29 Aug 2008 07:00
PuriCore plc
("PuriCore" or "the Company")
Interim Results for the Six Months Ended 30 June 2008
First half revenues increase 98%, operating expenses reduced by 9%
MALVERN, PENNSYLVANIA, AND STAFFORD, UK, 29 August 2008 - PuriCore (LSE: PURI), the life sciences company focused on developing and commercialising proprietary, green solutions that safely, effectively, and naturally kill infectious pathogens without causing harm to human health or the environment, announces its interim results for the six months ended 30 June 2008.
Financial Highlights (unaudited)
Q2 revenue up 107% to $10.4 million (2007: $5.0 million)
H1 revenue up 98% to $19.5 million (2007: $9.9 million)
H1 Food Safety sales up 188% to $10.8 million (2007: $3.8 million)
H1 Endoscopy sales up 43% to $8.4 million (2007: $5.8 million) with positive income before interest and taxes (2007: loss of $2.6 million)
H1 operating expenses 9.2% below the same period last year
Operational Highlights
$11 million Sterilox Food Safety contract announced with top-five US supermarket
Sterilox Solution demonstrated to be highly effective against pandemic H5N1 avian influenza
Sterilox Solution approved for organic food production, processing, and handling
Balance Sheet (unaudited)
$9 million in cash and restricted cash as at 30 June 2008
Debt reduced by $3.4 million in the six months ended 30 June 2008
Post Balance Sheet Developments
$8.6 million contract extension awarded from largest existing Sterilox Food Safety customer, a top-five US supermarket (announced 2 July)
$2.5 million contract extension awarded from another major Sterilox Food Safety customer (announced 30 July)
A total of £8.4 million raised in Placing and Open Offer (announced 30 July and 22 August)
Greg Bosch, Chief Executive of PuriCore, said:
"PuriCore has had a very strong start to 2008, with first half revenues nearly double the same period last year. Our focus on cost management reduced operating expenses by 9%, and we will continue to take further prudent steps to tighten operating costs. We appreciate the confidence exhibited by investors in the raising of £8.4 million in our recent Placing and Open Offer.
"Looking ahead, we will continue to focus primarily on our core businesses of US Food Retail and UK Endoscopy as well as on the significant opportunity in the Wound Management market, all of which have significant potential to drive us to profitability."
Enquiries:
| Ben Brewerton | Greg Bosch, CEO |
| Susan Quigley | Keith A. Goldan, CFO |
| Financial Dynamics | PuriCore |
| +44 (0) 20 7831 3113 | +1 484 321 2700 |
About PuriCore
PuriCore plc (LSE: PURI) is a life sciences company focused on developing and commercialising proprietary green solutions that safely, effectively, and naturally kill infectious pathogens without causing harm to human health or the environment. PuriCore targets markets that depend upon controlling contamination, including food safety in retail and foodservice, medical device disinfection, and wound management. The Company's patented, proprietary technology mimics the human body's production of the natural antimicrobial hypochlorous acid, which is highly effective in killing bacteria, viruses, and fungal spores, simply from water, common salt, and electricity. Hypochlorous acid is proven to be safe, environmentally friendly, and fast acting against a broad range of infectious pathogens, including major public health threats of M. tuberculosis, MRSA, E.coli, Norovirus, H5N1 Avian Influenza, HIV, Salmonella, Polio Virus, Helicobater pylori, and Legionella. PuriCore is headquartered in Malvern, Pennsylvania, with offices in Stafford, UK.
To receive additional information on PuriCore, please visit our website at www.puricore.com, which does not form part of this press release. To subscribe to PuriCore investor news alerts, visit http://investor.puricore.com.
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.
NB 31 December 2007 financials are audited. All Interim financials (30 June 2008 and 30 June 2007) are unaudited.
Chairman and CEO Review
H1 2008 Report
In the first half of 2008, we focused on expanding our two core businesses, namely US Food Retail and UK Endoscopy, ending the half with revenues of $19.5 million, a 98% increase over the first half of 2007.
