RLM.L Regulatory News (RLM)

24 Sep 2007 07:01

PuriCore Plc24 September 2007 Interim Results for the Six Months Ended 30 June 2007 MALVERN, PENNSYLVANIA, AND STAFFORD, UK, 24 September 2007- PuriCore (LSE:PURI), the life sciences company focused on the control of infectious pathogenswith its novel, safe antimicrobial technology, announces its interim results forthe six months ended 30 June 2007. PuriCore's products are used in a broad rangeof markets, including food safety in retail and foodservice, medical devicedisinfection, wound therapy, and hospitality. Financial Highlights • Sales increased 23% to $10.3 million (2006: $ 8.4 million) o 16% growth on a constant currency basis • Recurring revenue from leases, rentals, consumables, and service contracts increased 95% to $6.9 million (2006: $3.6 million) o Recurring revenue accounted for approximately two-thirds of all sales • Food Safety revenues increased by 56% to $3.8 million (2006: $2.4 million) o Installation of 60 systems lower than expected due to contract delays • Global Endoscopy revenues increased by 11.4% to $6.3 million (2006: $5.6 million) o UK Endoscopy grew 12% (constant currency) despite continued challenging NHS environment • Period-end cash (including restricted cash) was $29.2 million Operational Highlights • The UK Sterilox Endoscopy product portfolio was expanded through new distribution agreements. • FDA 510(k) clearance was received for the Sterilox Endoscopy System in the US. • The Sterilox Food Safety Solution was listed as safe for direct food contact by the FDA. • PuriCore expanded its microbiology research efforts demonstrating the effectiveness of Sterilox Solutions against major outbreak pathogens. New Developments • In a separate statement issued today, PuriCore announced positive initial results from clinical case studies utilizing its Vashe Wound Therapy Solution. More than 2,000 patients suffering from a diverse range of chronic and acute wounds were treated successfully by nine clinicians across 13 US clinical sites. No adverse effects were observed. • PuriCore named a new vice president for the Foodservice, Hospitality, and Institutional markets. Greg Bosch, Chief Executive of PuriCore, said: "PuriCore has progressed in all business segments and the increasing proportionof recurring revenues underscores the market's acceptance of our leased businessmodel. While the rate of adoption of Sterilox Systems in US supermarkets this year lagsour expectations, we remain very bullish on this market. We continue to reviewcosts and are focusing on opportunities with the greatest near-term potential.More than ever, we see a clear need in multiple markets for our highlyeffective, safe, and environmentally 'green' infection control solutions." Contacts: Ben Brewerton Greg Bosch, CEOJohn Gilbert Keith A. Goldan, CFOFD PuriCore plc+44 (0) 20 7831 3113 +1 484 321 2700 About PuriCore PuriCore (London Stock Exchange: PURI) is a life sciences company focused ondeveloping and commercialising proprietary products that safely, effectively,and naturally kill contagious pathogens. PuriCore's technology provides asolution to a broad range of markets that depend upon controlling contamination,including food safety in retail and foodservice, medical device disinfection,wound therapy, and hospitality. The Company's proprietary technology mimics thehuman body's production of the natural antimicrobial hypochlorous acid, which ishighly effective in killing bacteria, viruses, and fungal spores. Deployinghypochlorous acid solutions as soaks, sprays, mists, and in other forms,PuriCore's technology is designed to limit the spread of infectious disease,including major public health threats of M. tuberculosis, MRSA, E.coli,Norovirus, Avian Influenza, HIV, Polio Virus, Helicobater pylori, andLegionella. PuriCore is headquartered in Malvern, Pennsylvania, with offices inStafford, UK. To receive additional information on PuriCore, please visit our web site atwww.puricore.com, which does not form part of this press release. Certain statements made in this announcement are forward-looking statements.These forward-looking statements are not historical facts but rather are basedon the Company's current expectations, estimates, and projections about itsindustry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,''intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressionsare intended to identify forward-looking statements. These statements are