Synectics Regulatory News (SNX)

5 Dec 2006 07:01

Synexus Clinical Research PLC05 December 2006 SNX.L Synexus Clinical Research PLC ("Synexus" or the "Company") Interim results for the six months ended 30 September 2006 Highlights •Turnover up 49% to £5.2m (2005: £3.5m) •Operating Profit up 50% to £0.38m (2005: £0.25m) •Operating Profit before Plc infrastructure costs up 215% to £0.8m (2005: £0.25m) •Cash up 354% to £1.2m (2005: £0.3m) •Successful integration of SCM (Poland) and DUH (Hungary) into the Group •Conditional acquisition of Clinical Research Centres (SA) Pty in South Africa in October 2006 Mike Redmond, Chairman of Synexus, said: "Our flotation provided us with a platform upon which to develop the Group and,in particular, our objective of rapid international expansion. This strategy hasbeen vigorously pursued. As a result, we now offer our customers in the globalpharmaceutical industry an ever more compelling service as we develop thecapacity to deliver greater numbers of patients for high volume clinical trialsat the lowest industry cost. "The Group remains active in pursuing further opportunities to acquireprofitable operations in other markets to continue the expansion of ourcapabilities to meet clients' needs." Press enquiries Synexus Clinical Research plc Tel: +44 (0)1257 230723Michael Redmond, ChairmanMichael Fort, Chief Executive Biddicks - Financial Public Relations Tel: +44 (0)20 7448 1000Zoe Biddick Brewin Dolphin Securities Tel: +44 (0)845 270 8600Mark Brady/Sarah Kent Chairman's Statement The Group continued to make strong progress during the six months to 30September 2006, reflected in the financial results and in significantdevelopments within the business. For the comparative period in 2005, the Groupwas private, prior to being admitted to AIM in November 2005. The flotation,combined with the associated fund raising, provided us with a platform uponwhich to develop the Group and, in particular, our objective of rapidinternational expansion. This strategy has been vigorously pursued. As a result,we now offer our customers in the global pharmaceutical industry an ever morecompelling service as we develop the capacity to deliver greater numbers ofpatients for high volume clinical trials at the lowest industry cost. Results Turnover in the period increased by 49% to £5.2 million. The increase was drivenby strong organic growth in the UK operations, where turnover increased by 32%,together with a full contribution from our acquisition in January of SCM inPoland and the contribution for part of the period of our acquisition in June ofDUH in Hungary. Operating profit grew by 50% to £0.38 million and EBITDA by 56%to £0.63 million. During the reporting period, Synexus has been a public company with theassociated infrastructure costs. Excluding these costs for comparative purposes,the operations grew profits by 215% to £0.8 million, demonstrating the benefitsof the increasing scale of our operations. Cash at the period end was £1.2million. Operations Synexus' strategy is to build an international network of operations replicatingour UK capability of recruiting large numbers of patients into later stageclinical trials. During the period, the acquisitions of SCM in Poland and DUH inHungary have been successfully integrated and these two profitable businessesnow form an important additional part of our offering to clients. In Bulgaria wehave concluded an arrangement with a hospital in Sofia for premises in whichtrials can be conducted and expect to begin recruiting patients over the comingmonths. During the period, we also progressed the acquisition of CRC (SA) Pty in SouthAfrica, which, subject to South African Reserve Bank clearance, was completed inOctober. The addition of CRC will be earnings accretive in the current financialyear and has not only provided Synexus with a footprint in the SouthernHemisphere but extends the Group's therapeutic range. In the UK, several of our research centres have been, or are being, consolidatedinto larger, more efficient sites, which will allow us to absorb continuedexpansion in the numbers of patients recruited to trials in the UK in acost-effective way. Our partnership operation in India, Synexus-IRL, is now also active inrecruiting patients to studies. In achieving these goals, our operations have been internationalised to meet thegrowing demand for our services from clients, delivering on the strategy weoutlined at the time of the Group's listing on AIM. Order Pipeline We continue to make good progress in gaining acceptance by clients of our modelas we expand our international capability. Enquiries are running at recordlevels. As of the date of this announcement, our contracted forward orders represent a30% increase over the previous twelve months sales, representing a book to billratio of 1.3. We have a confirmed order book of £15.7 million. We also havecurrent bids to clients, based on enquiries to date, amounting to an additional£22.8 million. Outlook Based on the existing confirmed order book and the level of enquiries and bids,the Board has confidence in the Group's prospects for the financial year. The Group also remains active in pursuing further opportunities to acquireprofitable operations in other markets to continue the expansion of ourcapabilities to