22 Sep 2015 07:01
Venn Life Sciences Holdings Plc
("Venn" or the "Company")
Interim Results for 6 months ended 30 June 2015
Venn Life Sciences (AIM: VENN), a growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, announces its unaudited interim results for the six months ended 30 June 2015.
Financial Highlights
· Revenue of €4.259m (H1 2014: €1.512m)
· EBITDA loss of €0.04m (H1 2014: €0.91m)
· Loss before tax of €0.26m (H1 2014: €0.99m)
· Cash and cash equivalents of €1.096m (As at 30th June 2014: €0.119m)
Operational Highlights
· €9m in new contract wins during H1 brings greater scale to business
· Successful on going recruitment to meet work load sees resource base growing to 120 personnel
· Management team strengthened with appointment of new CFO in June 2015
· Successful integration of Cardinal Systems enables Venn to bid for and secure larger scale projects
Post period-end
· Proposed acquisition of Kinesis Pharma BV for up to €6.5m
· Placing to raise c. £3.57m (gross) through the issue of 16,231,311 new Ordinary shares at 22p
· The acquisition highly differentiates Venn in its market place and enables the company to offer a complete range of services across the non-clinical and clinical spectrum
Commenting on the Group's outlook, David Evans, non-Executive Chairman of Venn, said:
"We have seen greater scale develop in Venn. The rate of repeat business continues to rise and this coupled with investments in the areas of business development and systems infrastructure should see the business poised for extended growth. The acquisition of Kinesis will enable earlier and longer engagement with clients as we can now offer services across a broader range of areas. The Venn Kinesis combination affords an opportunity to cross-sell services to an expanded client base and greatly differentiate the business."
Enquiries:
Venn Life Sciences Holdings Plc |
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David Evans, Non-Executive Chairman | Tel: +44(0) 7980 541 893 |
Tony Richardson, Chief Executive Officer | Tel: +353 154 99 341 |
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Zeus Capital (Nominated Adviser and Co-Broker) |
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Ross Andrews/Andrew Jones | Tel: +44(0) 161 831 1512 |
Dominic Wilson/Alex Davies | Tel: +44(0) 20 7533 7716 |
Hybridan LLP (Co-Broker) Claire Louise Noyce |
Tel: +44(0) 20 3764 2341 |
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Walbrook PR Ltd | Tel: +44(0)20 7933 8787 or venn@walbrookpr.com |
Paul McManus | Mob: +44(0) 7980 541 893 |
Lianne Cawthorne | Mob: +44(0) 7584 391 303 |
Chairman's Statement
Dear Fellow Shareholder,
The first half of 2015 has seen the Company continue the good momentum generated in 2014. The successful integration of Cardinal Systems has been a key ingredient in enabling Venn to bid for and secure larger scale projects utilising the full range of capabilities. The investment in infrastructure and systems in the past year has given the business a solid base and enabled management to efficiently manage what has been a period of rapid growth in the business.
Financial Results
Fee income for the first six months of 2015 was €4.259m, up 182% on the first six months of 2014 (H1 2014: €1.512m). The EBITDA deficit for the period was €0.04m compared to €0.911m for the first half of 2014.
The significant improvement in the reported operating results for the business is largely driven by continued revenue growth and improved project margins due to greater efficiency in resource utilisation and project management. As the business continues to scale, margins should continue to improve.
Operational Review
A key catalyst for growth in this period has been the strong return on our business development efforts over the past 12 months. We have successfully profiled and targeted a client category that perfectly fits our size and capabilities and through the provision of high quality services to that group we have been rewarded with significant repeat business and increasing contract size.
At the beginning of this year we committed to strengthen our infrastructure and provide a solid base for further business growth. We have implemented a number of systems initiatives that should conclude by the year end, providing the business with a more scalable platform.
A significant amount of our success in the first half-year has come from the Biotechnology sector. This sector has received record amounts of funding over the past two years leaving it well funded and under pressure to deploy funds into development programmes. Our current scale and capabilities leave us ideally positioned to meet the requirements of this sector and we have tailored a suite of services focussed specifically on the particular requirements of this group.