notguarantees of future performance and are subject to known and unknown risks,uncertainties, and other factors, some of which are beyond the Company'scontrol, are difficult to predict, and could cause actual results to differmaterially from those expressed or forecasted in the forward-looking statements.The Company cautions shareholders and prospective shareholders not to placeundue reliance on these forward-looking statements, which reflect the view ofthe Company only as of the date of this announcement. The forward-lookingstatements made in this announcement relate only to events as of the date onwhich the statements are made. The Company will not undertake any obligation torelease publicly any revisions or updates to these forward-looking statements toreflect events, circumstances, or unanticipated events occurring after the dateof this announcement except as required by law or by any appropriate regulatoryauthority. Chairman and CEO Review PuriCore's singular core platform technology allows it to expand into manyindustries and geographies. This portfolio of businesses provides bothopportunities for growth as well as leverage against the cyclical nature ofindividual markets. In the first half of 2007, we focused on our existing corebusinesses: Sterilox Endoscopy in the UK, targeting hospital endoscopesterlisation units, and Sterilox Food Safety, targeting leading US retailsupermarket chains. We will leverage our success in the Food Retail market toexpand into the Foodservice, Hospitality, and Institutional markets to focus onfood safety, bio-decontamination, and viral outbreak prevention. To creategrowth platforms, we have initiated development of our promising Wound Therapyapplications for our technology, continue to develop our Endoscopy Systems forthe US market, and are evaluating the opportunities for Water Safetyapplications. We thank our investors for their continued support as we continue to grow theCompany and execute our business plan for our core markets while seeking newopportunities for advancing human health through the control of infectiouspathogens. Food Safety: Retail Supermarkets The US retail supermarket industry continues to be very receptive to the valueof the Sterilox Food Safety System. We are pleased with the market's acceptanceof our lease business model, exhibited by the 56% revenue growth of our FoodRetail business in the US over the same period in the prior year. However, weinstalled fewer new systems than expected in H1 because of large contractdelays. Early adopters of our Food Safety technology proved the economics quickly: usingSterilox Systems significantly reduces the amount of fresh produce lost due tospoilage, also known as 'shrink.' Many retail chains find it challenging toquantify properly the economics of their shrink. Consequently, we have developednew models to enable our customers to better measure both produce savings aswell as other economic benefits such as labour savings when implementing aSterilox System. Additionally, we increasingly see more customers placing valueon other intangibles including food safety, brand protection, and customersatisfaction. The early indication is that this modeling approach is effective. Of the 60 Sterilox Food Safety Systems installed in H1 2007, 56 were installedunder rental agreements. As of 30 June 2007, the Company had a total installedbase of approximately 1,450 systems in this segment, 85% of which were installedunder rental agreements. The Food Retail business has also continued to garner the approval of regulatoryauthorities. In addition to being FDA allowed, EPA registered, UL listed, andNSF certified for use in food applications, the Sterilox Solution was listed inMay by the US FDA as safe for direct food contact. We continue to focus on the largest national retail supermarket chains andleading regional chains that differentiate themselves to consumers based onquality and reputation. To date, Sterilox Food Safety Systems are installed infour of the top-10 US retail supermarket chains. Discussions to expand theseprograms with several major supermarket retailers are now far advanced, and weare on track to convert one or more of these opportunities in 2007. Based onour current target account status, we anticipate our full-year 2007installations to be approximately 150 to 200 systems and expect to enter 2008with a robust pipeline. Endoscopy Our Endoscopy Systems, which target hospital endoscope sterlisation