Core Business: US Food Retail
We are very pleased with the growth of our Food Retail business, which delivered a 188% increase in revenues resulting in part from the receipt of an $11 million contract with a top-five US supermarket retailer. This revenue growth resulted in a reduction in the business unit's H1 2008 loss (before interest and taxes) to $1.3 million (compared with a loss of $3.0 million, before interest and taxes, for the first half of 2007). As at 30 June 2008, more than 20 leading US retail supermarket chains, including two of the top-five, use Sterilox Food Safety Systems. With more than 2,100 Systems installed, PuriCore's estimated market share for this segment has increased to 8%.
In post-period developments, PuriCore received a further two major Food Safety lease extension contracts from two of its largest customers, resulting in additional revenue totalling $11.1 million over the next four years.
Core Business: UK Endoscopy
Sales in the UK Sterilox Endoscopy business grew 43% to $8.4 million in the first half of 2008 (also 43% on a constant currency basis). This strong sales growth reflects solid increases in our recurring revenue from rental and lease contracts with our Sterilox Endoscopy Systems as well as with service contracts and consumables. We estimate that approximately 40% of NHS hospitals with endoscope disinfection units now use at least one of our Sterilox Endoscopy products. We anticipate continued market share growth in the UK whilst better leveraging our operating costs in this business.
We are pleased to report that the UK Endoscopy business generated positive operating income (before interest and taxes) for the first half of 2008 (compared with a loss of $2.6 million, before interest and taxes, for the same period of 2007). This improvement was a direct result of our team's focus on product mix, pricing, and effective management of operational costs.
New Market Developments
Following encouraging results from clinicians in our Wound Management business, we will transition from an exclusively clinical development programme to early commercialisation of the Vashe Wound Therapy platform. To date we have treated more than 4,000 patients across 19 clinical sites in the US. We continue to explore partnership opportunities for various applications in Wound Management and now expect first revenues for this segment in the second half of 2008 as we initiate a targeted entry into selected applications and markets.
In our US Endoscopy program, we announce today the successful installation of our first pilot site earlier this month, meeting our previously announced timeline. We will support and monitor this customer location as we further develop our business plan for this segment.
In the Foodservice and Hospitality markets, we have established distribution channels in several targeted regions of the US. Business development has been slower than anticipated, largely driven by the economic challenges facing US hotel and restaurant operators. Therefore we will continue to focus our investments and resources principally in our Food Retail business.
Post-Period Developments
Placing and Open Offer
The recently completed Placing and Open Offer raised £8.4 million (approximately £7.3 million net of expenses). As outlined in the Prospectus, we plan to use the net proceeds of the Placing and Open Offer, together with our existing cash, to fund revenue growth in our two core businesses and selectively invest in market entry and product development in new markets, with the aim of reaching and sustaining profitability.
Changes to the Board of Directors
As part of the Company's overall focus on cost management, we announce today that two Non-Executive Director positions will be eliminated. As part of this action, Bishop Allen and Alan Suggett each have notified the Board of Directors of their intent to resign, and the Board has accepted their respective resignations with effect from 30 September 2008. We thank each of them for their guidance, commitment, and leadership.
Principal Risks and Uncertainties
The principal risks and uncertainties for the Group have not materially changed from those set out in the Corporate Governance Report of the 2007 Annual Report.
Related Party Transaction
On 27 June 2008, the Company issued an unsecured loan note to Woolwich International Holdings Limited, the largest shareholder of the Company's Ordinary Shares. The principal amount owed to Woolwich under the note is £1,500,000 with interest at a rate of 12%. In conjunction with this note, the Company issued a warrant to Woolwich as further consideration for the granting of the loan note. Woolwich is entitled until 30 June 2013 to subscribe for up to 247,100 Ordinary Shares at a price of £0.2125 (21.25 pence) per Ordinary Share (being the volume weighted average price of the Ordinary Shares over the five trading days preceding the date on which the note was issued.) The Company intends to repay the principal amount of this loan note out of the proceeds of the Placing and Open Offer this quarter.