In particular, we announced two significant contract wins with clients in this sector during the first half of the year for €2m and €4.1m respectively. Combined with other client wins during this period we secured a total of €9m of new contracts during the six months ended 30 June 2015. Whilst all of this work started in the first half we expect to benefit from the full contribution from these contracts in the second half and beyond.
Board changes
We were also very pleased to welcome Jonathan Hartshorn to the Board as Chief Financial Officer in June. Jonathan is a Chartered Accountant with over 18 years' experience in financial management roles, both as a consultant and as Head of Finance, across a range of industries including a number of large global pharmaceutical businesses.
New Developments and Outlook
We have broadened our business development base with the recruitment of an additional resource targeting Germany, Austria and Switzerland (DAC) and before year-end we expect to make a further business development appointment in the USA. This strengthening of the business development should contribute to the continued strong growth in revenues.
The acquisition of Kinesis Pharma affords the opportunity to develop Venn as a higher value proposition. The combined Venn Kinesis business will be highly differentiated in our market place and we expect will generate greater opportunities for earlier and longer ownership of client relationships. Kinesis brings further scale and capability to Venn and will help accelerate business profitability.
Our technology innovation division Innovenn continues to make good progress with initial sales of Labskin now achieved and exploratory licensing discussions underway regarding Clarogel.
Overall I am pleased with the strong progress achieved in this half year. Continued project execution to high standards, the on-going strengthening of the resource base and the addition of Kinesis will see the company well positioned to deliver profits and free cash-flows in subsequent periods.
David Evans
Chairman
22 September 2015
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2015
|
| Unaudited |
| Unaudited |
| Audited |
|
| 6 months ended |
| 6 months ended |
| Year ended |
|
| 30 June |
| 30 June |
| 31 December |
|
| 2015 |
| 2014 |
| 2014 |
|
| €'000 |
| €'000 |
| €'000 |
Continuing operations |
|
|
|
|
|
|
Revenue |
| 4,259 |
| 1,512 |
| 4,883 |
Administrative expenses |
| (4,476) |
| (2,469) |
| (6,650) |
Operating loss |
| (217) |
| (957) |
| (1,767) |
Depreciation and amortisation |
| (176) |
| (26) |
| (187) |
Exceptional items |
| - |
| (20) |
| (47) |
EBITDA before exceptional items |
| (41) |
| (911) |
| (1,533) |
Finance income |
| - |
| 1 |
| 9 |
Finance costs |
| (42) |
| (31) |
| (71) |
Loss before income tax |
| (259) |
| (987) |
| (1,829) |
Income tax credit/(charge) |
| - |
| 1 |
| 20 |
Loss for the period |
| (259) |
| (986) |
| (1,809) |
Currency translation differences |
| (39) |
| 16 |
| 8 |
Total comprehensive loss for the period |
| (298) |
| (970) |
| (1,801) |
|
|
|
|
|
|
|
Loss per ordinary share |
| € |
| € |
| € |
Basic and diluted |
| (0.01) |
| (0.04) |
| (0.06) |
|
|
|
|
|
|
|
Consolidated Statement of Financial Position
As at 30 June 2015
|
| Unaudited |
| Unaudited |
| Audited |
|
| As at |
| As at |
| As at |
|
| 30 June |
| 30 June |
| 31 December |
|
| 2015 |
| 2014 |
| 2014 |
|
| €'000 |
| €'000 |
| €'000 |
Assets |
|
|
|
|
|
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Non-current assets |
|
|
|
|
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Property, plant and equipment |
| 196 |
| 71 |
| 194 |
Intangible assets |
| 3,170 |
| 1,895 |
| 2,820 |
Investments |
| 31 |
| 31 |
| 31 |
Total non-current assets |
| 3,397 |
| 1,997 |
| 3,045 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Trade and other receivables |
| 2,627 |
| 1,079 |
| 2,097 |
Income tax recoverable |
| - |
| 29 |
| 32 |
Cash and cash equivalents |
| 1,096 |
| 317 |
| 806 |
Total current assets |
| 3,723 |
| 1,425 |
| 2,935 |
Total assets |
| 7,120 |
| 3,422 |
| 5,980 |
|
|
|
|
|
|
|
Equity attributable to owners |
|
|
|
|
|
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Share capital |