units, arecurrently marketed in the UK and internationally, with early-stage businessdevelopment in the US. The UK and International Sterilox Endoscopy business experienced 11.4% revenuegrowth in the period (1.4% on a constant currency basis). ExcludingInternational sales, UK Endoscopy revenues grew 12% (constant currency), withsignificant contribution from the new distribution partnerships with Minntechand BHT. Importantly, the Company's strategy to grow its recurring revenue base isyielding positive results: recurring revenue for H1 2007 in our UK Endoscopybusiness increased 74% over the same period in 2006. PuriCore continues to focuson expanding its recurring revenue through the sales of service agreements,consumables, and rental contracts. PuriCore's principal customer in the UK is the NHS hospital network. Despitecontinued budgetary challenges in the NHS, our sales were buoyed by thecombination of Sterilox business and the new distribution partnerships withMinntech and BHT. By 30 June, we had fully integrated Minntech's UK business,employing its field sales and engineering teams as well as consolidating itswarehouse into PuriCore's Stafford facilities. We have also installed our firstcombined Sterilox and distributed AER systems. We foresee continued increasedsales of both Sterilox Systems and our distributed products based on our solidpipeline of prospective NHS Trust customers. Internationally, PuriCore is targeting its launch into the European market andrest of world by establishing relationships with key distributors that have bothan endoscopy sales channel and an AER portfolio. Our endoscopy focus in 2007 wasin our UK market, and we anticipate early traction internationally in 2008. In the US, we are preparing for the commercialisation our Sterilox EndoscopySystems. In May, we received ahead of schedule 510(k) clearance from the US FDAto reprocess endoscopes. We have identified target accounts and now expect toestablish beta sites in Q4 2007 or Q1 2008. Wound Therapy PuriCore has continued to explore and invest in therapeutic applications of itscore technology with encouraging results. We are very excited to announce todaythat physicians at 13 US clinical sites have used the Vashe Wound Therapy Systemsuccessfully to treat more than 2,000 patients with chronic and acute woundswith no report of adverse effects. The clinicians have reported positive resultsand efficacy of Vashe for the treatment of patients with a variety ofchallenging wounds including chronic venous ulcers and non-healing surgicalwounds as well as patients with necrotizing fasciitis, a rare, life-threateningbacterial infection of the skin, subcutaneous tissue, and superficial facia witha mortality rate of 20 to 60%. These and other positive clinical results were presented earlier this month andagain this week at major woundcare conferences (see separate release dated 24September 2007). To date, all clinicians were un-paid, and these studies beingconducted are investigator-driven and non-controlled. The Company plans todevelop a formal clinical program to demonstrate the efficacy of Vashe in abroad range of applications including burns. PuriCore continues to develop the Vashe Wound Therapy System, a novel,noninvasive, easy to use wound treatment process that has been shown to becomplementary to existing treatment methods. The Vashe System received US FDA510(k) clearance for use as a medical device to irrigate, cleanse, moisturizeand debride acute and chronic wounds including stage I through IV pressureulcers, stasis ulcers, diabetic ulcers, post-surgical wounds, first and seconddegree burns, abrasions, and minor irritations of the skin. Previously, studieswith the Vashe Solution conducted in patients at the University of Oxford andpublished in the Journal of Wound Care showed a positive and observableimprovement in healing rates and pain reduction. We have initiated early discussions with potential partners. We are veryencouraged by the results of our studies and we will continue to evaluate ouroptions in the coming months. We expect continued news flow in this area in thenear term. Foodservice, Hospitality, and Institutional PuriCore recently expanded its business development initiatives in theFoodservice, Hospitality, and Institutional markets (collectively previouslyreferred to as 'Hospitality') with the addition of a new vice president in July.Combined, these markets represent a $1 billion opportunity. Our efforts in