Outlook
In our drive to achieve sustainable cash flow profitability, we will continue building on the strength of our core businesses and reprioritise our new market focus. Moving forward, we will continue to concentrate our resources on the US Food Retail and UK Endoscopy markets, which are expected to count for the majority of revenue in 2008 and 2009. Similarly, we will focus investment on our most promising new market opportunity and as a result, we will concentrate principally on Wound Management in the near term.
Additionally, we will continue our cost containment efforts throughout the Company, making prudent business decisions and reducing investments in new market opportunities that are not expected to demonstrate near-term profitability.
In the remainder of 2008, we expect to achieve the following:
• Complete the installation of Sterilox Food Safety Systems in currently contracted stores of a top-five US supermarket chain in Q4 2008
• Transition the clinical development programme on Vashe Wound Therapy to a controlled market entry with a view to posting early revenues in late 2008 and further early-stage discussions with potential partners
• Monitor and support the US Endoscopy pilot site
• Secure the contract for 2009 to install Sterilox Food Safety Systems for the remaining stores of the
same top-five US supermarket chain mentioned above
The Directors believe that the increased demand for the Company's products and the resulting revenue growth combined with increases in margins and controls on operating expense provides validation of PuriCore's business model. Accordingly, the Directors are confident that PuriCore will achieve sustainable profitability.
Financial Review
Income Statement
PuriCore achieved excellent sales growth in the first half of 2008 with revenues of $19.5 million, an increase of 98% over H1 2007 (also 98% growth on a constant currency basis). Recurring revenues, which are generated from rental agreements, service contracts, and the sale of consumables, were $8.5 million, and accounted for 44% of total revenue for H1 2008 (H1 2007: $7.3 million, 74% of total revenue). Whist the proportion of recurring revenue to total revenue decreased largely as a result of the $11 million capital Food Retail contract awarded in early 2008, the absolute increase in recurring revenue of approximately 17% is continuing validation of the Company's focus to grow recurring revenue.
H1 2008 gross profit margin improved two points over H1 2007 to 25%. We anticipate that sustained margin growth will be achievable as the result of both core businesses selling a more profitable mix of product and increased volumes that yield more effective leverage of the field service organizations. (This cost is captured above the gross profit/margin line in cost of goods sold.) Additionally, in H2 2008 the Company will begin to recognise revenue from the first of two lease extensions announced in July. Totalling approximately $11.1 million, these contracts provide PuriCore with higher gross profit margins as the Company begins to realize significant value from continued utilization of assets.
The Company made significant efforts in H1 2008 to reduce operating costs. The result was H1 2008 operating expenses (comprising sales & marketing, research & development, and general & administrative expenses) totalling $11.6 million, 9% below prior year (H1 2007: $12.8 million). Excluding H1 2008 non-cash stock compensation and warrant expense of $589,485 (H1 2007: $499,153), operating expenses decreased 10% in H1 2008 vs. H1 2007.
Most notably, general & administrative expenses in H1 2008 totalled $6.5 million compared with $7.4 million in H1 2007, a decrease of 12% resulting from the Company's growing experience as a public company and prudent cost control.
Sales & marketing expenses in H1 2008 totalled $3.8 million (H1 2007: $3.9 million), a decrease of 3%.
Investment in research & development in H1 2008 was reduced by 14% to $1.3 million (H1 2007: $1.5 million). The Company will continue to balance its investment in engineering, clinical development, chemistry, and microbiology with a focus on projects with near-term revenue and profitability.
Balance Sheet and Cash Flow
As at 30 June 2008, PuriCore had cash equivalents (including restricted cash) of $9.0 million (compared with $18.9 million as of 31 December 2007). Cash outflow from operating activities decreased in the six-month period ended 30 June 2008 to $4.7 million (H1 2007: $8.3 million).
The Company also reduced inventory by $1.2 million in H1 2008, which decreased to $4.5 million at 30 June 2008 from $5.7 million at 31 December 2007, resulting from utilisation of the 2007 inventory build-up in anticipation of the large contract received in early 2008.