meet clients' needs. Mike RedmondChairmanSynexus Clinical Research PLC5 December 2006 Consolidated profit and loss accountfor the six months ended 30 September 2006 6 months to 6 months to 12 months to 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Turnover 5,236 3,509 9,542Cost of sales (2,756) (1,795) (4,719) Gross profit 2,480 1,714 4,823Amortisation of goodwill (143) (103) (213)Other operating expenses (1,959) (1,359) (3,079) Operating profit 378 252 1,531Interest receivable 28 3 27Interest payable (20) (269) (326) Profit/(loss) on ordinaryactivities before taxation 386 (14) 1,232Taxation (37) - 29Retained profit/(loss) for thefinancial period 349 (14) 1,261 Basic and diluted earnings per share 1.5p (0.1)p 6.8p Consolidated statement of total recognized gains and lossesfor the six months ended 30 September 2006 The Group has no recognised gains and losses for the period other than thosestated above and therefore no separate statement of total recognised gains andlosses has been presented. The above results also represent the historical costprofit/(loss). Consolidated balance sheetas at 30 September 2006 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited £'000 £'000 £'000Fixed assetsIntangible fixed assets 4,794 3,044 3,881Tangible fixed assets 792 341 514 5,586 3,385 4,395Current assetsDebtors 3,315 2,181 2,428Deferred tax 103 74 103Cash at bank and in hand 1,222 269 1,982 4,640 2,524 4,513Creditors: amounts falling duewithin one year (2,624) (5,113) (2,020) Net current assets/(liabilities) 2,016 (2,589) 2,493 Total assets less current liabilities 7,602 796 6,888Creditors: amounts falling due aftermore than one year (272) (3,488) (251) Net assets/(liabilities) 7,330 (2,692) 6,637 Capital and reservesCalled up share capital 2,315 1,000 2,279Share premium account 2,491 296 2,491Merger reserve 1,520 515 1,253Capital redemption reserve 2,661 - 2,661Profit and loss account (1,657) (4,503) (2,047) 7,330 (2,692) 6,637 Consolidated cashflow statementfor the six months ended 30 September 2006 30 September 30 September 31 March 2006 2005 2006 Unaudited Unaudited Audited £'000 £'000 £'000Reconciliation of operating profit tooperating cash flowsOperating profit 378 252 1,531Depreciation and amortisation 249 151 324Increase in debtors (462) (573) (737)Increase/(decrease) in creditors 132 42 (219) 297 (128) 899 Net cash inflow/(outflow) fromoperating activities 297 (128) 899Interest received/(paid) 24 (20) (28)Purchase of tangible fixed assets (308) (11) (71)Purchase of subsidiary undertakings (1,083) - (60)Net cash acquired with subsidiaryundertakings 72 - 7 Net (outflow)/inflow before financing (998) (159) 747 FinancingIssue of share capital (net of issuecosts) - - 2,734Repayment of loans (12) - (1,927)New loans 250 - - 238 - 807 (Decrease)/increase in cash (760) (159) 1,554 Opening cash 1,982 428 428Closing cash 1,222 269 1,982 (Decrease)/Increase in cash (760) (159) 1,554 Notes 1. The interim financial statements for the six months ended 30 September 2006 have been prepared in accordance with the accounting policies detailed in the financial statements for the year ended 31 March 2006. The interim financial statements were approved by the Directors on 22 November 2006. 2. The comparative figures for the year ended 31 March 2006 do not constitute the Group's statutory accounts for that period. Those accounts, which were prepared under UK GAAP, have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. 3. The charge for taxation is based on the estimated effective rate for the year as a whole, adjusted for taxation losses brought forward. 4. The calculation of basic earnings per share is based on the profit for the period of £349,000 (six months ended 30 September 2005 - loss of £14,000) and on the weighted average number of shares in issue during the period of 23,033,180 (six months ended 30 September 2005 - 10,000,000). 5. On 5 June 2006 the Company purchased the entire share capital of Diagnostic Units Hungary Kft (DUH) for an initial consideration of 1.5 million euros which was satisfied by a payment of 1 million euros and the issue of 362,976 shares at a price of 95 pence per share. On the first anniversary after completion 0.5 million euros of deferred consideration is payable in cash subject to continuation of employment. A further 0.75 million euros is payable based on the trading performance of DUH in the year ending 31 March 2007 with the maximum payable if DUH generates profit after tax in the region of £259,000 in that period. 6. On 23 October 2006 the Company conditionally agreed to acquire the entire share capital of Clinical Research Centres SA (PTY) Ltd ('CRC') for an initial consideration of £0.81 million which is to be satisfied by the payment of £0.56 million in cash at completion and the issue of 266,109 shares of the Company at a price of 92.5 pence per share. Further amounts of £0.25 million and £0.74 million are payable based on the trading performance of CRC during the periods ended 31 March 2007 and 31 March 2008 respectively. 7. This report is being sent out to shareholders and copies will be made available from the Company's registered office at, Sandringham House, Ackhurst Park, Chorley, PR7 1NY. This information is provided by RNS The company news service from the London Stock Exchange