theFoodservice segment will focus on food preparation and service operationsincluding cafeterias and large banquet halls; the Hospitality market will focuson hotels, resorts, casinos, and cruise ships; and the Institutional segmentwill target schools, correctional facilities, and public facilities. For thesemarkets, our solutions will address the need for food safety and biosafety, thecontrol and spread of infectious pathogens in public facilities. Results of independents research studies showing the effectiveness of SteriloxSolution in these types of environments against major outbreak pathogens-including norovirus, MRSA, Acinetobacter, and avian influenza-were published inthe Journal of Applied and Environmental Microbiology and presented at twoconferences (see release dated 15 June 2007). This month, the Sterilox FoodSafety System was named a Product of the Year finalist by the influential tradegroup, the Foodservice Consultants Society International. We are identifying distribution channels and our initial efforts will be inthose markets in which we have currently have a presence, namely hotels andcorrectional facilities, leveraging our early success in many of the majorcasino properties in Las Vegas. Dental PuriCore's Global Dental strategy continues to focus on clinically orientedapplications such as root canal procedures and oral rinses. In May, results of auniversity study showing that our solution is extremely effective for root canalcleansing and disinfecting compared with bleach (sodium hypoclorite, a knowncyto-toxic solution) were presented at the American Association of Endodontistsannual meeting. Financial Review Income Statement PuriCore experienced a solid first half of 2007 with revenue of $10.3 million,an increase of 23% from H1 2006 (16% growth on a constant currency basis).Importantly, recurring revenues, which are generated from the rental agreements,service contracts, and the sales of consumables, accounted for 68% of totalrevenue for the six months ended 30 June 2007, a 95% increase in recurringrevenue from the six months ended 30 June 2006. The first six months of 2007was certainly our strongest half-year period to date, and the results havevalidated our shift to a recurring-revenue rental model. Gross margin for the six month period ended 30 June 2007 was 23.5%, comparedwith 28.4% for the six months ended 30 June 2006 and 18.4% for the 12 monthsended 31 December 2006. The margin improvement compared with the full-year 2006level is primarily the result of higher margins in the US Food Retail businessdue to lower installation costs in H1 2007. Compared with the first half of2006, this improvement was partially offset by lower margins in our UK Endoscopybusiness, which now includes sales of our new distributed products that carry alower margin than our proprietary systems. Operating expenses for the first six months of 2007 were $12.8 million, comparedwith $9.9 million for the first six months of 2006, an increase of approximately29%. Research and development increased 21% in H1 2007 vs. H1 2006, driven byinvestment in new market opportunity development. Selling, general, andadministrative costs increased 30% in H1 2007 vs. H1 2006. The increase waslargely the result of the additional costs associated with operating as a publiccompany (the Company was private for the first six months of 2006), includingthe additional overhead of legal, accounting, and other professional fees.Additionally, the Company recognized $0.5 million in H1 2007 ($0.9 million in H12006) of non-cash stock compensation expense related to the issuance of shareoptions to Employees and Directors of the Company (as determined under IFRS 2). Balance Sheet As of 30 June 2007, PuriCore had cash and cash equivalents (including restrictedcash) of $29.2 million (compared with $43.0 million as of 31 December 2006), adecrease of $13.8 million. A significant use of cash was approximately $3million for the repayment of debt associated with secured borrowing arrangementsthat the Company entered into to further the strategy of growing our base ofrented Sterilox Systems installed on operating lease agreements. As of 30 June,outstanding related debt related to these agreements totalled $11.7 million (vs.