The recently completed Placing and Open Offer raised £8.4 million (£7.3 million net of expenses). Additionally, the Company expects to increase its working capital through the monetisation of cash flows from certain Food Retail lease contracts. The Company has leases with revenues of approximately $12.5 million (as at 31 July) that have not yet been monetised. The Company expects to monetise a portion of these cash flow streams, which the Directors believe have a high likelihood of success based on the Company's previous experience of monetising leases.
The Directors are confident that with the net proceeds of the Placing and Open Offer, expected cash inflows, and monetisation strategy, the Company will be able to maintain adequate working capital.
Consolidated Income Statement
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ ______ | $ ______ | $ ______ | |
| Revenue | 19,475,237 | 9,851,841 | 18,642,124 |
| Cost of sales | (14,563,184) | (7,533,510) | (15,703,628) |
| Gross Profit | 4,912,053 | 2,318,331 | 2,938,496 |
| Sales and marketing expenses | (3,799,461) | (3,918,658) | (7,997,289) |
| General and administrative expenses | (6,544,731) | (7,407,960) | (14,148,836) |
| Research and development expenses | (1,280,845) ______ | (1,483,051) ______ | (2,405,930) ______ |
| Loss before Interest and Tax | (6,712,984) | (10,491,338) | (21,613,559) |
| Finance costs | (289,657) | (630,669) | (1,190,501) |
| Finance income | 178,960 ______ | 849,626 ______ | 1,372,962 ______ |
| Net Finance Income | (110,697) ______ | 218,957 ______ | 182,461 ______ |
| Loss before Taxation | (6,823,681) | (10,272,381) | (21,431,098) |
| Taxation | 218,510 ______ | - ______ | 116,434 ______ |
| Loss for the Period | (6,605,171) ______ | (10,272,381) ______ | (21,314,664) ______ |
| Attributable to: | |||
| Equity Holders of the Parent | (6,605,171) ______ | (10,272,381) ______ | (21,314,664) ______ |
| Basic and Diluted Loss per Share | (0.04) ______ | (0.07) ______ | (0.14) ______ |
Consolidated Statement of Recognised Income and Expenses
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ ______ | $ ______ | $ ______ | |
| Exchange differences on translation of foreign operations | (26,542) ______ | 387,853 ______ | 86,124 ______ |
| Net Income Recognised in Equity | (26,542) | 387,853 | 86,124 |
| Loss for the financial year | (6,605,171) ______ | (10,272,381) ______ | (21,314,664) ______ |
| Total Recognised Income and Expense | (6,631,713) ______ | (9,884,528) ______ | (21,228,540) ______ |
| Total Recognised Income and Expense Is Attributable to: | |||
| Equity holders of the parent | (6,631,713) ______ | (9,884,528) ______ | (21,228,540) ______ |
Consolidated Balance Sheet
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ ______ | $ ______ | $ ______ | |
| ASSETS | |||
| Non Current Assets | |||
| Intangible assets | 6,482,674 | 5,655,894 | 6,042,265 |
| Property, plant, and equipment | 6,586,523 | 9,277,840 | 8,002,124 |
| Restricted cash | - | 3,033,000 | - |
| Trade and other receivables | 473,528 ______ | - ______ | 487,039 ______ |
| Total Non Current Assets | 13,542,725 | 17,966,734 | 14,531,428 |
| Current Assets | |||
| Inventories | 4,472,465 | 7,035,700 | 5,683,726 |
| Trade and other receivables | 10,061,025 | 5,873,959 | 4,689,389 |
| Restricted cash | 2,033,000 | 2,250,000 | 3,033,000 |
| Cash and cash equivalents | 6,987,844 ______ | 23,903,728 ______ | 15,861,207 ______ |
| Total Current Assets | 23,554,334 ______ | 39,063,387 ______ | 29,267,322 ______ |
| Total Assets | 37,097,059 ______ | 57,030,121 ______ | 43,798,750 ______ |
| LIABILITIES | |||
| Current Liabilities | |||
| Trade and other payables | (10,115,436) | (7,874,719) | (7,326,745) |
| Loans and borrowings | (5,607,532) | (5,717,607) | (7,991,371) |
| Provisions | (93,872) ______ | (94,301) ______ | (93,870) ______ |
| Total Current Liabilities | (15,816,840) ______ | (13,686,627) ______ | (15,411,986) ______ |
| Non Current Liabilities | |||
