted increase, partly due to intense competition in the USA and further exacerbated by an increase in number of returned monitors from US distributors who were taken over or merged during the year.
For the future, we do not expect significant changes to stock balances, debtors' collection days and creditors' payment days. Cash balances will reduce whilst we remain pre-profit and we expect to drawdown the Laurus loan facility sometime during the current trading year.
A key performance indicator ("KPI") is the maintenance of margins. Over the past year, excluding fees for sale of monitors through financing arrangements, profit margins have been held steady at 77% for both years and we expect this to continue throughout 2007/8.
A second KPI is to maintain pricing and this was also achieved over the past year in comparison to 2005. The average sterling sales price of a monitor and sensor was constant comparing 2006/7 to 2005/6.
Payments of fees through the financing arrangement are expected to peak in 2007 /8 and thereafter reduce significantly by 2009/10.
Accounting policies
International Financial Reporting Standards (IFRS) are not mandatory for the Group, as an AIM-quoted Company, until the interim results for the six months to 31 July 2007 are reported. The Group has decided not to implement IFRS earlier than the mandatory date and therefore these results are produced in accordance with existing UK Accounting Standards. The Company will prepare its Interim accounts due to be published in October 2007 in accordance with IFRS.
Dr Terry O'BrienDirectorLiDCO Group Plc19 April 2007CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31 January 2007 2007 2006 ‚£'000 ‚£'000 (Restated) TURNOVER 3,443 3,421 Cost of sales (1,127) (871) Gross profit 2,316 2,550 Administrative expenses (4,939) (4,771) OPERATING LOSS (2,623) (2,221) Interest receivable and similar income 69 42 Interest Payable (35) (35)
LOSS ON ORDINARY ACTIVITIES BEFORE TAX (2,589) (2,214)
Tax on loss on ordinary activities 204 179 LOSS ON ORDINARY ACTIVITIES AFTER TAX (2,385) (2,035) Loss per share (basic and diluted) (p) (2.10) (2.04) CONSOLIDATED BALANCE SHEETAs at 31 January 2007 31 January 31 January 2007 2006 ‚£'000 ‚£'000FIXED ASSETS Tangible assets 854 1,038 Intangible assets 656 473 1,510 1,511 CURRENT ASSETS Stocks 1,080 1,140 Debtors 1,421 1,995 Cash at bank and in hand 1,474 951 3,975 4,086 CREDITORS: amounts falling due within one year (846) (759) NET CURRENT ASSETS 3,129 3,327 TOTAL ASSETS LESS CURRENT LIABILITIES 4,639 4,838 CREDITORS: amounts falling due after more than (51) (1,177)one year NET ASSETS 4,588 3,661 CAPITAL AND RESERVES Called up share capital 592 503 Share premium account 20,723 17,566 Merger reserve 8,513 8,513 Other reserve - (88) Profit and loss account (25,240) (22,833) EQUITY SHAREHOLDERS' FUNDS 4,588 3,661 CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 January 2007 2007 2006 ‚£'000 ‚£'000 (Restated) Operating loss (2,622) (2,221) Share based payments 66 129 Depreciation and amortisation 412 440 Decrease in stocks 196 25 (Increase) in debtors 495 (307) Increase / in creditors 87 130 Net cash outflow from operating activities (1,366) (1,804) Returns on investment and servicing of 34 7finance Capital expenditure and financial investment (264) (417) Cash outflow before financing (1,596) (2,214) Financing 2,119 1,558 (Decrease)/increase in cash in the period 523 (656)
NOTES TO THE FINANCIAL STATEMENTS
1. NATURE OF THE FINANCIAL INFORMATION
The financial information has been prepared in accordance with generally accepted accounting principles in the UK and was approved by the Board on 18 April 2007. The accounting policies applied in preparing the financial information are consistent with those adopted and disclosed in the Group's statutory accounts for the year ended 31 January 2006, except as stated in note 2 and 3 below.
These results are audited, however the financial information does not constitute statutory accounts as defined under section 240 of the Companies Act 1985. The financial information for the year ended 31 January 2006 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 2006 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 the Company will have sufficient funds to continue in operational existence for the foreseeable future. The Directors have approved forecasts which indicate the Company will have sufficient funding to continue to trade for the foreseeable future. These forecasts assume a level of new customer sales about which there is some degree of uncertainty. If necessary, the Directors believe there are sufficient opportunities available to the Company to obtain additional funding to address this uncertainty.
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. SHARE BASED PAYMENT
The effect of the introduction of FRS 20 on the prior year results was ‚£ 129,000.
4. 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.
LIDCO GROUP PLC