$14.7 at 31 December 2006). The Company also used $3 million of cash to build inventory, which increased to$6.7 million at 30 June 2007 from $3.7 million at 31 December 2006. Theincrease is a result of strategic decisions to increase inventories inanticipation of US Food Retail orders as well as to integrate the inventoryassociated with the Minntech distribution agreement. Thus we expect inventorylevels to decrease with conversions of Food Retail prospects as well as on-goingUK sales. Outlook PuriCore remains focused on driving end-customer adoption of our core technologyacross key markets. We diligently continue to control costs and allocateresources to the business areas with the highest potential for return. We have astrong pipeline of major opportunities in our core Food Retail and Endoscopybusinesses. We are excited about expansion into new geographies and other newareas including Wound Therapy and the Foodservice, Hospitality, andInstitutional markets. Overall, we are optimistic about the outlook for growthin the coming months while we judiciously manage the business. ThroughoutPuriCore, we remain focused on delivering value to our shareholders. CONSOLIDATED INCOME STATEMENT For the six month period ended 30 June 2007, 30 June 2006 and the year ended 31December 2006 Note 30 June 30 June 31 December 2007 2006 2006 $ $ $ CONTINUING OPERATIONS REVENUE 1 10,288,693 8,362,939 15,867,232 Cost of sales (7,868,036) (5,987,022) (12,943,478) ______ ______ ______GROSS PROFIT 1 2,420,657 2,375,917 2,923,754 Selling, general and administrative expenses (11,326,618) (8,709,298) (18,887,838)Research and development (1,483,051) (1,225,270) (2,120,795) ______ ______ ______LOSS BEFORE INTEREST AND TAX (10,389,012) (7,558,651) (18,084,879)Finance costs (630,669) (242,880) (1,261,644)Finance income 849,626 63,835 1,341,385 ______ ______ ______LOSS BEFORE TAX (10,170,055) (7,737,696) (18,005,138)Income tax income - - 166,160 ______ ______ ______LOSS FOR THE PERIOD (10,170,055) (7,737,696) (17,838,978) ______ ______ ______ ATTRIBUTABLE TO:EQUITY HOLDERS OF THE PARENT (10,170,055) (7,737,696) (17,838,978) ______ ______ ______ LOSS PER SHARE $/share $/share $/shareContinuing operations Basic (0.06) (0.07) (0.14) ______ ______ ______ CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE For the six month period ended 30 June 2007, 30 June 2006 and the year ended 31December 2006 30 June 30 June 31 December 2007 2006 2006 $ $ $ Exchange differences on translation of foreign operations 387,853 (223,085) 1,094,179 ______ ______ ______NET INCOME/(EXPENSE) RECOGNISED IN EQUITY 387,853 (223,085) 1,094,179Loss for the period (10,170,055) (7,737,696) (17,838,978) ______ ______ ______TOTAL RECOGNISED INCOME AND EXPENSE (9,782,202) (7,960,781) (16,744,799) ______ ______ ______ TOTAL RECOGNISED INCOME AND EXPENSE IS ATTRIBUTABLE TO:Equity holders of the parent (9,782,202) (7,960,781) (16,744,799) ______ ______ ______ CONSOLIDATED BALANCE SHEET For the six month period ended 30 June 2007, 30 June 2006 and the year ended 31December 2006 30 June 30 June 31 December 2007 2006 2006 $ $ $ASSETSNON CURRENT ASSETSIntangible assets 5,655,894 4,654,086 5,329,721Equipment leased to customers 5,914,248 5,647,116 6,779,094Property, plant and equipment - all other 3,363,592 1,598,394 2,543,930Restricted cash 3,033,000 254,671 3,033,000Other receivables - 1,810,098 - ______ ______ ______TOTAL NON CURRENT ASSETS 17,966,734 13,964,365 17,685,745 ______ ______ ______CURRENT ASSETSInventories 6,701,174 2,965,310 3,672,381Trade and other receivables 6,310,811 3,153,578 6,496,776IPO funds receivable - 6,863,979 -Restricted cash 2,250,000 794,690 2,250,000Cash and cash equivalents 23,903,728 46,977,061 37,683,515 ______ ______ ______TOTAL CURRENT ASSETS 39,165,713 60,754,618 50,102,672 ______ ______ ______TOTAL ASSETS 57,132,447 74,718,983 67,788,417 ______ ______ ______LIABILITIESCURRENT LIABILITIESTrade and other payables (7,874,720) (6,401,070) (6,295,128)IPO expenses payable - (5,162,462) -Financial liabilities (5,717,607) (6,103,953) (5,933,974)Provisions (94,301) - (91,989) ______ ______ ______TOTAL CURRENT LIABILITIES (13,686,628) (17,667,485) (12,321,091) ______ ______ ______NON CURRENT LIABILITIESFinancial liabilities (6,023,768) (4,622,311) (8,762,225)Provisions - (20,884) - ______ ______ ______TOTAL NON CURRENT LIABILITIES (6,023,768) (4,643,195) (8,762,225) ______ ______ ______TOTAL LIABILITIES (19,710,396) (22,310,680) (21,083,316) ______ ______ ______NET ASSETS 37,422,051 52,408,303 46,705,101 ______ ______ ______EQUITYShare capital 2,758,718 1,518,390 2,758,718Share premium 144,931,003 144,267,162 144,931,003Other reserves 5,886,454 3,764,484 5,387,301Retained