| Loans and borrowings | (484,748) ______ | (6,023,768) ______ | (1,549,064) ______ |
| Total Non Current Liabilities | (484,748) ______ | (6,023,768) ______ | (1,549,064) ______ |
| Total Liabilities | (16,301,588) ______ | (19,710,395) ______ | (16,961,050) ______ |
| Net Assets | 20,795,471 ______ | 37,319,726 ______ | 26,837,700 ______ |
| EQUITY | |||
| Share capital | 2,777,795 | 2,758,718 | 2,777,795 |
| Share premium | 145,455,963 | 144,931,003 | 145,455,962 |
| Other reserves | 6,793,889 | 5,886,454 | 6,204,404 |
| Retained earnings | (135,410,106) | (117,762,652) | (128,804,935) |
| Cumulative translation adjustment | 1,177,930 ______ | 1,506,203 ______ | 1,204,474 ______ |
| Issued Capital and Reserves Attributable to Equity Holders of the Parent | 20,795,471 ______ | 37,319,726 ______ | 26,837,700 ______ |
| Total Equity | 20,795,471 ______ | 37,319,726 ______ | 26,837,700 ______ |
Consolidated Cash Flow Statement
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ ______ | $ ______ | $ ______ | |
| Cash Flows from Operating Activities | |||
| Loss for the year | (6,605,171) | (10,272,381) | (21,314,664) |
| Adjustments for: | |||
| Taxation | (218,510) | - | (116,434) |
| Finance costs | 289,657 | 527,363 | 1,190,501 |
| Finance income | (178,960) | (849,626) | (1,372,962) |
| Depreciation and amortisation | 2,425,571 | 2,058,072 | 4,937,879 |
| Share based payment expense | 589,485 | 499,153 | 817,103 |
| Loss/ on disposal of property, plant, and equipment | - ______ | - ______ | 270,211 ______ |
| Operating Loss before Movement in Working Capital | (3,697,928) | (8,037,419) | (15,588,366) |
| (Increase)/decrease in inventories | 1,211,261 | (3,363,319) | (2,011,345) |
| (Increase)/decrease in trade and other receivables | (5,436,898) | 622,812 | 1,015,595 |
| Increase in trade and other payables | 2,788,691 | 1,579,596 | 1,031,617 |
| Increase in provisions | - ______ | 2,312 ______ | 1,881 ______ |
| Cash Absorbed by Operations | (5,134,874) | (9,196,018) | (15,550,618) |
| Interest received | 178,960 | 849,626 | 1,372,962 |
| Income tax credit received | 218,510 ______ | - ______ | 116,434 ______ |
| Net Cash Flow from Operating Activities | (4,737,404) ______ | (8,346,392) ______ | (14,061,222) ______ |
| Cash Flows from Investing Activities | |||
| Purchase of property, plant, and equipment | (673,443) | (1,712,695) | (3,294,420) |
| Proceeds from sale of property, plant, and equipment | - | - | - |
| Cash paid for internally generated intangibles | (781,484) ______ | (482,797) ______ | (1,787,122) ______ |
| Net Cash Flow from Investing Activities | (1,454,927) ______ | (2,195,492) ______ | (5,081,542) ______ |
| Cash Flows from Financing Activities | |||
| Issue of shares, options, and warrants | - | - | 544,036 |
| Proceeds from new loan notes | 3,000,000 | - | - |
| Proceeds from new bank loans | - | - | 4,500,000 |
| Repayment of borrowings | (6,254,062) | (2,880,669) | (9,519,069) |
| Interest paid on borrowings | (210,884) | (424,057) | (885,748) |
| Repayments of obligations under finance leases | (17,474) | (31,699) | (64,246) |
| Decrease in overdraft | (176,617) ______ | (249,068) ______ | (72,451) ______ |
| Net Cash Flow from Financing Activities | (3,659,037) ______ | (3,585,493) ______ | (5,497,478) ______ |
| Net Decrease in Cash and Cash Equivalents | (9,851,368) | (14,127,377) | (24,640,242) |
| Cash and cash equivalents at beginning of year | 18,894,207 | 42,966,515 | 42,966,515 |
| Effect of foreign exchange rate changes on cash held | (21,995) ______ | 347,590 ______ | 567,934 ______ |
| Restricted cash | 2,033,000 | 5,283,000 | 3,033,000 |
| Cash and cash equivalents | 6,987,844 ______ | 23,903,728 ______ | 15,861,207 ______ |
| Total Cash at End of Period | 9,020,844 ______ | 29,186,728 ______ | 18,894,207 ______ |
Basis of Preparation
The consolidated interim financial statements of PuriCore plc (the "Company") for the six months ended 30 June 2008 comprise the Company and its subsidiaries (together referred to as the "Group").