| 127 |
| 112 |
| 112 |
Share premium account |
| 8,072 |
| 5,443 |
| 5,483 |
Group re-organisation reserve |
| (541) |
| (541) |
| (541) |
Reverse acquisition reserve |
| 45 |
| 45 |
| 45 |
Foreign currency reserves |
| 39 |
| 8 |
| - |
Retained earnings |
| (3,557) |
| (3,294) |
| (3,297) |
Total equity |
| 4,185 |
| 1,773 |
| 1,802 |
|
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|
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Liabilities |
|
|
|
|
|
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Non-current liabilities |
|
|
|
|
|
|
Deferred consideration |
| - |
| 55 |
| - |
Borrowings |
|
|
| - |
| 99 |
Total non-current liabilities |
| - |
| 55 |
| 99 |
|
|
|
|
|
|
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Current liabilities |
|
|
|
|
|
|
Trade and other payables |
| 2,456 |
| 1,293 |
| 3,302 |
Deferred taxation |
| 271 |
| 16 |
| 271 |
Deferred consideration |
| 71 |
| 87 |
| 213 |
Borrowings |
| 137 |
| 198 |
| 293 |
Total current liabilities |
| 2,935 |
| 1,594 |
| 4,079 |
Total liabilities |
| 2,935 |
| 1,649 |
| 4,178 |
Total equity and liabilities |
| 7,120 |
| 3,422 |
| 5,980 |
Consolidated Statement of Cash Flows
For the year ended 30 June 2015
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| Unaudited | Unaudited | Audited |
|
| 6 months ended | 6 months ended | Year ended |
|
| 30 June | 30 June | 31 December |
|
| 2015 | 2014 | 2014 |
|
| €'000 | €'000 | €'000 |
Cash Flow from operating activities |
|
|
|
|
Loss before income tax |
| (259) | (987) | (1,829) |
Adjustments: |
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|
|
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- Depreciation & Amortisation |
| 176 | 26 | 187 |
- Foreign currency movement |
| (13) | 2 | 25 |
- Net finance costs |
| 41 | 30 | 62 |
Changes in working capital |
|
|
|
|
- Trade and other receivables |
| (530) | (423) | (892) |
- Trade and other payables |
| (845) | 115 | 1,453 |
Cash used in operations |
| (1,430) | (1,237) | (994) |
Interest paid |
| (41) | (18) | (54) |
Income tax received/(paid) |
| 32 | 23 | 20 |
Net cash used in operating activities |
| (1,439) | (1,232) | (1,028) |
|
|
|
|
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Cash flow from investing activities |
|
|
|
|
Acquisition of subsidiaries, net of cash acquired |
| - | - | (307) |
Purchase of property, plant and equipment (PPE) |
| (506) | (40) | (99) |
Proceeds from sale of PPE |
| - | - | 5 |
Purchase of investments |
| - | - | - |
Interest received |
| - | 1 | 9 |
Net cash used in investing activities |
| (506) | (39) | (73) |
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
Proceeds from issuance of ordinary shares |
| 2,605 | 1,169 | 1,194 |
Payment of deferred consideration |
| (142) | - | (154) |
Financing from non-controlling interests |
| - | - | 800 |
Repayments on borrowings |
| (46) | - | (40) |
Net cash generated by financing activities |
| 2,417 | 1,169 | 1,800 |
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|
|
|
|
Net increase /(decrease) in cash and cash equivalents |
| 472 | (102) | 380 |
Cash and cash equivalents at beginning of year |
| 596 | 216 | 216 |
Exchange gain on cash and cash equivalents |
| 28 | 5 | - |
Cash and cash equivalents at end of period |
| 1,096 | 119 | 596 |
Cash and cash equivalents include the following for the purposes of the statement of cash flows:
|
| Unaudited | Unaudited | Audited |
|
| 6 months ended | 6 months ended | Year ended |
|
| 30 June | 30 June | 31 December |
|
| 2015 | 2014 | 2014 |
|
| €'000 | €'000 | €'000 |
Cash and cash equivalents |
| 1,096 | 317 | 806 |
Bank overdrafts |
| - | (198) | (210) |
Cash and cash equivalents |
| 1,096 | 119 | 596 |
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|
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Consolidated Statement of Changes in Shareholders' Equity
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Share capital |
Share premium | Group re-organisation reserve | Reverse acquisition reserve | Foreign currency reserve |
Retained earnings |
Total |
| €'000 | €'000 | €'000 | €'000 | €'000 | €'000 | €'000 |
At 1 January 2014 | 102 | 3,431 | (541) | 45 | (8) | (2,308) | 721 |