earnings (117,660,326) (97,388,989) (107,490,271)Cumulative translation adjustment 1,506,203 247,256 1,118,350 _______ _______ _______ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS 37,422,051 52,408,303 46,705,101 _______ _______ _______TOTAL EQUITY 37,422,051 52,408,303 46,705,101 _______ _______ _______ CONSOLIDATED CASH FLOW STATEMENT For the six month period ended 30 June 2007, 30 June 2006 and the year ended 31December 2006 30 June 30 June 31 December 2007 2006 2006 $ $ $ CASH FLOWS FROM OPERATING ACTIVITIESLoss for the period (10,170,055) (7,737,696) (17,838,978)Adjustments for:Taxation - - (166,160)Finance costs 527,363 242,880 1,151,269Finance income (849,626) (63,835) (1,341,385)Depreciation and amortisation 1,954,766 1,398,139 2,995,164Amortisation of warrant and debt discount and issuance 103,306 - 110,375costsShare based payment expense 499,153 940,024 2,578,466Loss/(gain) on disposal of property, plant and equipment - 45,999 (31,221) _______ _______ _______OPERATING LOSS BEFORE MOVEMENT IN WORKING CAPITAL (7,935,093) (5,174,489) (12,542,470)(Increase)/decrease in inventories (3,028,793) 765,740 58,669(Increase)/decrease in trade and other receivables 185,960 (2,017,615) (798,196)(Increase)/decrease in IPO funds receivable - (6,863,979) -Increase/(decrease) in trade and other payables 1,579,596 4,924,855 (380,680)Increase/(decrease) in provisions 2,312 (4,868) 66,237 _______ _______ _______CASH ABSORBED BY OPERATIONS (9,196,018) (8,370,356) (13,596,440) _______ _______ _______NET CASH FLOW FROM OPERATING ACTIVITIES (9,196,018) (8,370,356) (13,596,440) _______ _______ _______CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (1,712,695) (4,640,391) (8,067,069)Proceeds from sale of property, plant and equipment - - 143,382Cash paid for internally generated intangibles (482,797) (343,719) (1,102,626) _______ _______ _______NET CASH FLOW FROM INVESTING ACTIVITIES (2,195,492) (4,984,110) (9,026,313) _______ _______ _______CASH FLOWS FROM FINANCING ACTIVITIESIssue of shares, options and warrants - 52,402,168 52,480,096Proceeds from new loans - 9,147,555 12,657,448Repayments of borrowings (3,304,726) (884,424) (3,227,254)Repayments of obligations under finance leases (31,699) (19,985) (69,119)Interest received 849,626 - 1,341,385Decrease in overdrafts (249,068) - (635,356) _______ _______ _______NET (DECREASE)/INCREASE IN CASH FLOW FROM FINANCINGACTIVITIES (2,735,837) 60,645,314 62,547,200 _______ _______ _______NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (14,127,377) 47,290,848 39,924,447Cash and cash equivalents at beginning of period 42,966,515 952,842 952,842Effect of foreign exchange rate changes on cash held 347,590 (217,268) 2,119,226 _______ _______ _______CASH AND CASH EQUIVALENTS AT END OF PERIOD 29,186,728 48,026,422 42,966,515 _______ _______ _______ BASIS OF PREPARATION The consolidated interim financial statements of the company for the six monthsended 30 June 2007 comprise the company and its subsidiaries (together referredto as the 'Group'). The consolidated interim financial statements were authorised for issuance on 24September 2007. These interim financial statements have been prepared on the basis of theaccounting policies set out in the annual report and accounts for the year ended31 December 2006. These accounts, which were prepared under InternationalFinancial Reporting Standards adopted by the EU ("Adopted IFRS"), have beendelivered to the Registrar of Companies. The report of the auditors wasunqualified in accordance with section 235 of the Companies Act 1985 and did notcontain a statement under section 237 (2) or (3) of the Companies Act 1985. The accounting policies have been applied consistently throughout the Group forpurposes of these consolidated interim financial statements. ADOPTED IFRS NOT YET APPLIED The following adopted IFRSs were available but have not been applied by thePuriCore Group in these financial statements: • IAS 23 (Amendment): 'Borrowing Costs' - effective for annual periods beginning on or after 1 January 2009. • IFRIC 11 IFRS 2: 'Group and Treasury Share Transactions' - effective for annual periods beginning on or after 1 March 2007. • IFRIC 12: 'Service Concession Arrangements' - effective for annual periods beginning on or after 1 January 2008. • IFRIC 13: 'Customers Loyalty Programmes' - effective for annual periods beginning on or after 1 July 2008. • IFRIC 14 'IAS 19 - the limit on a defined benefit asset, minimum