The consolidated interim financial statements are the responsibility of the Directors and were authorised and approved by the Board of Directors for issuance on 28 August 2008.
The interim financial statements for the period ended 30 June 2008 are unaudited and do not comprise statutory accounts within the meaning of Section 240 of the Companies Act of 1985.
This interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs.
These interim financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the group for the year ended 31 December 2007.
The statutory accounts for the year ended 31 December 2007, which were prepared under International Financial Reporting Standards adopted by the EU ("Adopted IFRS"), have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified in accordance with section 235 of the Companies Act 1985, (ii) included an emphasis of matter relating to the assumption that the going concern basis preparation is appropriate, and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
The accounting policies have been applied consistently throughout the Group for purposes of these consolidated interim financial statements.
Going Concern
The financial statements are prepared on a going concern basis, which the Directors believe to be appropriate for the reasons set out below.
The Group meets its day-to-day working capital requirements through cash reserves and external funding facilities. At 30 June 2008 cash held was $9.0 million (including $2.0 million restricted cash) and outstanding loan notes payable were $5.5 million.
As detailed in the Financial Review, the Group raised an additional £8.4 million in the period July to August 2008 through a Placing and Open Offer. The Board is constantly reviewing alternative strategies for funding the Group. On the basis of the additional funds raised and the strategies being considered, the Board considers that the Group will continue to operate with sufficient funding and accordingly these financial statements have been prepared on a going concern basis.
Segmental Analysis
The PuriCore Group is managed by type of business. Segmental information is provided having regard to the nature of the goods and services provided and the markets served. Under 'other,' we have identified the Group's Global Dental business and certain business development activities not yet generating significant revenues.
Primary Reporting Format - Business Segments
For the six-month period ended 30 June 2008
| Endoscopy | Food Safety | Other, Corporate, & Unallocated | Total as Reported for the PuriCore Group | |
| $ ______ | $ ______ | $ ______ | $ ______ | |
| Revenue | 8,369,788 | 10,848,233 | 257,216 | 19,475,237 |
| Income/(Loss) before Interest and Tax | 56,228 | (1,323,554) | (5,445,658) | (6,712,984) |
For the six-month period ended 30 June 2007
| Endoscopy | Food Safety | Other, Corporate, & Unallocated | Total as Reported for the PuriCore Group | |
| $ ______ | $ ______ | $ ______ | $ ______ | |
| Revenue | 5,848,926 | 3,763,327 | 239,588 | 9,851,841 |
| Income/(Loss) before Interest and Tax | (2,555,291) | (3,013,005) | (4,923,043) | (10,491,338) |
For the year ended 31 December 2007
| Endoscopy | Food Safety | Other, Corporate, & Unallocated | Total as Reported for the PuriCore Group | |
| $ ______ | $ ______ | $ ______ | $ ______ | |
| Revenue | 10,263,513 | 7,861,836 | 516,775 | 18,642,124 |
| Income/(Loss) before Interest and Tax | (7,335,241) | (5,724,633) | (8,553,685) | (21,613,559) |
Sales by Geographic Segment
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ ______ | $ ______ | $ ______ | |
| United Kingdom | 8,369,788 | 5,848,926 | 10,263,512 |
| United States | 11,105,449 ______ | 4,002,915 ______ | 8,378,611 ______ |
| 19,475,237 | 9,851,841 | 18,642,124 |
Share Based Payments
During the six-month periods ended 30 June 2008 and 30 June 2007 and during the year ended 31 December 2007, PuriCore plc operated an Employee Share Option Scheme. Excluding the Executive Directors, the share options granted under the scheme are not subject to performance conditions and have no vesting conditions other than completion of service. The exercise period is up to 10 years with options becoming vested at various points in time following the completion of one year's employment with PuriCore plc.