Changes in equity for 6 months ended 30 June 2014 |
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|
|
|
|
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Total loss for the period | - | - | - | - | - | (986) | (986) |
Currency translation differences | - | - | - | - | 16 | - | 16 |
Total comprehensive loss for the period | - | - | - | - | 16 | (986) | (970) |
Proceeds from shares issued (net of expenses) | 10 | 2,012 |
|
|
|
| 2,022 |
At 30 June 2014 | 112 | 5,443 | (541) | 45 | 8 | (3,294) | 1,773 |
Changes in equity for 6 months ended 31 December 2014 |
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|
|
|
|
|
|
Total loss for the period | - | - | - | - | - | (547) | (547) |
Currency translation differences | - | - | - | - | (8) | - | (8) |
Total comprehensive loss for the period | - | - | - | - | (8) | (547) | (555) |
Proceeds from shares issued (net of expenses) |
- |
40 | - | - | - | - | 40 |
At 31 December 2014 | 112 | 5,483 | (541) | 45 | 0 | (3,841) | 1,258 |
Changes in equity for 6 months ended 30 June 2015 |
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|
|
|
|
|
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Total loss for the period | - | - | - | - | - | (259) | (259) |
Currency translation differences | - | - | - | - | (39) | - | (39) |
Total comprehensive loss for the period | - | - | - | - | (39) | (259) | (298) |
Proceeds from shares issued (net of expenses) | 15 | 2,590 | - | - | - | - | 2,605 |
At 30 June 2014 | 127 | 8,073 | (541) | 45 | (39) | (4,100) | 3,565 |
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NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
Venn Life Sciences Holdings Plc is a company incorporated in England and Wales. The Company is a public limited company listed on the AIM market of the London Stock Exchange. The address of the registered office is 4 Lombard Street, London, EC3V 9HD.
The Group's principal activity continues to be that of a Clinical Research Organisation (CRO) providing a suite of consulting and clinical trial services to pharmaceutical, biotechnology and medical device organisations.
The financial information in these interim results is that of the holding company and all of its subsidiaries. It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2014 and which will form the basis of the 2015 financial statements except for a number of new and amended standards which have become effective since the beginning of the previous financial year. These new and amended standards are not expected to materially affect the Group.
The financial information presented herein does not constitute full statutory accounts under Section 434 of the Companies Act 2006 and was not subject to a formal review by the auditors. The financial information in respect of the year ended 31 December 2014 has been extracted from the statutory accounts which have been delivered to the Registrar of Companies. The Group's Independent Auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the half years ended 30 June 2015 and 30 June 2014 is unaudited and the twelve months to 31 December 2014 is audited.
2. Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.
| Unaudited |
| Unaudited |
| Audited |
| 6 months ended |
| 6 months ended |
| Year ended |
| 30 June |
| 30 June |
| 31 December |
| 2015 |
| 2014 |
| 2014 |
Loss attributable to equity holders of the Company (€'000) | 189 |
| 1,001 |
| 1,533 |
Weighted average number of Ordinary Shares in issue | 33,733,046 |
| 25,126,212 |
| 26,960,835 |
Basic loss per share | €0.01 |
| €0.04 |
| €0.06 |
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential ordinary Shares. No share options or warrants outstanding at period end were dilutive and all such potential ordinary shares are therefore excluded from the weighted average number of ordinary shares for the purposes of calculating diluted earnings per share.
3. Dividends
There were no dividends provided or paid during the six months.
4. Press
A copy of this announcement is available from the Company's website, being www.vennlifesciences.com. If you would like to receive a hard copy of the interim report please contact the Venn Life Sciences Holdings Plc offices on +31 (0) 524 712 456 to request a copy.