funding requirements and their interaction' - effective for annual periods beginning on or after 1 January 2008. The group does not anticipate that the adoption of these standards andinterpretations will have a material effect on its financial statements oninitial adoption. NOTES TO THE FINANCIAL STATEMENTSFor the six month period ended 30 June 2007 1 SEGMENTAL ANALYSIS The PuriCore Group is managed by type of business. Segmental information isprovided having regard to the nature of the goods and services provided and themarkets served. Primary reporting format - Business Segments For the period ended Endoscopy Food Other Corporate & Total as unallocated reported for30 June 2007 the PuriCore Group $ $ $ $ $ REVENUE 6,285,778 3,763,327 239,588 - 10,288,693 ______ ______ ______ ______ ______ GROSS PROFIT 1,768,552 538,787 113,318 - 2,420,657 ______ ______ ______ ______ ______ For the period ended Endoscopy Food Other Corporate & Total as unallocated reported for30 June 2006 the PuriCore Group $ $ $ $ $ REVENUE 5,641,029 2,411,799 310,131 - 8,362,939 ______ ______ ______ ______ ______ GROSS PROFIT/(LOSS) 2,342,602 (52,797) 121,115 (35,003) 2,375,917 ______ ______ ______ ______ ______ For the year ended Endoscopy Food Other Corporate & Total as unallocated reported for31 December 2006 the PuriCore Group $ $ $ $ $ REVENUE 8,902,951 6,477,618 486,663 - 15,867,232 ______ ______ ______ ______ ______ GROSS PROFIT/(LOSS) 2,299,460 626,585 (2,291) - 2,923,754 ______ ______ ______ ______ ______ 2 EMPLOYEE BENEFITS SHARE BASED PAYMENTS During the periods ended 30 June 2006 and 2007 and the year ended 31 December2006 PuriCore plc operated an Employee Share Option Scheme. The share optionsgranted under the scheme are not subject to performance conditions and have anexercise period of up to 7 years. There are no vesting conditions attached tothe options other than completion of service, with options becoming vested atvarious points in time following the completion of one year's employment withPuriCore plc. 30 June 2007 30 June 2006 Weighted average Weighted average exercise price exercise price Number of Number of options options $ $ $ $ Outstanding at beginning of period 1.12 20,142,700 1.63 17,031,617Granted during the period 1.03 447,500 1.01 6,993,600Exercised during the period - - 0.52 370,000Forfeited during the period (0.98) (130,250) 2.85 (4,989,267) ______ ______ ______ ______Outstanding at end of period 1.24 20,459,950 1.12 19,405,950 ______ ______ ______ ______ Exercisable at end of period 1.28 15,565,900 1.23 10,393,958 ______ ______ ______ ______ (continued from table above) 31 December 2006 Weighted average exercise price Number of options $ $ Outstanding at beginning of period 1.62 17,495,950Granted during the period 1.12 4,065,000Exercised during the period 0.18 (370,000)Forfeited during the period 1.24 (1,048,250) ______ ______Outstanding at end of period 1.12 20,142,700 ______ ______ Exercisable at end of period 1.16 13,910,899 ______ ______ The weighted average share price for the six months ended 30 June 2007 was$1.07. This compares to the weighted average share prices as at 30 June 2006($0.92) and 31 December 2006 ($1.05). The weighted average share prices for theperiods ended 30 June and 31 December 2006 were based wholly or partially onvaluations undertaken in the year since the PuriCore plc stock was not publiclytraded during the first six months of 2006. Therefore these weighted averageshare prices could not be based on market observable information. 3 PROPERTY, PLANT AND EQUIPMENT (INCLUDING LEASED EQUIPMENT) At 30 June At 30 June At 31 December 2007 2006 2006 $ $ $ CostAt beginning of period 14,390,414 6,212,663 6,212,663Additions 1,975,686 4,640,394 8,158,589Disposals (262,991) (46,004) (424,540)Effect of movements in foreign exchange 101,007 183,644 443,702 ______ ______ ______At end of period 16,204,115 10,990,697 14,390,414 ______ ______ ______ DepreciationAt beginning of period 5,067,390 2,563,251 2,563,251Charged in the period 1,846,192 1,174,564 2,520,795On disposals (48,050) - (312,379)Effect of movements in foreign exchange 60,743 7,372 295,723 ______ ______ ______At end of period 6,926,275 3,745,187 5,067,390 ______ ______ ______ Net book valueAt end of period 9,277,840 7,245,510 9,323,024 ______ ______ ______ At beginning of period 9,323,024 3,649,412 3,649,412 ______ ______ ______ This information is provided by RNS The company news service from the London Stock Exchange