| 30 June 2008 | 30 June 2007 | |||
| Weighted average exercise price | Number of options | Weighted average exercise price | Number of options | |
| $ | $ | |||
| Outstanding at beginning of period | 1.23 | 20,390,950 | 1.12 | 20,142,700 |
| Granted during the period | 0.61 | 6,405,000 | 1.03 | 447,500 |
| Exercised during the period | - | - | - | - |
| Forfeited during the period | 1.69 ______ | (838,750) ______ | (0.98) ______ | (130,250) ______ |
| Outstanding at end of period | 1.06 ______ | 25,957,200 ______ | 1.24 ______ | 20,459,950 ______ |
| Exercisable at end of period | 1.23 ______ | 16,564,049 ______ | 1.28 ______ | 15,565,900 ______ |
(continued from table above)
| 31 December 2007 | ||
| Weighted average exercise price | Number of options | |
| $ | ||
| Outstanding at beginning of period | 1.12 | 20,142,700 |
| Granted during the period | 0.98 | 687,500 |
| Exercised during the period | 0.90 | (50,000) |
| Forfeited during the period | 1.10 ______ | (389,250) ______ |
| Outstanding at end of period | 1.23 ______ | 20,390,950 ______ |
| Exercisable at end of period | 1.26 ______ | 16,867,674 ______ |
The weighted average share price for the six months ended 30 June 2008 was $0.51. This compares with the weighted average share prices of $1.07 as at 30 June 2007 and $0.953 as at 31 December 2007.
Property, Plant, and Equipment (including Leased Equipment)
For the six-month periods ended 30 June 2008 (unaudited) and 30 June 2007 (unaudited) and for the year ended 31 December 2007.
| 30 June 2008 | 30 June 2007 | 31 December 2007 | |
| $ | $ | $ | |
| Cost | |||
| At beginning of period | 17,362,065 | 14,390,414 | 14,390,414 |
| Additions | 940,065 | 1,975,686 | 3,294,420 |
| Disposals | (266,622) | (262,991) | (420,502) |
| Effect of movements in foreign exchange | (7,502) | 101,007 | 97,733 |
| _______ | _______ | _______ | |
| At end of period | 18,028,006 | 16,204,116 | 17,362,065 |
| _______ | _______ | _______ | |
| Depreciation | |||
| At beginning of period | 9,359,941 | 5,067,390 | 5,067,390 |
| Charged in the period | 2,336,385 | 1,846,192 | 4,087,003 |
| On disposals | (251,889) | (48,050) | (150,291) |
| Effect of movements in foreign exchange | (2,954) | 60,744 | 355,839 |
| _______ | _______ | _______ | |
| At end of period | 11,441,483 | 6,926,276 | 9,359,941 |
| _______ | _______ | _______ | |
| Net Book Value | |||
| At end of period | 6,586,523 | 9,277,840 | 8,002,124 |
| _______ | _______ | _______ | |
| At beginning of period | 8,002,124 | 9,323,024 | 9,323,024 |
| _______ | _______ | _______ |
Responsibility Statement of the Directors in Respect of the Interim Financial Report
We confirm that to the best of our knowledge:
The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board
| Greg Bosch | Chief Executive Officer |
| Keith A. Goldan | Chief Financial Officer |
29 August 2008